Document:

Exhibit
4.1

 

SECOND AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

 

Dated as of January 8, 2010

 

among

 

 

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Lenders,

 

BANK OF AMERICA, N.A.,
  as Administrative Agent,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Collateral Agent and as Syndication Agent,

 

AHERN RENTALS, INC.,

as the Obligated Party,

 

and

 

BANC OF AMERICA SECURITIES LLC and

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Lead Arrangers

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS, ACCOUNTING TERMS, AND
  INTERPRETIVE PROVISIONS

  	
   

  	
  1

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Accounting
  Terms

  	
   

  	
  41

  
	
  Section 1.3

  	
   

  	
  Interpretive
  Provisions

  	
   

  	
  41

  
	
  Section 1.4

  	
   

  	
  No
  Strict Construction

  	
   

  	
  42

  
	
  Section 1.5

  	
   

  	
  No
  Novation

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 LOANS AND LETTERS OF CREDIT

  	
   

  	
  43

  
	
  Section 2.1

  	
   

  	
  Credit
  Facility

  	
   

  	
  43

  
	
  Section 2.2

  	
   

  	
  Revolving
  Loans

  	
   

  	
  43

  
	
  Section 2.3

  	
   

  	
  Term
  Loans

  	
   

  	
  47

  
	
  Section 2.4

  	
   

  	
  Letters
  of Credit

  	
   

  	
  48

  
	
  Section 2.5

  	
   

  	
  Bank
  Products

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 INTEREST AND FEES

  	
   

  	
  53

  
	
  Section 3.1

  	
   

  	
  Interest

  	
   

  	
  53

  
	
  Section 3.2

  	
   

  	
  Continuation
  and Conversion Elections

  	
   

  	
  54

  
	
  Section 3.3

  	
   

  	
  Maximum
  Interest Rate

  	
   

  	
  56

  
	
  Section 3.4

  	
   

  	
  Unused
  Line Fee

  	
   

  	
  56

  
	
  Section 3.5

  	
   

  	
  Letter
  of Credit Fees and Expenses

  	
   

  	
  57

  
	
  Section 3.6

  	
   

  	
  Other Fees

  	
   

  	
  57

  
	
  Section 3.7

  	
   

  	
  Term
  Closing Fee

  	
   

  	
  57

  
	
  Section 3.8

  	
   

  	
  Engagement
  Letter Fee

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 PRINCIPAL PAYMENTS AND PREPAYMENTS

  	
   

  	
  57

  
	
  Section 4.1

  	
   

  	
  Repayment

  	
   

  	
  57

  
	
  Section 4.2

  	
   

  	
  Termination
  of Credit Facility; Prepayment
  or Termination of Term Loans

  	
   

  	
  59

  
	
  Section 4.3

  	
   

  	
  Mandatory
  Prepayment of the Loans

  	
   

  	
  59

  
	
  Section 4.4

  	
   

  	
  LIBOR
  Rate Revolving Loan Prepayments

  	
   

  	
  61

  
	
  Section 4.5

  	
   

  	
  Payments
  as Revolving Loans

  	
   

  	
  61

  
	
  Section 4.6

  	
   

  	
  Apportionment,
  Application, and Reversal of Payments

  	
   

  	
  62

  
	
  Section 4.7

  	
   

  	
  Indemnity
  for Returned Payments

  	
   

  	
  63

  
	
  Section 4.8

  	
   

  	
  Administrative
  Agent’s and the Lenders’ Books and Records; Monthly Statements

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  	
  64

  
	
  Section 5.1

  	
   

  	
  Taxes

  	
   

  	
  64

  
	
  Section 5.2

  	
   

  	
  Illegality

  	
   

  	
  65

  
	
  Section 5.3

  	
   

  	
  Increased
  Costs and Reduction of Return

  	
   

  	
  66

  
	
  Section 5.4

  	
   

  	
  Funding
  Losses

  	
   

  	
  67

  
	
  Section 5.5

  	
   

  	
  Inability
  to Determine Rates

  	
   

  	
  67

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.6

  	
   

  	
  Certificate
  of the Affected Lender

  	
   

  	
  68

  
	
  Section 5.7

  	
   

  	
  Survival

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 BOOKS AND RECORDS; FINANCIAL
  INFORMATION; NOTICES

  	
   

  	
  68

  
	
  Section 6.1

  	
   

  	
  Books
  and Records

  	
   

  	
  68

  
	
  Section 6.2

  	
   

  	
  Financial
  and Other Information

  	
   

  	
  68

  
	
  Section 6.3

  	
   

  	
  Notices

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 GENERAL WARRANTIES AND REPRESENTATIONS

  	
   

  	
  79

  
	
  Section 7.1

  	
   

  	
  Authorization,
  Validity, and Enforceability of the Transaction Documents

  	
   

  	
  79

  
	
  Section 7.2

  	
   

  	
  Validity
  and Priority of Security Interest

  	
   

  	
  80

  
	
  Section 7.3

  	
   

  	
  Organization,
  Authority, and Good Standing

  	
   

  	
  80

  
	
  Section 7.4

  	
   

  	
  Capitalization
  and Subsidiaries

  	
   

  	
  80

  
	
  Section 7.5

  	
   

  	
  Corporate
  Name; Prior Transactions

  	
   

  	
  81

  
	
  Section 7.6

  	
   

  	
  Financial
  Statements and Projections

  	
   

  	
  81

  
	
  Section 7.7

  	
   

  	
  Solvency

  	
   

  	
  81

  
	
  Section 7.8

  	
   

  	
  Debt

  	
   

  	
  81

  
	
  Section 7.9

  	
   

  	
  Distributions

  	
   

  	
  82

  
	
  Section 7.10

  	
   

  	
  Real
  Estate; Leases

  	
   

  	
  82

  
	
  Section 7.11

  	
   

  	
  Proprietary
  Rights

  	
   

  	
  82

  
	
  Section 7.12

  	
   

  	
  Trade
  Names

  	
   

  	
  82

  
	
  Section 7.13

  	
   

  	
  Litigation

  	
   

  	
  82

  
	
  Section 7.14

  	
   

  	
  Labor
  Matters

  	
   

  	
  82

  
	
  Section 7.15

  	
   

  	
  Environmental
  Law

  	
   

  	
  83

  
	
  Section 7.16

  	
   

  	
  No
  Violation of Law

  	
   

  	
  84

  
	
  Section 7.17

  	
   

  	
  No
  Default

  	
   

  	
  84

  
	
  Section 7.18

  	
   

  	
  ERISA
  Compliance

  	
   

  	
  84

  
	
  Section 7.19

  	
   

  	
  Taxes

  	
   

  	
  85

  
	
  Section 7.20

  	
   

  	
  Regulated
  Entities

  	
   

  	
  85

  
	
  Section 7.21

  	
   

  	
  Use
  of Proceeds; Margin Regulations

  	
   

  	
  85

  
	
  Section 7.22

  	
   

  	
  No
  Material Adverse Change

  	
   

  	
  85

  
	
  Section 7.23

  	
   

  	
  Full
  Disclosure

  	
   

  	
  85

  
	
  Section 7.24

  	
   

  	
  Material
  Agreements

  	
   

  	
  86

  
	
  Section 7.25

  	
   

  	
  Bank
  Accounts

  	
   

  	
  86

  
	
  Section 7.26

  	
   

  	
  Commercial
  Tort Claims

  	
   

  	
  86

  
	
  Section 7.27

  	
   

  	
  Governmental
  Authorization

  	
   

  	
  86

  
	
  Section 7.28

  	
   

  	
  Second
  Lien Debt

  	
   

  	
  86

  
	
  Section 7.29

  	
   

  	
  Certificates
  of Title

  	
   

  	
  86

  
	
  Section 7.30

  	
   

  	
  Subordinated
  Debt

  	
   

  	
  86

  
	
  Section 7.31

  	
   

  	
  Foreign
  Assets Control Regulations, Etc.

  	
   

  	
  86

  
	
  Section 7.32

  	
   

  	
  Ranking

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 AFFIRMATIVE AND NEGATIVE COVENANTS

  	
   

  	
  87

  
	
  Section 8.1

  	
   

  	
  Taxes
  and Other Obligations

  	
   

  	
  87

  
	
  Section 8.2

  	
   

  	
  Legal
  Existence and Good Standing

  	
   

  	
  88

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.3

  	
   

  	
  Compliance
  with Law and Agreements; Maintenance of Licenses

  	
   

  	
  88

  
	
  Section 8.4

  	
   

  	
  Maintenance
  of Property; Inspection of Property

  	
   

  	
  88

  
	
  Section 8.5

  	
   

  	
  Insurance

  	
   

  	
  89

  
	
  Section 8.6

  	
   

  	
  Condemnation

  	
   

  	
  90

  
	
  Section 8.7

  	
   

  	
  Environmental
  Law

  	
   

  	
  90

  
	
  Section 8.8

  	
   

  	
  Compliance
  with ERISA

  	
   

  	
  91

  
	
  Section 8.9

  	
   

  	
  Mergers,
  Consolidations, or Sales

  	
   

  	
  91

  
	
  Section 8.10

  	
   

  	
  Distributions;
  Capital Change; Restricted Investments

  	
   

  	
  92

  
	
  Section 8.11

  	
   

  	
  Guaranties

  	
   

  	
  92

  
	
  Section 8.12

  	
   

  	
  Debt

  	
   

  	
  92

  
	
  Section 8.13

  	
   

  	
  Prepayment;
  Amendment of Debt Agreements

  	
   

  	
  95

  
	
  Section 8.14

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  95

  
	
  Section 8.15

  	
   

  	
  Investment
  Banking and Finder’s Fees

  	
   

  	
  96

  
	
  Section 8.16

  	
   

  	
  Business
  Conducted

  	
   

  	
  96

  
	
  Section 8.17

  	
   

  	
  Liens

  	
   

  	
  96

  
	
  Section 8.18

  	
   

  	
  Sale
  and Leaseback Transactions

  	
   

  	
  97

  
	
  Section 8.19

  	
   

  	
  New
  Subsidiaries

  	
   

  	
  97

  
	
  Section 8.20

  	
   

  	
  Fiscal
  Year

  	
   

  	
  97

  
	
  Section 8.21

  	
   

  	
  Financial
  Covenants

  	
   

  	
  97

  
	
  Section 8.22

  	
   

  	
  Use
  of Proceeds

  	
   

  	
  98

  
	
  Section 8.23

  	
   

  	
  Lenders as Depository

  	
   

  	
  99

  
	
  Section 8.24

  	
   

  	
  Guaranties
  of the Obligations

  	
   

  	
  99

  
	
  Section 8.25

  	
   

  	
  Additional
  Collateral; Further Assurances

  	
   

  	
  99

  
	
  Section 8.26

  	
   

  	
  Changes
  in Accounting Treatment

  	
   

  	
  100

  
	
  Section 8.27

  	
   

  	
  [Intentionally
  Omitted]

  	
   

  	
  100

  
	
  Section 8.28

  	
   

  	
  Acquired
  Real Estate

  	
   

  	
  100

  
	
  Section 8.29

  	
   

  	
  Ranking

  	
   

  	
  101

  
	
  Section 8.30

  	
   

  	
  Kubota
  and Other Vendors

  	
   

  	
  101

  
	
  Section 8.31

  	
   

  	
  Other
  Debt Limitations

  	
   

  	
  101

  
	
  Section 8.32

  	
   

  	
  Compliance
  with and Amendments to Second Lien Debt Agreement

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 CONDITIONS OF LENDING

  	
   

  	
  101

  
	
  Section 9.1

  	
   

  	
  Conditions
  Precedent to Making of Loans on the Closing Date

  	
   

  	
  101

  
	
  Section 9.2

  	
   

  	
  Conditions
  Precedent to Each Loan

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 SECURITY

  	
   

  	
  106

  
	
  Section 10.1

  	
   

  	
  Grant
  of Lien

  	
   

  	
  106

  
	
  Section 10.2

  	
   

  	
  Perfection
  and Protection of Security Interest

  	
   

  	
  108

  
	
  Section 10.3

  	
   

  	
  Location
  of Collateral

  	
   

  	
  110

  
	
  Section 10.4

  	
   

  	
  Appraisals

  	
   

  	
  111

  
	
  Section 10.5

  	
   

  	
  Accounts

  	
   

  	
  112

  
	
  Section 10.6

  	
   

  	
  Collection
  of Accounts; Payments

  	
   

  	
  114

  
	
  Section 10.7

  	
   

  	
  Inventory;
  Perpetual Inventory

  	
   

  	
  115

  
	
  Section 10.8

  	
   

  	
  Equipment

  	
   

  	
  116

  
	
  Section 10.9

  	
   

  	
  Assigned
  Contracts

  	
   

  	
  116

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.10

  	
   

  	
  Documents,
  Instruments, and Chattel Paper

  	
   

  	
  117

  
	
  Section 10.11

  	
   

  	
  Right
  to Cure

  	
   

  	
  117

  
	
  Section 10.12

  	
   

  	
  Power
  of Attorney

  	
   

  	
  118

  
	
  Section 10.13

  	
   

  	
  The
  Collateral Agent’s, the Administrative Agent’s and the Lenders’ Rights,
  Duties, and Liabilities

  	
   

  	
  119

  
	
  Section 10.14

  	
   

  	
  Patent,
  Trademark, and Copyright Collateral

  	
   

  	
  120

  
	
  Section 10.15

  	
   

  	
  Indemnification

  	
   

  	
  122

  
	
  Section 10.16

  	
   

  	
  Grant
  of License to Use Proprietary Rights

  	
   

  	
  122

  
	
  Section 10.17

  	
   

  	
  Limitation
  on the Agents’ and the Lenders’ Duty in Respect of the Collateral

  	
   

  	
  122

  
	
  Section 10.18

  	
   

  	
  Miscellaneous

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 DEFAULT; REMEDIES

  	
   

  	
  123

  
	
  Section 11.1

  	
   

  	
  Events
  of Default

  	
   

  	
  123

  
	
  Section 11.2

  	
   

  	
  Remedies

  	
   

  	
  127

  
	
  Section 11.3

  	
   

  	
  Term
  Lender Purchase Option

  	
   

  	
  131

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12 TERM AND TERMINATION

  	
   

  	
  135

  
	
  Section 12.1

  	
   

  	
  Term
  and Termination

  	
   

  	
  135

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS;
  ASSIGNMENTS; SUCCESSORS

  	
   

  	
  136

  
	
  Section 13.1

  	
   

  	
  Amendments
  and Waivers

  	
   

  	
  136

  
	
  Section 13.2

  	
   

  	
  Assignments;
  Participations

  	
   

  	
  138

  
	
  Section 13.3

  	
   

  	
  Amendments
  and Waivers - Additional Voting Requirements

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14 THE ADMINISTRATIVE AGENT AND THE
  COLLATERAL AGENT

  	
   

  	
  146

  
	
  Section 14.1

  	
   

  	
  Appointment
  and Authorization

  	
   

  	
  146

  
	
  Section 14.2

  	
   

  	
  Delegation
  of Duties

  	
   

  	
  147

  
	
  Section 14.3

  	
   

  	
  Liability
  of the Agents

  	
   

  	
  147

  
	
  Section 14.4

  	
   

  	
  Reliance
  by the Agents

  	
   

  	
  148

  
	
  Section 14.5

  	
   

  	
  Notice
  of Default

  	
   

  	
  148

  
	
  Section 14.6

  	
   

  	
  Credit
  Decision

  	
   

  	
  149

  
	
  Section 14.7

  	
   

  	
  Indemnification

  	
   

  	
  149

  
	
  Section 14.8

  	
   

  	
  The
  Collateral Agent and the Administrative Agent in their Individual Capacity

  	
   

  	
  150

  
	
  Section 14.9

  	
   

  	
  Successor
  Agents

  	
   

  	
  150

  
	
  Section 14.10

  	
   

  	
  Withholding
  Tax

  	
   

  	
  153

  
	
  Section 14.11

  	
   

  	
  Collateral
  Matters

  	
   

  	
  154

  
	
  Section 14.12

  	
   

  	
  Restrictions
  on Actions by Lenders; Sharing of Payments

  	
   

  	
  156

  
	
  Section 14.13

  	
   

  	
  Agency
  for Perfection

  	
   

  	
  156

  
	
  Section 14.14

  	
   

  	
  Payments
  by Agents to the Lenders

  	
   

  	
  157

  
	
  Section 14.15

  	
   

  	
  Settlement

  	
   

  	
  157

  
	
  Section 14.16

  	
   

  	
  Letters
  of Credit; Intra-Revolving Lender Issues

  	
   

  	
  161

  
	
  Section 14.17

  	
   

  	
  Concerning
  the Collateral and the Related Loan Documents

  	
   

  	
  163

  
	
  Section 14.18

  	
   

  	
  Field
  Audit and Examination Reports; Disclaimer by Revolving Lenders

  	
   

  	
  164

  

 

iv

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.19

  	
   

  	
  Relation
  Among the Lenders

  	
   

  	
  165

  
	
  Section 14.20

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  	
  165

  
	
  Section 14.21

  	
   

  	
  Co-Lead Arrangers and Syndication Agent

  	
   

  	
  165

  
	
  Section 14.22

  	
   

  	
  Revolving
  Loans and Letters of Credit in Excess of Unused Availability

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15 MISCELLANEOUS

  	
   

  	
  166

  
	
  Section 15.1

  	
   

  	
  No
  Waivers; Cumulative Remedies

  	
   

  	
  166

  
	
  Section 15.2

  	
   

  	
  Severability

  	
   

  	
  166

  
	
  Section 15.3

  	
   

  	
  Governing
  Law; Choice of Forum; Service of Process

  	
   

  	
  166

  
	
  Section 15.4

  	
   

  	
  Waiver
  of Jury Trial

  	
   

  	
  167

  
	
  Section 15.5

  	
   

  	
  Survival
  of Representations and Warranties

  	
   

  	
  168

  
	
  Section 15.6

  	
   

  	
  Other
  Security and Guaranties

  	
   

  	
  168

  
	
  Section 15.7

  	
   

  	
  Fees
  and Expenses

  	
   

  	
  168

  
	
  Section 15.8

  	
   

  	
  Notices
  and Information

  	
   

  	
  169

  
	
  Section 15.9

  	
   

  	
  Waiver
  of Notices

  	
   

  	
  173

  
	
  Section 15.10

  	
   

  	
  Binding
  Effect

  	
   

  	
  173

  
	
  Section 15.11

  	
   

  	
  Indemnity
  of the Credit Providers by the Obligated Parties

  	
   

  	
  173

  
	
  Section 15.12

  	
   

  	
  Limitation
  of Liability

  	
   

  	
  174

  
	
  Section 15.13

  	
   

  	
  Final
  Agreement

  	
   

  	
  174

  
	
  Section 15.14

  	
   

  	
  Counterparts

  	
   

  	
  175

  
	
  Section 15.15

  	
   

  	
  Right
  of Setoff

  	
   

  	
  175

  
	
  Section 15.16

  	
   

  	
  Confidentiality

  	
   

  	
  175

  
	
  Section 15.17

  	
   

  	
  USA
  Patriot Act Notice

  	
   

  	
  176

  
	
  Section 15.18

  	
   

  	
  Joint
  and Several Liability

  	
   

  	
  176

  
	
  Section 15.19

  	
   

  	
  Contribution
  and Indemnification among the Obligated Parties

  	
   

  	
  178

  
	
  Section 15.20

  	
   

  	
  Agency
  of Ahern for Each Other Obligated Party

  	
   

  	
  178

  
	
  Section 15.21

  	
   

  	
  Additional
  Borrowers and Guarantors

  	
   

  	
  178

  
	
  Section 15.22

  	
   

  	
  Express
  Waivers By the Obligated Parties In Respect of Cross Guaranties and Cross
  Collateralization

  	
   

  	
  179

  
	
  Section 15.23

  	
   

  	
  Intercreditor
  Agreement

  	
   

  	
  180

  
	
  Section 15.24

  	
   

  	
  Consent
  to Amendment of Certain Loan Documents

  	
   

  	
  180

  
	
  Section 15.25

  	
   

  	
  Term
  Loan Obligations

  	
   

  	
  181

  
	
  Section 15.26

  	
   

  	
  Retention
  of Consultant

  	
   

  	
  181

  
	
  Section 15.27

  	
   

  	
  Reaffirmation
  and Grant of Security Interests

  	
   

  	
  181

  
	
  Section 15.28

  	
   

  	
  Amendment and Restatement

  	
   

  	
  182

  

 

v

 

	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  –

  	
  Form of
  Term Loan Note

  
	
  Exhibit B

  	
  –

  	
  Form of
  Borrowing Base Certificate

  
	
  Exhibit C

  	
  –

  	
  Form of
  Compliance Certificate

  
	
  Exhibit D

  	
  –

  	
  Form of
  Notice of Borrowing

  
	
  Exhibit E

  	
  –

  	
  Form of
  Notice of Continuation/Conversion

  
	
  Exhibit F

  	
  –

  	
  Form of
  Assignment and Acceptance

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1(A)

  	
  –

  	
  Commitments

  
	
  Schedule
  1.1(B)

  	
  –

  	
  Permitted
  Investments

  
	
  Schedule
  1.1(C)

  	
  –

  	
  Permitted
  Liens

  
	
  Schedule
  1.1(D)

  	
  –

  	
  Assigned
  Contracts

  
	
  Schedule
  1.1(E)

  	
  –

  	
  Excluded
  Assets

  
	
  Schedule
  7.3

  	
  –

  	
  Organization;
  Authority; and Good Standing

  
	
  Schedule
  7.4

  	
  –

  	
  Capitalization;
  Subsidiaries

  
	
  Schedule
  7.5

  	
  –

  	
  Corporate
  name; Prior Transactions

  
	
  Schedule
  7.6

  	
  –

  	
  Undisclosed
  Material Liabilities

  
	
  Schedule
  7.9

  	
  –

  	
  Distributions

  
	
  Schedule
  7.10

  	
  –

  	
  Real
  Estate; Leases

  
	
  Schedule
  7.11

  	
  –

  	
  Proprietary
  Rights

  
	
  Schedule
  7.12

  	
  –

  	
  Trade
  Names

  
	
  Schedule
  7.13

  	
  –

  	
  Litigation

  
	
  Schedule
  7.14

  	
  –

  	
  Labor
  Matters

  
	
  Schedule
  7.15

  	
  –

  	
  Environmental
  Matters

  
	
  Schedule
  7.24

  	
  –

  	
  Material
  Agreements

  
	
  Schedule
  7.25

  	
  –

  	
  Bank
  Accounts

  
	
  Schedule
  7.26

  	
  –

  	
  Commercial
  Tort Claims

  
	
  Schedule
  7.29

  	
  –

  	
  Certificates
  of Title

  
	
  Schedule
  8.12

  	
  –

  	
  Debt

  
	
  Schedule
  8.14

  	
  –

  	
  Affiliate
  Transactions

  
	
  Schedule
  10.3

  	
  –

  	
  Locations
  of Collateral

  

 

vi

 

SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

 

This Second Amended and Restated Loan and Security
Agreement, dated as of January 8, 2010, is among the lending institutions from time to time party hereto
as Lenders (as hereinafter defined), Bank of America, N.A. (“BofA”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), Wachovia Bank, National Association (“Wachovia”), as
collateral agent for the Lenders (in such capacity, the “Collateral Agent”),
Ahern Rentals, Inc. (“Ahern”), each of its subsidiaries party from
time to time hereto that becomes a borrower hereunder with the prior written
consent of all the Revolving Lenders (such subsidiaries, together with Ahern,
are referred to hereinafter each individually as a “Borrower” and
collectively as the “Borrowers”) and each of the other Obligated Parties
(as hereinafter defined) signatory to this Agreement.

 

RECITALS:

 

WHEREAS, the Borrowers, the Agents and certain of
the Lenders party hereto were party to a certain Loan and Security Agreement,
dated as of October 29, 2004, as amended to but excluding August 18,
2005 (as so amended, the “Original Loan and Security Agreement”);

 

WHEREAS, the Borrowers, the Agents and certain of
the Lenders party hereto amended and restated the Original Loan and Security
Agreement pursuant to an Amended and Restated Loan and Security Agreement,
dated as of August 18, 2005 (as amended to but excluding the date hereof,
the “First Amended and Restated Loan and Security Agreement”); and

 

WHEREAS, the parties hereto desire to amend and
restate the First Amended and Restated Loan and Security Agreement in its
entirety, but not as a novation, on the terms and subject to the conditions
hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual
conditions and agreements set forth in this Agreement, and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto hereby agree that the First Amended and Restated Loan and
Security Agreement shall be, and hereby is, amended and restated in its
entirety as follows, effective on and as of the Closing Date.

 

ARTICLE 1

 

DEFINITIONS, ACCOUNTING TERMS, AND INTERPRETIVE PROVISIONS

 

Section 1.1             Definitions.  Capitalized terms wherever used in this
Agreement and the other Loan Documents, unless otherwise defined therein, shall
have the meanings specified in this Section 1.1.

 

“Accelerated Delivery Date” means any date on
which the Unused Availability is less than $15,000,000.

 

“Accelerated Delivery Period” means the
period commencing on an Accelerated Delivery Date and ending on the first day
after any full Fiscal Quarter of Ahern, occurring after an 

 

1

 

Accelerated Delivery Date,
during which the Unused Availability equals or exceeds $15,000,000 for each day
during such Fiscal Quarter and no Event of Default has occurred or existed.

 

“Accommodation Payment” has the meaning
specified in Section 15.19.

 

“Account Debtor” means each Person obligated
in any way on or in connection with an Account, Chattel Paper, or General
Intangible (including a payment intangible).

 

“Accounts” means “accounts”, as such term is
defined in the UCC, and any rights to payment for the sale or lease of goods or
rendition of services, whether or not they have been earned by performance.

 

“Accounts Payable” means all trade accounts
payable of the Obligated Parties and all Debt and other obligations owing by
the Obligated Parties with respect to Inventory or Equipment.

 

“ACH Transactions” means any cash management,
disbursement, or related services, including overdrafts and the automated
clearinghouse transfer of funds, by BofA or Wachovia for the account of any
Obligated Party.

 

“Additional Mortgaged Property” has the
meaning specified in Section 8.28.

 

“Adjusted Net Earnings from Operations”
means, with respect to any fiscal period of Ahern, net income of Ahern and its
Subsidiaries on a consolidated basis after provision for state and local income
taxes (if any) for such fiscal period, as determined in accordance with GAAP
and reported on the Financial Statements for such fiscal period, excluding any
and all of the following included in the determination of such net income:  (a) gain or loss arising from the sale
of any capital assets (which shall not include, in any event, Inventory); (b) gain
arising from any write-up in the book value of any asset or non-cash loss
arising from any write-down or write-off in the book value of any non-operating
asset; (c) earnings of any other Person, substantially all the assets of
which have been acquired by Ahern or any of its Subsidiaries in any manner, to
the extent realized by such other Person prior to the date of acquisition; (d) earnings
of any other Person (other than a Subsidiary of Ahern) in which Ahern or
any of its Subsidiaries has an ownership interest unless (and only to the
extent) such earnings shall actually have been received by Ahern or any of
its Subsidiaries in the form of cash distributions; (e) earnings of any
Person to which assets of Ahern or any of its Subsidiaries shall have been
sold, transferred, or disposed of, or into which Ahern or any of its
Subsidiaries shall have been merged, or which has been a party with Ahern or
any of its Subsidiaries to any consolidation or other form of reorganization,
prior to the date of such transaction; (f) gain arising from the
acquisition of debt or equity securities of Ahern or any of its Subsidiaries or
from cancellation or forgiveness of Debt; and (g) gain or non-cash loss
generated or arising from extraordinary items, as determined in accordance with
GAAP, or from any other non-recurring transaction; provided that any
non-cash loss generated from the write-down or write-off of operating assets
shall not be included in this clause (g).

 

“Administrative Agent” means BofA, solely in
its capacity as administrative agent for the Lenders, and any successor
administrative agent.

 

2

 

“Affiliate” means, as to any Person (the “subject
Person”), any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, the subject Person or which
owns, directly or indirectly, 5.0% or more of the outstanding Capital Stock of
the subject Person.  A Person shall be
deemed to control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.

 

“Agent” means each of the Administrative
Agent and the Collateral Agent, individually, and “Agents” means both of
such Persons, collectively.

 

“Agent Advances” has the meaning specified in
Section 2.2(j).

 

“Agent-Related Persons” means the Collateral
Agent and the Administrative Agent, together with their respective Affiliates,
and the officers, directors, employees, counsel, representatives, agents, and
attorneys-in-fact of the Collateral Agent and the Administrative Agent and
their respective Affiliates.

 

“Agent’s Liens” means the Liens in the
Collateral granted to the Collateral Agent, for the benefit of the Credit
Providers, pursuant to the terms of this Agreement (and, for the avoidance of
doubt, the Original Loan and Security Agreement and the First Amended and
Restated Loan and Security Agreement) and the other Loan Documents.

 

“Aggregate Revolver Outstandings” means, at
any time, the sum of (a) the aggregate unpaid balance of the Revolving
Loans, (b) the aggregate undrawn amount of all outstanding Letters of
Credit, and (c) the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit.

 

“Agreement” means this Second Amended and
Restated Loan and Security Agreement, as it may be further amended, restated,
or otherwise modified from time to time.

 

“Ahern” means Ahern Rentals, Inc., a Nevada corporation.

 

“Aircraft Mortgage” means the Aircraft
Security Agreement, dated as of the Original Closing Date, by and between Ahern
and the Collateral Agent, by which the Collateral Agent, for the benefit of the
Credit Providers, acquired a Lien on a certain 1979 Hughes model 369D
helicopter bearing Serial Number 790544D and FAA Registration Number N58341.

 

“Allocable Amount” has the meaning specified
in Section 15.19.

 

“Anniversary Date” means an anniversary of the
Closing Date.

 

“Applicable Margin”
means, as of the Closing Date,

 

(a)           with respect to Base Rate Revolving
Loans and all other Obligations (other than LIBOR Rate Revolving Loans and Term
Loan Obligations), 3.00% per annum, and

 

3

 

(b)           with respect to LIBOR Rate Revolving
Loans, 4.00%,

 

in each case subject to
adjustment from time to time thereafter to the applicable percentage specified
corresponding to the Fixed Charge Coverage Ratio, as set forth below, respectively:

 

	
  Fixed
  Charge

  Coverage Ratio

  	
   

  	
  Base
  Rate Revolving Loans

  and other Obligations

  (other than LIBOR Rate

  Revolving Loans and

  Term Loan Obligations)

  	
   

  	
  LIBOR
  Rate

  Revolving Loans

  	
   

  
	
  less than or equal to
  1.0:1.0

  	
   

  	
  3.00%

  	
   

  	
  4.00%

  	
   

  
	
  greater than 1.0:1.0 

  and less than 1.1:1.0

  	
   

  	
  2.75%

  	
   

  	
  3.75%

  	
   

  
	
  greater than 1.1:1.0

  	
   

  	
  2.50%

  	
   

  	
  3.50%

  	
   

  

 

For the purpose of determining any such adjustments
to the Applicable Margin, the Fixed Charge Coverage Ratio shall be determined,
beginning with the Fiscal Quarter ending June 30, 2010, based upon the
Financial Statements of Ahern and its Subsidiaries for the immediately
preceding four (4) Fiscal Quarters of Ahern, and  for
each Fiscal Quarter of Ahern ending thereafter,  delivered
to the Agents as required by Section 6.2(a) (with respect to
the Financial Statements as of the last day of each Fiscal Year) or Section 6.2(b)(i) (with
respect to the Financial Statements for each of the other Fiscal Quarters  of each Fiscal Year), and any such adjustment, if any,
shall become effective prospectively on and after the first day of the calendar
month following the date of delivery of such Financial Statements to the
Agents.  Concurrently with the delivery
of such Financial Statements, Ahern shall deliver to the Agents a certificate,
signed by a Responsible Officer, setting forth in reasonable detail the basis
for the continuance of, or any change in, the Applicable Margin.  In the event the Obligated Parties fail to
timely deliver any such Financial Statements, in addition to any other remedy
provided for in this Agreement, the Applicable Margin shall be deemed to be
equal to the highest level set forth in the preceding table, until the first
day of the calendar month following the date of delivery of such Financial
Statements to the Agents, at which time the Applicable Margin shall be
determined, prospectively, in accordance with the terms hereof.  If a Default or an Event of Default exists at
the time any reduction in the Applicable Margin is to be implemented, such
reduction shall not occur until the first day of the calendar month following
the date on which such Default or Event of Default is Waived or cured.

 

4

 

“Applicable Unused Line Fee Percentage” means, with respect to
the Unused Line Fee payable for any calendar month or a portion of any calendar
month, the percentage per annum set forth below opposite the respective Level
(i.e., Level 1 or Level 2, as the case may be) of Average Usage for the
immediately preceding calendar month.

 

	
  Level

  	
   

  	
  Average Usage

  	
   

  	
  Applicable Unused

  Line Fee Percentage

  	
   

  
	
  1

  	
   

  	
  < 50%

  	
   

  	
  0.75%

  	
   

  
	
  2

  	
   

  	
  > 50%

  	
   

  	
  0.50%

  	
   

  

 

Notwithstanding anything to the contrary contained
above in this definition, Level 1 pricing shall apply at all times during which
there shall exist any Default or Event of Default.

 

“Assigned Contracts” means, collectively, all
of each Obligated Party’s rights and remedies under, and all moneys and claims
for money due or to become due to such Obligated Party under, those contracts
set forth on Schedule 1.1(D) and any other material contracts,
and any and all amendments, supplements, extensions, renewals, and other
modifications thereof including all rights and claims of such Obligated Party
now or hereafter existing:  (a) under
any insurance, indemnities, warranties, and guaranties provided for or arising
out of or in connection with any of the foregoing agreements; (b) for any
damages arising out of or for breach or default under or in connection with any
of the foregoing contracts; (c) to all other amounts from time to time
paid or payable under or in connection with any of the foregoing agreements; or
(d) to exercise or enforce any and all covenants, remedies, powers, and
privileges thereunder.

 

“Assignee” has the meaning specified in Section 13.2(a).

 

“Assignment and Acceptance” has the meaning
specified in Section 13.2(a).

 

“Attorney Costs” means and includes (a) all
reasonable fees, expenses, and disbursements of (i) any law firm or other
counsel engaged by the Collateral Agent or the Administrative Agent, (ii) one
law firm or other external counsel engaged by the Revolving Lenders and (iii) one
law firm or other external counsel engaged by the Term Lenders and (b) the
reasonably allocated costs and expenses of internal legal services of the
Collateral Agent and the Administrative Agent.

 

“Average Usage” means, for any period, an
amount, expressed as a percentage, equal to (i) the quotient of (x) the
Aggregate Revolver Outstandings for each day during such period, divided by (y) the
number of days in such period, divided by (ii) the quotient of (x) the
sum of the Revolving Credit Commitments of all Lenders for each day during such
period, divided by (y) the number of days in such period, all as
determined by the Administrative Agent.

 

“Bank Product Reserves” means all reserves
which either or both of the Agents from time to time establish in its or their
reasonable credit judgment for the Bank Products then provided or outstanding.

 

5

 

“Bank Products” means each and any of the
following types of services or facilities extended to any of the Obligated
Parties by (I) in the case of (b) below, BofA or Wachovia or any
Affiliate of BofA or Wachovia and (II) in the case of (a), (c) and (d) below,
any Revolving Lender or any Affiliate of any Revolving Lender:  (a) commercial credit cards; (b) cash
management services (including controlled disbursement services, ACH
Transactions, and interstate depository network services), (c) Hedge
Agreements; and (d) foreign exchange.

 

“Bankruptcy Code” means Title 11 of the
United States Code (11 U.S.C. § 101 et  seq.).

 

“Base Rate” means, for any day, the greatest
of (a) the rate of interest in effect for such day as publicly announced
from time to time by BofA in Charlotte, North Carolina as its “prime rate” (the
“prime rate” being a rate set by BofA based upon various factors including BofA’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); (b) the Federal Funds Rate in effect
for such day, plus 0.50%
per annum; and (c) the LIBOR Rate for a 30-day interest period as determined
for such day, plus 1.00% per annum, provided, that, in the Agents’
sole discretion, such amount is subject to change at any time without notice to
the Borrowers.  With respect to any
determination of any Interest Rate which is based on the Base Rate, any change
in the prime rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change, and
any change in the Federal Funds Rate shall take effect as of the date of such
change.

 

“Base Rate Revolving Loan” means any portion
of the Revolving Loans during any period in which such portion bears interest
based on the Base Rate.

 

“Blocked Availability Amount” means
$10,000,000.

 

“BofA” has the meaning specified in the
introductory paragraph of this Agreement.

 

“Borrower” means, separately and
individually, any of Ahern and any other Person who becomes a party to this
Agreement as a “Borrower” pursuant to the terms hereof, jointly, severally, and
collectively, and “Borrowers” means more than one or all of the
foregoing Persons, jointly, severally, and collectively, as the context
requires.

 

“Borrowing” means (a) a borrowing
hereunder consisting of Revolving Loans made available to the Borrowers, or any
of them, on the same day (i) by the Revolving Lenders, (ii) by BofA
(in the case of a Borrowing funded as a Non-Ratable Loan), or (iii) by the
Administrative Agent (in the case of a Borrowing consisting of an Agent
Advance), (b) the issuance of a Letter of Credit hereunder or (c) the
borrowing of the Term Loans hereunder on the Closing Date.

 

“Borrowing Base” means, at any time, (a) an
amount equal to the lesser of (i) the Maximum Revolver Amount or (ii) the
sum of, without duplication, (1) up to eighty-five percent (85%) of the Net Amount of Eligible
Accounts, plus (2) up to the lesser of (A) ninety-five percent
(95%) of the Net Book Value of Eligible Rental and Sale Equipment and (B) eighty-five
percent (85%) of the Net Orderly Liquidation Value of Eligible Rental and
Sale Equipment, plus (3) up to the lesser of (A) ninety-five
percent (95%) of the Net Book Value of Eligible Transportation Equipment and (B) eighty-five
percent (85%) of the Net Orderly Liquidation Value of Eligible Transportation
Equipment, plus (4) up
to the lesser of (A) sixty percent (60%) 

 

6

 

of the value (at the lower
of cost, on an average cost basis, or market) of Eligible Spare Parts Inventory
and (B) eighty-five percent (85%) of the Net Orderly Liquidation Value of
Eligible Spare Parts Inventory, minus  (5) if the sum of the Aggregate
Revolver Outstandings and the aggregate unpaid principal balance of the Term
Loans exceeds or will exceed the difference of $435,000,000 minus the
Supplemental Blocked Availability Amount as in effect from time to time, the
amount of such excess, minus
(6) the aggregate amount, if any, by which the Revolving Credit
Commitments and the Maximum Revolver Amount have been permanently reduced in
accordance with Section 4.3(f) or the Term Loans have been
paid in accordance with Section 4.3(f),  minus
(b) such Reserves as are established from time to time by either or both
of the Agents in its or their reasonable credit judgment (including in any
event the Reserve established pursuant to the last sentence of the definition
of Reserves) minus (c) the sum of the Blocked Availability Amount
and the Supplemental Blocked Availability Amount.

 

“Borrowing Base Certificate” means a
certificate by a Responsible Officer of the Borrowers, or Ahern on behalf of
the Borrowers, substantially in the form of Exhibit B (or another
form acceptable to the Agents) setting forth the calculation of the Borrowing
Base, including a calculation of each component thereof (including to the
extent a Borrower has received notice of any Reserve from an Agent, any of the
Reserves included in such calculation pursuant to clause (b) of
the definition of Borrowing Base), all in such detail as shall be satisfactory
to the Agents.  All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrowers, or Ahern on behalf of
the Borrowers, and certified to the Agents; provided that each of the
Agents shall have the right to review and adjust, in the exercise of its credit
judgment, any such calculation (a) to reflect its estimate of declines in
value of any of the Collateral described therein, (b) to reflect the
receipt of proceeds of the Collateral, and (c) to the extent that such
calculation is not made in accordance with the terms of this Agreement.

 

“Business Day” means (a) any day that is
not a Saturday, Sunday, Nevada Day or a day on which banks in New York, New
York or Charlotte, North Carolina are required or permitted to be closed and (b) with
respect to all notices, determinations, fundings, and payments in connection
with the LIBOR Rate or LIBOR Rate Revolving Loans, any day that is a Business
Day pursuant to clause (a) preceding and that is also a day on
which trading in Dollars is carried on by and between banks in the London
interbank market.  “Nevada Day” means the
holiday celebrating the admission of Nevada into statehood, which occurs on or
about October 31st of each year.

 

“Capital Adequacy Regulation” means any
guideline, request, or directive of any central bank or other Governmental
Authority, or any other law, rule, or regulation, whether or not having the
force of law, in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.

 

“Capital Expenditures” means, with respect to
any Person, all payments made by such Person with respect to the cost of any
Inventory (other than spare parts Inventory and other than Inventory at all
times held for sale and not rental), Fixed Asset or improvement, or
replacement, substitution, or addition thereto, which has a useful life of more
than one year, including those costs arising in connection with the direct or
indirect acquisition of such asset or improvement by way of increased product
or service charges or in connection with a Capital Lease, excluding 

 

7

 

(a) expenditure of
insurance proceeds to rebuild or replace any asset or improvement after a
casualty loss and (b) leasehold improvement expenditures for which such
Person is reimbursed promptly by the lessor.

 

“Capital Lease” means any lease of property
by a Person which, in accordance with GAAP, should be reflected as a capital
lease on the balance sheet of such Person.

 

“Capital Stock” means any and all corporate
stock, units, shares, partnership interests, membership interests, equity
interests, rights, securities, or other equivalent evidences of ownership
(howsoever designated) issued by any Person.

 

“Change of Control” means the occurrence of
any of the following:  (a) except as
allowed by Section 8.9, the adoption of a plan relating to the
liquidation or dissolution of any Obligated Party; (b) (i) Don Ahern
shall cease to own, directly or indirectly, at least 51% of the outstanding
voting Capital Stock of Ahern, (ii) Don Ahern, any member of his immediate
family and any trust established for the benefit of Don Ahern and/or any member
of his immediate family shall cease to own, directly or indirectly, at least
75.0% of the outstanding voting Capital Stock of Ahern, (iii) Don Ahern
shall, by agreement or otherwise, cease to have the right to exercise voting
control of Ahern or (iv) Don Ahern shall die or shall become incapacitated
or disabled such that Don Ahern is unable to properly perform the duties for
Ahern that he performs for Ahern on the Original Closing Date; provided,
that if Don Ahern shall die or become so incapacitated or disabled, a Change of
Control under this clause (b) shall not occur as a result of
such death, incapacitation or disability if, within 90 days after the
occurrence of his death or such incapacity or disability and at all times
thereafter, Ahern shall have employed one or more Persons with requisite
experience that are reasonably satisfactory to the Agents to perform those
duties for Ahern that Don Ahern performed for Ahern on the Original Closing
Date; (c) except as allowed by Section 8.9, any Obligated Party (other than Ahern)
shall cease to be a Wholly-Owned Subsidiary of Ahern or (d) there shall
occur a “Change of Control” or a “Change in Control” as defined in any Second
Lien Debt Document, any Refinancing Second Lien Debt Document or any other
document governing material Debt of any Obligated Party.

 

“Chattel Paper” means “chattel paper”, as
such term is defined in the UCC, and any electronic chattel paper.

 

“Clearing Account” means each bank account
maintained with BofA or a Clearing Bank, subject to a Deposit Account Control
Agreement providing for the Collateral Agent’s dominion and control of such
bank account, to which the funds of an Obligated Party (including proceeds of
Accounts and other Collateral) are deposited or credited, and which is
maintained in the name of the Collateral Agent or such Obligated Party (as the
Agents may determine) on terms acceptable to the Agents.  For purposes of this Agreement, “Clearing
Account” includes any Clearing Accounts opened by any Obligated Party with BofA
and pledged in accordance with Article 10, and any renewals or
rollovers thereof, any successor or substitute deposit accounts, including any
such deposit account as it may have been renumbered or retitled, any proceeds
thereof (including any interest paid thereon), and any general intangibles and
choses in action arising therefrom or related thereto.  Whenever there is more than one Clearing
Account, the term “Clearing Account” shall refer to all such Clearing Accounts,
collectively.

 

8

 

“Clearing Bank” means any banking institution
reasonably acceptable to the Agents with whom a Clearing Account has been established.

 

“Closing Date” means the date of this
Agreement.

 

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

 

“Co-Lead Arrangers” means Banc of America
Securities LLC and Wachovia Capital Markets, LLC, solely in their respective
capacities as co-lead arrangers.

 

“Collateral” has the meaning specified in Section 10.1.

 

“Collateral Agent” means Wachovia, solely in
its capacity as collateral agent for the Lenders, and any successor collateral
agent.

 

“Collateral Documents” means this Agreement,
the Intercreditor Agreement, the Proprietary Rights Security Agreements, any
Mortgages, any Aircraft Mortgage,  any
Guaranty Agreements, and any other agreements, instruments, and documents
heretofore, now or hereafter executed and delivered in connection with this
Agreement, the Original Loan and Security Agreement or the First Amended and
Restated Loan and Security Agreement, pursuant to which liens and security
interests are granted to the Collateral Agent in the Collateral for the benefit
of the Credit Providers.

 

“Collateral Waiver Agreement” means any
agreement, in form and substance reasonably satisfactory to the Agents, between
the Collateral Agent (or the Collateral Agent and the Second Lien Agent) and
any landlord of any Obligated Party for any Real Estate where any Collateral is
located or any third party (including any bailee, consignee, customs broker,
processor, warehouseman, or other similar Person) in possession of any
Collateral, as such agreement may be amended, restated, or otherwise modified from
time to time.

 

“Commitment” means, at any time with respect
to a Lender, the sum of the Term Loan Commitment and Revolving Credit
Commitment of such Lender.

 

“Compliance Certificate” has the meaning
specified in Section 6.2(d).

 

“Contaminant” means any material defined as
waste, pollutant, hazardous substance, toxic substance, hazardous waste, or
special waste under any Environmental Law (including petroleum or
petroleum-derived substance or waste, asbestos in any form or condition, and
polychlorinated biphenyls), or any constituent of any such substance or waste.

 

“Continuation/Conversion Date” means the
effective date of (a) any continuation of LIBOR Rate Revolving Loans as
LIBOR Rate Revolving Loans and (b) any conversion of LIBOR Rate Revolving
Loans to Base Rate Revolving Loans or of Base Rate Revolving Loans to LIBOR
Rate Revolving Loans.

 

“Credit Facility” has the meaning specified
in Section 2.1.

 

9

 

“Credit Providers” means, collectively, the
Collateral Agent, the Administrative Agent (in its capacity as administrative
agent for the Lenders and, additionally, as provider of Agent Advances), the
Lenders, BofA, in its capacity as provider of Non-Ratable Loans, each of BofA,
Wachovia and each other Revolving Lender and their respective Affiliates as a
provider of Bank Products, the Letter of Credit Issuer, and the Indemnified
Persons, and “Credit Provider” means any of the foregoing, individually.

 

“Debt” means, without duplication, with
respect to any Person (the “subject Person”) all liabilities, obligations, and
indebtedness of the subject Person to any other Person, of any kind or nature,
now or hereafter owing, arising, due, or payable, howsoever evidenced, created,
incurred, acquired, or owing, whether primary, secondary, direct, contingent,
fixed, or otherwise, consisting of indebtedness for borrowed money or the
deferred purchase price of property, excluding trade payables and the
endorsement of checks and other similar instruments in the ordinary course of
business, but including, in any event and without in any way limiting the
generality of the foregoing:  (a) in
the case of the Obligated Parties, the Obligations; (b) all such
indebtedness, liabilities, and obligations of any Person secured by any Lien on
the subject Person’s property, even if the subject Person shall not have
assumed or become liable for the payment thereof; provided that all such
indebtedness, liabilities, and obligations which are limited in recourse to
such property shall be included in Debt only to the extent of the book value of
such property as would be shown on a balance sheet of the subject Person
prepared in accordance with GAAP; (c) all such indebtedness, liabilities,
and obligations created or arising under any Capital Lease or conditional sale
or other title retention agreement with respect to property used or acquired by
the subject Person, even if the rights and remedies of the lessor, seller, or
lender thereunder are limited to repossession of such property; provided
that all such indebtedness, liabilities, and obligations which are limited in
recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of the subject
Person prepared in accordance with GAAP; (d) all indebtedness,
liabilities, and obligations under Guaranties of Debt; (e) the present
value (discounted at the implicit interest rate in such transaction) of lease
payments due under synthetic leases; (f) net obligations in respect of
Hedge Agreements; (g) all indebtedness, liabilities and obligations of the
subject Person evidenced by notes, bonds, debentures or similar instruments; (h) all
preferred capital stock issued by the subject Person that is required to be
repurchased or redeemed by the subject Person or is repurchaseable or
redeemable at the option of the holder thereof; and (i) all indebtedness,
liabilities and obligations of the subject Person in respect of letters of
credit or instruments serving a similar function issued or accepted for the
account of the subject Person (whether or not representing obligations for
borrowed money).  Debt of any Person
shall include all obligations of such Person of the character described in clauses (a) through
(i) to the extent such Person remains legally liable in respect
thereof notwithstanding that any such obligation is deemed to be extinguished
under GAAP.  Debt of any Person shall
include the Debt of any partnership or Joint Venture in which such Person is a
general partner or a joint venturer, unless such Debt is, by its terms,
non-recourse to the assets of such Person other than as a result of customary
exclusions.

 

“Default” means any event or circumstance
which, with the giving of notice, the lapse of time, or both, would (if not
cured, Waived, or otherwise remedied during such time) constitute an Event of
Default.

 

10

 

“Default Rate” means a fluctuating per annum
interest rate at all times equal to the sum of (a) the otherwise applicable
Interest Rate, plus (b) 2.00% per annum.  The Default Rate shall be adjusted
simultaneously with any change in the applicable Interest Rate.

 

“Defaulting Lender” has the meaning specified
in Section 14.15(c).

 

“Deposit Account Control Agreement” means an
agreement, including a blocked account agreement, in form and substance
satisfactory to each Agent, among an Obligated Party, a banking institution
holding funds of such Obligated Party, the Collateral Agent (or the Collateral
Agent and the Second Lien Agent) and the Administrative Agent with respect to
collection and control of all deposits and balances held in a Deposit Account
maintained by such Obligated Party with such banking institution.

 

“Deposit Accounts” means “deposit accounts”,
as such term is defined in the UCC.

 

“Dilution” means, at the time of any relevant
determination, the average amount for the twelve (12) consecutive Fiscal Month
period most recently ended prior to such time of determination, by which the
amount of Eligible Accounts is reduced due to returns, discounts, claims,
credits, allowances, accrued rebates, offsets, deductions, counterclaims,
disputes and other defenses of any nature at any time issued, owing, granted,
outstanding, available or claimed.

 

“Disposition” or “Dispose” means the
sale, transfer, license, lease, or other disposition (including any sale and
leaseback transaction) of any property by any Person.

 

“Distribution” means, with respect to any
Person (other than a natural person) (a) the payment or making of any
dividend or other distribution of property by such Person in respect of its
Capital Stock (or any options or warrants for, or other rights with respect to,
such Capital Stock), other than distributions solely in such Person’s Capital
Stock (or any options or warrants for, or other rights with respect to, such
Capital Stock) of the same class or (b) the redemption, repurchase,
retirement, or other acquisition by such Person of any Capital Stock (or any
options or warrants for, or other rights with respect to, such Capital Stock)
of such Person.

 

“Documents” means “documents”, as such term
is defined in the UCC, and bills of lading, warehouse receipts, and other
documents of title.

 

“DOL” means the United States Department of
Labor or any successor department or agency.

 

“Dollar” and “$” mean dollars in the
lawful currency of the U.S.  Unless
otherwise specified, all payments under any Loan Document shall be made in
Dollars.

 

“Dollar Utilization” means, with respect to
any Fiscal Quarter of Ahern, an annualized ratio, the numerator of which is the
sum of revenues from all equipment rentals and related revenues of the
Obligated Parties, as reported by Ahern on its statement of income and retained
earnings for such Fiscal Quarter, multiplied by four (4), and the denominator
of which is the average original cost of the fleet of rental equipment owned by
the Obligated Parties during such Fiscal Quarter.

 

11

 

“Early Term Loan Prepayment Fee” has the
meaning specified in Section 4.2.

 

“EBITDA” means, with respect to any fiscal
period of Ahern, Adjusted Net Earnings from Operations, plus, to the extent deducted in
the determination of Adjusted Net Earnings from Operations for such fiscal
period, (a) Interest Expense, (b) federal, state, local, and foreign
income taxes, and (c) depreciation and amortization, in each case for
Ahern and its Subsidiaries on a consolidated basis.

 

“Eligible Accounts” means the Accounts of the Borrowers that
both of the Agents in the exercise of their reasonable credit judgment
determine to be Eligible Accounts. 
Without limiting the discretion of the Agents to establish other
criteria of ineligibility, Eligible Accounts shall not include any Account (except
as may be otherwise specified below):

 

(a)           that does not arise
from the sale or lease of Goods or rendition of services in the ordinary course
of business of a Borrower;

 

(b)           that is not subject
to the Agent’s Liens which are perfected as to such Account, or that is subject
to any other Lien (other than the Lien permitted under clause (i) of
the defined term Permitted Liens);

 

(c)           with respect to
which either (i) any payment, or part thereof, remains unpaid for more
than 90 days from the
original due date therefor, or (ii) more than 120 days have elapsed from the date of the original invoice
therefor, or no invoice has been issued;

 

(d)           with respect to
which any of the representations, warranties, covenants, and agreements
contained in this Agreement are incorrect or have been breached;

 

(e)           with respect to
which (or any other Account due from the applicable Account Debtor), in whole
or in part, a check, promissory note, draft, trade acceptance, or other
instrument for the payment of money has been received, presented for payment,
and returned uncollected for any reason;

 

(f)            that is the subject
of any debit memo or charge-back, but only to the extent of such debit memo or
charge-back;

 

(g)           that represents a
progress billing (for the purposes hereof, “progress billing” means any invoice
for goods sold or leased or services rendered under a contract or agreement
pursuant to which the Account Debtor’s obligation to pay such invoice is
conditioned upon such Borrower’s completion of any further performance under
such contract or agreement, other than, in the case of a lease of Inventory in
the ordinary course of business, the performance of any covenant of quiet
enjoyment);

 

(h)           with respect to
which any one or more of the following events has occurred to the Account
Debtor on such Account:  (i) death
or judicial declaration of incompetency of such Account Debtor who is a natural
person; (ii) the filing by or against such Account Debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief 

 

12

 

under
the Bankruptcy Code or any other Requirement of Law, now or hereafter in
effect; (iii) the making of any general assignment by such Account Debtor
for the benefit of creditors; (iv) the appointment of a receiver or
trustee for such Account Debtor or for any of the assets of such Account
Debtor, including the appointment of or taking possession by a “custodian,” as
defined in the Bankruptcy Code; (v) the institution by or against such
Account Debtor of any other type of insolvency proceeding (under the Bankruptcy
Code or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, such Account Debtor; (vi) the sale, assignment, or transfer of
all or any material part of the assets of such Account Debtor; (vii) the
nonpayment generally by such Account Debtor of its debts as they become due; or
(viii) the cessation of the business of such Account Debtor as a going
concern;

 

(i)            with respect to
which 50% or more of the
aggregate Dollar amount of outstanding Accounts owed at such time to the
Borrowers by the Account Debtor thereon is classified as ineligible pursuant to
the other provisions of this definition;

 

(j)            owed by an Account
Debtor that:  (i) does not maintain
its chief executive office in the U.S.; (ii) is not organized under the
laws of the U.S. or any political subdivision, state or territory thereof; or (iii) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof,
except to the extent that such Account is secured or payable by a letter of
credit the terms of which are satisfactory to the Agents in their reasonable
credit judgment and which is in the possession of the Collateral Agent and
which, together with all related Letter-of-Credit Rights, is subject to a first
priority Lien in favor of the Collateral Agent, for the benefit of the Credit
Providers;

 

(k)           owed by an Account
Debtor that is an Affiliate, officer, director, or employee of any Borrower or
any Affiliate of any Borrower;

 

(l)            except as provided
in clause (n) following, with respect to which either the
perfection or validity of the Agent’s Liens in such Account, or the Collateral
Agent’s right or ability to obtain direct payment to the Collateral Agent of
the proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC;

 

(m)          owed by an Account
Debtor to which an Obligated Party or any of its Affiliates, is indebted in any
way (including accrued liabilities), or which is subject to any right of setoff
or recoupment by the Account Debtor, unless the Account Debtor has entered into
an agreement acceptable to the Agents to waive setoff rights, or if the Account
Debtor thereon has disputed liability or made any claim with respect to any
other Account due from such Account Debtor, but in each such case only to the
extent of such indebtedness, setoff, recoupment, dispute, or claim;

 

(n)           owed by (i) the
government of the U.S., or any department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of Claims 

 

13

 

Act
of 1940, as amended (31 U.S.C. § 3727 et seq.), and any other steps
necessary to perfect the Agent’s Liens therein, have been complied with to the
Agents’ reasonable satisfaction with respect to such Account or (ii) any
state, municipality, or other political subdivision of the U.S., or any
department, agency, public corporation, or other instrumentality thereof and as
to which either of the Agents determines that the Agent’s Lien therein is not
or cannot be perfected;

 

(o)           that represents a
sale on a (i) cash or C.O.D. basis or (ii) bill-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other repurchase or
return basis;

 

(p)           [Intentionally
Omitted];

 

(q)           that is evidenced by
a promissory note or other instrument or by Chattel Paper;

 

(r)            with respect to
which either Agent believes, in the exercise of its reasonable credit judgment,
that the prospect of collection of such Account is impaired or that such
Account may not be paid by reason of the Account Debtor’s financial inability
to pay;

 

(s)           except as may be
permitted by the Agents in their reasonable credit judgment, with respect to
which the Account Debtor is located in any state requiring the filing of a
Notice of Business Activities Report or similar report in order to permit the
applicable Borrower to seek judicial enforcement in such state of payment of
such Account, unless such applicable Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year;

 

(t)            to the extent
constituting finance or similar charges or sales or use tax;

 

(u)           with respect to
which the goods giving rise to such Account have not been shipped and delivered
to and accepted by, or have been rejected or objected to by, the Account Debtor
or to the extent the services giving rise to such Account have not been
performed by the applicable Borrower, and, if applicable, accepted by the
Account Debtor, or the Account Debtor revokes its acceptance of such goods or
services;

 

(v)           owed by an Account
Debtor, or group of affiliated Account Debtors, which is obligated to the
Borrowers respecting Accounts the aggregate unpaid balance of which exceeds 10%
of the aggregate unpaid balance of all Eligible Accounts owed to the Borrowers
at such time by all of the Borrowers’ Account Debtors, but only to the extent
of such excess;

 

(w)          that is the subject
of any unreconciled variance between the aging of Accounts delivered to either
Agent, the general ledger of the applicable Borrower, and the applicable
Borrowing Base Certificate; or

 

14

 

(x)            that either of the
Agents determines in its reasonable credit judgment is ineligible for any other
reason.

 

“Eligible Assignee” means (i) with
respect to an assignment of all or a portion of a Revolving Lender’s Revolving
Loans and/or Revolving Credit Commitment, (a) a commercial bank,
commercial finance company, or other asset based lender having total assets in
excess of One Billion Dollars ($1,000,000,000), (b) any Revolving Lender, (c) any
Affiliate of any Revolving Lender, and (d) if an Event of Default has
occurred and is continuing, any Person reasonably acceptable to the Agents and (ii) with
respect only to an assignment of all or a portion of a Term Lender’s Term
Loans, (a) any Lender, (b) any Affiliate of any Lender, (c) with
respect to any Term Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Term
Lender or by an Affiliate of such investment advisor, and (d) any
commercial bank, savings and loan association or savings bank or any other
entity which is an “accredited investor” (as defined in Regulation D under the
Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, investment funds,
lease financing companies and commercial finance companies.

 

“Eligible Inventory” means Inventory of the Borrowers which both
of the Agents, in their reasonable credit judgment, determine to be Eligible
Inventory.  Without limiting the
discretion of the Agents to establish other criteria of ineligibility, Eligible
Inventory shall not include any Inventory (except as may be otherwise specified
below):

 

(a)           that is not owned by
a Borrower, including goods held by a Borrower on consignment;

 

(b)           that is not subject
to the Agent’s Liens, which are perfected as to such Inventory, or that is
subject to any Lien (other than the Liens described in clauses (a),
(c), (e) and (i) of the definition of Permitted
Liens; provided that such Permitted Liens (i) are junior in
priority to the Agent’s Liens or subject to Reserves and (ii) do not
impair directly or indirectly the ability of the Collateral Agent to realize on
or obtain the full benefit of the Collateral);

 

(c)           that is not finished
goods or raw materials;

 

(d)           that consists of
work-in-process, chemicals, samples, prototypes, supplies, or packing and
shipping materials;

 

(e)           that is not in good
condition, is unmerchantable or not rentable in the ordinary course of business
of a Borrower, or does not meet all standards imposed by any Governmental
Authority having regulatory authority over such goods or their use or sale;

 

(f)            that is obsolete or
defective;

 

(g)           consisting of
airplanes, helicopters or other aircraft or spare parts therefor;

 

(h)           that is located
outside the U.S. or that is in transit from vendors or suppliers or to buyers; provided
that the Agents may in their discretion include as Eligible 

 

15

 

Inventory
any Inventory which is in transit within the U.S. or Canada to a Borrower’s
place of business and any Inventory held for lease which is in transit to
lessees shall not be excluded by this clause (h), provided
that upon the request of either Agent the Borrowers shall deliver to the Agents
a listing of all such Inventory and its location;

 

(i)            that is consigned
to third parties or is subject to any bill-and-hold, guaranteed sale, sale on
approval, or other repurchase or return basis;

 

(j)            that is located
in a public warehouse or in possession of a bailee or in a facility leased by a
Borrower, if the applicable warehouseman, bailee, or lessor has not delivered
to the Agents a Collateral Waiver Agreement or if, in lieu of such Collateral
Waiver Agreement, a Reserve for rents or storage charges (in an amount for any
location not to exceed at any time three (3) months’ rent or storage
charges plus any then unpaid rent or storage charges owing with respect to such
location) has not been established to the extent the Agents deem appropriate in
their reasonable credit judgment for Inventory at that location;

 

(k)           that contains or
bears any Proprietary Rights licensed to a Borrower by any Person, if either of
the Agents is not satisfied that the Collateral Agent may sell or otherwise
dispose of such Inventory in accordance with the terms of this Agreement
(including Section 11.2) without infringing the rights of the
licensor of such Proprietary Rights or violating any contract with such
licensor (and without payment of any royalties other than any royalties due
with respect to the sale or disposition of such Inventory pursuant to the
existing license agreement), and, if either of the Agents deems it necessary,
as to which such Borrower has not delivered to the Agents a consent or
sublicense agreement from such licensor in form and substance acceptable to the
Agents;

 

(l)            that is not
reflected in the details of a current perpetual inventory report;

 

(m)          that is leased to any
Person which is not in compliance with the terms of the lease agreement
relating to such lease and as to which there is any restriction or impediment
(legal or otherwise), as determined by either of the Agents in its reasonable
credit judgment, on the ability of the Collateral Agent to obtain access
thereto in order to repossess same; or

 

(n)           that either of the
Agents determines in its reasonable credit judgment is ineligible for any other
reason.

 

“Eligible Rental and Sale Equipment” means
Eligible Inventory consisting of Inventory (other than spare parts and
merchandise Inventory) held for sale or lease in the ordinary course of a
Borrower’s business, which is marked with an identifiable serial number.

 

“Eligible Spare Parts Inventory” means
Eligible Inventory consisting of unused spare parts and merchandise inventory
located on premises owned or leased by a Borrower, which spare parts and
merchandise inventory are held for sale by a Borrower in the ordinary course of
its business or for the repair or maintenance of Inventory of a Borrower that
is held for sale or lease by such Borrower in the ordinary course of its
business.

 

16

 

“Eligible Transportation Equipment” means Transportation
Equipment of the Borrowers marked with an identifiable serial number which both
of the Agents, in their reasonable credit judgment, determine to be Eligible
Transportation Equipment.  Without
limiting the discretion of the Agents to establish other criteria of
ineligibility, Eligible Transportation Equipment shall not include any
Transportation Equipment (except as may be otherwise specified below):

 

(a)           that is not owned by
a Borrower, including goods held by a Borrower on consignment;

 

(b)           that is not subject
to the Agent’s Liens, which are perfected as to such Transportation Equipment,
or that is subject to any Lien (other than the Liens described in clauses (a),
(c), (e) and (i) of the definition of Permitted
Liens; provided that such Permitted Liens (i) are junior in
priority to the Agent’s Liens or subject to Reserves and (ii) do not
impair directly or indirectly the ability of the Collateral Agent to realize on
or obtain the full benefit of the Collateral);

 

(c)           that is not in good
condition or does not meet all standards imposed by any Governmental Authority
having regulatory authority over such goods or their use or sale;

 

(d)           that is obsolete or
defective;

 

(e)           consisting of
airplanes, helicopters or other aircraft or spare parts therefore;

 

(f)            that is located
outside the U.S.; provided that the Agents may in their discretion
include as Eligible Transportation Equipment any Transportation Equipment which
is in transit within Canada moving Inventory to or from a customer of a
Borrower in the ordinary course of such Borrower’s business;

 

(g)           that is consigned to
third parties or is subject to any bill-and-hold, guaranteed sale, sale on
approval, or other repurchase or return basis;

 

(h)           that is located in a
public warehouse or in possession of a bailee or in a facility leased by a
Borrower, if the applicable warehouseman, bailee, or lessor has not delivered
to the Agents a Collateral Waiver Agreement or if, in lieu of such Collateral
Waiver Agreement, a Reserve for rents or storage charges (in an amount for any
location not to exceed at any time three (3) months’ rent or storage
charges plus any then unpaid rent or storage charges owing with respect to such
location) has not been established to the extent the Agents deem appropriate in
their reasonable credit judgment for Transportation Equipment at that location;

 

(i)            that contains or
bears any Proprietary Rights licensed to a Borrower by any Person, if either of
the Agents is not satisfied that the Collateral Agent may sell or otherwise
dispose of such Transportation Equipment in accordance with the terms of this
Agreement (including Section 11.2) without infringing the rights of
the licensor of such Proprietary Rights or violating any contract with such
licensor (and without payment of any royalties), and, if either of the Agents
deems it necessary, as to which such Borrower 

 

17

 

has
not delivered to the Agents a consent or sublicense agreement from such
licensor in form and substance acceptable to the Agents; or

 

(j)            that either of the
Agents determines in its reasonable credit judgment is ineligible for any other
reason.

 

“Engagement Letter” means the engagement
letter agreement, dated December 14, 2009, among Ahern, BofA and Banc of
America Securities LLC.

 

“Environmental Claim” means any claim,
however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law,
or for a Release or injury to the environment.

 

“Environmental Compliance Reserve” means any
reserve that either of the Agents establishes from time to time in its
reasonable credit judgment after prior written notice to the Borrowers for
amounts that are reasonably likely to be expended by an Obligated Party in
order for such Obligated Party and its operations and property (a) to
comply with any notice from a Governmental Authority asserting non-compliance
with any Environmental Law or (b) to correct any non-compliance identified
in a report delivered to the Agents pursuant to Section 8.7.

 

“Environmental Law” means any Requirement of
Law relating to environmental, health, safety, and land use matters.

 

“Environmental Lien” means a Lien in favor of
any Governmental Authority or any other Person for (a) any liability under
any Environmental Law or (b) damages arising from, or costs incurred by
such Governmental Authority or other Person in response to, a Release or
threatened Release of a Contaminant into the environment.

 

“Equipment” means “equipment”, as such term
is defined in the UCC, and all machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory), including
embedded software, motor vehicles with respect to which a certificate of title
has been issued, aircraft, dies, tools, jigs, molds, and office equipment, as
well as all of such types of property leased by the applicable Person and all
of such Person’s rights and interests with respect thereto under such leases
(including options to purchase), together with all present and future additions
and accessions thereto, replacements therefor, component and auxiliary parts
and supplies used or to be used in connection therewith, and all substitutes
for any of the foregoing, and all manuals, drawings, instructions, warranties
and rights with respect thereto.

 

“Equipment Appraisal” means, with respect to
a Borrower, the most recently delivered appraisal of the Transportation
Equipment of such Borrower delivered to the Agents pursuant to Section 10.4.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974.

 

“ERISA Affiliate” means any trade or business
(whether or not incorporated) under common control with an Obligated Party
within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).  Any former ERISA Affiliate of a Person or any
of its Subsidiaries shall continue to 

 

18

 

be considered an ERISA
Affiliate of such Person or such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of
such Person or such Subsidiary and with respect to liabilities arising after
such period for which such Person or such Subsidiary could be liable under the
Code or ERISA.

 

“ERISA Event” means (a) a Reportable
Event with respect to a Pension Plan, (b) a withdrawal by an Obligated
Party or any ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA, (c) a
complete or partial withdrawal by an Obligated Party or any ERISA Affiliate
from a Multiemployer Plan, (d) the filing of a notice of intent to
terminate, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or the termination, insolvency, or reorganization of a
Multiemployer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan, or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, upon an Obligated Party or any ERISA Affiliate.

 

“Event of Default” has the meaning specified
in Section 11.1.

 

“Exchange Act” means the Securities Exchange
Act of 1934.

 

“Exchanged Term Loan Amount” has the meaning
specified in Section 2.3(a).

 

“Excluded Asset” means any lease (including
any fixtures or improvements on the property subject to the lease), license,
contract or agreement to which Ahern or any Guarantor is a party or any of its
rights or interests thereunder (including any rights or interests in tangible
property in which Ahern or any Guarantor grants a Lien pursuant to any such
agreement), in each instance, if and only for so long as the grant of a
security interest under this Agreement therein shall constitute or result in a
breach, termination or default under any such lease, license, contract or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to the Uniform Commercial Code of any relevant
jurisdiction (including, without limitation, under Sections 9-406, 9-407,
9-408 or 9-409 thereof) or any other applicable law or principles of equity); provided
that notwithstanding the foregoing (i) no lease, license, contract or
agreement or any right or interest thereunder, in each instance, existing on
the Closing Date shall constitute an Excluded Asset unless described on Schedule 1.1(E),
(ii) no Account or money or other amounts due or to become due to Ahern or
any Guarantor under or with respect to any such lease, license, contract or agreement
or right or interest thereunder (other than amounts constituting proceeds from
the sale of Inventory (other than Eligible Inventory) or Equipment (other than
Eligible Transportation Equipment), in each instance, subject to purchase money
financing permitted hereunder) shall constitute an Excluded Asset, (iii) no
item of tangible property owned by Ahern or any Guarantor shall constitute an
Excluded Asset unless such item is subject to purchase money Debt or other
financing permitted under this Agreement or is an aircraft (other than the
helicopter subject to the Aircraft Mortgage), (iv) any interest of Ahern
or any Guarantor, as lessee, in a lease of real property shall constitute an
Excluded Asset and (v) such lease, license, contract or agreement or right
or interest thereunder shall be an 

 

19

 

Excluded Asset only to the
extent and for so long as the consequences specified above shall result and
shall cease to be an Excluded Asset and shall become subject to the security
interest granted under this Agreement, immediately and automatically, at such
time as such consequences shall no longer result (including, without limitation
and in any event, in the case of any item of tangible property which is the subject
of purchase money Debt or other financing permitted hereunder when such
financing has been paid in full).

 

“FDIC” means the Federal Deposit Insurance
Corporation, and any Governmental Authority succeeding to any of its principal
functions.

 

“Federal Funds Rate” means, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest 1/8th of 1.00%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if
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 BofA on such day on such
transactions as determined by BofA.

 

“Federal Reserve Board” means the Board of
Governors of the Federal Reserve System or any successor thereto.

 

“Fee Letters” means (i) that certain fee
and payment agreement, dated August 18, 2005, entered into among the
Administrative Agent, the Collateral Agent and the Borrowers and (ii) that
certain fee and payment agreement, dated the Closing Date, entered into between
the Administrative Agent and the Borrowers, 
in each case, as amended, supplemented or otherwise modified from time
to time.

 

“Financial Statements” means, according to
the context in which used, the financial statements referred to in Section 6.2
and Section 7.6 or any other financial statements required to be
given to either of the Agents pursuant to this Agreement.

 

“First Amended and Restated Loan and Security
Agreement” has the meaning specified in the recitals of this Agreement.

 

“Fiscal Month”
means  a calendar month.  There are twelve Fiscal Months in each Fiscal
Year.

 

“Fiscal Quarter”
means a period of three calendar months (with respect to Ahern beginning on
the first day of each January, April, July, and October)  constituting
a Person’s fiscal quarter for financial accounting purposes, with the first of
such measurement periods beginning on the first day of each Fiscal Year and the
last of such measurement periods ending on the last day of such Fiscal Year.

 

“Fiscal Year” means, with respect to any
Person, such Person’s fiscal year for
financial accounting purposes. 
The current Fiscal Year of Ahern will end on December 31, 2010, and each Fiscal Year of Ahern is the
relevant calendar year.

 

20

 

“Fixed Assets” means, with respect to any
Person, the Equipment and Real Estate of such Person.

 

“Fixed Charge Coverage Ratio” means, as of
the end of any Fiscal Quarter of Ahern,
determined for Ahern and its Subsidiaries on a consolidated basis for the
preceding four Fiscal Quarters, the ratio of EBITDA, divided by Fixed
Charges.

 

“Fixed Charge Rental
Fleet CapEx Percentage” means, at any time, that percentage which is (x) 100%
minus (y) 85% of the Net Orderly Liquidation Percentage at such
time with respect to rental fleet Inventory.

 

“Fixed Charge Rental
Fleet Depreciation Percentage” means, at any time, that percentage which is
(x) 100% minus (y) the Fixed Charge Rental Fleet CapEx
Percentage at such time.

 

“Fixed Charges” means, with respect to any fiscal period,
determined for Ahern and its Subsidiaries on a consolidated basis, without
duplication, the sum of:

 

(a)           cash Interest Expense,

 

(b)           an amount equal to
the product of (x) the Fixed Charge Rental Fleet CapEx Percentage in
effect on the last day of such fiscal period times (y) the aggregate
amount of Capital Expenditures made or incurred during such fiscal period with
respect to Inventory which was in the rental fleet of Ahern or any of its
Subsidiaries at any time on or prior to the last day of such fiscal period (excluding,
in the case of the Obligated Parties, any such Capital Expenditures to the
extent funded with proceeds from the sale of Inventory in the rental fleet of
any Obligated Party permitted hereunder),

 

(c)           an amount equal to
the product of (x) the Fixed Charge Transportation CapEx Percentage in
effect on the last day of such fiscal period times (y) the aggregate
amount of Capital Expenditures made or incurred during such fiscal period with
respect to Transportation Equipment (excluding, in the case of the
Obligated Parties, any such Capital Expenditures to the extent (1) funded
with Debt other than Revolving Loans, but including, without duplication,
principal payments with respect to any such Debt or (2) funded with
proceeds from the sale of Transportation Equipment of any Obligated Party
permitted hereunder),

 

(d)           an amount equal to
the product of (x) the Fixed Charge Rental Fleet Depreciation Percentage
in effect on the last day of such fiscal period times (y) depreciation
expense taken in such fiscal period with respect to any Inventory which was in
the rental fleet of Ahern or any of its Subsidiaries at any time on or prior to
the last day of such fiscal period,

 

(e)           an amount equal to
the product of (x) the Fixed Charge Transportation Depreciation Percentage
in effect on the last day of such fiscal period times (y) depreciation
expense taken in such fiscal period with respect to Transportation Equipment
owned by Ahern or any of its Subsidiaries at any time on or prior to the last
day of such fiscal period,

 

21

 

(f)            cash Distributions
in respect of any Capital Stock,

 

(g)           scheduled principal
payments of Debt, plus

 

(h)           federal, state,
local, and foreign cash income taxes (not less than zero), excluding deferred
taxes.

 

“Fixed Charge
Transportation CapEx Percentage” means, at any time, that percentage which
is (x) 100% minus (y) 85% of the Net Orderly Liquidation
Percentage at such time with respect to Transportation Equipment.

 

“Fixed Charge Transportation Depreciation
Percentage” means, at any time, that percentage which is (x) 100% minus
(y) the Fixed Charge Transportation CapEx Percentage at such time.

 

“Funding Account” has the meaning specified
in Section 2.2(d).

 

“Funding Date” means the date on which a
Borrowing occurs.

 

“GAAP” means, subject to the limitations on
the application thereof set forth in Section 1.2, generally
accepted accounting principles and practices set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession) that are applicable to the circumstances as of the date of
determination.

 

“GE Intercreditor Agreement” means the
intercreditor agreement entered into by the Collateral Agent and General
Electric Capital Corporation relating to that certain Master Lease Agreement
between Ahern and General Electric Capital Corporation dated as of February 14,
2003, both of which agreements have been terminated prior to the date hereof.

 

“General Intangibles” means, with respect to
any Person, “general intangibles”, as such term is defined in the UCC, and all
other choses in action and causes of action, intangible personal property of
every kind and nature (other than Accounts), including all contract rights,
payment intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds that may become due to such Person in
connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to such Person from any Plan
or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which such Person is beneficiary, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
equity interests or Investment Property and any letter of credit, guarantee,
claim, security interest or other security held by or granted to such Person.

 

22

 

“Goods” means “goods” as such term is defined
in the UCC.

 

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing, and any department, agency, board, commission, tribunal,
committee, or instrumentality of any of the foregoing.

 

“Guarantor” means each of (a) the
Borrowers and (b) each other Person who becomes a party to any Guaranty
Agreement pursuant to the terms of this Agreement, and “Guarantors”
means two or more of the foregoing Persons, collectively.

 

“Guaranty” means, with respect to any Person,
all obligations of such Person that in any manner directly or indirectly
guarantee or assure, or in effect guarantee or assure, the payment or
performance of any indebtedness, dividend, or other obligations of any other
Person (the “guaranteed obligations”), or assure or in effect assure the holder
of the guaranteed obligations against loss in respect thereof, excluding the
endorsement of checks and other similar instruments in the ordinary course of
business, but including any such obligations incurred through an agreement,
contingent or otherwise:  (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of
the guaranteed obligations or to maintain a working capital or other balance
sheet condition; or (c) to lease property or to purchase any debt or
equity securities or other property or services.  In any computation of the indebtedness or
other liabilities of the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.

 

“Guaranty Agreement” means each guaranty
agreement in favor of the Collateral Agent to which any Person becomes a party
pursuant to the terms of this Agreement, and “Guaranty Agreements” means
all of such agreements, collectively.

 

“Hedge Agreement” means any and all
transactions, agreements, or documents now existing or hereafter entered into,
which provide for an interest rate, credit, commodity, or equity swap, cap,
floor, collar, forward foreign exchange transaction, currency swap, cross currency
rate swap, currency option, or any combination of, or option with respect to,
these or similar transactions, for the purpose of hedging a Person’s exposure
to fluctuations in interest or exchange rates, loan, credit exchange, security,
or currency valuations, or commodity prices.

 

“Incremental Commitment Agreements” means the
incremental commitment agreements contemplated under the First Amended and
Restated Loan and Security Agreement, which were entered into by the Obligated
Parties and certain of the Revolving Lenders (each, an “Incremental Lender”)
pursuant to which each such Incremental Lender committed (such commitment, an “Incremental
Commitment”) to increase its Commitment or provide a new Commitment, in
each instance, to make Revolving Loans (the aggregate amount of which increased
or new Commitments are included in the aggregate Revolving Credit Commitments
on the Closing Date).

 

23

 

“Indemnified Liabilities” has the meaning
specified in Section 15.11(a).

 

“Indemnified Person” has the meaning
specified in Section 15.11(a).

 

“Instruments” means “instruments”, as such
term is defined in the UCC.

 

“Intercompany Accounts” means all assets and
liabilities, however arising, which are due to Ahern or a Subsidiary of Ahern
from, which are due from Ahern or a Subsidiary of Ahern to, or which otherwise
arise from any transaction by Ahern or a Subsidiary of Ahern with, any
Affiliate of Ahern or a Subsidiary of Ahern.

 

“Intercreditor Agreement” means the Intercreditor
Agreement, dated as of August 18, 2005, by and among the Obligated
Parties, the Collateral Agent, the Second Lien Agent and Wachovia, as control
agent, as amended, restated, supplemented or otherwise modified from time to
time.

 

“Interest Expense” means with respect to
Ahern and its Subsidiaries for any fiscal period, the aggregate amount of
interest required to be paid or accrued on all Debt of Ahern and its
Subsidiaries during such period, whether such interest was or is required to be
reflected as an item of expense or capitalized, including payments consisting
of interest in respect of Capital Leases or synthetic leases, and including
unused commitment fees, facility fees, and similar fees and expenses in
connection with the borrowing of money (including all fees and expenses
incurred in connection with Hedge Agreements entered into with respect to any
Debt).

 

“Interest Payment Date” means (a) the
first day of each calendar month, (b) additionally, in the case of
interest on any Obligations (other than Term Loan Obligations), the Revolving
Termination Date and (c) additionally, in the case of interest on any Term
Loan Obligations, the Term Loan Termination Date.

 

“Interest Period” means, with respect to any LIBOR Rate
Revolving Loan, the period commencing on the Funding Date of such Loan or on
the Continuation/Conversion Date on which such Loan is continued as or
converted into a LIBOR Rate Revolving Loan, and ending on the date one, two, or
three months thereafter as selected by a Borrower in a Notice of Borrowing or
Notice of Continuation/Conversion, provided that:

 

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

 

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

 

(c)           no Interest Period
shall extend beyond the Stated Revolving Termination Date.

 

24

 

“Interest Rate” means each or any of the
interest rates, including the Default Rate, set forth in Section 3.1.

 

“Inventory” means “inventory”, as such term
is defined in the UCC, and inventory, goods, and merchandise to be furnished
under any contract of service or held for sale or lease, returned goods, raw
materials, work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature, or description which are used or
consumed in a Person’s business or used in connection with the packing,
shipping, advertising, selling, or finishing of such goods, merchandise, and
all documents of title or other Documents representing them.

 

“Inventory Appraisal” means with respect to a
Borrower (a) on the Closing Date and until the first appraisal of the
relevant class of Inventory of such Borrower is delivered to the Agents
pursuant to Section 10.4, (i) the appraisal of Inventory of
such Borrower consisting of spare parts and merchandise inventory or (ii) the
appraisal of Inventory of such Borrower (other than Inventory consisting of
spare parts and merchandise inventory), or both such appraisals, as the context
may require, in each case prepared by Rouse Asset Services and dated September 30,
2009 and (b) thereafter, each appraisal of the relevant class of Inventory
of such Borrower delivered to the Agents pursuant to Section 10.4.

 

“Investment” means any acquisition by an
Obligated Party of property in exchange for cash or other property, whether in
the form of an acquisition of Capital Stock, Debt, or other indebtedness or
obligation, or the purchase or acquisition of any other assets or property, or
a loan, advance, capital contribution, or subscription, excluding acquisitions
in the ordinary course of business of such Obligated Party of Real Estate,
Equipment, and Inventory to be used in the business of such Obligated
Party.  The amount of any Investment
shall be the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment (other
than adjustments for the repayment of, or the refund of capital with respect
to, the original principal amount of any such Investment).

 

“Investment Property” means “investment
property”, as such term is defined in the UCC, and any (a) securities,
whether certificated or uncertificated, (b) securities entitlements, (c) securities
accounts, (d) commodity contracts, and (e) commodity accounts.

 

“IRS” means the Internal Revenue Service and
any Governmental Authority succeeding to any of its principal functions under
the Code.

 

“Joint Venture” means a joint venture,
partnership or other similar arrangement, whether in corporate, partnership or
other legal form.

 

“Latest Projections” means:  (a) on the Closing Date and thereafter
until the  Agents receive new projections
pursuant to Section 6.2(e), the monthly projections of the
Obligated Parties’ financial condition, results of operations, cash flow,
Borrowing Base, and Unused Availability, in each case for the period commencing
on January 1, 2010 and
ending on December 31, 2013 (for
the period commencing on January 1, 2009 and ending on December 31,
2012 for purposes of Section 6.2(b)(ii) with respect to any
Financial Statements for any Fiscal 

 

25

 

Month
included in the 2009 Fiscal Year of Ahern) and the annual financial
projections for Fiscal Years 2010-2013 (for Fiscal Years 2009-2012 for purposes
of Section 6.2(d) with respect to the Financial Statements for
the 2009 Fiscal Year of Ahern), each as delivered to the Agents prior to the
Closing Date; and (b) thereafter, the projections most recently received
by the Agents pursuant to Section 6.2(e).

 

“Leasehold Property” means any leasehold
interest of any Obligated Party as lessee under any lease of real property.

 

“Lender” means any of the lending
institutions signatory to this Agreement as specified on the signature pages hereto
or in any Assignment and Acceptance as a “Lender”, any Non-Executing Revolving
Lender, the Administrative Agent to the extent of any Agent Advance
outstanding, and BofA to the extent of any Non-Ratable Loan outstanding, and “Lenders”
means any two or more of such Persons, collectively; provided, however,
that until the Revolving Facility Payment In Full (x) for purposes of the
second sentence of Section 2.2(a), Section 4.6(b) and
Section 13.1, each reference therein to a “Lender” or the “Lenders”
shall be deemed to be solely a reference to a “Revolving Lender” or the “Revolving
Lenders”, respectively, and (y) for purposes of the definition of “Majority
Lenders” when used in Section 13.1 or in connection with such Section or
when used in the Intercreditor Agreement, each reference in such definition to
a “Lender” or “Lenders” shall be deemed to be solely a reference to a “Revolving
Lender” or “Revolving Lenders”, respectively, and consequently Pro Rata Share
shall be determined for such purposes solely in the context of the revolving
credit facility provided under this Agreement.

 

“Letter of Credit” has the meaning specified
in Section 2.4(a).

 

“Letter of Credit Fee” has the meaning
specified in Section 3.5.

 

“Letter of Credit Fee Percentage” means with
respect to any Letter of Credit, on any date of determination, a per annum
percentage equal to the Applicable
Margin for LIBOR Rate Revolving Loans as of such date of determination, plus, during the existence of any
Event of Default, an additional 2.00% per annum.

 

“Letter of Credit Issuer” means BofA or
Wachovia or any Affiliate of BofA or Wachovia.

 

“Letter-of-Credit Rights” means “letter-of-credit
rights”, as such term is defined in the UCC, and any rights to payment or
performance under a letter of credit, whether or not the beneficiary has demanded
or is entitled to demand payment or performance.

 

“Letter of Credit Subfacility” means $10,000,000.

 

“LIBOR Rate” means, for any Interest Period,
with respect to LIBOR Rate Revolving Loans, the per annum rate of interest
(rounded up, if necessary, to the nearest 1/8th of 1%), determined by the
Administrative Agent at approximately 11:00 a.m. (London time) two
Business Days prior to commencement of such Interest Period, for a term
comparable to such Interest Period, equal to (a) the British Bankers Association
LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially
available source designated by the Administrative 

 

26

 

Agent); or (b) if BBA
LIBOR is not available for any reason, the interest rate at which Dollar
deposits in the approximate amount of the LIBOR Rate Revolving Loan would be
offered by BofA’s London branch to major banks in the London interbank
Eurodollar market.  If the Federal
Reserve Board imposes a Reserve Percentage with respect to LIBOR deposits, then
LIBOR Rate shall be the foregoing rate, divided by 1 minus the Reserve
Percentage.

 

“LIBOR Rate Revolving Loan” means any portion
of the Revolving Loans during any period in which such portion bears interest
based on the LIBOR Rate.

 

“Lien” means (a) any interest in
property securing an obligation owed to, or a claim by, a Person other than the
owner of the property, whether such interest is based on the common law,
statute, or contract, and including a security interest, charge, claim, or lien
arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, agreement, security agreement, conditional
sale or trust receipt or a lease, consignment, or bailment for security
purposes, (b) to the extent not included under clause (a) preceding,
any reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease, or other title exception or encumbrance
affecting property, and (c) any contingent or other agreement to provide
any of the foregoing.

 

“Loan Account” means the loan account of the
Borrowers, which account shall be maintained by the Administrative Agent.

 

“Loan Documents” means, collectively, this
Agreement, the Intercreditor Agreement, the Proprietary Rights Security
Agreements, any Term Loan Notes, any Mortgages, any Aircraft Mortgage,  any Guaranty Agreements, any agreements providing for Bank Products, the
Fee Letters and any other agreements, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing, or otherwise
relating to any of the Obligations, any of the Collateral, or any other aspect
of the transactions contemplated by this Agreement.

 

“Loans” means, collectively, all loans and
advances provided for in Article 2.

 

“Majority Lenders” means, at any time,
Lenders whose Pro Rata Shares aggregate more than 50%; provided, that
the Commitment, Loans and other Obligations of any Defaulting Lender and such
Defaulting Lender’s right to vote on any issue shall be excluded for the
purpose of making any determination of Majority Lenders.

 

“Majority Revolving Lenders” means, at any
time, Revolving Lenders whose Pro Rata Shares (as determined in such definition
solely in the context of the revolving credit facility provided under this
Agreement) aggregate more than 50.0%; provided, that the Revolving
Credit Commitment, Revolving Loans and other Revolving Obligations of any
Defaulting Lender and such Defaulting Lender’s right to vote on any issue shall
be excluded for the purpose of making any determination of Majority Revolving
Lenders; provided, further, that so long as BofA and Wachovia are
the Agents and the Pro Rata Shares (as determined in such definition solely in
the context of the revolving credit facility provided under this Agreement) of
BofA and Wachovia aggregate more than 50.0%, “Majority Revolving Lenders”
means at least three (3) Revolving Lenders whose Pro Rata Shares (as
determined in such definition solely in the context of the revolving credit
facility provided under this Agreement) aggregate more than 50.0%.

 

27

 

“Majority Term Lenders” means, at any time,
Term Lenders whose Pro Rata Shares (as determined in such definition solely in
the context of the Term Loans) aggregate more than 50%; provided, that
the Term Loan Commitment and Term Loans of any Defaulting Lender and such
Defaulting Lender’s right to vote on any issue shall be excluded for the
purpose of making any determination of Majority Term Lenders.

 

“Management Agreement” means (a) with
respect to any corporation, its bylaws, (b) with respect to any limited
liability company or other similar entity, its operating agreement, (c) with
respect to any limited partnership, its partnership agreement, and (d) with
respect to any other entity, any agreement or other document similar in nature
to any of the foregoing.

 

“Margin Stock” means “margin stock” as such
term is defined in Regulation T, U, or X of the Federal Reserve Board.

 

“Material Adverse Effect” means:  (a) a material adverse change in, or a
material adverse effect upon, (i) the Collateral or (ii) the
operations, business, properties, prospects or condition (financial or
otherwise) of Ahern and its Subsidiaries, taken as a whole; (b) a
material impairment of the ability of any Obligated Party or any Affiliate of
any Obligated Party to perform under any Loan Document to which it is a party; or (c) a material adverse effect upon
the legality, validity, binding effect, or enforceability against any Obligated Party or any Affiliate of any
Obligated Party of any Loan Document to which it is a party.

 

“Material Contract” means any contract or
other arrangement to which Ahern or any of its Subsidiaries is a party (other
than the Loan Documents) for which breach, nonperformance, cancellation or
failure to renew could reasonably be expected to have a Material Adverse
Effect.

 

“Maximum Rate” means, at any time with
respect to any Obligation, the highest rate of interest the Lenders holding
such Obligation may legally contract for, charge, or receive in respect of such
Obligation as allowed by any Requirement of Law.

 

“Maximum Revolver Amount” means $350,000,000 as such amount shall be reduced
in accordance with Section 4.3(f).

 

“Mortgage” means and includes any mortgage,
deed of trust, deed to secure debt, assignment, or other instrument executed
and delivered by any Obligated Party to or for the benefit of the Collateral
Agent by which the Collateral Agent, for the benefit of the Credit Providers,
acquires a Lien on any Real Estate of such Obligated Party, and all amendments,
modifications, and supplements thereto, and “Mortgages” means two or
more of such mortgages, deeds of trust, deeds to secure debt, assignments, and
other instruments, as the context requires.

 

“Multiemployer Plan” means a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA that is or was at any
time during the current calendar year or the immediately preceding six calendar
years contributed to by an Obligated Party or any ERISA Affiliate.

 

“Negative Pledge” means any agreement,
contract, or other arrangement whereby any Obligated Party is prohibited from,
or would otherwise be in default as a result of, creating, assuming, incurring,
or suffering to exist, directly or indirectly, any Lien on any of its assets in
favor of the Collateral Agent under the Loan Documents.

 

28

 

“Net Amount of Eligible Accounts” means, at
any time, without duplication, the gross amount of Eligible Accounts, less
sales, excise, or other similar taxes, and less returns, discounts,
claims, credits, allowances, accrued rebates, offsets, deductions,
counterclaims, disputes, and other defenses of any nature at any time issued,
owing, granted, outstanding, available, or claimed.

 

“Net Book Value” means, with respect to any
item of Eligible Rental and Sale Equipment or Eligible Transportation Equipment
of a Borrower, the cost to such Borrower of such item of Eligible Rental and
Sale Equipment or Eligible Transportation Equipment, as the case may be, less
the accumulated depreciation taken by such Borrower thereon, all as reflected
in the books and records of such Borrower.

 

“Net Orderly Liquidation Percentage” means (a) with
respect to any class of Inventory of a Borrower at any time, the ratio
(expressed as a percentage) computed by dividing (i) (x) if such
percentage is being determined on the Closing Date or on any date prior to the
first delivery of an Inventory Appraisal of such Borrower’s Inventory
(containing such class of Inventory) required pursuant to Section 10.4,
the net recovery value of such class of Inventory of such Borrower (which in
any event shall give effect to all costs and expenses of liquidation), as set
forth in the Inventory Appraisal of such Borrower’s Inventory (containing such
class of Inventory) most recently delivered to the Agents prior to the Closing
Date and (y) if such percentage is being determined on or after the date
of the first delivery of an Inventory Appraisal of such Borrower’s Inventory
(containing such class of Inventory) required pursuant to Section 10.4,
the net recovery value of such class of Inventory of such Borrower (which in
any event shall give effect to all costs and expenses of liquidation), as set
forth in the Inventory Appraisal of such Borrower’s Inventory (containing such
class of Inventory) most recently delivered to the Agents pursuant to Section 10.4
by (ii) the value of such class of Inventory of such Borrower, valued at
net book value, as set forth in the corresponding Inventory Appraisal and (b) with
respect to Transportation Equipment of a Borrower at any time, the ratio
(expressed as a percentage) computed by dividing (i) (x) if such
percentage is being determined on the Closing Date or on any date prior to the
first delivery of an Equipment Appraisal of such Borrower’s Transportation
Equipment pursuant to Section 10.4, the net recovery value of the
Transportation Equipment of such Borrower (which in any event shall give effect
to all costs and expenses of liquidation), as set forth in the Equipment
Appraisal of such Borrower’s Transportation Equipment most recently delivered
to the Agents prior to the Closing Date, and (y) if such percentage is
being determined on or after the date of the first delivery of an Equipment
Appraisal of such Borrower’s Transportation Equipment pursuant to Section 10.4,
the net recovery value of the Transportation Equipment of such Borrower (which
in any event shall give effect to all costs and expenses of liquidation), as
set forth in the Equipment Appraisal of such Borrower’s Transportation
Equipment most recently delivered to the Agents pursuant to Section 10.4
by (ii) the value of the Transportation Equipment of such Borrower, valued
at net book value, as set forth in the corresponding Equipment Appraisal.

 

“Net Orderly Liquidation Value” means (x) with
respect to the applicable class of Eligible Inventory of a Borrower at any
time, an amount equal to the product of (i) the value of such class of
Eligible Inventory of such Borrower at such time valued at the lower of Net
Book Value (or average cost in the case of Eligible Spare Parts Inventory) or
market, multiplied by (ii) the Net Orderly Liquidation Percentage
for such class of Eligible Inventory of such Borrower 

 

29

 

in effect at such time and (y) with
respect to the Eligible Transportation Equipment of a Borrower at any time, an
amount equal to the product of (i) the value of the Eligible
Transportation Equipment of such Borrower at such time valued at the lower of
Net Book Value or market, multiplied by (ii) the Net Orderly
Liquidation Percentage for the Eligible Transportation Equipment of such
Borrower in effect at such time.

 

“New Aircraft” means a Cessna Citation CJ3
that was ordered by Ahern prior to the Original Closing Date, with a purchase
price of approximately $6,000,000.

 

“New Term Loan Funding Amount” has the
meaning specified in Section 2.3(a).

 

“Non-Consenting Lender” has the meaning
specified in Section 13.1(d).

 

“Non-Consenting Lender Party” has the meaning
specified in Section 13.3(g).

 

“Non-Executing Revolving Lender” means any
lending institution party to the First Amended and Restated Loan and Security
Agreement as a “Lender” thereunder immediately prior to the effectiveness of
the amendment and restatement thereof pursuant to this Agreement that does not
execute and deliver to either Agent its counterpart signature page to this
Agreement prior to or at the time of such effectiveness.  For the avoidance of doubt, each
Non-Executing Revolving Lender is a party to and bound by this Agreement on the
effectiveness of the amendment and restatement of the First Amended and
Restated Loan and Security Agreement pursuant to this Agreement notwithstanding
its failure to execute and deliver to either Agent its counterpart signature page to
this Agreement prior to or at the time of such effectiveness.

 

“Non-Ratable Loan” and “Non-Ratable Loans”
have the meanings specified in Section 2.2(i).

 

“Notice of Borrowing” has the meaning specified
in Section 2.2(c).

 

“Notice of Continuation/Conversion” has the
meaning specified in Section 3.2(b).

 

“Obligated Party” means each of the Borrowers
and the Guarantors, individually, and “Obligated Parties” means two or
more of such Persons, collectively.

 

“Obligations” means (a) all present and
future loans, advances, liabilities, obligations, covenants, duties, and debts
owing by the Obligated Parties, or any of them, to the Administrative Agent,
the Collateral Agent, BofA, Wachovia, the Letter of Credit Issuer, each
Indemnified Person, and the Lenders, or any of them, arising under or pursuant
to this Agreement or any of the other Loan Documents, whether or not evidenced
by any note, or other instrument or document, whether arising from an extension
of credit, opening of a letter of credit, loan, guaranty, indemnification, or
otherwise, whether direct or indirect, absolute or contingent, due or to become
due, primary or secondary, as principal or guarantor, and including all
principal, interest, charges, expenses, fees, attorneys’ fees (including
Attorney Costs), filing fees, and any other sums chargeable to any Obligated
Party hereunder or under any of the other Loan Documents, including, without
limitation, post-petition interest whether or not such interest is an allowable
claim in a bankruptcy, (b) all debts, liabilities, and obligations owing
by the Obligated Parties, or any of them, now or hereafter arising from or in
connection with the Letters of Credit 

 

30

 

and (c) all debts,
liabilities, and obligations owing by the Obligated Parties, or any of them,
now or hereafter arising from or in connection with Bank Products.

 

“Operating Lease”, as applied to any Person,
means any lease (including leases that may be terminated by the lessee at any
time) of any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor and
excluding Re-Rental Leases.

 

“Organization Certificate” means, (a) with
respect to any corporation, its articles or certificate of incorporation, (b) with
respect to any limited liability company or other similar entity, its
certificate of formation or organization, (c) with respect to any limited
partnership, its certificate of limited partnership, and (d) with respect
to any other entity, any certificate or other document similar in nature to any
of the foregoing.

 

“Original Closing Date” means October 29,
2004.

 

“Original Loan and Security Agreement” has
the meaning specified in the recitals of this Agreement.

 

“Other Taxes” means any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies (excluding, in the case of each Lender and each Agent, such
taxes (including income taxes or franchise taxes) as are imposed on or
measured by such Lender’s or such Agent’s gross or net income) that arise
from any payment made hereunder or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.

 

“Participant” means any commercial bank,
financial institution, or other Person that is not an Affiliate of the
Obligated Parties who shall have been granted the right by any Lender to
participate in the financing provided by such Lender under this Agreement, and
who shall have entered into a participation agreement in form and substance
satisfactory to such Lender.

 

“Patriot Act” means the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Pub. L. No. 107-56, 115 Stat. 272 (Oct. 26,
2001)).

 

“PBGC” means the Pension Benefit Guaranty
Corporation or any Governmental Authority succeeding to the functions thereof.

 

“Pension Plan” means a pension plan (as
defined in Section 3(2) of ERISA) subject to Title IV of ERISA
that any Obligated Party or any ERISA Affiliate sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, or in the
case of a Multiemployer Plan has made contributions at any time during the
immediately preceding five plan years.

 

“Permitted
Distributions” means with respect to a period during which Ahern is or was
an S Corporation or a substantially similar pass-through entity for federal
income tax purposes, the making of any Distribution in an amount equal to the
aggregate net federal, state and local income and alternative minimum taxes
(including federal and state estimated income taxes then 

 

31

 

payable)
attributable to income from Ahern and any Subsidiaries for such period
allocated to the holders of Capital Stock of Ahern (after taking into account
the reduction in (i) federal income tax liability that will result from
the payment of such state and local income taxes, and (ii) federal, state
and local income and alternative minimum tax liability that has previously, or
will for such tax period, result from the utilization of losses from prior
periods attributable to the operations of Ahern and any Subsidiaries that has
been allocated to the holders of Capital Stock of Ahern) and, if required to
maintain such S Corporation or similar pass-through status, a proportionate
distribution to all such holders.

 

“Permitted Investment”
means any Investment made by an Obligated Party at a time when no Default or
Event of Default exists or would result therefrom consisting of:  (a) Investments in direct obligations of
the U.S., or any agency thereof, or obligations guaranteed by the U.S., provided
that such obligations mature within one year from the date of acquisition
thereof; (b) Investments in certificates of deposit maturing within one
year from the date of investment, bankers’ acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by, created by, or
with, a bank or trust company organized under the laws of the U.S. or any state
thereof having capital and surplus aggregating at least One Hundred
Million Dollars ($100,000,000); (c) Investments in commercial paper given
a rating of “A2” or better by Standard & Poor’s Corporation or “P2” or
better by Moody’s Investors Service, Inc. and maturing not more than 90
days from the date of creation thereof; (d) Investments in Hedge
Agreements entered into for the purpose of limiting the amount of interest
payable under this Agreement; (e) Investments in mutual funds
substantially all of the assets of which are comprised of securities of the
types described in clause (a), clause (b), and clause (c) preceding;
(f) Investments by any Obligated Party in any Borrower; (g) existing
Investments listed on Schedule 1.1(B); (h) loans to executive
officers and employees of the Obligated Parties (that are not also holders of
equity of any Obligated Party); provided that (x) at the time of
such loan no Default or Event of Default shall exist or result therefrom, (y) the
aggregate amount of such loans made by the Obligated Parties and outstanding at
any one time does not exceed $100,000,
and (z) such loan does not violate any Requirement of Law; and (i) other
Investments not included in clause (a) through clause (h) preceding
in an aggregate amount at any time not exceeding $100,000.

 

“Permitted Liens” means:

 

(a)           the Agent’s Liens;

 

(b)           Liens, if any, that
are described on Schedule 1.1(C) and Liens that secure Debt
permitted pursuant to clause (c) of Section 8.12, provided
that any Liens securing refunded, renewed, or extended Debt pursuant to such clause (c) shall
not attach to any assets other than those assets securing the Debt being
refunded, renewed, or extended;

 

(c)           Liens for (i) taxes,
fees, assessments, or other charges of a Governmental Authority that are not
delinquent and (ii) taxes, fees, assessments, or other charges of a
Governmental Authority in an amount not in excess of $250,000, provided that the payment of such taxes, fees,
assessments, or other charges of a Governmental Authority referenced in this clause (ii) that
are due and payable is being contested in good faith and by appropriate
proceedings diligently pursued and as to which adequate financial reserves 

 

32

 

have
been established in accordance with GAAP on the applicable Obligated Party’s
books and records and a stay of enforcement of any such Lien is in effect;

 

(d)           Liens consisting of
deposits made in the ordinary course of business in connection with, or to
secure payment of, obligations under worker’s compensation, unemployment
insurance, social security, and other similar laws, or to secure the
performance of bids, tenders, or contracts (other than for the repayment of
Debt) or to secure indemnity, performance, or other similar bonds for the
performance of bids, tenders, or contracts (other than for the repayment of
Debt) or to secure statutory obligations (other than Liens arising under ERISA
or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;

 

(e)           Liens securing the
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords,
and other similar Persons, provided that if any such Lien arises from
the nonpayment of such claims or demands when due, such claims or demands do
not exceed $250,000 in the
aggregate and are being contested in good faith and by appropriate proceedings
diligently pursued and as to which adequate financial reserves have been
established in accordance with GAAP on the applicable Obligated Party’s books
and records and a stay of enforcement of any such Lien is in effect;

 

(f)            Liens constituting
encumbrances in the nature of reservations, exceptions, encroachments,
easements, rights of way, covenants running with the land, and other similar
title exceptions or encumbrances affecting any Real Estate, provided
that any such Liens do not in the aggregate materially interfere with the use
of such Real Estate in the ordinary conduct of an Obligated Party’s business;

 

(g)           Liens (i) arising
from rights of setoff, but excluding any requirement for provision of cash
collateral, in favor of BofA or Wachovia or any of their respective Affiliates
arising from any agreement entered into in connection with any Obligated Party
obtaining Bank Products from BofA or Wachovia or any of their respective
Affiliates and (ii) arising in favor of the Letter of Credit Issuer under
the applicable application and reimbursement agreement delivered to the Letter
of Credit Issuer in connection with each Letter of Credit;

 

(h)           Liens arising from
judgments and attachments in connection with court proceedings, provided
that (i) the attachment or enforcement of such Liens would not otherwise
result in an Event of Default hereunder, (ii) such Liens are being
contested in good faith by appropriate proceedings diligently pursued, (iii) adequate
financial reserves have been established on the applicable Obligated Party’s
books and records in accordance with GAAP, (iv) no material Collateral is
subject to a material risk of loss or forfeiture, and (v) a stay of
execution pending appeal or proceeding for review is in effect;

 

(i)            Liens granted in
favor of the Second Lien Agent to secure the repayment of the Second Lien Debt
(or if all of the Second Lien Debt is repaid with proceeds of Refinancing
Second Lien Debt, in favor of the holders of the Refinancing Second Lien Debt
or an agent or trustee therefor to secure the repayment of the Refinancing
Second 

 

33

 

Lien
Debt), which Liens are junior and subordinate to the Agent’s Liens and are
subject to the terms of the Intercreditor Agreement (or in the case of Liens
securing Refinancing Second Lien Debt, an intercreditor agreement substantially
identical to the Intercreditor Agreement or otherwise satisfactory to the
Agents and the Majority Revolving Lenders (or after the Revolving Facility
Payment In Full, the Majority Term Lenders));

 

(j)            [Intentionally
Omitted];

 

(k)           Liens
that constitute purchase money Liens and secure Debt permitted under clause (h) of
Section 8.12 including the lessors’ interests under Capital Leases
permitted under clause (h) of Section 8.12, but
only to the extent such Liens attach only to the Transportation Equipment,
aircraft or computer or office equipment acquired by the incurrence of such
Capital Leases and purchase money secured Debt, and Liens securing refinancings
of such Debt permitted under clause (c) of Section 8.12;
provided that such Liens are not extended to property other than the
Transportation Equipment, aircraft or computer or office equipment securing the
Debt being refinanced; and

 

(l)            Liens that
constitute purchase money Liens and secure Debt permitted under clause (i) of
Section 8.12, but only to
the extent such Liens attach only to the Inventory acquired by the incurrence
of such purchase money secured Debt and not to any Account, including,
in any event, any rental proceeds of any such Inventory;

 

provided that (i) none of such
Liens listed in clause (b) through clause (h) or
clause (k) through clause (l) preceding may
attach to any Accounts of a Borrower, (ii) none of such Liens listed in clause (b) through
clause (h) or clause (k) preceding, other
than such Liens of a type and to the extent provided by clause (c) and
clause (e) preceding, may attach to any Inventory owned by a
Borrower and (iii) none of such Liens listed in clause (b) through
clause (h) or clause (l) preceding, other
than such Liens of a type and to the extent provided by clause (c) and
clause (e) preceding, may attach to any Transportation
Equipment owned by a Borrower.

 

“Person” means any individual, sole
proprietorship, partnership, limited liability company, joint venture, trust,
unincorporated organization, association, corporation, Governmental Authority,
or any other entity.

 

“Plan” means an employee benefit plan (as
defined in Section 3(3) of ERISA) that any Obligated Party
sponsors or maintains or to which any Obligated Party makes, is making, or is
obligated to make contributions and includes any Pension Plan.

 

“Pro Rata Share” means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the numerator of
which is the sum of (x) the amount of such Lender’s Commitment at such
time plus (y) the aggregate unpaid principal balance of the Term Loans
owing to such Lender at such time and the denominator of which is the sum of (x) the
amounts of all of the Lenders’ Commitments at such time plus (y) the
aggregate unpaid principal balance of the Term Loans owing to all of the
Lenders at such time (or if no Commitments are outstanding at such time, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender at such time and the denominator of which is
the aggregate amount of the Obligations owed to all Lenders at such time); provided,
that references to Pro Rata Share in the

 

34

 

 

context solely of the
revolving credit facility provided hereunder (including, without limitation,
with respect to Revolving Loans and participations in Revolving Loans and
Letters of Credit) means, with respect to a Lender at any time, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender’s Revolving Credit Commitment at such time and the denominator of which
is the sum of the amounts of all of the Lenders’ Revolving Credit Commitments
at such time, or if no Revolving Credit Commitments are outstanding at such
time, a fraction (expressed as a percentage), the numerator of which is the
amount of Obligations owed to such Lender at such time with respect to the
revolving credit facility provided hereunder and the denominator of which is
the aggregate amount of the Obligations owed to all Lenders at such time with
respect to the revolving credit facility provided hereunder; and provided,
further, that references to Pro Rata Share in the context solely of the
Term Loans means, with respect to a Lender at any time, a fraction (expressed
as a percentage), the numerator of which is the aggregate unpaid principal
balance of the Term Loans owing to such Lender at such time and the denominator
of which is the aggregate unpaid principal balance of the Term Loans owing to
all of the Lenders at such time.

 

“Proprietary Rights” means licenses,
franchises, permits, patents, patent rights, copyrights, works that are the
subject matter of copyrights, trademarks, service marks, trade names, trade
styles, patent applications, copyright applications, trademark and service mark
applications, and licenses and rights related to any of the foregoing, and any
other rights under any of the foregoing, extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing,
and any rights to sue for past, present and future infringement of any of the
foregoing.  With respect to the Obligated
Parties, “Proprietary Rights” includes, without limitation, all of the
items listed on Schedule 7.11.

 

“Proprietary Rights
Security Agreements” means the assignments for security and special powers
of attorney executed and delivered by one or more of the Obligated Parties to
the Collateral Agent, for the benefit of the Credit Providers, to evidence the
Agent’s Liens in each such Obligated Party’s present and future patents,
trademarks, copyrights and related licenses and rights and/or provide certain
rights with respect to such Liens.

 

“Real Estate” means, with respect to any
Person, such Person’s now or hereafter owned or leased estates in real property
(as applicable), including fees, leaseholds, and future interests, together
with such Person’s now or hereafter owned or leased interests in the
improvements thereon, the fixtures attached thereto, and the easements
appurtenant thereto.

 

“Refinancing Second Lien Debt” has the
meaning specified in Section 8.12.

 

“Refinancing Second Lien Debt Documents” has
the meaning specified in Section 8.12.

 

“Release” means a release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching,
or migration of a Contaminant into the indoor or outdoor environment or into or
out of any Real Estate or other property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater, or Real
Estate or other property.

 

“Report” has the meaning specified in Section 14.18(a).

 

35

 

“Reportable Event” means any of the events
set forth in Section 4043(b) of ERISA or the regulations thereunder,
other than any such event for which the 30 day notice requirement under ERISA
has been waived in regulations issued by the PBGC.

 

“Requirement of Law” means, as to any Person,
any law (statutory or common), treaty, rule, or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable to or
binding upon the Person or any of its property or to which the Person or any of
its property is subject.

 

“Re-Rental Lease” means any lease of property
entered into by Ahern as lessee which property is immediately subleased by
Ahern to another Person in the ordinary course of business of Ahern.

 

“Reserve Percentage” means the reserve
percentage (expressed as a decimal, rounded up to the nearest 1/8th of 1%)
applicable to member banks under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

 

“Reserves” means any and all reserves that
either of the Agents deems necessary in the exercise of its reasonable credit
judgment to maintain with
respect to the Collateral or any Obligated Party that limit the availability of
Borrowings hereunder or that represent amounts the Administrative Agent, the
Collateral Agent or any Lender may be obligated to pay in the future on behalf
of an Obligated Party (including, without limitation, (a) Bank Product
Reserves, (b) reserves for accrued, unpaid interest on the Obligations, (c) reserves
for rent at each leased location where any
Collateral or the books and records of an Obligated Party are maintained
or kept, except to the extent a Collateral Waiver Agreement is delivered to the
Agents for such leased location, (d) reserves for Inventory shrinkage, (e) Environmental Compliance Reserves, (f) reserves
for customs charges and shipping charges relating to any Inventory in transit, (g) reserves
for warehousemen’s or bailees’ charges, except to the extent a Collateral
Waiver Agreement is delivered to the Agents by the applicable warehouseman or
bailee, (h) reserves for taxes, fees, assessments, and other governmental
charges, (i) a dilution reserve equal to the difference (if a positive
number) between Dilution and 5% of the Net Amount of Eligible Accounts and
(j) reserves for any amounts reflected in any Borrower’s ledger accounts
under any of the following categories: “Equipment Down Long Term” or “Rebate
Accrual”).  Reserves shall in any event
include a reserve for interest on the Term Loans in an amount equal to two (2) months
interest on the original aggregate principal amount thereof, which reserve may
only be released (in whole or in part) with the written consent of the Agents
and the Majority Revolving Lenders.

 

“Responsible Officer” means, with respect to
any Obligated Party, the chief executive officer, the president, the chief
financial officer, the treasurer,  the director
of finance, any vice president, or any other officer having substantially the
same authority and responsibility as any of the foregoing.

 

“Revolving Credit Commitment” means, at any
time with respect to a Lender, the principal amount set forth beside such Lender’s
name under the heading “Revolving Credit 

 

36

 

Commitment” on Schedule 1.1(A) or
as set forth as such Lender’s Revolving Credit Commitment in the most recent
Assignment and Acceptance to which such Lender is a party, as such Revolving
Credit Commitment may be adjusted from time to time in accordance with the
provisions of this Agreement, and “Revolving Credit Commitments” means
the aggregate amount of the Revolving Credit Commitments of all of the Lenders.

 

“Revolving Facility Payment In Full” means
the following have occurred:  (a) all
the Revolving Credit Commitments have expired or have been terminated, (b) all
Letters of Credit have expired, have been terminated or cancelled or have been
collateralized as provided in Section 2.4(g) and (c) all
Revolving Obligations have been paid in full in cash.

 

“Revolving Lender” means each Lender that has
a Revolving Credit Commitment or that holds Revolving Loans.  References herein or in any other Loan
Document to “Revolving Lender” shall not include a Lender in its capacity, if
any, as a Term Lender.

 

“Revolving Loans” has the meaning specified
in Section 2.2(a) and includes each Agent Advance and
Non-Ratable Loan.

 

“Revolving Obligations” means all Obligations
other than Term Loan Obligations.

 

“Revolving Termination Date” means the
earliest to occur of (a) the Stated Revolving Termination Date, (b) the
date the Revolving Credit Commitments are terminated (i) by the Borrowers
pursuant to Section 4.2 or (ii) pursuant to Section 11.2,
and (c) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.

 

“Second Lien Agent” means Wells Fargo Bank,
N.A., as Trustee, in its capacity as collateral trustee for the Second Lien
Lenders and its successors and assigns in such capacity from time to time.

 

“Second Lien Debt” means the Debt issued by
the Borrower pursuant to the terms of the Second Lien Debt Agreement and the
other Second Lien Debt Documents and evidenced by the Second Lien Notes.

 

“Second Lien Debt Agreement” means the
Indenture, dated as of August 18, 2005, between Ahern and Wells Fargo
Bank, N.A., as Trustee, providing for the issuance by Ahern of the Second Lien
Notes, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.

 

“Second Lien Debt Documents” means the Second
Lien Debt Agreement, the Second Lien Notes, any security agreements in favor of
the Second Lien Agent securing the payment of the Second Lien Debt and any
other agreements between any of the Obligated Parties and the Second Lien Agent
executed from time to time in connection with the Second Lien Debt Agreement,
if any.

 

“Second Lien Lenders” means the holders of
the Second Lien Debt.

 

37

 

“Second Lien Notes” means the senior secured
notes due 2013 issued by Ahern pursuant to the Second Lien Debt Agreement, as
amended, restated, supplemented or substituted for from time to time in
accordance with the terms thereof and hereof.

 

“Settlement” has the meaning specified in Section 14.15(a)(i).

 

“Settlement Date” has the meaning specified
in Section 14.15(a)(i).

 

“Software” means “software”, as such term is
defined in the UCC, other than software embedded in any category of Goods,
including all computer programs and all supporting information provided in
connection with a transaction related to any program.

 

“Solvent” means, when used with respect to any Person, that at
the time of determination:

 

(a)           the assets of
such Person, at a fair valuation, are in excess of the total amount of its
debts (including contingent liabilities);

 

(b)           the present
fair saleable value of its assets is greater than its probable liability on its
existing debts as such debts become absolute and matured;

 

(c)           it is then able
and expects to be able to pay its debts (including contingent debts and other
commitments) as they mature; and

 

(d)           it has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.

 

For purposes of determining whether a Person is
Solvent, the amount of any contingent liability shall be computed as the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Stated Revolving Termination Date” means August 21,
2011, as such date may be extended pursuant to Section 4.1(a) or
Article 13.

 

“Stated Term Loan Termination Date” means December 15,
2012, as such date may be extended pursuant to Article 13.

 

“Subsidiary” means, with respect to any
Person (the “subject Person”), any corporation, association, partnership,
limited liability company, joint venture, or other business entity of which
more than 50.0% of the voting Capital Stock is owned or controlled directly or
indirectly by the subject Person, or one or more of the Subsidiaries of the
subject Person, or a combination thereof. 
Unless the context otherwise clearly requires, references herein to a “Subsidiary”
refer to a Subsidiary of an Obligated Party.

 

“Supermajority Revolving Lenders” means, at
any time, Revolving Lenders whose Pro Rata Shares (as determined in such
definition solely in the context of the revolving credit facility provided
under this Agreement) aggregate more than 85.0%; provided, that the
Revolving Credit Commitment, Revolving Loans and other Obligations of any
Defaulting Lender and such 

 

38

 

Defaulting Lender’s right to
vote on any issue shall be excluded for the purpose of making any determination
of Supermajority Revolving Lenders.

 

“Supplemental Blocked Availability Amount”
means $30,000,000 or such lesser amount (but in no event less than $20,000,000)
as the Supermajority Revolving Lenders may agree to in writing in their sole
discretion.

 

“Supporting Cash Deposit” has the meaning
specified in Section 2.4(g).

 

“Supporting Letter of Credit” has the meaning
specified in Section 2.4(g).

 

“Supporting Obligations” means “supporting
obligations”, as such term is defined in the UCC, including letters of credit
and guaranties issued in support of Accounts, Chattel Paper, Documents, General
Intangibles, Instruments, or Investment Property.

 

“Syndication Agent” means Wachovia, solely in
its capacity as a syndication agent.

 

“Taxes” means any and all present or future
taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding, in the case of the Administrative
Agent, each Lender and the Collateral Agent, such taxes (including income taxes
or franchise taxes) as are imposed on or measured by the Administrative
Agent’s, such Lender’s or the Collateral Agent’s net income (or on gross income
where such tax is in lieu of a tax on net income and is not a withholding tax)
in any jurisdiction (whether federal, state, or local and including any
political subdivision thereof) under the laws of which the Administrative
Agent, such Lender or the Collateral Agent, as the case may be, is organized or
maintains a lending office or where the contacts with such jurisdiction (other
than the Loan Documents or events contemplated by the Loan Documents) would
otherwise subject the Administrative Agent, such Lender or the Collateral Agent,
as the case may be, to taxes on such net income.

 

“Term Closing Fee” has the meaning specified
in Section 3.7.

 

“Term Lender” means each Lender that has a
Term Loan Commitment or is the holder of a Term Loan.  References herein or in any other Loan Document
to “Term Lender” shall not include a Lender in its capacity, if any, as a
Revolving Lender.

 

“Term Loan” and “Term Loans” have the
meanings specified in Section 2.3(a).

 

“Term Loan Commitment” means, with respect to
a Lender, the principal amount set forth beside such Lender’s name under the
heading “Term Loan Commitment” on Schedule 1.1(A), and “Term
Loan Commitments” means the aggregate amount of the Term Loan Commitments
of all of the Lenders.  Effective
immediately after the making of the Term Loans on the Closing Date, the Term
Loan Commitment of each Lender shall be permanently reduced to zero.

 

“Term Loan Note” and “Term Loan Notes” have
the meanings specified in Section 2.3(c).

 

39

 

“Term Loan Obligations” means all principal
of and interest on the Term Loans, the Early Term Loan Prepayment Fee and any
and all other Obligations owing to any Term Lender.

 

“Term Loan Termination Date” means the
earliest to occur of (a) the Stated Term Loan Termination Date, (b) the
date the Credit Facility is terminated (i) by the Borrowers pursuant to Section 4.2
or (ii) pursuant to Section 11.2, and (c) the date this
Agreement is otherwise terminated for any reason whatsoever pursuant to the
terms of this Agreement.

 

“Time Utilization” means the ratio,
calculated on a monthly basis for Ahern and its Subsidiaries, of (i) the
average number of units of aerial lift rental equipment on rent during such
month divided by (ii) the average number of units of aerial lift
rental equipment available for rent during such month; provided, however,
that such calculation of such equipment which is available for rent shall
exclude (1) for purposes of Section 8.21(a), any unit of
rental equipment that (a) is in transit to, from or between rental
locations and (b) is not available for rental because it is being
maintained or serviced, such maintenance or service period not to extend longer
than ninety (90) days, and (2) for purposes of Section 6.2(k)(ix),
any unit of rental equipment while such unit is reflected in Ahern’s ledger
accounts under “Equipment Down Long Term”.

 

“Title Company” means one of more title
insurance companies reasonably satisfactory to the Agents.

 

“Transaction Documents” means, collectively,
the Loan Documents, the Second Lien Debt Documents, the Refinancing Second Lien
Debt Documents (if any) and all other documents, instruments and agreements
executed and/or delivered in connection therewith.

 

“Transportation Equipment” means each of the
following types of licensed vehicles and trailers owned by any Obligated Party
so long as they are not included in the rental fleet available for rental to
third parties:  (a) vehicles and
trailers used for delivery, (b) vehicles used for service and (c) vehicles
used by employees for transportation.

 

“UCC” means the Uniform Commercial Code (or
any successor statute), as in effect from time to time, of the State of New York or of any other state the
laws of which are required as a result thereof to be applied in connection with
the issue of perfection of security interests; provided that to the
extent that the UCC is used to define any term herein or in any other documents
and such term is defined differently in different Articles or Divisions of the
UCC, the definition of such term as contained in Article or Division 9
shall govern.

 

“Unfunded Pension Liability” means the excess
of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over
the current value of that Plan’s assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.

 

“Unused Availability” means, at any time, the
Borrowing Base minus the
Aggregate Revolver Outstandings.

 

“Unused Letter of Credit Subfacility” means
an amount equal to the Letter of Credit Subfacility, minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of 

 

40

 

Credit, plus, without duplication, (b) the
aggregate unpaid reimbursement obligations with respect to all Letters of
Credit.

 

“Unused Line Fee” has the meaning specified
in Section 3.4.

 

“U.S.” means the United States of America.

 

“Wachovia” has the meaning specified in the
introductory paragraph of this Agreement.

 

“Waived” means waived in accordance with Article 13.

 

“Wholly-Owned Subsidiary” means, with respect
to any Person (the “subject Person”), a Subsidiary all of the issued and
outstanding Capital Stock (other than directors’ qualifying shares) of which
are owned by the subject Person or one or more of the subject Person’s other
Wholly-Owned Subsidiaries or by the subject Person and one or more of the
subject Person’s Wholly-Owned Subsidiaries.

 

Section 1.2            Accounting Terms.  Any accounting term used in
this Agreement shall have, unless otherwise specifically provided herein, the
meaning customarily given to such term in accordance with GAAP, and all
financial computations in this Agreement shall be computed, unless otherwise
specifically provided herein, in accordance with GAAP as consistently applied
and using the same method for inventory valuation as used in the preparation of
the Financial Statements.  If at any time
any change in GAAP would affect the computation of any financial covenant or
requirement set forth in any Loan Document, and any of the Obligated Parties,
either of the Agents or the Majority Revolving Lenders (or after the Revolving
Facility Payment In Full, the Majority Term Lenders) shall request, the Agents,
the Revolving Lenders (or after the Revolving Facility Payment In Full, the
Term Lenders) and the Obligated Parties shall negotiate in good faith to amend
such covenant or requirement to preserve the original intent thereof in light
of such change in GAAP (subject to the approval of the Majority Revolving
Lenders (or after the Revolving Facility Payment In Full, the Majority Term
Lenders) and the Agents); provided that, until so amended, (a) such
covenant or requirement shall continue to be determined in accordance with GAAP
prior to such change and (b) the Obligated Parties shall provide to the
Agents (with sufficient copies to the Administrative Agent for distribution to
each Lender) Financial Statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.

 

Section 1.3            Interpretive Provisions.

 

(a)           The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.  Terms used herein that
are defined in the UCC and are not otherwise defined herein shall have the
meanings specified therefor in the UCC.

 

(b)           The words “hereof,”
“herein,” “hereunder,” and similar words refer to this Agreement as a whole and
not to any particular provision of this Agreement.  Section, Schedule, and Exhibit references
are to this Agreement unless otherwise specified.  The term “documents” includes any and all
instruments, documents, agreements, certificates, indentures, notices, and
other writings, however evidenced.  The
term “including” is not 

 

41

 

limiting
and means “including, without limitation.” 
In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including,” the words “to” and “until”
each mean “to but excluding” and the word “through” means “to and including.”  The word “or” is not exclusive.

 

(c)           Unless
otherwise expressly provided herein, (i) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments, restatements, and other modifications
thereto, but only to the extent such amendments, restatements, and other modifications
are not prohibited by the terms of any Loan Document, and (ii) references
to any statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing, or
interpreting the statute or regulation.

 

(d)           The captions
and headings of this Agreement and other Loan Documents are for convenience of
reference only and shall not affect the interpretation of this Agreement and
the other Loan Documents.

 

(e)           This Agreement
and the other Loan Documents may use several different limitations, tests, or
measurements to regulate the same or similar matters.  All such limitations, tests, and measurements
are cumulative and shall each be performed in accordance with their terms.

 

(f)            For purposes of
Section 11.1, a breach of a financial covenant contained in Section 8.21
shall be deemed to have occurred as of any date of determination thereof by
either of the Agents or as of the last day of any specified measuring period,
regardless of when the Financial Statements reflecting such breach are
delivered to either of the Agents.

 

(g)           Certain
amendments have been made to the defined terms “GE Intercreditor Agreement”, “Incremental
Commitment Agreements” and “Lender” to preserve certain rights of the Revolving
Lenders under the First Amended and Restated Loan and Security Agreement as in
effect immediately prior to the effectiveness of the amendment and restatement
thereof pursuant to this Agreement.

 

Section 1.4             No Strict Construction. 
This Agreement and the other Loan Documents are the result of
negotiations among, and have been reviewed by counsel to, each Agent, each
Lender, and the Obligated Parties and are the products of all parties.  Accordingly, this Agreement and the other
Loan Documents shall not be construed against the Administrative Agent, the
Collateral Agent, the Lenders, or the Obligated Parties merely because of their
respective involvement in their preparation.

 

Section 1.5             No Novation. 
It is the intent of the parties hereto that this Agreement does not
constitute a novation of the rights, obligations and liabilities of the
respective parties (including the Obligations) existing under the First Amended
and Restated Loan and Security Agreement or evidence payment of all or any of such
obligations and liabilities, and such rights, obligations and liabilities shall
continue and remain outstanding under the terms and conditions of, and as
amended and restated by, this Agreement, and that this Agreement amends and
restates 

 

42

 

in its
entirety the First Amended and Restated Loan and Security Agreement.  Without limiting the generality of the
foregoing (i) all Revolving Loans outstanding under the First Amended and
Restated Loan and Security Agreement shall on the Closing Date become Revolving
Loans hereunder, (ii) all Letters of Credit under the First Amended and
Restated Loan and Security Agreement shall on the Closing Date become Letters
of Credit hereunder and (iii) all other Obligations outstanding under the
First Amended and Restated Loan and Security Agreement shall on the Closing
Date be Obligations under this Agreement. 
Each of the Borrowers and the other Obligated Parties hereby ratifies
and confirms its grant of security interests and Liens in the Collateral
(including, without limitation, any and all Collateral granted under the
Original Loan and Security Agreement, the First Amended and Restated Loan and
Security Agreement and the other Loan Documents) in which it has rights and confirms
and agrees that such Collateral secures any and all of the Obligations,
including, without limitation, the Revolving Loans.

 

The Borrowers acknowledge and agree that as of the
close of business on January 7, 2010, the Aggregate Revolver Outstandings
under and as defined in the First Amended and Restated Loan and Security
Agreement (excluding the aggregate undrawn amount of all outstanding Letters of
Credit under the First Amended and Restated Loan and Security Agreement) is
$317,482,878.43.  As of the date hereof,
none of the Obligated Parties or any of their respective Affiliates has offset
rights, counterclaims or defenses of any kind against any of their obligations,
indebtedness or liabilities under the First Amended and Restated Loan and
Security Agreement.  As of the date
hereof immediately prior to the amendment and restatement of the First Amended
and Restated Loan and Security Agreement contemplated herein, there exists no
Default or Event of Default under and as defined in the First Amended and
Restated Loan and Security Agreement. 
The Obligated Parties hereby irrevocably and unconditionally release the
Agents and the other Credit Providers from any and all actions, causes of
action, damages, judgments, executions and claims arising on or prior to the
Closing Date under or with respect to the First Amended and Restated Loan and
Security Agreement, any of the other Loan Documents (as defined in the First
Amended and Restated Loan and Security Agreement) or any of the transactions
contemplated thereby.

 

ARTICLE 2

 

LOANS AND LETTERS OF CREDIT

 

Section 2.1            Credit Facility.  Subject to the terms and
conditions of this Agreement, the Lenders agree to make available a credit facility for use by any one
or more of the Borrowers from time to time during the term of this Agreement
(the “Credit Facility”).  The Credit Facility shall be composed of a
revolving credit facility consisting of Revolving Loans and Letters of Credit
as described in Section 2.2 and Section 2.4 and a term
loan facility consisting of Term Loans as described in Section 2.3.

 

Section 2.2            Revolving Loans.

 

(a)           Amounts.  Subject to the terms and conditions of this
Agreement, each Revolving Lender severally, but not jointly, agrees, upon a
Borrower’s request from time to time on any Business Day during the period from
the Original Closing Date to the Revolving Termination Date, to make revolving
loans (the “Revolving Loans”) to the 

 

43

 

Borrowers
in amounts not to exceed such Revolving Lender’s Pro Rata Share of the
Revolving Credit Commitments.  The
Lenders, however, in their unanimous discretion, may elect to make Revolving
Loans that would cause the Aggregate Revolver Outstandings to exceed the
Borrowing Base on one or more occasions, but if they do so, neither the Agents
nor the Lenders shall be deemed thereby to have changed the limits of the
Borrowing Base or to be obligated to exceed such limits on any other
occasion.  If any requested Revolving Loan
exceeds the Unused Availability then the Revolving Lenders may refuse to make
or may otherwise restrict the making of such Revolving Loan, subject to the
authority of the Administrative Agent, in its sole discretion, to make Agent
Advances pursuant to the terms of Section 2.2(j).

 

(b)           [Intentionally
Omitted.]

 

(c)           Procedure for Borrowing.

 

(i)            Each Borrowing
of Revolving Loans shall be made upon a Borrower’s irrevocable written notice
delivered to the Administrative Agent, in the form of a notice of borrowing in
the form of Exhibit D or such other form as may be acceptable to
the Agents in their sole discretion (any such notice being referred to herein
as a “Notice of Borrowing”), which must be received by the
Administrative Agent prior to 1:00 p.m. (New York time) (y) three
Business Days prior to the requested Funding Date, in the case of LIBOR Rate
Revolving Loans or (z) on the requested Funding Date, in the case of Base
Rate Revolving Loans, specifying:

 

(A)                              the amount of
the Borrowing, which in the case of LIBOR Rate Revolving Loans shall be in an
amount that is not less than One Million Dollars ($1,000,000) or an integral
multiple of One Million Dollars ($1,000,000) in excess thereof;

 

(B)                                the requested
Funding Date, which must be a Business Day;

 

(C)                                whether the
Revolving Loans requested are to be Base Rate Revolving Loans or LIBOR Rate
Revolving Loans; provided that if such Borrower fails to specify whether
any Revolving Loans are to be Base Rate Revolving Loans or LIBOR Rate Revolving
Loans, such request shall be deemed a request for Base Rate Revolving Loans;

 

(D)                               if the
requested Revolving Loans are to be LIBOR Rate Revolving Loans, the duration of
the Interest Period; provided that if such Borrower fails to select the
duration of the Interest Period with respect to any requested LIBOR Rate
Revolving Loans, such Borrower shall be deemed to have requested such Revolving
Loans be made as LIBOR Rate Revolving Loans with an Interest Period of one
month in duration; and

 

(E)                                 whether the
proceeds of such Borrowing are to be deposited to the Funding Account or sent
by wire transfer to a third party,

 

44

 

 

in which case such Borrower
shall provide the Administrative Agent with written wire transfer instructions
satisfactory to the Administrative Agent;

 

provided that with
respect to the Borrowing to be made on the Original Closing Date, such
Borrowing will consist of Base Rate Revolving Loans only.

 

(ii)           With respect to
any request for Base Rate Revolving Loans, in lieu of delivering a Notice of
Borrowing, a Borrower may give the Administrative Agent telephonic notice of
such request for advances to the Funding Account not later than the required
time specified in clause (i) preceding.  The Administrative Agent at all times shall
be entitled to rely on such telephonic notice in making any such Revolving
Loans, regardless of whether any written confirmation is received by it.

 

(iii)          Whenever checks
or other items are presented to BofA for payment against the Funding Account or
any other Deposit Account maintained by a Borrower with BofA in an amount
greater than the then available balance in the Funding Account or such other
Deposit Account, such presentation may, at the election of the Administrative
Agent in its sole discretion, be deemed to be a request by the Borrowers for a
Base Rate Revolving Loan on the date of such presentation in an amount
sufficient to cover all such items presented in the Funding Account or such
other Deposit Account on such date.

 

(iv)          At the election
of either of the Agents or the Majority Revolving Lenders, the Borrowers shall
have no right to request LIBOR Rate Revolving Loans during the existence of any
Default or Event of Default.

 

(d)           Disbursement.  On or prior to the Closing Date, the
Borrowers shall have delivered to the Administrative Agent a notice setting
forth the deposit account maintained with BofA (the “Funding Account”)
to which the Administrative Agent is authorized by the Borrowers to transfer
the proceeds of the Revolving Loans requested hereunder.  Each of the Borrowers agrees that the Funding
Account may be established in the name of any other Borrower, and hereby agrees
that the Funding Account has been established for the benefit of all of the
Borrowers for receipt of the proceeds of Revolving Loans hereunder.  Each Borrower hereby appoints each other
Borrower as its agent with respect to receipt of the proceeds of Revolving
Loans in the Funding Account as contemplated herein.  The Borrowers may designate a replacement
Funding Account from time to time by written notice to the Administrative
Agent.  Any designation by the Borrowers
of the Funding Account must be reasonably acceptable to the Administrative
Agent.

 

(e)           Reliance Upon
Authority; No Liability.  The
Administrative Agent is entitled to rely conclusively on any individual’s
request for Revolving Loans on behalf of a Borrower, as long as the proceeds
thereof are to be transferred to the Funding Account or according to such other
instructions as may be provided to the Administrative Agent pursuant to Section 2.2(c)(i)(E).  The Administrative Agent has no duty to
verify the identity of any individual representing himself or herself as a
person authorized by any 

 

45

 

Borrower
to make such requests on its behalf.  The
Administrative Agent shall not incur any liability to the Borrowers as a result
of acting upon any notice referred to in Section 2.2(c) or Section 2.2(d) which
the Administrative Agent reasonably believes to have been given by an officer
or other person duly authorized by a Borrower to request Revolving Loans on its
behalf or for otherwise acting under this Section 2.2.  The crediting of Revolving Loans to the
Funding Account or wire transfer to such Person as a Borrower shall direct
shall conclusively establish the obligation of the Borrowers to repay such
Revolving Loans as provided herein.

 

(f)            Notice
Irrevocable.  Any Notice
of Borrowing (or telephonic notice in lieu thereof) made pursuant to Section 2.2(c) shall
be irrevocable and the Borrowers shall be bound to borrow the funds requested
therein in accordance therewith.

 

(g)           Administrative
Agent’s Election.  Promptly
after receipt of a Notice of Borrowing (or telephonic notice in lieu thereof),
the Administrative Agent shall elect in its sole discretion to have the terms
of Section 2.2(h), Section 2.2(i), or Section 2.2(j) apply
to such requested Borrowing.  If BofA
declines in its sole discretion to make a Non-Ratable Loan pursuant to Section 2.2(i),
the terms of Section 2.2(h) shall apply to the requested
Borrowing unless such requested Borrowing is to be made by the Administrative
Agent as an Agent Advance pursuant to Section 2.2(j).

 

(h)           Making of
Revolving Loans.  If the
Administrative Agent elects to have the terms of this Section 2.2(h) apply
to a requested Borrowing, then promptly after receipt of a Notice of Borrowing
or telephonic notice in lieu thereof, the Administrative Agent shall notify the
Revolving Lenders by telecopy, telephone, or e-mail of the requested Borrowing.  Each Revolving Lender shall transfer its Pro
Rata Share of the requested Borrowing to the Administrative Agent, in immediately
available funds, to the account from time to time designated by the
Administrative Agent not later than 3:30 p.m. (New York time) on the
applicable Funding Date.  After receipt
by the Administrative Agent of all proceeds of such requested Borrowing, it
shall make the proceeds of such requested Borrowing available to the applicable
Borrower on the applicable Funding Date by transferring same day funds to the
Funding Account or as otherwise requested by such Borrower in accordance with Section 2.2(c)(i)(E).  Unless the Revolving Lenders in their
unanimous discretion consent otherwise, no Borrowing under this clause (h) shall
be permitted if the requested Borrowing exceeds the Unused Availability on the
applicable Funding Date prior to giving effect to such requested Borrowing.

 

(i)            Making of
Non-Ratable Loans.  If the
Administrative Agent elects, with the consent of BofA, in its capacity as a
Revolving Lender, to have the terms of this Section 2.2(i) apply
to a requested Borrowing, BofA shall make a Revolving Loan in the amount of
such requested Borrowing available to the Borrowers on the applicable Funding
Date by transferring same day funds to the Funding Account or as otherwise
requested by the applicable Borrower in accordance with Section 2.2(c)(i)(E).  Each Revolving Loan made solely by BofA
pursuant to this Section 2.2(i) is referred to hereinafter as
a “Non-Ratable Loan,” and such Revolving Loans are collectively referred
to as the “Non-Ratable Loans.” 
Each Non-Ratable Loan shall be subject to all the terms 

 

46

 

and
conditions applicable to other Revolving Loans except that all payments of
principal and interest thereon shall be payable to BofA solely for its own
account.  The aggregate amount of Non-Ratable Loans outstanding at any time shall
not exceed $10,000,000.  The
Administrative Agent shall not request BofA to make any Non-Ratable Loan if (A) the
Administrative Agent has received written notice from any Revolving Lender that
one or more of the applicable conditions precedent set forth in Article 9
will not be satisfied on the requested Funding Date for the applicable
Borrowing or (B) the Administrative Agent has actual knowledge (based
solely on the Borrowing Base Certificate most recently delivered to it or
written notice from any Revolving Lender thereof) that the requested Borrowing
exceeds the Unused Availability on the applicable Funding Date prior to giving
effect to such requested Borrowing.  The
Non-Ratable Loans shall be secured by the Agent’s Liens in and to the
Collateral and shall constitute Base Rate Revolving Loans and Obligations
hereunder.

 

(j)            Agent Advances.  Subject to the limitations set forth below,
the Administrative Agent is authorized by the Borrowers and the Lenders, from
time to time in its sole discretion in such capacity, after the occurrence of a
Default or an Event of Default or at any time that any of the other conditions
precedent set forth in Article 9 have not been satisfied, to make
Base Rate Revolving Loans to the Borrowers or any Borrower on behalf of the
Revolving Lenders in an aggregate amount outstanding at any time not to exceed
$10,000,000 which the Administrative Agent, in its reasonable business
judgment, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations (including
through the Borrowers using any proceeds of such Revolving Loans to pay payroll
and associated tax obligations), or (iii) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including
costs, fees, and expenses as described in Section 15.7 (any of such
advances are herein referred to as “Agent Advances”); provided
that after giving effect to the making of any Agent Advance, the Aggregate
Revolver Outstandings shall not exceed the Maximum Revolver Amount.  The Majority Revolving Lenders may at any
time revoke the authorization of the Administrative Agent to make Agent
Advances.  Any such revocation must be in
writing and shall become effective prospectively upon the receipt by the
Administrative Agent thereof.  The Agent
Advances shall be secured by the Agent’s Liens in and to the Collateral and
shall constitute Base Rate Revolving Loans and Obligations hereunder.

 

Section 2.3            Term Loans.

 

(a)           Amounts of Term
Loans.  Each Term Lender severally
agrees to make a term loan (any such term loan being referred to as a “Term
Loan” and such term loans being referred to collectively as the “Term
Loans”) to the Borrowers on the Closing Date, upon the satisfaction of the
conditions precedent set forth in Article 9, in an amount equal to such
Term Lender’s Term Loan Commitment.  A
portion of the Term Loan of each Term Lender to be made on the Closing Date
shall be made as new funds to the Borrowers in the amount set forth beside such
Term Lender’s name under the heading “New Term Loan Funding Amount” on Schedule 1.1(A) (such
amount for any Term Lender, its “New Term Loan Funding Amount”), with
the remaining portion of the Term 

 

47

 

Loan
of such Term Lender to be made on the Closing Date (such portion for any Term
Lender, its “Exchanged Term Loan Amount”) to be deemed made as an
exchange for cancellation of certain of the Second Lien Debt held by such Term
Lender immediately prior to such Borrowing (the amount of such Second Lien Debt
of any Term Lender to be so cancelled to be equal to such Term Lender’s
Exchanged Term Loan Amount multiplied by 4/3).

 

(b)           Making of Term
Loans.  Each Term Lender shall make
the amount of such Term Lender’s New Term Loan Funding Amount available to the
Administrative Agent in same day funds, to the Administrative Agent’s
designated account, not later than 12:00 noon (New York time) on the Closing
Date.  After the Administrative Agent’s
receipt of the New Term Loan Funding Amounts of all the Term Lenders, upon
satisfaction of the conditions precedent set forth in Article 9, the
Administrative Agent shall make such amounts available to the Borrowers on such
Funding Date by transferring same day funds equal to the aggregate New Term
Loan Funding Amounts received by the Administrative Agent to a Clearing Account
designated in writing by the Borrowers or as the Borrowers shall otherwise
instruct in writing.

 

(c)           Term Loan Notes.  The Borrowers shall execute and deliver to
the Administrative Agent on behalf of each Term Lender, on the Closing Date, a
promissory note, substantially in the form of Exhibit A attached
hereto and made a part hereof (such promissory notes, together with any new
promissory notes issued pursuant to Section 13.2 upon the
assignment of any portion of any Term Lender’s Term Loan, being hereinafter
referred to collectively as the “Term Loan Notes” and each of such
promissory notes being hereinafter referred to individually as a “Term Loan
Note”). The Term Loan Notes shall evidence each Term Lender’s Term Loan, in
an original principal amount equal to that Term Lender’s Term Loan Commitment
and with other appropriate insertions. Each Term Loan Note shall be dated the
Closing Date and be stated to mature on the Stated Term Loan Termination
Date.  The Borrowers shall repay the
outstanding principal balance of the Term Loans, plus all accrued but unpaid
interest thereon, on the Term Loan Termination Date.  Payments or prepayments of the Term Loans may
not be reborrowed.  The liability of the
Borrowers with respect to the Term Loans shall be joint and several.

 

Section 2.4            Letters of Credit.

 

(a)           Agreement to
Cause to Issue.  Subject to
the terms and conditions of this Agreement, the Agents agree to cause the
Letter of Credit Issuer to issue for the account of any of the Borrowers
(whether one or more) one or more commercial/documentary and standby letters of
credit (each a “Letter of Credit” and collectively, the “Letters of
Credit”) from time to time prior to the Revolving Termination Date.

 

(b)           Amounts;
Outside Expiration Date.  The
Agents shall not cause to be issued any Letter of Credit at any time if:  (i) the maximum face amount of the
requested Letter of Credit is greater than the Unused Letter of Credit
Subfacility at such time; (ii) the maximum undrawn amount of the requested
Letter of Credit and all commissions, fees, and charges due from such Borrower
in connection with the opening thereof 

 

48

 

exceeds
the Unused Availability prior to giving effect to issuance of such requested
Letter of Credit; (iii) such Letter of Credit has an expiration date later
than 30 days prior to the Stated Revolving Termination Date; or (iv) such
Letter of Credit has an expiration date later than twelve calendar months from
the date of issuance for standby letters of credit and six calendar months from
the date of issuance for commercial/documentary letters of credit, provided
that any Letter of Credit issued hereunder may, subject to this clause (iv) and
the other provisions of this Section 2.4, include an “evergreen” or
automatic renewal provision of the type referenced in Section 2.4(d)(iii) without
contravening the requirement contained in this Section 2.4(b).

 

(c)           Other
Conditions.  In addition
to being subject to the satisfaction of the applicable conditions precedent
contained in Article 9, the obligation of the Agents to cause any
Letter of Credit to be issued is subject to the following conditions precedent
having been satisfied in a manner satisfactory to the Agents and the Letter of
Credit Issuer:

 

(i)            the Borrowers
shall have delivered to the Letter of Credit Issuer, at such times and in such
manner as the Letter of Credit Issuer may prescribe, an application in form and
substance satisfactory to the Letter of Credit Issuer and reasonably
satisfactory to each Agent for the issuance of the Letter of Credit and such
other documents as may be required pursuant to the terms thereof, and the form,
terms, and purpose of the proposed Letter of Credit shall be reasonably
satisfactory to each Agent and the Letter of Credit Issuer (provided
that in the event any term of such application or any other document is
inconsistent with the terms of this Agreement and the Letter of Credit Issuer
is either the same Person as an Agent or any Revolving Lender, then the terms
of this Agreement shall be controlling); and

 

(ii)           as of the date
of issuance, no order of any court, arbitrator, or Governmental Authority shall
purport by its terms to enjoin or restrain money center banks generally from
issuing letters of credit of the type and in the amount of the proposed Letter
of Credit, and no law, rule, or regulation applicable to money center banks
generally and no request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over money center
banks generally shall prohibit, or request that the Letter of Credit Issuer
refrain from, the issuance of letters of credit generally or the issuance of
such Letter of Credit.

 

(d)           Issuance of Letters of
Credit.

 

(i)            Request for
Issuance.  Any
Borrower that wishes to cause the issuance of a Letter of Credit shall notify
each Agent and the Letter of Credit Issuer of such request for issuance at
least three Business Days prior to the proposed issuance date.  Such notice shall be irrevocable and must
specify the original face amount of the Letter of Credit requested, the
Business Day of issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in partial draws, the Business Day
on which the requested 

 

49

 

Letter
of Credit is to expire, the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit.  The applicable Borrower shall attach to such
notice the proposed form of the Letter of Credit.

 

(ii)           Responsibilities
of the Agents; Issuance.  As
of the Business Day immediately preceding the requested issuance date of the
Letter of Credit set forth in the notice from a Borrower pursuant to Section 2.3(d)(i),
the Agents shall determine (A) the amount of the Unused Letter of Credit
Subfacility and (B) the Unused Availability (based solely on the Borrowing
Base Certificate most recently delivered to the Agents).  If the face amount of the requested Letter of
Credit is not greater than the Unused Letter of Credit Subfacility (prior to
giving effect to issuance of such requested Letter of Credit) and the
amount of such requested Letter of Credit and all commissions, fees, and
charges due from the Borrower in connection with the opening thereof do not
exceed the Unused Availability (prior to giving effect to issuance of such
requested Letter of Credit and based solely on the Borrowing Base Certificate
most recently delivered to the Agents), the Agents shall cause the Letter of
Credit Issuer to issue the requested Letter of Credit on the requested issuance
date if the other conditions hereof and of the application for such requested
Letter of Credit are met.

 

(iii)          Extensions and
Amendments.  The Agents
shall not be obligated to cause the Letter of Credit Issuer to extend, renew,
or amend any Letter of Credit issued pursuant hereto unless the requirements of
this Section 2.4 are met as though a new Letter of Credit were
being requested and issued.  With respect
to any Letter of Credit that contains any “evergreen” or automatic renewal
provision, each Revolving Lender shall be deemed to have consented to any such
extension or renewal unless such Revolving Lender shall have provided to each
Agent written notice that such Revolving Lender declines to consent to any such
extension or renewal at least 30 days prior to the date on which the Letter of
Credit Issuer is entitled to decline to extend or renew such Letter of Credit; provided
that, notwithstanding the foregoing, if all of the requirements of this Section 2.4
are met and no Default or Event of Default exists, no Revolving Lender may
decline to consent to any such extension or renewal.

 

(e)           Payments
Pursuant to Letters of Credit.  The Borrowers agree to reimburse the Letter
of Credit Issuer immediately for any draw under any Letter of Credit and to pay
the Letter of Credit Issuer the amount of all other charges and fees payable to
the Letter of Credit Issuer under or in connection with any Letter of Credit
immediately when due, irrespective of any claim, setoff, defense, or other
right that any Borrower may have at any time against the Letter of Credit
Issuer or any other Person.  Each drawing
under any Letter of Credit shall constitute a request by the Borrower for whose
account such Letter of Credit was issued for a Borrowing of a Base Rate
Revolving Loan in the amount of such drawing. 
The Funding Date with respect to such Borrowing shall be the date of
such drawing.

 

50

 

(f)            Indemnification;
Exoneration; Power of Attorney.

 

(i)            Indemnification.  In addition to amounts payable as elsewhere
provided in this Section 2.4, each Borrower agrees to protect,
indemnify, pay, and save the Revolving Lenders, the Agents, and the Letter of
Credit Issuer harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges, and expenses (including
reasonable attorneys’ fees) that any Revolving Lender, either Agent, or
the Letter of Credit Issuer may incur or be subject to as a consequence, direct
or indirect, of the issuance of any Letter of Credit.  The foregoing indemnity shall not apply to
the Letter of Credit Issuer to the extent of any wrongful honor or dishonor of
a drawing against any Letter of Credit or to the extent of any gross negligence
or willful misconduct of the Letter of Credit Issuer as determined in a final,
nonappealable judgment by a court of competent jurisdiction.  The Borrowers’ obligations under this Section 2.4(f) shall
survive payment of all other Obligations.

 

(ii)           Assumption of
Risk by the Borrowers.  As
among the Borrowers, the Revolving Lenders, the Agents, and the Letter of
Credit Issuer, the Borrowers assume all risks of the acts and omissions of, or
misuse of any of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit.  In furtherance and
not in limitation of the foregoing, the Revolving Lenders, the Agents, and the
Letter of Credit Issuer shall not be responsible for:  (A) the form, validity, sufficiency,
accuracy, genuineness, or legal effect of any document submitted by any Person
in connection with the application for and issuance of and presentation of
drafts with respect to any of the Letters of Credit, even if it should prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent, or
forged; (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, that
may prove to be invalid or ineffective for any reason; (C) the failure of
the beneficiary of any Letter of Credit to comply duly with conditions required
in order to draw upon such Letter of Credit; (D) errors, omissions,
interruptions, or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, or otherwise, whether or not they be in cipher; (E) errors
in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of
any drawing under such Letter of Credit; (H) any consequences arising from
causes beyond the control of any of the Revolving Lenders, either of the
Agents, or the Letter of Credit Issuer, including any act or omission, whether
rightful or wrongful, of any present or future de  jure or de
facto Governmental Authority; or (I) the Letter of Credit Issuer’s
honor of a draw for which the draw or any certificate fails to comply in any
respect with the terms of the Letter of Credit. 
None of the foregoing shall affect, impair, or prevent the vesting of
any rights or powers of either Agent, any Revolving Lender, or, subject to Section 2.4(f)(iv),
the Letter of Credit Issuer under this Section 2.4(f).

 

51

 

(iii)          Exoneration.  Without limiting the foregoing, no action or
omission whatsoever by either Agent, any Revolving Lender, or the Letter of
Credit Issuer under or in connection with any of the Letters of Credit or any
related matters shall result in any liability of either Agent, any Revolving
Lender, or the Letter of Credit Issuer to any Borrower, or relieve any Borrower
of any of its obligations hereunder to any such Person.

 

(iv)          Rights Against
the Letter of Credit Issuer.  Nothing contained in this Section 2.4(f) is
intended to limit any Borrower’s rights, if any, with respect to the Letter of
Credit Issuer that arise as a result of the letter of credit application and
related documents executed by and between such Borrower and the Letter of
Credit Issuer.

 

(v)           Account Party.  Each Borrower hereby authorizes and directs
the Letter of Credit Issuer to name any Borrower as the “Account Party” in any
Letter of Credit and to deliver to the Agents all instruments, documents, and
other writings and property received by the Letter of Credit Issuer pursuant to
each such Letter of Credit, and to accept and rely upon either Agent’s
instructions and agreements with respect to all matters arising in connection
with each such Letter of Credit or the application therefor.

 

(g)           Supporting
Letter of Credit; Cash Collateral.  If, notwithstanding the provisions of Section 2.4(b) and
Section 12.1, any Letter of Credit is outstanding on the Revolving
Termination Date, then on the Revolving Termination Date the Borrowers shall
deposit with the Collateral Agent, for the benefit of the Agents, the Letter of
Credit Issuer, and the Revolving Lenders, with respect to each such Letter of
Credit then outstanding, either (i) a standby letter of credit (a “Supporting
Letter of Credit”) in form and substance satisfactory to each Agent, issued
by an issuer satisfactory to the Agents in their sole discretion in an amount equal
to 105% of the maximum undrawn amount of such Letter of Credit, plus any fees and expenses
associated with such Letter of Credit, under which Supporting Letter of Credit
the Collateral Agent is entitled to draw amounts necessary to reimburse the
Agents, the Letter of Credit Issuer, and the Revolving Lenders for payments to
be made by either of the Agents, the Letter of Credit Issuer, and any of the
Revolving Lenders under or with respect to such Letter of Credit and any fees
and expenses associated with such Letter of Credit or (ii) cash (a “Supporting
Cash Deposit”) in an amount equal to 105% of the maximum undrawn amount of
such Letter of Credit, plus
any fees and expenses associated with such Letter of Credit.  Such Supporting Letter of Credit or Supporting
Cash Deposit shall be held by the Collateral Agent, for the benefit of the
Agents, the Letter of Credit Issuer, and the Revolving Lenders, as security
for, and to provide for the payment of, the aggregate undrawn amount of such
Letters of Credit remaining outstanding and the fees and expenses associated
with such Letters of Credit.

 

Section 2.5            Bank Products.  Any Obligated Party may obtain
Bank Products from BofA or Wachovia or any of BofA’s or Wachovia’s Affiliates,
or, subject to the definition of Bank Products, another Revolving Lender or any
of such Revolving Lender’s Affiliates, although no Obligated Party is required
to do so.  To the extent Bank Products
are provided by 

 

52

 

an
Affiliate of BofA, Wachovia or another Revolving Lender, the Obligated Parties
agree to indemnify and hold the Agents and BofA, Wachovia or such other
Revolving Lender, as applicable, harmless from any and all costs and
obligations now or hereafter incurred by any of the Credit Providers which
arise from any indemnity given by BofA, Wachovia or such other Revolving
Lender, as applicable, to its Affiliates related to such Bank Products; provided,
however, nothing contained herein is intended to limit any Obligated
Party’s rights, with respect to BofA, Wachovia or such other Revolving Lender,
as applicable, or its Affiliates, if any, that arise as a result of the
execution of documents by and between such Obligated Party and BofA, Wachovia
or such other Revolving Lender, as applicable, or its Affiliates that relate to
Bank Products.  The agreement contained
in this Section 2.5 shall survive termination of this
Agreement.  Each Obligated Party
acknowledges and agrees that the obtaining of Bank Products from BofA, Wachovia
, any other Revolving Lender or any of their respective Affiliates (a) is
in the sole and absolute discretion of BofA, Wachovia, such other Revolving
Lender or such Affiliate, and (b) is subject to all rules and
regulations of BofA, Wachovia, such other Revolving Lender or such Affiliate.

 

ARTICLE 3

 

INTEREST AND FEES

 

Section 3.1            Interest.

 

(a)           Interest Rates.  All outstanding Obligations (other than Term
Loans and other Term Loan Obligations) shall bear interest on the unpaid
principal amount thereof (including, to the extent permitted by law, on accrued
interest thereon not paid when due) from the date made or incurred until paid
in full in cash at a rate determined by reference to the Base Rate or the LIBOR
Rate, as applicable, plus
the Applicable Margin as set forth below, but not to exceed the Maximum
Rate.  All Term Loans and other Term Loan
Obligations shall bear interest on the unpaid principal amount thereof
(including, to the extent permitted by law, on accrued interest thereon not
paid when due) from the date made or incurred until paid in full in cash at the
interest rate set forth in clause (iii) below.  If at any time Revolving Loans are
outstanding with respect to which a Borrower has not delivered to the
Administrative Agent a notice specifying the basis for determining the interest
rate applicable thereto in accordance herewith, such Revolving Loans shall be
Base Rate Revolving Loans and bear interest at a rate determined by reference
to the Base Rate until notice to the contrary has been given to the
Administrative Agent in accordance with this Agreement and such notice has
become effective.  Except as otherwise
provided herein, the outstanding Obligations shall bear interest as follows:

 

(i)            for all Base
Rate Revolving Loans and other Obligations (other than LIBOR Rate Revolving
Loans, Term Loans and other Term Loan Obligations) at a fluctuating per annum
rate equal to the lesser of (A) the Base Rate, plus the Applicable Margin or (B) the Maximum Rate;

 

53

 

(ii)           for all LIBOR
Rate Revolving Loans at a per annum rate equal to the lesser of (A) the
LIBOR Rate, plus the
Applicable Margin or (B) the Maximum Rate; and

 

(iii)          for all Term
Loans and other Term Loan Obligations at a per annum rate equal to the lesser
of (A) 16% or (B) the Maximum Rate.

 

Each
change in the Base Rate shall be reflected in the interest rate described in clause (i) preceding
as of the effective date of such change. 
Subject to Section 3.3, all interest charges on the
Obligations shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year).

 

(b)           Interest
Payments.  The
Borrowers shall pay to the Administrative Agent, for the benefit of the
applicable Lenders, accrued interest in arrears on each Interest Payment Date,
as applicable.

 

(c)           Default Rate.  During the existence of any Default or Event
of Default if either of the Agents or the Majority Revolving Lenders (in the
case of Revolving Obligations) or the Majority Term Lenders (in the case of
Term Loan Obligations) in their discretion so elect (in the case of the
Majority Revolving Lenders or the Majority Term Lenders, upon written notice to
the Agents), the applicable Obligations shall, subject to Section 3.3,
bear interest at a rate per annum equal to the lesser of (i) the Default
Rate applicable thereto or (ii) the Maximum Rate.

 

(d)           Interest
Periods.  After giving effect to any
Borrowing of any LIBOR Rate Revolving Loan, there may not be more than ten (10) different
Interest Periods in effect hereunder.

 

Section 3.2            Continuation and Conversion Elections.

 

(a)           A Borrower may upon
irrevocable written notice to the Administrative Agent in accordance with Section 3.2(b):

 

(i)            provided that Borrowing
of LIBOR Rate Revolving Loans is permitted pursuant to Section 2.2,
elect, as of any Business Day, in the case of Base Rate Revolving Loans to
convert any such Base Rate Revolving Loans (or any part thereof in an amount
not less than One Million Dollars ($1,000,000), or that is in an integral
multiple of One Million Dollars ($1,000,000) in excess thereof) into
LIBOR Rate Revolving Loans;

 

(ii)           provided that Borrowing
of LIBOR Rate Revolving Loans is permitted pursuant to Section 2.2,
elect, as of the last day of the applicable Interest Period, to continue any
LIBOR Rate Revolving Loans having Interest Periods expiring on such day (or any
part thereof) in an amount not less than One Million Dollars ($1,000,000),
or that is in an integral multiple of One Million Dollars ($1,000,000) in
excess thereof as LIBOR Rate Revolving Loans; or

 

54

 

 

(iii)          elect, as of
any Business Day subject to Section 5.4, in the case of LIBOR Rate
Revolving Loans to convert any such LIBOR Rate Revolving Loans (or any part
thereof not being continued pursuant to clause (ii) preceding)
into Base Rate Revolving Loans;

 

provided that if at any
time the aggregate amount of LIBOR Rate Revolving Loans in respect of any
Borrowing is reduced, by payment, prepayment, or conversion of part thereof to
be less than One Million Dollars ($1,000,000), such LIBOR Rate Revolving Loans
shall automatically convert into Base Rate Revolving Loans; provided, further,
that if the notice shall fail to specify the duration of the Interest Period of
any LIBOR Rate Revolving Loan to result from any such continuation or
conversion, such Interest Period shall be one month in duration.

 

(b)           For any
continuation or conversion pursuant to clause (a) preceding,
the Borrowers shall deliver a notice of continuation/conversion in the form of Exhibit E
or such other form as may be acceptable to the Agents, in their sole discretion
(any such notice being referred to herein as a “Notice of Continuation/
Conversion”) to the Administrative Agent not later than 1:00 p.m. (New
York time) at least three Business Days in advance of the
Continuation/Conversion Date specifying:

 

(i)             the proposed
Continuation/Conversion Date;

 

(ii)           the aggregate
amount of such Revolving Loans to be continued or converted and, if continuing
LIBOR Rate Revolving Loans, the specific Revolving Loans (or portions thereof)
to be continued or converted;

 

(iii)          the type of
Revolving Loans resulting from the proposed continuation or conversion; and

 

(iv)          the duration of
any requested Interest Period, provided, however, the Borrowers
may not select an Interest Period that ends after the Stated Revolving
Termination Date.

 

(c)           If upon the
expiration of any Interest Period applicable to LIBOR Rate Revolving Loans, the
Borrowers have failed to timely select a new Interest Period to be applicable
to such LIBOR Rate Revolving Loans, the Borrowers shall be deemed to have
elected to convert such LIBOR Rate Revolving Loans into Base Rate Revolving
Loans effective as of the expiration date of such Interest Period.

 

(d)           On
or before the deadline set forth in clause (b) preceding, in
lieu of delivering a Notice of Continuation/Conversion, the Borrowers may give the
Administrative Agent telephonic notice
of any request for a continuation or conversion.  The Administrative Agent shall be entitled to rely on such telephonic
notice in continuing or converting such Revolving Loans, regardless of whether
any written confirmation is received.

 

(e)           The
Administrative Agent will promptly notify each Revolving Lender of its receipt
of a Notice of Continuation/Conversion. 
All continuations and conversions 

 

55

 

shall
be made ratably according to the respective outstanding principal amounts of
the Revolving Loans held by each Revolving Lender with respect to which such
notice was given.

 

(f)            After giving
effect to any continuation or conversion of any LIBOR Rate Revolving Loan,
there may not be more than ten (10) different Interest Periods in effect
hereunder.

 

(g)           At the election
of either of the Agents or the Majority Revolving Lenders, the Borrowers shall
have no right to convert any Base Rate Revolving Loans into LIBOR Rate
Revolving Loans or to continue any LIBOR Rate Revolving Loans as LIBOR Rate
Revolving Loans during the existence of any Default or Event of Default.

 

Section 3.3             Maximum Interest Rate. 
In no event shall the Interest Rate provided for in this Agreement
applicable to any Obligation exceed the Maximum Rate.  If the Interest Rate applicable to any
Obligation, absent the limitation set forth in this Section 3.3,
would otherwise exceed the Maximum Rate, then such Interest Rate shall be the
Maximum Rate, and, if in the future, such Interest Rate would otherwise be less
than the Maximum Rate, then such Interest Rate shall remain at the Maximum Rate
until such time as the amount of interest paid hereunder in respect of such
Obligation equals the amount of interest which would have been paid in respect
of such Obligation if the Interest Rate for such Obligation had not been
limited to the Maximum Rate.  In the
event that, upon payment in full of the applicable Obligation, the total amount
of interest paid or accrued under the terms of this Agreement in respect of
such Obligation is less than the total amount of interest which would, but for
this Section 3.3, have been charged, paid, or accrued in respect of
such Obligation if the Interest Rate for such Obligation otherwise set forth in
this Agreement had at all times been in effect, then the Borrowers shall, to
the extent permitted by applicable law, pay the Administrative Agent, for the
account of the applicable Lenders, an amount equal to the excess of (a) the
lesser of (i) the amount of interest which would have been charged, paid,
or accrued in respect of such Obligation if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have been
charged, paid, or accrued in respect of such Obligation had the Interest Rate
for such Obligation otherwise set forth in this Agreement, at all times, been
in effect over (b) the amount of interest actually charged, paid, or
accrued under this Agreement in respect of such Obligation.  If a court of competent jurisdiction
determines that either Agent and/or any Lender has charged, received, or
demanded interest and other charges hereunder in respect of any Obligation in
excess of the Maximum Rate, such excess shall be deemed charged, received, or
demanded on account of, and shall automatically be applied to reduce, the
applicable Obligation other than interest, in the inverse order of maturity,
and if there is no applicable Obligation outstanding, the applicable Agent
and/or such Lender shall refund to the Borrowers (as applicable) such
excess.

 

Section 3.4             Unused Line Fee. 
Subject to Section 3.3, until the Revolving Facility Payment
In Full, the Borrowers agree to pay to the Administrative Agent, for the
account of the Revolving Lenders in accordance with their respective Pro Rata
Shares, on the first day of each calendar month and on the Revolving
Termination Date, an unused line fee (the “Unused Line Fee”) computed
at a rate per annum equal to the Applicable Unused Line Fee Percentage, multiplied
by the amount by which (A) the average daily Maximum Revolver Amount
exceeded 

 

56

 

(B) the
sum of the average daily outstanding amount of the Revolving Loans other than Non-Ratable Loans and the
average daily undrawn amount of all outstanding Letters of Credit during the
immediately preceding calendar month or shorter period if calculated on the
Revolving Termination Date.  Subject to Section 3.3,
the Unused Line Fee shall be computed on the basis of a 360 day year for the
actual number of days elapsed.  For
purposes of calculating the Unused Line Fee pursuant to this Section 3.4,
any payment received by the Administrative Agent (if received prior to 12:00
noon (New York time)) shall be deemed to be credited to the Borrowers’ Loan
Account on the Business Day such payment is received by the Administrative
Agent.

 

Section 3.5             Letter of Credit Fees and Expenses.

 

(a)           Subject to Section 3.3,
the Borrowers agree to pay to the Administrative Agent for the account of the
Revolving Lenders in accordance with their respective Pro Rata Shares a fee
(the “Letter of Credit Fee”) equal to the Letter of Credit Fee
Percentage, multiplied by the average undrawn amount of each Letter of
Credit issued and outstanding hereunder. 
The Letter of Credit Fee shall be (i) computed on the basis of a
360 day year for the actual number of days elapsed and (ii) payable
monthly in arrears on the first day of each month following any month in which
a Letter of Credit was issued and/or in which a Letter of Credit remained
outstanding and on the Revolving Termination Date.

 

(b)           Subject to Section 3.3,
the Borrowers agree to pay to the Letter of Credit Issuer, for its sole
benefit, (i) all out-of-pocket costs, fees, and expenses incurred by the
Letter of Credit Issuer in connection with the application for, processing,
issuance, renewal, extension, or amendment of any Letter of Credit and (ii) a
“fronting fee” in an amount equal to 0.125%
of the face amount of such Letter of Credit on the date of issuance, renewal,
or extension of each Letter of Credit.

 

Section 3.6             Other Fees. 
Subject to Section 3.3, the Borrowers agree to pay the
Agents when due all other fees and expenses as set forth in the Fee Letters.

 

Section 3.7             Term Closing Fee.  Subject to Section 3.3,
the Borrowers agree to pay to the Administrative Agent for the account of each
Term Lender on the Closing Date a closing fee in an amount equal to 1.632% of
the New Term Loan Funding Amount of such Term Lender (the “Term Closing Fee”).

 

Section 3.8             Engagement Letter Fee.  Subject to Section 3.3,
the Borrowers agree to pay to Banc of America Securities LLC on the Closing
Date the arrangement fee described in the Fee Letter (as defined in the
Engagement Letter).

 

ARTICLE 4

 

PRINCIPAL PAYMENTS AND PREPAYMENTS

 

Section 4.1             Repayment.

 

(a)           Revolving Loans.  The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, together with all other
non-contingent Obligations (other 

 

57

 

than
Term Loan Obligations), including all accrued and unpaid interest thereon, on
the Revolving Termination Date (or with
respect to any Bank Products, any applicable earlier date).  The Borrowers may prepay the Revolving Loans,
in whole or in part, at any time and from time to time and, subject to the
terms of this Agreement, reborrow prior to the Revolving Termination Date.  In addition, and without limiting the
generality of the foregoing, the Borrowers shall immediately pay to the
Administrative Agent, for the account of the Revolving Lenders, the amount, if
any and without duplication, by which the Aggregate Revolver Outstandings
exceed the Borrowing Base.  The Borrowers
shall have the option, without the consent of the Term Lenders, to request that
the Revolving Lenders extend the Stated Revolving Termination Date to a date no
later than the Stated Term Loan Termination Date, subject to the approval of
all of the Revolving Lenders in their sole discretion.  In the event that the Borrowers wish to
obtain a revolving credit facility on terms that, in the reasonable judgment of
the Majority Term Lenders, are no less adverse taken as a whole to the Term Lenders
than those contained in this Agreement with revolving credit lenders that are
commercial banks, commercial finance companies or other asset-based lenders
that provide asset-based revolving credit loans in the ordinary course of
business, the Term Lenders agree to amend this Agreement or enter into a new
loan agreement to provide for such replacement revolving credit facility on
such terms; provided that in no event shall the foregoing obligate the
Term Lenders to consent to any amendment to this Agreement or enter into a new
loan agreement in respect of such replacement revolving credit facility which
in the reasonable judgment of the Majority Term Lenders would be adverse to the
Term Lenders taken as a whole; provided  further that the
Borrowers shall pay all of the Term Lenders’ reasonable fees and expenses
(including reasonable fees and expenses of counsel) incurred in connection with
the negotiation of such replacement revolving credit facility.

 

(b)           Term Loans.  The Borrowers shall repay the outstanding
principal balance of the Term Loans, together with all other non-contingent
Obligations, including all accrued and unpaid interest thereon and the Early
Term Loan Prepayment Fee, if any, on the Term Loan Termination Date.

 

(c)           Payments.  All payments to be made by the Borrowers with
respect to the Loans shall be made without setoff, recoupment, or
counterclaim.  Unless otherwise expressly
provided herein, all payments by the Borrowers shall be made to the
Administrative Agent, for the account of the applicable Lenders, to the account
designated by the Administrative Agent and shall be made in Dollars and in
immediately available funds, no later than 12:00 noon (New York time) on
the date specified herein.  Any payment
received by the Administrative Agent after such time shall be deemed to have
been received on the following Business Day and any applicable interest or fee
shall continue to accrue.

 

(d)           LIBOR Rate
Revolving Loan Payment Dates.  Subject to the provisions set forth in the
definition of Interest Period, whenever any payment is due on a day other than
a Business Day, such payment shall be due on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.

 

58

 

Section 4.2             Termination of Credit Facility; Prepayment or Termination of Term Loans. 
The Borrowers may, at any time, terminate this Agreement upon at least
ten Business Days’ prior written notice thereof to the Agents, upon (a) the
payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon, and the cancellation and return of all outstanding Letters of
Credit (or alternatively with respect to each such Letter of Credit, the
furnishing to the Collateral Agent of either a Supporting Cash Deposit or a
Supporting Letter of Credit as required by Section 2.4(g)), (b) the
payment of the Early Term Loan Prepayment Fee provided below (if applicable), and (c) the payment in full of
all reimbursable expenses and other Obligations (including any amount due under
Section 5.4) together with accrued and unpaid interest thereon; provided
that this Agreement may not be terminated as to the Term Loans prior to the
first Anniversary Date.  The Maximum
Revolver Amount shall not be reduced except in connection with termination of
the Revolving Credit Commitments and payment in full of all Revolving
Obligations as provided by this Section 4.2 or as otherwise
provided in Section 4.3(f) or Section 11.2.  For the avoidance of doubt, the Maximum Revolver
Amount shall be reduced to zero and the Revolving Credit Commitments shall be
terminated upon the termination, in accordance with this Section 4.2,
of the revolving credit facility provided hereunder (whether or not the Term
Loans or any other Term Loan Obligations have been paid as provided in this Section 4.2).  Subject to Section 3.3, if this
Agreement is terminated or all or any portion of the Term Loans are prepaid or
repaid at any time prior to the date that is thirty months after the Closing
Date, whether pursuant to Section 4.3 or pursuant to Section 11.2
or otherwise, the Borrowers shall pay to the Administrative Agent, for the
account of the Term Lenders, a fee (the “Early Term Loan Prepayment Fee”)
in an amount determined in accordance with the following table and allocated to
each Term Lender pro rata based upon the amount of its Term Loans being so
repaid, prepaid or terminated:

 

	
  Period during which
  repayment, prepayment or early termination occurs

  	
   

  	
  Early Term Loan Prepayment
  Fee

  
	
   

  	
   

  	
   

  
	
  On or prior to the second
  Anniversary Date

  	
   

  	
  3.00% of the aggregate
  outstanding principal amount of Term Loans being repaid, prepaid or
  terminated

  
	
   

  	
   

  	
   

  
	
  After the second
  Anniversary Date, but prior to the date that is thirty months after the
  Closing Date

  	
   

  	
  2.00% of the aggregate
  outstanding principal amount of Term Loans being repaid, prepaid or
  terminated

  

 

No Term Loans may be voluntarily prepaid prior to
the Revolving Facility Payment In Full.

 

Section 4.3             Mandatory Prepayment of the Loans. 
Without limiting Section 4.1, each of the Borrowers agrees
to make a prepayment with respect to the outstanding Loans and other
Obligations as follows:

 

(a)           On any Business
Day, if the Aggregate Revolver Outstandings exceed the Borrowing Base, the
Borrowers shall immediately pay to the Administrative Agent, for the account of
the Revolving Lenders, the amount (if any) of such excess for application to
the principal amount of the Revolving Loans and, if after such application
there 

 

59

 

remains
any portion of such excess, such remaining unapplied amount shall be delivered
to and held by the Collateral Agent as cash collateral for the Obligations
(contingent or otherwise) with respect to outstanding Letters of Credit.

 

(b)           All cash proceeds received by any Borrower from the Disposition or sale of
Inventory or collection of Accounts in the ordinary course of business shall be
applied to repayment of the applicable Obligations promptly (and in any event
within one Business Day of receipt) as specified in Section 4.6(c).

 

(c)           The Borrowers
shall pay to the Administrative Agent, for the account of the applicable
Lenders, promptly (and in any event within one Business Day of receipt) all net
cash proceeds received by an Obligated Party in connection with any
Disposition, excluding proceeds received pursuant to clause (b) preceding,
for application to the applicable Obligations as provided in Section 4.6(c).  As used in this Section 4.3(c), “net
cash proceeds” means the proceeds of any applicable Disposition, minus (i) commissions and
other reasonable and customary transaction costs, fees, and expenses properly
attributable to such transaction and payable by such Obligated Party in
connection therewith (in each case, paid to non-Affiliates), (ii) transfer
taxes and (iii) amounts payable to holders of Liens (to the extent such
Liens constitute Permitted Liens hereunder and such Liens are senior to the
Agent’s Liens), if any, on the property subject to such Disposition to the
extent the documentation governing such senior Liens required such payment to
such holders upon such Disposition.

 

(d)           All cash payments or other cash proceeds received by any Obligated Party
constituting proceeds of a Distribution, loan, or other advance (other than a Distribution,
loan or advance by an Obligated Party to an Obligated Party) to such Obligated
Party, excluding proceeds of Revolving Loans, Term Loans, the Second Lien Debt
or the Refinancing Second Lien Debt, such proceeds which are proceeds of a loan
or advance from one Borrower to another Obligated Party, and other than such
proceeds which are proceeds of a loan or advance permitted under clause (c) through
clause (j) of Section 8.12, shall be paid to the
Administrative Agent promptly upon such receipt, for application to the
applicable Obligations as specified in Section 4.6(c).

 

(e)           Upon
any issuance of any Capital Stock of any Obligated Party, no later than two
Business Days after such issuance, the Borrowers shall make a prepayment in an
amount equal to the proceeds of such issuance, net of underwriting discounts,
commissions, and other reasonable and customary transaction costs, fees, and
expenses properly attributable to such transaction and payable by such
Obligated Party in connection therewith (in each case paid to Persons who are
not Affiliates of any Obligated Party) for application to the applicable
Obligations in accordance with Section 4.6(c).

 

(f)            In any event, if any Obligated Party receives (i) net cash proceeds
in connection with any Disposition, (ii) cash payments or other cash
proceeds of a Distribution, loan, or other advance to such Obligated Party or (iii) proceeds
of any issuance of Capital Stock, on or after the Closing Date, any such
proceeds or payments shall be applied to the payment of the Revolving Loans
(and after the payment in full of 

 

60

 

the Revolving Loans and so long as no Event of
Default is then continuing, to the payment of the Term Loans) to the extent
necessary to avoid any requirement under any Second Lien Debt Documents or Refinancing Second Lien
Debt Documents to prepay or redeem (or
to make any offer to prepay or redeem) any portion of the Second Lien
Debt or Refinancing Second Lien
Debt, together with a permanent reduction of the Revolving Credit Commitments
and the Maximum Revolver Amount in the amount of any such application to the
Revolving Loans (such reduction to result in each Revolving Lender’s Revolving
Credit Commitment being permanently reduced by its Pro Rata Share of such
reduction).  Any payment of the Term Loans made pursuant
to this Section 4.3(f) and prior to the date that is thirty
months after the Closing Date shall be accompanied by the Early Term Loan
Prepayment Fee in accordance with Section 4.2.  For the avoidance of doubt, no Early
Term Loan Prepayment Fee shall be payable in connection with any prepayments or
payments on the Term Loans made at any time after thirty months after the
Closing Date.

 

No provision contained in this Section 4.3
shall constitute a consent to an asset disposition, Distribution, loan, advance
or equity issuance that is otherwise not permitted by the terms of this
Agreement.

 

Section 4.4             LIBOR Rate Revolving Loan Prepayments. 
In connection with any prepayment, if any LIBOR Rate Revolving Loans are
prepaid prior to the expiration date of the Interest Period applicable thereto,
the Borrowers shall pay to the Administrative Agent, for the benefit of the
Revolving Lenders, the amounts described in Section 5.4, provided
that the Borrowers shall not be required to pay the amounts described in Section 5.4
in connection with any Revolving Lender’s entering into an Assignment and
Acceptance.

 

Section 4.5             Payments as Revolving Loans. 
At the election of the Administrative Agent, all payments of principal,
interest, reimbursement obligations in connection with Letters of Credit, fees,
premiums, reimbursable expenses (including all reimbursement for expenses
pursuant to Section 15.7), other sums payable under the Loan
Documents, and any and all amounts equal to the excess of checks and other
items presented to BofA for payment against the Funding Account or any other
Deposit Account maintained by a Borrower with BofA in an amount greater than
the then available balance in such Deposit Account may be paid with the
proceeds of Revolving Loans made hereunder whether made following a request for
such purpose by the Borrowers pursuant to Section 2.2 or pursuant
to a deemed request as provided in this Section 4.5.  The Borrowers hereby irrevocably authorize
the Administrative Agent to charge the Loan Account for the purpose of paying
all amounts from time to time due under the Loan Documents (including as
described in this Section 4.5) and agree that all such amounts
charged shall constitute Revolving Loans (including Non-Ratable Loans and Agent
Advances) and that all such Revolving Loans shall be deemed to have been
requested pursuant to Section 2.2; provided that, except as
set forth in the succeeding sentence, so long as no Event of Default exists,
the Administrative Agent shall not charge the Loan Account for expenses until
10 days have elapsed since the Administrative Agent has sent an invoice
therefor to Ahern.  In the event the
Collateral Agent is required to make any payment to Wells Fargo Bank, N.A. (“WFB”)
pursuant to the payoff letter delivered by WFB to Ahern and the Collateral
Agent on the Original Closing Date with respect to that certain Credit and
Security Agreement, dated as of July 25, 2003, the Administrative Agent
shall immediately charge the Loan Account for the purpose of 

 

61

 

reimbursing
the Collateral Agent for all such payments and all such amounts charged shall
constitute Revolving Loans.

 

Section 4.6             Apportionment, Application, and Reversal
of Payments.

 

(a)           Principal and
interest payments shall be apportioned ratably among the applicable Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each applicable Lender) and payments of the fees shall, as
applicable, be apportioned ratably among the applicable Lenders, except for
fees payable solely to BofA, Wachovia, the Agents, either of them, Banc of America Securities LLC and the Letter of
Credit Issuer and except as provided in Article 13.

 

(b)           Except as
provided otherwise in this Agreement, all payments shall be remitted to the
Administrative Agent or, if applicable, to the Collateral Agent, and all such
payments not relating to principal or interest of specific Loans, or not constituting
payment of specific fees, and all proceeds of any Obligated Party’s Accounts or
any other Collateral received by the Administrative Agent or the Collateral
Agent, shall be applied, ratably, subject to the other provisions of this
Agreement, FIRST, to pay any fees,
indemnities, or expense reimbursements then due to either of the Agents from
any Obligated Party, SECOND, to
pay any fees, indemnities, or expense reimbursements then due to any of the
Credit Providers other than the Agents from any Obligated Party, THIRD, to pay interest then due in
respect of the Loans, including Non-Ratable Loans and Agent Advances, FOURTH, to pay or prepay principal
of the Non-Ratable Loans and the Agent Advances, FIFTH,
to pay or prepay principal of the Revolving Loans (other than the Non-Ratable
Loans and the Agent Advances) and unpaid reimbursement obligations in
respect of Letters of Credit, SIXTH,
during the existence of a Default or an Event of Default, to pay an amount to
the Collateral Agent equal to 105% of the aggregate undrawn amount of all
outstanding Letters of Credit and the aggregate amount of any unpaid
reimbursement obligations in respect of Letters of Credit, to be held as cash
collateral for such Obligations, and SEVENTH, to
the payment of any other Obligation including any amounts relating to Bank
Products due to BofA, Wachovia, any other Lender or any of their respective
Affiliates by any of the Obligated Parties.  Subject to items “first”
through “seventh” preceding, the Administrative Agent and the Lenders
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Obligations.

 

(c)           Payments
received pursuant to Section 4.3(b), Section 4.3(c), Section 4.3(d) and
Section 4.3(e) shall be applied, ratably, subject to the other
provisions of this Agreement (including, without limitation, Section 4.3(f) and
Section 4.6(e)), in the order of priority set forth for items “first”
through “fifth” of clause (b) preceding at any time other
than during the existence of a Default or an Event of Default, and during the
existence of any Default or Event of Default, as specified in clause (b) preceding
but with such payments to be applied first, to payment or cash
collateralization, as applicable, of the Revolving Obligations in accordance
with the allocation arrangements prescribed in such clause (b) until
fully paid or cash collateralized, as applicable, and thereafter to
payment of the Term Loan Obligations.

 

62

 

(d)           Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by a
Borrower, or unless an Event of Default is in existence, neither the
Administrative Agent nor any Revolving Lender shall apply any payment which it
receives to any LIBOR Rate Revolving Loan, except (i) on the expiration
date of the Interest Period applicable to any such LIBOR Rate Revolving Loan or
(ii) in the event, and only to the extent, that there are no outstanding
Base Rate Revolving Loans and, in any such event, the Borrowers shall pay the
LIBOR breakage losses in accordance with Section 5.4.

 

(e)           Notwithstanding
anything to the contrary contained in this Agreement or any other Loan
Document, (i) subject to clause (iii) of this Section 4.6(e),
on the Stated Term Loan Termination Date, the Administrative Agent shall apply
Collateral and proceeds of Collateral remitted to it (other than Collateral and
proceeds of Collateral described in the last sentence of Section 10.1)
to pay the outstanding Term Loan Obligations, (ii) the Administrative
Agent shall allocate amounts received by it to Term Loan Obligations in
accordance with and to the extent provided in Section 4.3(f), and (iii) with
respect to all Collateral and proceeds of Collateral received by the Collateral
Agent or the Administrative Agent from and after the acceleration of the
Obligations under this Agreement or the commencement of any bankruptcy or
similar proceeding by or against any Obligated Party, such Collateral and
proceeds of Collateral shall be applied first, to pay or cash
collateralize, as applicable, the Revolving Obligations in accordance with the
allocation arrangements prescribed in Section 4.6(b) until
fully paid or cash collateralized, as applicable, and thereafter to pay
the Term Loan Obligations.

 

Section 4.7             Indemnity for Returned Payments. 
If after receipt of any payment or of any proceeds of Collateral that is
applied to the payment of all or any part of the Obligations, any Credit
Provider is for any reason compelled to surrender such payment or proceeds to
any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by such Credit Provider
and the Borrowers shall be liable to pay to the Administrative Agent, for the
benefit of the applicable Credit Providers, and each Borrower hereby
indemnifies the applicable Credit Providers and holds the applicable Credit
Providers harmless for the amount of such payment or proceeds surrendered.  The provisions of this Section 4.7
shall be and remain effective notwithstanding any release of Collateral or
guarantors, cancellation or return of Loan Documents, or other contrary action
that may have been taken by any Credit Provider in reliance upon such payment
or application of proceeds, and any such contrary action so taken shall be
without prejudice to the Credit Providers’ rights under this Agreement and the
other Loan Documents and shall be deemed to have been conditioned upon such
payment or application of proceeds having become final and irrevocable.  The provisions of this Section 4.7
shall survive the termination of this Agreement.

 

Section 4.8             Administrative Agent’s and the Lenders’
Books and Records; Monthly Statements.  The
Administrative Agent shall record the principal amount of the Loans, the
undrawn amount of all outstanding Letters of Credit, and the aggregate amount
of unpaid reimbursement obligations outstanding with respect to the Letters of
Credit from time to time on 

 

63

 

its
books.  In addition, each Lender may note
the date and amount of each payment or prepayment of principal of such Lender’s
Loans in its books and records.  Failure
by the Administrative Agent or any Lender to make any such notation shall not
affect the obligations of the Borrowers with respect to the Loans or the
Letters of Credit.  The Borrowers agree
that the Administrative Agent’s and each Lender’s books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom,
and shall constitute presumptive proof thereof, irrespective of whether any
Obligation is also evidenced by a promissory note or other instrument.  The Administrative Agent will provide to the
Borrowers and the Revolving Lenders (and, if requested in writing by any Term
Lender, such Term Lender) a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. 
Such statement shall be deemed correct, accurate, and binding on the
Borrowers and an account stated (except for reversals and reapplications of
payments made as provided in Section 4.6 and corrections of errors
discovered by either of the Agents), unless a Borrower notifies the
Administrative Agent in writing to the contrary within 30 days after such
statement is rendered.  In the event a
timely written notice of objections is given by a Borrower, only the items to
which exception is expressly made will be considered to be disputed by the
Borrowers.  Each Term Lender agrees to
provide the Administrative Agent with such information as to the Term Loans and
other Term Loan Obligations owing to such Term Lender and as to such Term
Lender (including, without limitation, wire transfer information) as the
Administrative Agent may reasonably request in order for the Administrative
Agent to properly and accurately perform its duties under this Section 4.8,
Section 4.6 and the other relevant provisions of this Agreement.

 

ARTICLE 5

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

Section 5.1             Taxes.

 

(a)           Any and all
payments by the Obligated Parties, or any of them, to either Agent or any
Lender under this Agreement or any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes.  In addition, subject to Section 14.10(c),
the Obligated Parties shall pay all Other Taxes.

 

(b)           The Obligated
Parties agree to indemnify and hold harmless the Administrative Agent, the
Collateral Agent and each Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5.1) paid by the Administrative Agent,
the Collateral Agent or any Lender and any liability (including penalties,
interest, additions to tax, and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted.  Payment under this
indemnification shall be made within 30 days after the date the Administrative
Agent, the Collateral Agent or any Lender makes written demand therefor.

 

64

 

 

(c)                                  If an Obligated
Party shall be required by law to deduct or withhold any Taxes or Other Taxes
from or in respect of any sum payable hereunder to the Administrative Agent,
the Collateral Agent or any Lender, then:

 

(i)                                     the sum payable
shall be increased as necessary so that after making all required deductions
and withholdings (including, without limitation, deductions and withholdings
applicable to additional sums payable under this Section 5.1) the
Administrative Agent, the Collateral Agent or such 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 Obligated
Party shall make such deductions and withholdings;

 

(iii)                               such Obligated
Party shall pay the full amount deducted or withheld to the relevant taxing
authority or other authority in accordance with any applicable Requirement of
Law; and

 

(iv)                              such Obligated
Party shall also pay to the Administrative Agent, for the account of each
Lender, or each Lender at the time interest is paid, all additional amounts
that the respective Lender specifies as necessary to preserve the after-tax
yield such Lender would have received if such Taxes or Other Taxes had not been
imposed.

 

(d)                                 Within 30 days
after the date of any payment by any Obligated Party of Taxes or Other Taxes,
such Obligated Party shall furnish to the Administrative Agent the original or
a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

 

(e)                                  If the
Obligated Parties are required to pay additional amounts to any Lender pursuant
to Section 5.1(c), then such Lender shall use reasonable efforts
(consistent with legal and regulatory restrictions) to change the
jurisdiction of its lending office so as to eliminate any such additional
payment by the Obligated Parties that may thereafter accrue, if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.

 

Section 5.2                                      Illegality.

 

(a)                                  If any
Revolving Lender determines that, after the date of this Agreement, the
introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for such Revolving Lender or its applicable
lending office to make LIBOR Rate Revolving Loans, then, on notice thereof by
such Revolving Lender to the Borrowers through the Administrative Agent, any
obligation of such Revolving Lender to make LIBOR Rate Revolving Loans shall be
suspended until such Revolving Lender notifies the Administrative Agent and the
Borrowers that the circumstances giving rise to such determination no longer
exist.

 

65

 

(b)                                 If a Revolving
Lender determines that it is unlawful to maintain any LIBOR Rate Revolving
Loan, the Borrowers shall, upon receipt of notice of such fact and demand from
such Revolving Lender (with a copy to the Administrative Agent), prepay in full
such LIBOR Rate Revolving Loans of such Revolving Lender then outstanding,
together with accrued and unpaid interest thereon and amounts required under Section 5.4,
either on the last day of the Interest Period thereof, if such Revolving Lender
may lawfully continue to maintain such LIBOR Rate Revolving Loans to such day,
or immediately, if such Revolving Lender may not lawfully continue to maintain
such LIBOR Rate Revolving Loans.  If the
Borrowers are required to so prepay any LIBOR Rate Revolving Loans, then
concurrently with such prepayment, the Borrowers shall borrow from the affected
Revolving Lender, in the amount of such repayment, a Base Rate Revolving
Loan.  Each Revolving Lender agrees to
designate a different lending office if such designation will avoid the need
for such notice and will not, in the judgment of such Revolving Lender,
otherwise be disadvantageous to such Revolving Lender.

 

Section 5.3                                      Increased Costs and Reduction of Return.

 

(a)                                  If any
Revolving Lender determines that due to either (i) the introduction of or
any change in the interpretation of any law or regulation after the date of
this Agreement or (ii) the compliance by such Revolving Lender with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law) made after the date of this Agreement,
there shall be any increase in the cost to such Revolving Lender of agreeing to
make or making, funding, or maintaining any LIBOR Rate Revolving Loans, then
the Borrowers shall be liable for, and shall from time to time, within three
Business Days of demand by such Revolving Lender (with a copy of such demand to
be sent to the Administrative Agent), pay to the Administrative Agent, for the
account of such Revolving Lender, additional amounts as are sufficient to
compensate such Revolving Lender for such increased costs.

 

(b)                                 If any
Revolving Lender shall have determined that (to the extent it occurs after the
date of this Agreement) (i) the introduction of any Capital Adequacy
Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any
change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by such
Revolving Lender or any corporation or other entity controlling such Revolving
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by such Revolving Lender or
any corporation or other entity controlling such Revolving Lender and (taking
into consideration such Revolving Lender’s or such corporation’s or other
entity’s policies with respect to capital adequacy and such Revolving Lender’s
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans, credits, or obligations
under this Agreement, then, within three Business Days of demand by such
Revolving Lender (with a copy of such demand to be sent to the Administrative
Agent), the Borrowers shall pay to the Administrative Agent, for the account of
such Revolving Lender, from time to time as specified by such 

 

66

 

Revolving
Lender, additional amounts sufficient to compensate such Revolving Lender for
such increase.

 

Section 5.4                                      Funding Losses. 
The Borrowers shall reimburse each Revolving Lender and hold each
Revolving Lender harmless from any loss or expense that such Revolving Lender
may sustain or incur as a consequence of:

 

(a)                                  the failure of
the Borrowers to make on a timely basis any payment of principal of any LIBOR
Rate Revolving Loan;

 

(b)                                 except as
permitted by Section 5.5, the failure of the Borrowers to (i) borrow
any requested LIBOR Rate Revolving Loan, (ii) continue any LIBOR Rate
Revolving Loan, or (iii) convert a Base Rate Revolving Loan to a LIBOR
Rate Revolving Loan, in each case, after any Borrower has given (or is deemed
to have given) a Notice of Borrowing, a Notice of Continuation/Conversion,
or any telephonic notice in lieu thereof with respect thereto; or

 

(c)                                  the prepayment
or other payment (including after acceleration thereof) of any LIBOR Rate
Revolving Loans on a day that is not the last day of the relevant Interest
Period;

 

including any such loss of anticipated profit and
any loss or expense arising from the liquidation or reemployment of funds
obtained by such Revolving Lender (but excluding loss of the Applicable Margin)
to maintain its LIBOR Rate Revolving Loans or from fees payable to terminate
the deposits from which such funds were obtained.  The Borrowers shall also pay any customary
administrative fees, including a processing fee (the processing fee is currently
Three Hundred Fifty Dollars ($350) but is subject to change from time to time
by the Administrative Agent without notice), charged by the Administrative
Agent or any Revolving Lender in connection with the foregoing.

 

Section 5.5                                      Inability to Determine Rates. 
If the Administrative Agent determines that for any reason adequate and
reasonable means do not exist for determining the LIBOR Rate for any requested
Interest Period with respect to a proposed LIBOR Rate Revolving Loan or that
the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Revolving Loan does not adequately and fairly reflect the cost to
the Revolving Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrowers and each Revolving Lender.  Thereafter, the obligation of the Revolving
Lenders to make or maintain LIBOR Rate Revolving Loans hereunder shall be
suspended until the Administrative Agent revokes such notice in writing.  Upon receipt of a notice pursuant to the
first sentence of this Section 5.5, the Borrowers may revoke any
Notice of Borrowing or Notice of Continuation/Conversion then submitted by any
of them.  If the Borrowers do not revoke
any such Notice of Borrowing or Notice of Continuation/Conversion, the
Revolving Lenders shall make, convert, or continue the Revolving Loans, as
proposed by the Borrowers, in the amount specified in the applicable notice
submitted by a Borrower, but such Revolving Loans shall be made, converted, or
continued as Base Rate Revolving Loans instead of LIBOR Rate Revolving Loans.

 

67

 

Section 5.6                                      Certificate of the Affected Lender. 
If any Lender claims reimbursement or compensation under this Article 5,
the affected Lender shall determine the amount thereof and shall deliver to the
Borrowers (with a copy to the Administrative Agent) a certificate setting
forth in reasonable detail the amount payable to the affected Lender, and such
certificate shall be conclusive and binding on the Borrowers in the absence of
manifest error.

 

Section 5.7                                      Survival.  The
agreements and obligations of the Borrowers in this Article 5 shall
survive the payment of all other Obligations.

 

ARTICLE 6

 

BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

 

Section 6.1                                      Books and Records. 
The Obligated Parties shall maintain, and shall cause each of their
Subsidiaries to maintain, at all times, correct and complete books, records,
and accounts in which full, true, complete, correct, and timely entries are
made of such Person’s transactions in accordance with GAAP consistently
applied.  The Obligated Parties shall
reflect, and shall cause each of their Subsidiaries to reflect, by means of
appropriate entries, in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation
and amortization of property and bad debts, all in accordance with GAAP.  The Obligated Parties shall maintain at all
times books and records pertaining to the Collateral in such detail, form, and
scope as the Agents shall reasonably require, including, but not limited to,
timely records of (a) all payments received and all credits and extensions
granted with respect to the Accounts, (b) the return, rejection,
repossession, stoppage in transit, loss, damage, or destruction of any
Inventory, and (c) all other dealings affecting the Collateral.

 

Section 6.2                                      Financial and Other Information. 
The Obligated Parties shall promptly furnish to the Agents all such
information regarding the Obligated Parties’ and each of their Subsidiaries’
financial and business affairs as either of the Agents or any Lender (through
either of the Agents, and the applicable Agent agrees to pass along all such
reasonable requests by any Lender to the Obligated Parties) may reasonably
request.  Without limiting the foregoing,
the Obligated Parties will furnish, or cause to be furnished, to both Agents
(with sufficient copies to the Administrative Agent for distribution to each
Lender) the following, in such detail as either of the Agents or the Lenders
(through either of the Agents, and the applicable Agent agrees to pass along
all such reasonable requests by any Lender to the Obligated Parties) shall
reasonably request:

 

(a)                                  The Obligated
Parties will furnish, or cause to be furnished, as soon as available, but in
any event not later than 120
days after the close of each Fiscal Year of Ahern, consolidated audited balance
sheets and statements of income, cash flow, and stockholders’ equity for Ahern and its Subsidiaries for such Fiscal Year,
and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable
detail, fairly presenting the financial position and the results of operations
of Ahern and its Subsidiaries on a consolidated basis as at the date thereof
and for the Fiscal Year then ended, and prepared in accordance with GAAP; provided
that the Obligated Parties will furnish or cause to be furnished unaudited
drafts of each of such financial statements to the Agents as soon as available,
but in any event 

 

68

 

not
later than 90 days after the close of each Fiscal Year of Ahern.  Such Financial Statements shall be audited in
accordance with generally accepted auditing standards by and accompanied by a
report thereon containing an opinion that is unqualified in any respect of,
independent certified public accountants selected by Ahern (it being agreed by
the parties hereto, however, that at any time after the Closing Date, the
Agents shall have the right, in their reasonable discretion, to require that
Ahern and its Subsidiaries retain independent certified public accountants of
national standing to perform such examinations and provide such reports).  The Obligated Parties hereby authorize each
of the Agents to communicate directly with the Obligated Parties’ certified
public accountants and, by this provision, authorizes such accountants to
disclose to each of the Agents any and all financial statements and other
supporting financial documents and schedules relating to the Obligated Parties
and to discuss directly with each of the Agents the finances and affairs of the
Obligated Parties, provided that the applicable Agent shall provide the
Obligated Parties the opportunity to attend and participate in such
discussions.

 

(b)                                 The Obligated
Parties will furnish or cause to be furnished,

 

(i)                                     as soon as
available, but in any event not later than 45 days after the end of each Fiscal Quarter, other than a Fiscal
Quarter that is a year end, an unaudited balance sheet, income statement, and
statement of cash flow for Ahern and its Subsidiaries prepared on a
consolidated basis for the period from the beginning of the current Fiscal Year
to the end of such Fiscal Quarter, all in reasonable detail and fairly
presenting the financial position and results of operations of Ahern and its
Subsidiaries as at the date thereof and for such period, and, in each case, in
comparable form, figures for the corresponding period in the prior Fiscal Year,
and in the Latest Projections, and prepared in accordance with GAAP (other than
the omission of footnotes and subject to normal year-end audit adjustments, if
any) applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 6.2(a); and

 

(ii)                                  as soon as
available, but in any event not later than 30 days after the end of each Fiscal Month, an unaudited balance
sheet, income statement, and statement of cash flow for Ahern and its
Subsidiaries prepared on a consolidated basis for the period from the beginning
of the current Fiscal Year to the end of such Fiscal Month, all in reasonable
detail and fairly presenting the financial position and results of operations
of Ahern and its Subsidiaries as at the date thereof and for such period, and,
in each case, in comparable form, figures for the corresponding period in the
prior Fiscal Year, and in the Latest Projections, and prepared in accordance
with GAAP (other than the omission of footnotes and subject to normal year-end
audit adjustments, if any, and, solely in the case of the financial statements
for the Fiscal Months of January and February of each Fiscal Year,
subject to normal year-end audit adjustments from the prior Fiscal Year that
have an impact on the financial statements for such Fiscal Months) applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 6.2(a).

 

69

 

Ahern shall certify by a certificate signed by a
Responsible Officer that all such Financial Statements have been prepared in
accordance with GAAP (other than the omission of footnotes and subject to
normal year-end audit adjustments, if any) applied consistently with the
audited Financial Statements required to be delivered pursuant to Section 6.2(a) and
present fairly, subject to normal year-end audit adjustments, the financial
position of Ahern and its Subsidiaries as at the dates thereof and their
results of operations for the periods then ended.

 

(c)                                  The Obligated
Parties will cause to be furnished, with each of the Financial Statements
delivered pursuant to Section 6.2(a), a letter from the independent
certified public accountants that audited such Financial Statements to the
effect that such accountants are familiar with this Agreement and that, in
auditing such Financial Statements, they did not become aware of any fact or
condition which then constituted a Default or Event of Default with respect to
a financial covenant set forth in Section 8.21, except for those,
if any, described in reasonable detail in such letter.

 

(d)                                 The Obligated
Parties will furnish or cause to be furnished, with each of the Financial
Statements delivered pursuant to Section 6.2(a), and with each of
the Financial Statements delivered pursuant to Section 6.2(b)(i), a
certificate of a Responsible Officer of Ahern in the form of Exhibit C
(a “Compliance Certificate”), or another form acceptable to the Agents
in their discretion, (i) setting forth in reasonable detail the calculations
required to establish compliance with the covenants set forth in Section 8.21
during the period covered by such Financial Statements and as at the end
thereof and (ii) except as explained in reasonable detail in such
certificate, (A) stating that all of the representations and warranties of
the Obligated Parties contained in this Agreement and the other Loan Documents
are correct and complete in all material respects as at the date of such
certificate as if made at such time, except for those that speak as of a
particular date, (B) stating that the Obligated Parties are, at the date
of such certificate, in compliance in all material respects with all of their
respective covenants and agreements in this Agreement and the other Loan
Documents, (C) stating that no Default or Event of Default then exists or
existed during the period covered by such Financial Statements, (D) analyzing
in reasonable detail the material variances of the figures in the Latest
Projections and corresponding Financial Statements for the prior Fiscal Year
and (E) certifying, to the Obligated Parties’ knowledge, that the amount
of the Unused Availability during the period covered by such certificate did
not fall to an amount which would give rise to an Accelerated Delivery Date or,
if the Unused Availability fell to any such amount, the first date on which
such event occurred.  If such certificate
discloses that a representation or warranty is not correct or complete, or that
a covenant has not been complied with, or that a Default or Event of Default
existed or exists, such certificate shall set forth what action the Obligated
Parties have taken or propose to take with respect thereto.  In addition, if, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited Financial Statements referred to in Section 7.6(a), the
consolidated Financial Statements of Ahern and its Subsidiaries delivered
pursuant to Section 6.2(a) or (b) will differ in
any material respect from the consolidated Financial Statements that would have
been delivered pursuant to such clauses had no such change in accounting
principles and policies been made, then the Obligated Parties will deliver to
both Agents (with sufficient 

 

70

 

copies
to the Administrative Agent for distribution to each Lender) (i) together
with the first delivery of Financial Statements pursuant to Section 6.2(a) or
(b) following such change, consolidated Financial Statements of
Ahern and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) one full Fiscal Year immediately
preceding the Fiscal Year in which such change is made, in each case prepared
on a pro forma basis as if such change had been in effect during such periods,
and (ii) together with each delivery of Financial Statements pursuant to Section 6.2(a) or
(b) following such change, subject to Section 1.2, a
written statement of a Responsible Officer of Ahern setting forth the
differences (including, subject to Section 1.2, any differences
that would affect any calculations relating to the financial covenants set
forth in Section 8.21) which would have resulted if such Financial
Statements had been prepared without giving effect to such change.  The Obligated Parties will furnish or cause to
be furnished, with each of the Financial Statements delivered pursuant to Section 6.2(b)(ii),
a monitoring report, in form, scope and substance reasonably satisfactory to
the Agents, for the Fiscal Month covered by such Financial Statements.

 

(e)                                  The Obligated
Parties will furnish, or cause to be furnished, no sooner than 60 days but not
less than 30 days prior to the beginning of each Fiscal Year of Ahern, annual
forecasts prepared by Ahern (to include forecasted consolidated balance sheets,
income statements, statements of cash flow, and Borrowing Base and Unused
Availability projections) for Ahern and its Subsidiaries as at the end of
and for each Fiscal Month of such Fiscal Year and the following Fiscal Year.

 

(f)                                    Upon the request of either of the Agents, the Obligated Parties will
furnish, or cause to be furnished, within three Business Days of such request,
a copy of the most recent annual report or other requested filing filed with
the PBGC, IRS or any other Governmental Authority with respect to each Plan of
any Obligated Party.

 

(g)                                 The Obligated
Parties will furnish, or cause to be furnished, within three Business Days
after filing thereof, copies of (i) all reports, if any, or other
documents filed by Ahern or any of its Subsidiaries with the Securities and
Exchange Commission under the Exchange Act or any other similar Governmental
Authority pursuant to any Requirement of Law, (ii) all reports, notices,
or statements sent or received by Ahern or any of its Subsidiaries to or from
the holders of any Debt of Ahern or any of its Subsidiaries registered under
the Securities Act of 1933 or to or from the trustee under any indenture under
which the same is issued, and (iii) all press releases and other statements
made available generally by Ahern or any of its Subsidiaries to the public
concerning material developments in the business of Ahern or any of its
Subsidiaries.

 

(h)                                 The Obligated
Parties will furnish, or cause to be furnished, as soon as available, but in
any event not later than fifteen days after Ahern’s or any of its Subsidiaries’
receipt thereof, a copy of all reports and letters prepared by any independent
certified public accountants of Ahern or any of its Subsidiaries and submitted
by such independent certified public accountants to the board of directors (or
the audit committee of the board of directors) of Ahern or any of its
Subsidiaries; provided that the Obligated Parties shall request such
reports and letters at least once per year.

 

71

 

(i)                                     The Obligated
Parties will furnish, or cause to be furnished, (i) concurrently with
distribution thereof to the owners of Capital Stock of any Obligated Party,
copies of any and all proxy statements and financial statements which such
Obligated Party makes available to any such Person, (ii) concurrently with
distribution thereof to the primary recipients, copies of any and all proxy
statements, financial statements, and reports which any Obligated Party makes
available to any holder of any Debt of any Obligated Party, (iii) not
later than three (3) Business Days after execution, receipt or delivery
thereof, copies of any material notices or other communications that any
Obligated Party executes, receives or delivers in connection with any Second
Lien Debt Document or any Refinancing Second Lien Debt Document and (iv) not
later than five (5) Business Days (or such lesser number of Business Days
as agreed to by the Agents) prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or
other modification with respect to any Second Lien Debt Document, Refinancing
Second Lien Debt Document or any related document, and promptly after the
execution thereof, copies of any executed amendment, supplement, waiver or
other modification with respect to any Second Lien Debt Document, any
Refinancing Second Lien Debt Document or any related document.

 

(j)                                     If requested by
either of the Agents, the Obligated Parties will furnish, or cause to be
furnished, promptly after such request, a copy of each tax return filed by
Ahern or any of its Subsidiaries with the IRS or any other Governmental
Authority.

 

(k)                                  The Obligated
Parties will furnish, or cause to be furnished to the Agents,

 

(i)                                     as soon as
available, but in any event within twenty (20) days after the end of each
Fiscal Month of Ahern as of the end of such Fiscal Month, and at such other
times as may be requested by either of the Agents, a Borrowing Base Certificate
and supporting information in connection therewith; provided, that
during each Accelerated Delivery Period, the Borrowers shall deliver a
Borrowing Base Certificate and supporting information in connection therewith
to the Agents on a weekly basis (not later than the fourth Business Day after
the last Business Day of the previous week) with the information thereon to be
as of the last Business Day of such previous week;

 

(ii)                                  within twenty
(20) days of the end of each Fiscal Month, or more frequently if requested by
either of the Agents, a schedule (in form reasonably satisfactory to the
Agents) of each Borrower’s Accounts created, credits given, cash collected, and
other adjustments made to such Borrower’s Accounts as of the last day of such
Fiscal Month since the date of the previous such schedule;

 

(iii)                               within twenty
(20) days of the end of each Fiscal Month, or more frequently if requested by
either of the Agents, an aging (in form reasonably satisfactory to the Agents)
of each Borrower’s Accounts as of the last day of such Fiscal Month, together
with a reconciliation to the corresponding Borrowing Base and to such Borrower’s
general ledger;

 

72

 

(iv)                              within twenty
(20) days of the end of each Fiscal Month, or more frequently if requested by
either of the Agents, an aging (in form reasonably satisfactory to the Agents)
of each Borrower’s accounts payable as of the last day of such Fiscal Month
together with a reconciliation to the corresponding general ledger of such
Borrower;

 

(v)                                 within twenty
(20)  days of the end of each Fiscal Month, or more frequently if
requested by either of the Agents, a detailed calculation (in form reasonably
satisfactory to the Agents) of Eligible Accounts, Eligible Transportation Equipment
and Eligible Inventory as of the last day of such Fiscal Month;

 

(vi)                              within twenty
(20) days of the end of each Fiscal
Month, or more frequently if requested by either of the Agents,
Inventory and Transportation Equipment reports by each Borrower, category,
quantity, cost, and location (in form reasonably satisfactory to the Agents),
together with a reconciliation to the corresponding Borrowing Base and to the
Borrowers’ general ledger as of the last day of such Fiscal Month;

 

(vii)                           within twenty (20)
days of the end of each Fiscal Month, a schedule identifying each location, if
any, where any Collateral is located with a sales representative, agent,
contractor, or other Person under any bailee, consignee, or warehouse
arrangement, in each case setting forth, as of the last day of the immediately
preceding Fiscal Month, (A) the name and address of each such sales
representative, agent, contractor, or other Person and a description of the
nature of any such arrangement and (B) the cost of such Inventory and
Transportation Equipment at each such location;

 

(viii)                        upon request by
either of the Agents, within three (3) Business Days of such request,
copies of invoices, customer statements, credit memos, remittance advices and
reports, leases, lease forms, deposit slips, and leasing, shipping and delivery
documents with respect to each Borrower’s Accounts and Inventory, and purchase
orders and invoices with respect to any Equipment or Inventory acquired by any
Borrower or a written explanation of why the requested items cannot be
delivered within such three (3) Business Day period (in which case, such
requested items shall then be delivered as promptly thereafter as is reasonably
practicable);

 

(ix)                                within twenty
(20) days of the end of each Fiscal Month, a report in a format to be agreed
upon between the Agents and Ahern with relevant operating information including
Time Utilization by product category, average discount and average rental
rates;

 

(x)                                   upon request by
either of the Agents, within three (3) Business Days of such request, a
statement of the balance of each of the Intercompany Accounts; and

 

73

 

(xi)                                within three (3) Business
Days, such other reports with respect to the Collateral as either of the Agents
may reasonably request or a written explanation of why the requested reports
cannot be delivered within such three (3) Business Day period (in which
case such requested reports shall then be delivered as promptly thereafter as
is reasonably practicable).

 

With
the delivery of each of the foregoing, the Obligated Parties shall furnish a
certificate executed by a Responsible Officer of the Borrowers certifying as to
the accuracy and completeness of the foregoing. 
If any of any Borrower’s records or reports with respect to the
Collateral are prepared by an accounting service or other agent, such Borrower
hereby authorizes such service or agent to deliver such records, reports, and
related documents to the Administrative Agent for distribution to the Lenders.

 

(l)                                     The Obligated
Parties will provide the Agents the information required by Section 8.7(b).

 

(m)                               Within 30 days
following the date franchise taxes are due, the Obligated Parties will, unless
the Agents shall each otherwise consent, provide to the Administrative Agent a
certificate of the applicable Governmental Authority evidencing each Obligated
Party’s good standing in its jurisdiction of formation, incorporation, or
organization, as applicable.

 

(n)                                 The Obligated
Parties will furnish, or cause to be furnished, such additional information as
either Agent and/or any Lender (through either of the Agents, and the
applicable Agent agrees to pass along all such reasonable requests by any
Lender to the Obligated Parties) may from time to time reasonably request
regarding the financial and business affairs of Ahern or any Subsidiary of
Ahern.

 

(o)                                 The Obligated
Parties will furnish, or cause to be furnished, with each of the Financial
Statements delivered pursuant to Section 6.2(b), a description of
any commercial tort claim acquired by any Obligated Party during the period
covered by such Financial Statements.

 

(p)                                 The Obligated
Parties will furnish, or cause to be furnished, with each of the Financial
Statements delivered pursuant to Section 6.2(b), a description of
all Collateral acquired by any Obligated Party during the period covered by
such Financial Statements which is subject to any certificate of title law of
the U.S. or any state.

 

(q)                                 After any item
of Inventory is no longer subject to a Lien described in clause (l) of
the definition of “Permitted Liens”, the Obligated Parties will furnish, or
cause to be furnished, either a UCC partial release for such item of Inventory
or a statement from the vendor of such item of Inventory that such vendor no longer
has a Lien in such item of Inventory, and until such partial release or
statement is delivered to the Agents such item of Inventory shall in no event
constitute Eligible Inventory and no Accounts created with respect to such
Inventory shall constitute Eligible Accounts.

 

(r)                                    After any item
of Transportation Equipment is no longer subject to a Lien described in clause (k) of
the definition of “Permitted Liens”, the Obligated Parties will

 

74

 

 

furnish,
or cause to be furnished, (i) if a certificate of title is not required
with respect to such item of Transportation Equipment under the titling
statutes of any relevant Governmental Authority, either a UCC partial release
for such item of Transportation Equipment or a statement from the vendor or
lessor of such item of Transportation Equipment that such vendor or lessor, as
the case may be, no longer has a Lien in such item of Transportation Equipment
or (ii) if a certificate of title has been issued with respect to such
item of Transportation Equipment, such certificate of title endorsed by the
secured party releasing its Lien in such item of Transportation Equipment or,
if such original certificate of title cannot be furnished, such other lien release
as is acceptable to the Governmental Authority issuing such certificate of
title to permit the issuance of a replacement certificate of title without the
notation of such Lien, and until such partial release, statement, certificate
of title or other release, as applicable, is delivered to the Agents such item
of Transportation Equipment shall in no event constitute Eligible
Transportation Equipment.

 

In addition to the foregoing delivery requirements,
if at any time during which the Term Loans are outstanding Ahern is no longer
subject to the periodic reporting requirements of the Exchange Act for any
reason, Ahern will nevertheless continue filing with the Securities and
Exchange Commission (the “Commission”), unless the Commission will not
accept such a filing, all quarterly and annual reports on Forms 10-Q and 10-K
and all current reports on Form 8-K that would be required to be filed if
Ahern were required to file such reports, in each case within the time periods
specified in the Commission’s rules and regulations and prepared in all
material respects in accordance with all of the rules and regulations
applicable to such reports.  Ahern will
not take any action for the purpose of causing the Commission not to accept any
such filings.  If, notwithstanding the
foregoing, the Commission will not accept Ahern’s filings for any reason, Ahern
will post the reports referred to in this paragraph on its website within the
time periods that would apply if Ahern were required to file such reports with
the Commission.  In addition, Ahern
agrees that, for so long as any Term Loans remain outstanding, if at any time
Ahern is not required to file with the Commission the reports required by this
paragraph, Ahern will furnish to the Term Lenders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act of
1933, as amended.

 

The Obligated Parties acknowledge that one or more
of the Term Lenders may be “public-side” Lenders (i.e. Term Lenders that do not
wish to receive material non-public information with respect to any Obligated
Party or its securities).  Ahern agrees
to make any and all material and/or information to be provided by any of the
Obligated Parties hereunder or under any other Loan Document intended to be
distributed or made available to the Lenders (collectively, “Obligated
Parties Material”) clearly and conspicuously designated by Ahern as “PUBLIC”
if such Obligated Parties Material is either publicly available or not material
information (though it may be sensitive and proprietary) with respect to the
Obligated Parties and their respective securities for purposes of the United
States Federal and state securities laws. 
Notwithstanding anything herein or in any other Loan Document to the
contrary, unless and until a Term Lender notifies the Administrative Agent in
writing to the contrary, the Administrative Agent shall only furnish or make
available to such Term Lender under this Agreement or any other Loan Document
Obligated Parties Material clearly and conspicuously designated by Ahern as “PUBLIC”.

 

75

 

Section 6.3                                    Notices.  The Obligated
Parties shall notify each Agent in writing of the following matters at the
following times:

 

(a)                                  immediately
after a Responsible Officer’s becoming aware of any Default or Event of
Default;

 

(b)                                 within three (3) Business
Days after a Responsible Officer’s becoming aware of the assertion by the
holder of any Capital Stock of Ahern or any Subsidiary of Ahern or the holder
of any Debt of Ahern or any Subsidiary of Ahern in excess of $500,000  that a default exists with respect thereto or that any such
Person is not in compliance with the terms thereof, or the written threat or
commencement by such holder of any enforcement action because of such asserted
default or non-compliance;

 

(c)                                  within five (5) Business
Days after a Responsible Officer’s becoming aware of any pending or threatened
(in writing) action, suit, proceeding, or counterclaim by any Person, or
any pending or threatened (in writing) investigation by a Governmental
Authority, that could reasonably be expected to result in, or has resulted in,
liability in excess of $500,000 or otherwise could reasonably be expected to
have, or has resulted in, a Material Adverse Effect;

 

(d)                                 within five (5) Business
Days after a Responsible Officer’s becoming aware of any pending or threatened
(in writing) strike, work stoppage, unfair labor practice claim or other
similar labor dispute affecting any Obligated Party that could reasonably be
expected to result in, or has resulted in, liability in excess of $500,000 or
otherwise could reasonably be expected to have, or has resulted in, a Material
Adverse Effect;

 

(e)                                  within five (5) Business
Days after a Responsible Officer’s becoming aware of any violation of any
Requirement of Law affecting any Obligated Party that reasonably could be
expected to result in, or has resulted in, liability in excess of $500,000 or
otherwise could reasonably be expected to have, or has resulted in, a Material
Adverse Effect;

 

(f)                                    within five (5) Business
Days after (i) a Responsible Officer’s receipt of any written notice of
any violation by any Obligated Party of any Environmental Law or (ii) a
Responsible Officer’s obtaining knowledge that any Governmental Authority has
asserted that any Obligated Party is not in compliance with any Environmental
Law or that any Governmental Authority is investigating any Obligated Party’s
compliance therewith, which in any event under clause (i) or clause (ii) preceding
could reasonably be expected to result in, or has resulted in, liability in
excess of $500,000 or otherwise could reasonably be expected to have, or has
resulted in, a Material Adverse Effect;

 

(g)                                 within five (5) Business
Days after a Responsible Officer’s receipt of any written notice from any
Governmental Authority or other Person or otherwise obtaining knowledge that
any Obligated Party is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant or that any Obligated Party is
subject to investigation by any Governmental Authority evaluating whether any
remedial action 

 

76

 

is
needed to respond to the Release or threatened Release of any Contaminant that,
in either case, could reasonably be expected to result in, or has resulted in,
liability in excess of $500,000  or otherwise
could reasonably be expected to have, or has resulted in, a Material Adverse
Effect;

 

(h)                                 within five (5) Business
Days after a Responsible Officer’s receipt of any written notice of the
imposition of any Environmental Lien against any property of any Obligated
Party;

 

(i)                                     not less than
30 days prior to any change in any Obligated Party’s (i) name as it
appears in the jurisdiction of its formation, incorporation, or organization, (ii) type
of entity, (iii) organizational identification number, or (iv) trade
names under which such Obligated Party will sell Inventory or create Accounts,
or to which instruments in payment of Accounts may be made payable;

 

(j)                                     within five (5) Business
Days after any Responsible Officer knows or has reason to know, (i) that
an ERISA Event or a prohibited transaction (as defined in Sections 406 of ERISA
and 4975 of the Code) has occurred or (ii) that any action has been taken
or threatened (in writing) by the IRS, the DOL, or the PBGC with respect to any
such ERISA Event or prohibited transaction;

 

(k)                                  upon either
Agent’s request, copies of the following: 
(i) each annual report (form 5500 series), including
Schedule B thereto, filed with the DOL or the IRS with respect to each
Plan; (ii) a copy of each funding waiver request filed with the IRS with
respect to any Plan and all communications received by any Obligated Party or
any ERISA Affiliate from the IRS with respect to such request; and (iii) a
copy of each other filing or notice filed with the PBGC, the DOL, or the IRS,
with respect to each Plan by any Obligated Party or any ERISA Affiliate;

 

(l)                                     upon request from
either Agent, copies of each most recent actuarial report for any Plan (except
that in the case of a Multiemployer Plan, the Obligated Party will request of
the plan administrator thereof that a copy of each actuarial report and annual
report for the Multiemployer Plan be sent to the requesting Agent), and within
five (5) Business Days after receipt thereof by any Obligated Party or any
ERISA Affiliate, copies of the following: 
(i) any notices of the PBGC’s intention to terminate a Plan or to
have a trustee appointed to administer such Plan; (ii) any favorable or
unfavorable determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Code; or (iii) any notice from
a Multiemployer Plan regarding the imposition of withdrawal liability;

 

(m)                               within five (5) Business
Days after the occurrence thereof:  (i) any
changes in the benefits of any existing Plan which the Obligated Party expects
to increase any Obligated Party’s annual costs with respect thereto by an
amount in excess of $500,000, or the establishment of any new Plan or the
commencement of contributions to any Plan to which any Obligated Party or any
ERISA Affiliate was not previously contributing; or (ii) any failure by
any Obligated Party or any ERISA Affiliate to make a 

 

77

 

required
installment or any other required payment to any Plan in excess of $250,000
under Section 412 of the Code on or before the due date for such
installment or payment;

 

(n)                                 within five (5) Business
Days after commencement of any proceedings contesting any tax, fee, assessment,
or other governmental charge in excess of $500,000;

 

(o)                                 within five (5) Business
Days after any Responsible Officer becomes aware that any material assumption on
which the Obligated Parties prepared and presented the Latest Projections is no
longer valid;

 

(p)                                 with each of
the financial statements required to be delivered pursuant to Section 6.2(b),
a listing of (i) each Deposit Account opened by any Obligated Party and (ii) any
Proprietary Rights registered with the United States Patent and Trademark
Office or the United States Copyright Office, in the preceding Fiscal Month;

 

(q)                                 within five (5) Business
Days after the occurrence thereof, any loss, damage, or destruction to the
Collateral, whether due to any casualty, condemnation, or other reason, having
a value in excess of $500,000, whether or not covered by insurance;

 

(r)                                    within five (5) Business
Days after any Responsible Officer becomes aware of any Lien (other than
Permitted Liens) against, or any claim in excess of $100,000 made or asserted in writing
against, any of the Collateral;

 

(s)                                  within five (5) Business
Days after a Responsible Officer’s becoming aware of any event or circumstance
not covered by clause (a) through clause (r) preceding
that could reasonably be expected to have, or has resulted in, a Material
Adverse Effect;

 

(t)                                    [Intentionally
Omitted];

 

(u)                                 promptly, any
material additions to or deletions from any Obligated Party’s Inventory or Transportation
Equipment that are not made in the ordinary course of business;

 

(v)                                 promptly, any
material change in insurance coverage maintained by any Obligated Party,
specifying the changes and reasons therefor;

 

(w)                               promptly, and
in any event within ten (10) Business Days after any Material Contract of
any Obligated Party set forth on Schedule 7.24 is terminated or
amended in a manner that is materially adverse to any Obligated Party, a
written statement describing such event with copies of such material
amendments, and an explanation of any actions being taken with respect thereto;
and

 

(x)                                   not less than
ten (10) days prior to any Asset Sale (as defined in the Second Lien Debt
Agreement) or any application of proceeds thereof to the payment of any Obligations,
in each instance, that will result in a reduction of the maximum amount of
Aggregate Revolver Outstandings permitted to be incurred under Section 4.09(b)(1) of
the Second Lien Debt Agreement (other than solely as a result of a reduction
due to the 

 

78

 

borrowing
base formula under Section 4.09(b)(1)(b) of the Second Lien Debt
Agreement), notice of such Asset Sale and the amount of such reduction.

 

Each notice given under this Section 6.3
shall describe the subject matter thereof in reasonable detail, and shall set
forth the action that any Obligated Party or any ERISA Affiliate, as
applicable, has taken or proposes to take with respect thereto.

 

ARTICLE 7

 

GENERAL WARRANTIES AND
REPRESENTATIONS

 

Each Obligated Party warrants and represents to the
Agents and the other Credit Providers as follows:

 

Section 7.1                                    Authorization, Validity, and Enforceability of the
Transaction Documents.  Each Obligated Party has the
power and authority to execute, deliver, and perform this Agreement and the
other Transaction Documents to which it is a party, to incur the indebtedness,
liabilities, and obligations it has agreed to undertake under the Transaction
Documents to which it is a party, and to grant the Agent’s Liens.  Each Obligated Party has taken all necessary
action (including obtaining approval of the owners of its Capital Stock or any
other Person required to provide approval or consent, if necessary) to
authorize its execution, delivery, and performance of the Transaction Documents
to which it is a party.  The Transaction
Documents to which each Obligated Party is a party have been duly executed and
delivered by such Obligated Party, and constitute the legal, valid, and binding
obligations of such Obligated Party, enforceable against it in accordance with
their respective terms without defense, setoff, or counterclaim except as such
enforceability is limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the rights of creditors generally and to
the effect of general principles of equity whether applied by a court of law or
equity.  Each Obligated Party’s
execution, delivery, and performance of the Transaction Documents to which it
is a party do not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in or require the creation
or imposition of any Lien upon any property of any Obligated Party by reason of
the terms of (a) any contract, mortgage, Lien, lease, agreement,
indenture, document, or instrument to which such Obligated Party is a party or
that is binding upon it, (b) any Requirement of Law applicable to such
Obligated Party, or (c) the Organization Certificate or Management
Agreement of such Obligated Party.  Each
Borrowing and each delivery by any or all of the Borrowers (or Ahern on behalf
of the Borrowers) of a Borrowing Base Certificate constitutes a representation
and warranty by Ahern that, as of the date of such Borrowing or delivery, as
the case maybe (both before and after giving effect to such Borrowing, if
applicable), the financial accommodations provided to the Borrowers hereunder
do not violate the debt incurrence limits set forth in the Second Lien Debt
Agreement or exceed the Maximum First Lien Principal Indebtedness (as defined
in the Intercreditor Agreement).  Without
limitation of the foregoing, the Borrowers represent and warrant that (i) each
Borrowing is permitted under Section 4.09(b)(1) of the Second Lien
Debt Agreement, (ii) each Borrowing is permitted to be incurred and
secured by all applicable Secured Debt Documents (as defined in the Second Lien
Debt Agreement) and constitutes Priority Lien Debt (as defined in the Second
Lien Debt Agreement), (iii) all Obligations constitute “First Lien
Obligations” as defined in the Intercreditor Agreement, (iv) there are in
existence no Credit Facilities (as defined in the Second 

 

79

 

Lien
Debt Agreement) other than this Agreement and (v) there is in existence no
Parity Lien Debt (as defined in the Second Lien Debt Agreement) other than
Second Lien Debt.  There is no
restriction or other impediment (legal, contractual or otherwise) to the
cancellation of Second Lien Debt as contemplated in Section 2.3(a) and,
upon the making of the Term Loans on the Closing Date, Second Lien Debt shall
be cancelled in the aggregate principal amount required under Section 2.3(a).

 

Section 7.2                                    Validity and Priority of Security Interest. 
The provisions of the Loan Documents create legal and valid Liens on the
Collateral in favor of the Collateral Agent, for the benefit of the Credit
Providers, and such Liens (a) constitute perfected and continuing Liens on
the Collateral, securing the Obligations, (b) are enforceable against the
applicable Obligated Party and all third parties, and (c) have priority
over all other Liens on the Collateral except for those Liens identified in clause (b) through
clause (h) or clause (k) through clause (l) of
the definition of Permitted Liens (but only to the extent any such Permitted
Liens would have priority over the Agent’s Liens pursuant to any Requirement of
Law) and Liens perfected only by possession (including possession of any
certificate of title) to the extent the Collateral Agent has not obtained or
does not maintain possession of such Collateral.

 

Section 7.3                                    Organization, Authority, and Good Standing. 
Each of the Obligated Parties

 

(a)                                  is a
corporation, limited liability company, partnership, limited partnership, or
other business entity duly and properly formed, incorporated, or organized and
validly existing under Requirements of Law of the jurisdiction of its
formation, incorporation, or organization as set forth in Schedule 7.3,
and such jurisdiction is the only jurisdiction under which it is formed,
incorporated, or organized,

 

(b)                                 has all
requisite power and authority to conduct its business in each jurisdiction in
which it conducts business and to own its property, and

 

(c)                                  to the extent
applicable, is qualified and in good standing under the Requirements of Law of (i) its
jurisdiction of formation, incorporation, or organization and (ii) each
other jurisdiction in which qualification is necessary in order for it to own
or lease its property and conduct its business.

 

Section 7.4                                    Capitalization and Subsidiaries. 
As of the Closing Date, Schedule 7.4 sets forth (a) a
correct and complete list of the relationship of the Obligated Parties and all
of their respective Subsidiaries, (b) the location of the chief executive
office of each of the Obligated Parties, (c) a true and complete listing
of each class of the Capital Stock of each of the Obligated Parties, of which
all of such issued shares or other interests are validly issued, outstanding,
fully paid and non-assessable, and owned beneficially and of record by the
Persons identified in Schedule 7.4,  (d) the
type of entity of each of the Obligated Parties, (e) the jurisdiction of
formation, incorporation or organization of each of the Obligated Parties and
the employer or taxpayer identification number of each of the Obligated Parties
and the organizational identification number issued by each of the Obligated
Parties’ jurisdiction of formation, incorporation, or organization (or a
statement that no such number has been issued). 
Each Obligated Party has only one state of formation, incorporation, or
organization.

 

80

 

Section 7.5                                    Corporate Name; Prior Transactions. 
As of the Closing Date, Schedule 7.5 sets forth a correct
and complete list of the name of each Obligated Party as it appears in official
filings in the jurisdiction of its formation, organization, or
incorporation.  Except as set forth in Schedule 7.5,
no Obligated Party has, during the past five years, been known by or used any
other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property outside of the ordinary course of
business.

 

Section 7.6                                    Financial Statements and Projections.

 

(a)                                  The Obligated
Parties have delivered to each Agent and the Lenders the audited financial
statements for Ahern and its Subsidiaries for the Fiscal Years ended December 31,
2007 and December 31, 2008, accompanied by the report thereon of Ahern’s
independent certified public accountants, Piercy Bowler Taylor &
Kern.  The Obligated Parties have also
delivered to each Agent and the Lenders the unaudited balance sheet and related
statements of income and cash flow for Ahern and its Subsidiaries on a
consolidated basis as of the end of the Fiscal Month ending November 30, 2009.  All such financial statements have been
prepared in accordance with GAAP and fairly present the financial position of
Ahern and its Subsidiaries as at the dates thereof and their results of
operations for the periods then ended (except with respect to the unaudited
financial statements referred to immediately above, for the omission of
applicable footnotes and subject to normal year-end audit adjustments).  Except as set forth on Schedule 7.6,
as of the Closing Date, Ahern and its Subsidiaries do not have any material
liabilities that are not disclosed in such financial statements.

 

(b)                                 The Latest
Projections when submitted to the Agents as required herein represent the
Obligated Parties’ good faith estimate of the future financial performance of
the Borrowers for the periods set forth therein.  The Latest Projections have been prepared on
the basis of the assumptions set forth therein, which the Obligated Parties believe
are fair and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Agents.

 

(c)                                  The pro forma balance sheet of Ahern and its Subsidiaries as at November 30,
2009, delivered to the Agents presents fairly and accurately Ahern’s and its
Subsidiaries’ financial condition as of such date and after giving effect to
consummation of the transactions contemplated by this Agreement and the Second
Lien Debt Documents.

 

Section 7.7                                    Solvency.  As of the
Closing Date, prior to and after giving effect to all of the transactions to
occur on the Closing Date (including the Borrowings to be made on the Closing
Date), and at all times after the Closing Date, each of the Obligated
Parties is Solvent.

 

Section 7.8                                    Debt.  As of the
Closing Date, after giving effect to the Borrowings to be made on the Closing
Date, the Obligated Parties and their Subsidiaries have no Debt, except (a) the
Obligations and (b) Debt permitted pursuant to Section 8.12.

 

81

 

Section 7.9                                    Distributions.  Schedule 7.9
accurately sets forth, as of the
date hereof, all Distributions which have been declared, paid, or made upon or
in respect of any Capital Stock of Ahern since December 31, 2007.

 

Section 7.10                              Real Estate; Leases.  As of the
Closing Date, Schedule 7.10 sets forth a correct and complete list
of all Real Estate owned by each Obligated Party, all leases and subleases of
real or personal property by each Obligated Party as lessee or sublessee (other
than leases of personal property as to which such Obligated Party is lessee or
sublessee for which the value of such personal property under any such lease in
the aggregate is less than $10,000, and Re-Rental Leases) and all leases and
subleases of real or personal property by each Obligated Party as lessor or
sublessor.  Each material lease and
sublease between an Obligated Party and DFA LLC is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by
any party to any such lease or sublease exists. 
All other leases and subleases of the Obligated Parties are in full
force and effect, and no default by any party to any such lease or sublease
exists, except if the result thereof would not have a Material Adverse Effect; provided
that, as of the Closing Date, each lease and sublease set forth on Schedule 7.10
is valid and enforceable in accordance with its terms and is in full force and
effect, and no default by any party to any such lease or sublease exists.  Each Obligated Party has good and
indefeasible title in fee simple to the Real Estate identified in Schedule 7.10
as “owned” by such Obligated Party, or valid leasehold interests in all Real
Estate identified in Schedule 7.10 as “leased” by such Obligated Party,
and each Obligated Party has good, indefeasible, and merchantable title to all
of its other property reflected on the November 30,
2009  Financial Statements of Ahern and
its Subsidiaries delivered to the Agents and the Lenders, except as disposed of
in the ordinary course of business since the date thereof, free of all Liens
except Permitted Liens.

 

Section 7.11                              Proprietary Rights.  As of the
Closing Date, (a) Schedule 7.11 sets forth a correct and
complete list of all of each Obligated Party’s registered patents, trademarks,
copyrights, and other material Proprietary Rights, (b) none of the
Proprietary Rights listed in Schedule 7.11 is subject to any
licensing agreement or similar arrangement except as set forth in Schedule 7.11,
(c) the Proprietary Rights listed in Schedule 7.11 constitute
all of the property of such type necessary to the current and anticipated
future conduct of the Obligated Parties’ business, (d) to the best of each
Obligated Party’s knowledge, none of the Proprietary Rights listed in Schedule 7.11
infringes upon or conflicts with any rights held by any other Person, and (e) no
claim or litigation regarding any of the foregoing is pending or threatened (in
writing).

 

Section 7.12                              Trade Names.  All trade
names or styles under which any Obligated Party will sell or lease Inventory or
create Accounts, or to which instruments in payment of Accounts may be made
payable, are listed in Schedule 7.12.

 

Section 7.13                              Litigation.  Except as set
forth in Schedule 7.13, there is no pending or threatened (in
writing), action, suit, proceeding, or counterclaim by any Person, or
investigation by any Governmental Authority, or any basis for any of the
foregoing, that could reasonably be expected to have a Material Adverse Effect.

 

Section 7.14                              Labor Matters.  As of the
Closing Date, except as set forth in Schedule 7.14, (a) there
is no collective bargaining agreement or other labor contract covering
employees of any Obligated Party, (b) no such collective bargaining
agreement or other labor 

 

82

 

contract
is scheduled to expire during the term of this Agreement, (c) to the best
of any Obligated Party’s knowledge, no union or other labor organization is
seeking to organize, or to be recognized as, a collective bargaining unit of
employees of any Obligated Party or for any similar purpose, (d) to the
best of any Obligated Party’s knowledge, there is no pending or threatened
strike, work stoppage, unfair labor practice claim, or other material dispute
against or affecting any Obligated Party or its employees, and (e) to the
best of any Obligated Party’s knowledge, there is no pending or threatened
unfair labor practice claim or other similar labor dispute against or affecting
any Obligated Party or its employees that could reasonably be expected to
result in, or has resulted in, liability in excess of $500,000 or that could
reasonably be expected to have a Material Adverse Effect.

 

Section 7.15                              Environmental Law.  Except as
otherwise set forth in Schedule 7.15 and except as could not
reasonably be expected to result in liability in excess of $500,000 in the
aggregate for all the Obligated Parties and otherwise could not reasonably be
expected to have a Material Adverse Effect:

 

(a)                                  Each Obligated
Party is in compliance with all applicable Environmental Laws, and neither any
Obligated Party nor any of their respective presently or previously owned Real
Estate or presently conducted or prior operations, is subject to any
enforcement order from, or liability agreement with, any Governmental Authority
or private Person respecting (i) compliance with any Environmental Law or (ii) any
potential liabilities and costs or remedial action arising from a Release or
threatened Release of a Contaminant.

 

(b)                                 Each Obligated
Party has obtained all permits necessary for its current operations under
applicable Environmental Law, and all such permits are in good standing, and
each Obligated Party is in compliance with all terms and conditions of such
permits.

 

(c)                                  No Obligated
Party is in violation of any Environmental Law with respect to storage,
treatment, or disposal of any hazardous waste (as defined pursuant to
40 CFR Part 261 or any equivalent Environmental Law).

 

(d)                                 No Obligated
Party has received any summons, complaint, order, or similar written notice of
any Environmental Claim indicating that it is not currently in compliance with,
or that any Governmental Authority is currently investigating such Obligated
Party’s compliance with, any Environmental Law or that it is or may be liable
to any other Person as a result of a Release or threatened Release of a
Contaminant.

 

(e)                                  To the best of
each Obligated Party’s knowledge, none of the present or past operations of any
Obligated Party is the subject of any investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to a
Release or threatened Release of a Contaminant.

 

(f)                                    To the best of
each Obligated Party’s knowledge, there is not now on the Real Estate of any
Obligated Party in violation of any Environmental Law:

 

(i)                                     any underground
storage tanks or surface impoundments,

 

83

 

(ii)                                  any
asbestos-containing material, or

 

(iii)                               any
polychlorinated biphenyls used in hydraulic oils, electrical transformers, or
other equipment.

 

(g)                                 No Obligated
Party has filed, or has had the obligation to file, any notice under any
requirement of Environmental Law reporting a spill or accidental and
unpermitted Release or discharge of a Contaminant into the environment.

 

(h)                                 No Obligated
Party has entered into any pending or ongoing negotiations or any currently
effective settlement agreements with any Person (including any prior owner of
such Obligated Party’s property) imposing obligations or liabilities on any
Obligated Party with respect to any remedial action in response to the Release
of a Contaminant or environmentally related claim.

 

(i)                                     None of the
products manufactured, distributed, or sold by any Obligated Party or any
Subsidiary of any Obligated Party contains asbestos containing material.

 

(j)                                     No presently
effective Environmental Lien has attached to any of the Real Estate owned by
any Obligated Party.

 

Section 7.16                              No Violation of Law.  No Obligated
Party is in violation of any Requirement of Law applicable to it, which
violation could reasonably be expected to have a Material Adverse Effect.

 

Section 7.17                              No Default.  No Obligated
Party is in default with respect to any note, indenture, loan agreement,
mortgage, lease, deed, or other agreement to which such Obligated Party is a
party or by which it is bound, which default could reasonably be expected to
have a Material Adverse Effect.

 

Section 7.18                              ERISA Compliance.

 

(a)                                  Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code, and other federal or state law;

 

(b)                                 Each Plan that
is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and, to the best
knowledge of each Obligated Party, nothing has occurred which would cause the
loss of such qualification;

 

(c)                                  Each Obligated
Party and each ERISA Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan;

 

(d)                                 There are no
pending or, to the best knowledge of any Obligated Party, threatened (in
writing) claims, actions, or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect;

 

84

 

(e)                                  There has been
no prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan that has resulted or could reasonably be expected to result
in a Material Adverse Effect; and

 

(f)                                    Except where
the occurrence or existence could not, individually or in the aggregate, result
in liability in excess of $500,000  or otherwise
be reasonably expected to have a Material Adverse Effect, (i) no ERISA
Event has occurred or is reasonably expected to occur, (ii) no Pension
Plan has any Unfunded Pension Liability, (iii) no Obligated Party and no
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA), (iv) no
Obligated Party and no ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred that, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan, and (v) no
Obligated Party and no ERISA Affiliate has engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.

 

Section 7.19                               Taxes.  Each
Obligated Party has filed all federal, state, and other tax returns and reports
required to be filed (or appropriate extensions have been timely filed), and
has paid all federal, state, and other taxes, assessments, fees, and other
governmental charges levied or imposed upon it or its properties, income, or
assets otherwise due and payable unless such unpaid taxes and assessments would
constitute a Permitted Lien.

 

Section 7.20                               Regulated Entities.  No Obligated
Party or Affiliate of any Obligated Party is an “Investment Company” within the
meaning of the Investment Company Act of 1940. 
No Obligated Party or Affiliate of any Obligated Party is subject to
regulation under the Public Utility Holding Company Act of 1935, any state
public utilities Requirement of Law, the Federal Power Act, the Interstate
Commerce Act, or any other Requirement of Law limiting its ability to incur
indebtedness.

 

Section 7.21                               Use of Proceeds; Margin Regulations. 
The proceeds of the Loans are to be used solely for the purposes
specified in Section 8.22. 
No Obligated Party is engaged in the business of buying or selling
Margin Stock or extending credit for the purpose of buying or carrying Margin
Stock.  Margin Stock constitutes less
than 5.0% of the value of those assets of the Obligated Parties that are subject
to any limitation on sale, pledge, or other restriction hereunder.

 

Section 7.22                               No Material Adverse Change. 
No Material Adverse Effect has occurred since the date of the latest
Financial Statements delivered to the Agents and the Lenders referenced in Section 7.6(a).

 

Section 7.23                               Full Disclosure.  None of the
representations or warranties made by any Obligated Party in any of the Loan
Documents as of the date such representations and warranties are made or deemed
made, and none of the statements contained in any document, agreement, exhibit,
report, statement, or certificate furnished by or on behalf of any Obligated
Party in connection with the Loan Documents (including any offering and
disclosure materials delivered by or on behalf of any Obligated Party to either
of the Agents or any of the Lenders prior to the 

 

85

 

Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.

 

Section 7.24                               Material Agreements.  As of the
Closing Date, Schedule 7.24 sets forth a complete and accurate list
of all material agreements and contracts (other than the Loan Documents) to
which any Obligated Party is a party or is bound.

 

Section 7.25                               Bank Accounts.  As of the
Closing Date, Schedule 7.25 contains a complete and accurate list
of all bank accounts maintained by each Obligated Party with any bank or other
financial institution.

 

Section 7.26                               Commercial Tort Claims.  As of the
Closing Date, Schedule 7.26 contains a complete and accurate list
of all commercial tort claims owned by each Obligated Party.

 

Section 7.27                               Governmental Authorization. 
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or other Person is
necessary or required in connection with the execution, delivery, or
performance by, or enforcement against, any Obligated Party of any Transaction
Document except for those that have been duly obtained by the Obligated
Parties, copies of which, with respect to the Loan Documents, have been
provided to the Agents, and for filing of financing statements and recording of
Mortgages (if any).

 

Section 7.28                               Second Lien Debt.  The
transactions contemplated by the Second Lien Debt Documents have been duly and
validly consummated in accordance with the terms, conditions and provisions of
such documents.  Each of the
representations and warranties made by any of the Obligated Parties pursuant to
any of the Second Lien Debt Documents is true and correct, in all material
respects.  None of the transactions
contemplated by this Agreement, any of the other Loan Documents or any of the
Second Lien Debt Documents shall result in a breach of any of the
representations and warranties or other provisions contained in any of the
Transaction Documents.

 

Section 7.29                               Certificates of Title.  As of the
Closing Date, Schedule 7.29 contains a complete and accurate list
of all Collateral owned by each Obligated Party which is subject to a
certificate of title law of the U.S. or any state.

 

Section 7.30                               Subordinated Debt.  The
Obligations constitute senior indebtedness that is entitled to the benefits of
the subordination provisions, if any, of all Debt of the Obligated Parties.

 

Section 7.31                               Foreign Assets Control Regulations, Etc.

 

(a)                                  None of the
execution, delivery or performance of the Loan Documents by the Obligated
Parties nor the use of the proceeds of the Loans hereunder will violate (i) the
United States Trading with the Enemy Act, as amended, (ii) any of the
foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, (iii) Executive Order No. 13,224,
66 Fed Reg 49,079 (2001), issued by the President of 

 

86

 

the
United States (Executive Order Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit or Support Terrorism) (the “Terrorism
Order”) or (iv) the Patriot Act. 
No part of the proceeds from the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

 

(b)                                 No Obligated
Party (i) is or will become a “blocked person” as described in Section 1
of the Terrorism Order or (ii) engages or will engage in any dealings or
transactions, or is otherwise associated, with any such blocked person or any
such Person.

 

(c)                                  Each Obligated
Party and its Affiliates are in compliance, in all material respects, with the
Uniting And Strengthening America By Providing Appropriate Tools Required To
Intercept And Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law
107-56 (October 26, 2001).

 

Section 7.32                               Ranking.  All
Obligations constitute direct, unconditional and general obligations of the
Obligated Parties and rank in right of payment either pari passu or senior to
all other Debt of the Obligated Parties.

 

ARTICLE 8

 

AFFIRMATIVE AND NEGATIVE
COVENANTS

 

Each Obligated Party covenants to each Agent and
each Lender that as long as any of the Obligations remain outstanding or this
Agreement is in effect each Obligated Party will keep and perform each of the
following covenants:

 

Section 8.1                                     Taxes and Other Obligations. 
Except as otherwise permitted by the terms of this Agreement, each
Obligated Party shall (a) file when due (after giving effect to all timely
filed appropriate extensions) all tax returns and other reports that it is
required to file, (b) pay, or provide for the payment, when due, of all
taxes, fees, assessments, and other governmental charges against it or upon its
property, income, and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items in
accordance with GAAP, and provide to the Agents and the Lenders, upon request,
satisfactory evidence of its timely compliance with the foregoing, and (c) pay
when due all Debt and claims owed to materialmen, mechanics, carriers,
warehousemen, landlords, processors, and other like Persons, and all other
indebtedness, liabilities, and obligations the nonpayment of which could result
in a Lien on any of the Collateral; provided that upon prior written
notice to each Agent, such Obligated Party need not pay any of the foregoing (x) which
it is contesting in good faith by appropriate proceedings diligently pursued, (y) for
which it has established proper reserves as required in accordance with GAAP,
and (z) for which no Lien (other than a Permitted Lien) results from
such non-payment.

 

87

 

Section 8.2                                     Legal Existence and Good Standing. 
Except as allowed by Section 8.9, each Obligated Party shall
maintain (i) its legal existence and good standing in the jurisdiction of
its formation, incorporation, or organization and (ii) its qualification
and good standing in all other jurisdictions in which the failure to maintain
such qualification and good standing could reasonably be expected to have a
Material Adverse Effect.  No Obligated
Party shall change the jurisdiction of its formation, incorporation, or
organization or change its type of entity as identified on Schedule 7.3
without the prior written consent of the Agents.

 

Section 8.3                                     Compliance with Law and Agreements; Maintenance of
Licenses.  Each Obligated Party shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all
Requirements of Law.  Each Obligated
Party shall, and shall cause each of its Subsidiaries to, obtain and maintain
all licenses, permits, franchises, and governmental authorizations necessary to
own its property and to conduct its business as conducted on the Original
Closing Date or as permitted by Section 8.16.  No Obligated Party shall modify, amend, or
alter its Organization Certificate or Management Agreement other than in a
manner that does not adversely affect the rights of the Lenders or the Agents
under any of the Loan Documents.

 

Section 8.4                                     Maintenance of Property; Inspection of Property.

 

(a)                                  Each Obligated
Party shall (i) maintain all of its inventory, equipment and facilities
necessary and useful in the conduct of its business in good operating order and
condition, ordinary wear and tear excepted and (ii) make all necessary
repairs thereto and renewals and replacements thereof.

 

(b)                                 Each Obligated
Party shall permit employees, representatives and independent contractors of
each of the Agents (accompanied by any Lender that so elects with the consent
of such Agent, such consent not to be unreasonably withheld) to visit and
inspect any of such Obligated Party’s properties, to examine, audit, make
extracts from or copies of and inspect any or all of such Obligated Party’s
Collateral, its corporate, financial, and operating records, files, and books
of account, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances, and accounts with its officers, directors, and independent
public accountants (provided that the relevant Agent shall provide the
Obligated Parties the opportunity to attend and participate in such discussions
with such public accountants) at such reasonable times during normal
business hours and as soon as may be reasonably desired, upon reasonable
advance notice to such Obligated Party, provided that during the
existence of any Event of Default, each Agent (accompanied by any Lender that
so elects with the consent of such Agent, such consent not to be unreasonably
withheld) may do any of the foregoing at any time without advance
notice.  Each Obligated Party will
deliver to each Agent any instrument necessary for such Agent to obtain records
from any service bureau maintaining records for such Obligated Party.  Each Agent shall have the right, at any time,
in the applicable Obligated Party’s name, in such Agent’s name, or in the name
of a nominee of such Agent, to verify the validity, amount, or any other matter
relating to the Accounts, Inventory, or other Collateral, by mail, telephone,
or otherwise.  The Obligated Parties
shall reimburse each of the Agents for its expenses incurred in connection with
any such audit, inspection, and examination as provided in Section 15.7.  Each of the Agents may, without expense to
any of them, use such of each Obligated Party’s respective personnel, 

 

88

 

supplies,
and Real Estate as may be necessary for maintaining or enforcing the Agent’s
Liens.

 

Section 8.5                                     Insurance.

 

(a)                                  Each Obligated
Party shall maintain with financially sound and reputable insurers having a
rating of at least A+ or better by Best Rating Guide (or self-insure with
respect to workers compensation, health, and other insurance (excluding
insurance of the Collateral), including deductible and loss retention
provisions, compatible with the standards set forth in this Section 8.5(a)),
insurance against (i) loss or damage by fire (with extended coverage),
theft, burglary, pilferage, and loss in transit, (ii) public liability and
third party property damage, (iii) larceny, embezzlement, or other
criminal liability, (iv) business interruption, and (v) such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, in amounts, and under policies reasonably acceptable to
the Agents.  Without limiting the
foregoing, in the event that any improved Real Estate covered by a Mortgage is
determined to be located within an area that has been identified by the
Director of the Federal Emergency Management Agency as a Special Flood Hazard
Area (“SFHA”), the applicable Obligated Party shall purchase and
maintain flood insurance on such improved Real Estate and any Equipment and
Inventory located on such Real Estate.  Each Obligated Party shall also maintain flood
insurance for its Inventory and Equipment that is, at any time, located in a
SFHA.  Without limiting the Agents’
discretion with respect to the amount of any insurance as provided by the first
sentence of this Section 8.5, the amount of any flood insurance
required by this Section 8.5 shall, at a minimum, comply with
applicable federal regulations as required by the Flood Disaster Protection Act
of 1973.

 

(b)                                 For each of the
insurance policies issued as required by this Section 8.5 that
insures Collateral against loss or damage, each Obligated Party shall cause the
Collateral Agent to be named as secured party or mortgagee and loss payee, in a
manner acceptable to the Collateral Agent.  Each policy of insurance shall contain (i) a
clause or endorsement requiring the insurer to give not less than ten days
prior written notice to the Collateral Agent in the event of cancellation of
such policy for non-payment of premiums and not less than thirty days prior
written notice to the Collateral Agent in the event of cancellation of such
policy for any other reason whatsoever and (ii) a clause or endorsement
stating that the interest of the Collateral Agent shall not be impaired or
invalidated by any act or neglect of the insured Person or the owner of any
premises for purposes more hazardous than are permitted by such policy.  All premiums for insurance required to be
maintained by this Section 8.5 shall be paid by the applicable
Obligated Party when due.  Certificates
of insurance and, if requested by either of the Agents, photocopies of the
policies shall be delivered to each of the Agents (with sufficient copies to
the Administrative Agent for distribution to each of the Lenders).  If any Obligated Party fails to procure (or
cause to be procured) such insurance or to pay the premiums therefor when due,
the Administrative Agent may, and at the direction of the Majority Revolving
Lenders shall, do so from the proceeds of Revolving Loans.

 

(c)                                  The Obligated
Parties shall deliver all proceeds of any insurance policies covering any
Collateral to the Administrative Agent. 
If any Obligated Party fails to 

 

89

 

promptly
do so or if any Event of Default exists, the Collateral Agent may directly
collect all insurance proceeds in respect of any loss, damage, or destruction
of Collateral.  All proceeds of any
insurance policy covering any Collateral received by the Administrative Agent
or the Collateral Agent shall be applied to the Obligations in the manner
provided for in Section 4.3 as if such Collateral were the subject
of a Disposition permitted pursuant to this Agreement.

 

Section 8.6                                     Condemnation.  The Obligated
Parties shall deliver to the Administrative Agent all proceeds received with
respect to any Collateral that is the subject of any condemnation or other
similar proceeding.  If any Obligated
Party fails to promptly do so or if any Event of Default exists, the Collateral
Agent may directly collect all such proceeds. 
All proceeds resulting from any condemnation or other similar proceeding
received by the Administrative Agent or the Collateral Agent shall be applied
to the Obligations in the manner provided for in Section 4.3 as if
such Collateral were the subject of a Disposition permitted pursuant to this
Agreement.

 

Section 8.7                                     Environmental Law.

 

(a)                                  Each Obligated
Party shall conduct, and shall cause each of its Subsidiaries to conduct, its
business in compliance with all Environmental Laws applicable to it, including
those relating to the generation, handling, use, storage, and disposal of any
Contaminant.  Each Obligated Party shall
take, and shall cause each of its Subsidiaries to take, prompt and appropriate
action to respond to any non-compliance with any Environmental Law.  Each Obligated Party shall regularly report
to the Agents on any such response with respect to any circumstance that could
reasonably be expected to result in, or has resulted in, liability in excess of
$500,000 or otherwise could reasonably be expected to result in, or has
resulted in, a Material Adverse Effect.

 

(b)                                 Without
limiting the generality of the foregoing, the Obligated Parties shall submit to
each of the Agents (with sufficient copies to the Administrative Agent for
distribution to the Lenders) annually, or more frequently if requested by
either of the Agents, commencing on August 18, 2006, and on August 18
of each year thereafter, an update of the status of each environmental
compliance or liability issue concerning any Obligated Party or any Subsidiary
of an Obligated Party or any of their respective properties or operations
(whether past or present), if any, that could reasonably be expected to result
in, or has resulted in, liability in excess of $500,000 or otherwise could
reasonably be expected to result in, or has resulted in, a Material Adverse
Effect.  Each Agent (or any Lender
through either of the Agents) may request, in which case the Borrowers will
promptly furnish or cause to be promptly furnished to each of the Agents (with
sufficient copies to the Administrative Agent for distribution to the Lenders),
copies of technical reports prepared or received by any Obligated Party or any
Subsidiary of an Obligated Party and its communications with any Governmental
Authority to determine whether such Obligated Party or Subsidiary of an
Obligated Party is proceeding reasonably to correct, cure, or contest in good
faith any alleged non-compliance or environmental liability.  Each Obligated Party shall, at either of the
Agent’s request (or at the Majority Revolving Lenders’ (or after the Revolving
Facility Payment In Full, the Majority Term Lenders’) request through either of
the Agents) and 

 

90

 

at
such Obligated Party’s expense, (i) retain an independent environmental
engineer acceptable to the Agents to evaluate any site, including tests if
appropriate, where the non-compliance or alleged non-compliance with any
Environmental Law has occurred and prepare and deliver to each of the Agents
(with sufficient copies to the Administrative Agent for distribution to the
Lenders) a report setting forth the results of such evaluation, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (ii) provide to each of the Agents (with
sufficient copies to the Administrative Agent for distribution to the Lenders)
a supplemental report of such engineer whenever the scope of the environmental
problems (if any), or the response thereto or the estimated costs thereof,
shall increase in any material respect.

 

Section 8.8                                     Compliance with ERISA.  Each
Obligated Party shall, and shall cause each of its ERISA Affiliates to:  (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code, and
Requirements of Law; (b) cause each Plan that is qualified under Section 401(a) of
the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code in a timely
fashion; (d) not engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan; and (e) not
engage in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.

 

Section 8.9                                     Mergers, Consolidations, or Sales. 
No Obligated Party shall enter into any transaction of merger,
reorganization, or consolidation, or transfer, sell, assign, lease, or
otherwise Dispose of all or any part of its property, or sell or issue any of its
preferred Capital Stock, or wind up, liquidate, or dissolve, or agree to do any
of the foregoing, except for (A) sales and other Dispositions of Inventory
in the ordinary course of its business, (B) sales or other Dispositions of
Equipment in the ordinary course of business that is (1) damaged, worn
out, unserviceable, or obsolete, (2) no longer necessary for the proper
conduct of business with a good faith estimated value not in excess of $100,000
in any Fiscal Year of Ahern, or (3) contemporaneously replaced with
Equipment of comparable utility, in each case in the ordinary course of
business and operations of the Obligated Parties and on a basis consistent with
past practices, (C) the sale of the helicopter that is the subject of the
Aircraft Mortgage or the Cessna 525 aircraft (serial number 525-0341); provided
that the purchase price received by the relevant Obligated Party for each such
aircraft shall not be less than the fair market value of such aircraft and at
least 75% of the purchase price therefor shall be payable in cash on the
closing date of such sale or by the assumption of Debt secured by such
aircraft, (D) payments of cash in the ordinary course of business and as
otherwise permitted by this Agreement, and (E) subject to Section 8.10,
other transactions between or among the Obligated Parties in the ordinary
course of each Obligated Party’s business consistent with past practices; provided
that, notwithstanding the foregoing or any other provision of this Agreement,
as long as no Default or Event of Default exists or would result therefrom and
provided Ahern gives the Agents prior written notice:

 

(a)                                  a Borrower
(other than Ahern) may wind-up, dissolve, or liquidate if (i) its property
is transferred to another Borrower and (ii) the Borrower acquiring such
property complies with its obligations under Section 8.25 and Section 10.2
simultaneously with such acquisition;

 

91

 

(b)                                 an Obligated
Party that is not a Borrower may wind-up, dissolve, or liquidate if (i) its
property is transferred to another Obligated Party and (ii) the Obligated
Party acquiring such property complies with its obligations under Section 8.25
and Section 10.2 simultaneously with such acquisition;

 

(c)                                  a Borrower may
merge or consolidate with another Borrower, provided that if Ahern is a party to any such merger or
consolidation, Ahern shall be the surviving entity;

 

(d)                                 an Obligated
Party may transfer assets in connection with a Permitted Investment; and

 

(e)                                  an Obligated
Party that is not a Borrower may merge or consolidate with another Obligated
Party, provided that if a Borrower is a party to any such merger or
consolidation, such Borrower shall be the surviving entity, and a Subsidiary of
an Obligated Party that is not an Obligated Party may merge or consolidate with
an Obligated Party; provided that the Obligated Party is the survivor of
any such merger or consolidation.

 

The inclusion of proceeds in the definition of
Collateral shall not be deemed to constitute the Administrative Agent’s, the
Collateral Agent’s or any Lender’s consent to any sale or other Disposition of
the Collateral except as expressly permitted herein.

 

Section 8.10                               Distributions; Capital Change; Restricted Investments. 
Ahern will not, nor will it permit any of its Subsidiaries to, (a) directly
or indirectly declare or pay any Distributions, except that (i) any
Subsidiary of Ahern that is an Obligated Party may make Distributions to a
Borrower, and (ii) any Subsidiary of Ahern that is not an Obligated Party may
make Distributions to Ahern or any other Subsidiary of Ahern that is an
Obligated Party, and Ahern may make Permitted Distributions (but only to the
extent that such Permitted Distribution is not prohibited to be made under the
terms of any other agreement to which Ahern is a party or by which it is
otherwise bound), (b) make any change in its capital structure which could
have an adverse effect on the ability of any of the Obligated Parties to
perform any of its duties and obligations under any Loan Document or pay the
Obligations when due, or (c) make any Investment other than Permitted
Investments.

 

Section 8.11                               Guaranties.  No Obligated
Party shall make, issue, or become liable on any Guaranty, except (a) Guaranties
of Debt allowed under Section 8.12 and (b) endorsement in the
ordinary course of business of negotiable instruments for deposit or
collection.

 

Section 8.12                               Debt.  No Obligated
Party shall incur or maintain any Debt, other than:

 

(a)                                  the
Obligations;

 

(b)                                 the Debt
existing on the Closing Date described in Schedule 8.12;

 

(c)                                  Debt evidencing
a refunding, renewal, or extension of the Debt described in clause (b) preceding
or in clause (h) below; provided that (i) the
principal amount thereof is not increased at the time of such renewal, refinancing,
refunding, or extension 

 

92

 

thereof;
(ii) no Obligated Party that is not an obligor or guarantor of such Debt
as of the Closing Date shall become an obligor or guarantor thereof, (iii) the
terms of such refunding, renewal, or extension are no less favorable to the
Obligated Parties and the Lenders than the original Debt and (iv) the
Liens, if any, securing such refunded, renewed or extended Debt do not attach
to any assets in addition to those assets, if any, securing the Debt to be
refunded, renewed or extended (except additions to the aircraft);

 

(d)                                 Debt owing by
an Obligated Party to another Obligated Party for intercompany loans and
advances made for working capital in the ordinary course of business; provided
that (i) all such intercompany Debt shall be evidenced by promissory
notes, (ii) all such intercompany Debt owed by Ahern to any of its
Subsidiaries shall be subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory notes or
an intercompany subordination agreement satisfactory to the Agents, and (iii) any
payment by any Subsidiary of Ahern under any guaranty of the Obligations or the
Second Lien Debt shall result in a pro  tanto reduction of the
amount of any intercompany Debt owed by such Subsidiary to Ahern or to any of
its Subsidiaries for whose benefit such payment is made;

 

(e)                                  subject to clause (c)(ii) above,
Guaranties permitted under Section 8.11;

 

(f)                                    Debt incurred
in connection with the financing of premiums payable with respect to insurance
policies required to be maintained by the Obligated Parties pursuant to this
Agreement;

 

(g)                                 the Second Lien
Debt; provided that the aggregate principal amount of such Debt under this
clause (g) after giving effect to all cancellations of
principal thereof in exchange for Term Loans shall not at any time exceed
$237,000,000 less all payments
and prepayments of principal thereon, and the refinancing thereof (the Debt
under or with respect to such refinancing, the “Refinancing Second Lien Debt”
and the agreements evidencing, governing, securing or guaranteeing any of the
Refinancing Second Lien Debt (as amended, modified or supplemented from time to
time in a manner not in contravention of the terms of this Agreement),
collectively, the “Refinancing Second Lien Debt Documents”); provided
that such refinancing shall be permitted only so long as (i) all, and not
a portion of, the Second Lien Debt is refinanced and the principal amount of such
refinancing is not greater than the principal amount of Debt being refinanced
(other than with respect to any reasonable fees and other costs of refinancing
and with respect to accrued interest on the Second Lien Debt), (ii) the
Liens, if any, securing such refinancing do not attach to any assets in
addition to those assets securing the Second Lien Debt and those Liens shall be
junior and subordinate to the Agent’s Liens and be subject to the terms and
conditions of an intercreditor agreement between the Collateral Agent and the
holders of the Refinancing Second Lien Debt (or an agent or trustee therefor)
substantially identical to the Intercreditor Agreement or otherwise
satisfactory to the Agents and the Majority Revolving Lenders (or after the
Revolving Facility Payment In Full, the Majority Term Lenders), (iii) no
Person that is not an obligor or guarantor of the Second Lien Debt immediately
prior to the refinancing shall become an obligor or guarantor of the
Refinancing Second Lien Debt, unless such Person simultaneously becomes a
Guarantor, (iv) the terms under the Refinancing Second Lien 

 

93

 

Debt
Documents are no less favorable in all material respects to the Obligated
Parties, the Agents and the Lenders than the terms under the Second Lien Debt
Documents (without in any way limiting the foregoing, in no event shall the
financial or other covenants or events of default in the Refinancing Second
Lien Debt Documents be more restrictive than those in the Second Lien Debt
Documents in effect on August 18, 2005), (v) no payments of principal
on the Refinancing Second Lien Debt (including, without limitation, the final
scheduled maturity thereof) shall be scheduled to be due and payable on or
prior to the Stated Term Loan Termination Date and (vi) no Default or
Event of Default shall exist either immediately prior to or after giving effect
to such refinancing;

 

(h)                                 Capital Leases
of Transportation Equipment, the New Aircraft and/or computer and office equipment
and Debt to finance (as purchase money or otherwise (any such financing that is
not purchase money Debt to be on terms reasonably satisfactory to the Agents))
Transportation Equipment, the New Aircraft (purchase money Debt only) and/or
computer and office equipment; provided that (1) the aggregate
amount of Debt (including Capital Leases but excluding Revolving Loans)
relating to Transportation Equipment incurred in any Fiscal Year shall not
exceed $4,000,000, (2) the aggregate amount of Debt (including Capital
Leases) permitted to be outstanding under this Section 8.12
(including, without limitation, under clauses (b), (c) and
(h) hereof) relating to Transportation Equipment (but excluding
Revolving Loans) shall not exceed $15,000,000 at any time outstanding, (3) the
aggregate amount of Debt relating to the New Aircraft (including, without
limitation, any refinancings thereof) shall not exceed $6,000,000 at any time
outstanding and (4) the aggregate amount of Debt (including Capital
Leases) relating to computer and office equipment under this clause (h) and
any refinancings thereof under clause (c) shall not exceed
$2,000,000 at any time outstanding;

 

(i)                                     purchase money
Debt to vendors to finance the purchase from such vendors of Inventory not to
exceed an aggregate amount at any time outstanding equal to $10,000,000 less
the aggregate amount of inventory consigned to the Obligated Parties at such
time; provided that (1) on or prior to the incurrence of any such
Debt, the applicable Obligated Party has identified to the Agents in writing,
in reasonable detail, the specific items of Inventory being financed thereby, (2) the
applicable Obligated Party shall be able to readily identify such financed
Inventory in its computer records in a manner reasonably satisfactory to the
Agents; provided that during the existence of an Event of Default, if
requested by either Agent, the applicable Obligated Party shall attach to such
Inventory in a conspicuous location an insignia, stencil, plaque, or other form
of notice indicating in a manner satisfactory to the Agents that such Inventory
is being financed by such vendor, (3) the Liens created in connection with
such purchase money Debt shall attach only to (and any UCC financing statements
filed by any such vendor with respect to such Liens shall only cover) either (x) the
specific items of Inventory being purchased and proceeds of the sale of such
Inventory or (y) Inventory purchased from time to time by such Obligated
Party from such vendor for which there remains an unpaid purchase price owing
and proceeds of the sale of such Inventory (and a copy of each UCC financing
statement filed by a vendor shall be delivered to the Agents promptly after
filing thereof with the appropriate Governmental Authority), (4) the Liens
created in connection with such purchase money Debt shall not attach to any
Account arising from

 

94

 

the
rental of such Inventory, and (5) such Obligated Party shall cause any
vendor whose Lien and UCC financing statement is of the type included in clause (3)(y) above
to deliver to the Agents a monthly statement, in form and substance reasonably
satisfactory to the Agents, detailing those items of Inventory for which there
remains an unpaid purchase price and the amount of such unpaid purchase price
and those items of Inventory that have been released from the vendor’s Lien
since the last day of the period covered by the last monthly statement
delivered to the Agents; and

 

(j)                                     other unsecured
Debt; provided that the aggregate amount of unsecured Debt outstanding
under this clause (j) does not exceed $2,000,000 at any time
outstanding.

 

Section 8.13                               Prepayment; Amendment of Debt Agreements.

 

(a)                                  No Obligated
Party shall voluntarily prepay or redeem any Debt prior to the Stated Term Loan
Termination Date, except the Obligations (other than, prior to the Revolving
Facility Payment In Full, principal of the Term Loans unless required by Section 4.3(f) or
permitted under Section 4.2) or through the proceeds of a
refinancing permitted under Section 8.12(c) or (g) or
as permitted under clause (c) below.

 

(b)                                 No Obligated
Party shall, directly or indirectly, amend, modify, supplement, waive
compliance with or consent to any departure from any provision of (1) existing
Debt (other than the Second Lien Debt Documents or the Refinancing Second Lien
Debt Documents) or of any agreement (including any purchase agreement, indenture,
loan agreement or security agreement) relating thereto (other than the Second
Lien Debt Documents or the Refinancing Second Lien Debt Documents), other than
any amendments or modifications to such Debt which do not in any way materially
adversely affect the interests of the Credit Providers and are otherwise
permitted under Section 8.12; or (2) any of the Second Lien
Debt Documents or any of the Refinancing Second Lien Debt Documents in any
material respect.

 

(c)                                  In no event
shall any Borrower or any other Obligated Party make any payment or prepayment
of principal or interest on any Second Lien Debt or any Refinancing Second Lien
Debt, except (i) scheduled payments of interest on the Second Lien Debt
and the Refinancing Second Lien Debt when due and payable, (ii) the
scheduled payment of principal on the Second Lien Debt or the Refinancing
Second Lien Debt, as the case may be, on the stated maturity date thereof and (iii) in
the case of Second Lien Debt, through the proceeds of a refinancing permitted
under Section 8.12(g).

 

Section 8.14                               Transactions with Affiliates. 
Except as otherwise provided in Section 8.10, Section 8.11,
Section 8.12 and this Section 8.14 or except as set
forth on Schedule 8.14, during the term of this Agreement, no
Obligated Party shall sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate that is not a Borrower, or lend or advance money or property to any
Affiliate that is not a Borrower, or invest in (by capital contribution or
otherwise) or purchase or repurchase any Capital Stock or indebtedness, or any
property, of any Affiliate that is not a Borrower, or become 

 

95

 

liable
on any Guaranty of the indebtedness, liabilities, dividends, or other
obligations of any Affiliate that is not a Borrower, or enter into a lease for
real or personal property with any Affiliate that is not a Borrower or extend
or renew any such lease (whether such lease is existing on the Closing Date or
entered into thereafter). 
Notwithstanding the foregoing, if no Default or Event of Default is in existence
or would result therefrom, an Obligated Party may engage in transactions with
an Affiliate that is not a Borrower (including, without limitation, any such
transaction that constitutes an extension or renewal of a transaction permitted
under this Section 8.14 that was in existence on the Original
Closing Date) in the ordinary course of such Obligated Party’s business
consistent with past practices in amounts and upon terms fully disclosed to the
Agents and the Lenders and no less favorable to such Obligated Party than would
be obtained in a comparable arm’s-length transaction with a third party who is
not an Affiliate; provided, that (i) with respect to any
transaction or series of transactions with an Affiliate that is not a Borrower
involving aggregate consideration in excess of $500,000, such transaction shall
require the approval of the Board of Directors of Ahern and evidence of such
approval shall be delivered to the Agents; provided, further,
that with respect to any transaction or series of transactions with an
Affiliate that is not a Borrower involving aggregate consideration in excess of
$2,500,000, the relevant Obligated Party shall obtain a favorable written
opinion as to the fairness of such transaction to such Obligated Party from a
financial point of view from an independent investment banking firm of national
reputation in the U.S. or, if pertaining to a matter for which such investment
banking firms do not customarily render such opinions, an appraisal or
valuation firm of national reputation in the U.S., and a copy of such opinion
shall be delivered to the Agents.

 

Section 8.15                               Investment Banking and Finder’s Fees. 
No Obligated Party shall pay or agree to pay, or reimburse any other
party with respect to, any investment banking or similar or related fee,
underwriter’s fee, finder’s fee, or broker’s fee to any Person in connection
with this Agreement, except for any investment banking fee payable to
Oppenheimer & Co. in connection with the making of the Term Loans.  The Obligated Parties shall defend and
indemnify the Agents and the Lenders against and hold them harmless from (a) all
claims of any Person that any Obligated Party is obligated to pay any such fees
and (b) all costs and expenses (including reasonable attorneys’ fees and
Attorney Costs) incurred by either Agent and/or any Lender in connection
therewith.

 

Section 8.16                               Business Conducted.  The Obligated
Parties shall not engage, directly or indirectly, in any line of business other
than the lines of business in which the Obligated Parties were engaged on the
Original Closing Date and those reasonably similar, related, or incidental
thereto.

 

Section 8.17                               Liens.

 

(a)                                  No Obligated
Party shall create, incur, assume, or permit to exist, and will defend the
Collateral against, and take such other action as is necessary to remove, any
Lien on any property now owned or hereafter acquired by it, except Permitted
Liens.  Each Obligated Party will defend
the right, title, and interest of the Collateral Agent in and to any of such
Obligated Party’s rights under the Collateral against the claims and demands of
all Persons whomsoever.  Each Obligated
Party will advise each Agent promptly, in reasonable detail, (i) of any
Lien (other than Permitted Liens) or claim made 

 

96

 

or
asserted against any of the Collateral and (ii) of the occurrence of any
other event with respect to the Collateral that could reasonably be expected to
have, or has resulted in, a Material Adverse Effect.

 

(b)                                 Other than in
connection with the creation of any Debt under Section 8.12(c), (h) or
(i) or in any agreement relating to the lease of an Excluded Asset
by an Obligated Party as lessee or sublessee, no Obligated Party will enter
into, become subject to or otherwise permit to exist any Negative Pledge; provided
that any Negative Pledge entered into or existing in connection with the
creation of Debt under Section 8.12(c), (h) or (i) or
in any agreement relating to the lease of an Excluded Asset by an Obligated
Party as lessee or sublessee shall be limited to the applicable property being
financed or leased, as the case may be.

 

(c)                                  No Obligated
Party shall create, incur, assume or otherwise cause or permit to exist or
become effective any consensual encumbrance, condition, prohibition or
restriction of any kind on any Obligated Party’s right to:  (a) incur or repay Debt (whether owing
to any Obligated Party or otherwise); (b) guarantee the Obligations
pursuant to any Guaranty Agreement; (c) amend, modify, extend or renew any
agreement evidencing Debt; (d) repay any obligations owed to any Obligated
Party; (e) make loans or advances to any Obligated Party; (f) pay
dividends or make any other distributions on any Subsidiary’s Capital Stock
owned by Ahern or any other Subsidiary of Ahern; or (g) transfer any of
its property to any Obligated Party, in each case except as provided in this
Agreement, the other Loan Documents and the Second Lien Debt Documents or the
Refinancing Second Lien Debt Documents and, in the case of clause (g),
in connection with any Debt permitted under Section 8.12(h) or
(i), or in any agreement relating to the lease of an Excluded Asset by
any Obligated Party as lessee or sublessee.

 

Section 8.18                               Sale and Leaseback Transactions. 
No Obligated Party shall, directly or indirectly, enter into or otherwise
be subject to any arrangement with any Person providing for such Obligated
Party to lease or rent property that such Obligated Party has sold or will sell
or otherwise transfer to such Person.

 

Section 8.19                               New Subsidiaries.  No Obligated
Party shall, directly or indirectly, organize, create, acquire, or permit to
exist any Subsidiary without the prior written consent of the Majority
Revolving Lenders (or after the Revolving Facility Payment In Full, the
Majority Term Lenders), other than those listed on Schedule 7.4.

 

Section 8.20                               Fiscal Year.  Each
Obligated Party (other than Ahern) shall cause its Fiscal Year to be the same
as Ahern’s.  Ahern shall not change its
Fiscal Year.

 

Section 8.21                               Financial Covenants.

 

(a)                                  Capital
Expenditures.  For each
Fiscal Quarter commencing after the date hereof, the Obligated Parties shall
not permit the difference between (x) the aggregate amount of all Capital
Expenditures made or incurred by the Obligated Parties, on a consolidated
basis, during such Fiscal Quarter, minus (y) the proceeds received by the
Obligated Parties, on a consolidated basis, during such Fiscal Quarter from
sales of rental 

 

97

 

equipment
and other property (in each case, as reported by Ahern in the statement of cash
flows delivered to the Agents as part of the financial information required by Section 6.2(a) and
(b)), to exceed the following (provided that (i) any amount
not utilized in one Fiscal Quarter may be carried forward to the amount permitted
to be expended in (but only in) the immediately succeeding Fiscal Quarter and (ii) Capital
Expenditures made during any Fiscal Quarter shall be deemed to be made first
without regard to any amount carried forward to such Fiscal Quarter in
accordance with clause (i)):

 

(i)                                     for the Fiscal
Quarter ended March 31, 2010, $4,500,000;

 

(ii)                                  for the Fiscal
Quarter ended June 30, 2010, $4,500,000; and

 

(iii)                               for each Fiscal
Quarter thereafter, the lesser of 30% of equipment rental and related revenue
for such Fiscal Quarter and the amount determined according to the following
grid:

 

Time
Utilization

($ in millions)

 

	
   

  	
   

  	
   

  	
   

  	
  <55%

  	
   

  	
  55%

  to <60%

  	
   

  	
  60%

  to <65%

  	
   

  	
  65%

  to <70%

  	
   

  	
  >70%

  	
   

  
	
  Dollar

  	
   

  	
  <30%

  	
   

  	
  $

  	
  2.50

  	
   

  	
  $

  	
  3.25

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  4.75

  	
   

  	
  $

  	
  5.50

  	
   

  
	
  Utilization

  	
   

  	
  30% to <35%

  	
   

  	
  $

  	
  3.25

  	
   

  	
  $

  	
  5.00

  	
   

  	
  $

  	
  7.09

  	
   

  	
  $

  	
  9.35

  	
   

  	
  $

  	
  10.25

  	
   

  
	
   

  	
   

  	
  35% to <40%

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  7.09

  	
   

  	
  $

  	
  11.00

  	
   

  	
  $

  	
  15.81

  	
   

  	
  $

  	
  18.75

  	
   

  
	
   

  	
   

  	
  40% to <45%

  	
   

  	
  $

  	
  4.75

  	
   

  	
  $

  	
  9.35

  	
   

  	
  $

  	
  15.81

  	
   

  	
  $

  	
  21.56

  	
   

  	
  $

  	
  24.44

  	
   

  
	
   

  	
   

  	
  45% to <50%

  	
   

  	
  $

  	
  5.50

  	
   

  	
  $

  	
  11.79

  	
   

  	
  $

  	
  21.56

  	
   

  	
  $

  	
  25.50

  	
   

  	
  $

  	
  25.50

  	
   

  
	
   

  	
   

  	
  >50%

  	
   

  	
  $

  	
  6.25

  	
   

  	
  $

  	
  13.20

  	
   

  	
  $

  	
  24.44

  	
   

  	
  $

  	
  25.50

  	
   

  	
  $

  	
  25.50

  	
   

  

 

(b)                                 Minimum
Equipment Utilization.  The
Obligated Parties shall not permit the average actual customer lease
utilization of all of the Borrowers’ aerial lift Inventory during any two
consecutive Fiscal Quarter period to be less than 45% of the maximum average
customer lease utilization possible for all such Inventory during such two
consecutive Fiscal Quarter period (assuming that all such Inventory of the
Borrowers was available to be leased at all times during such two consecutive
Fiscal Quarter period, but excluding any unit of aerial lift Inventory so long
as such unit is reflected in Ahern’s ledger accounts under “Equipment Down Long
Term”).

 

Section 8.22                              Use of Proceeds.  The Borrowers
shall use the proceeds of the Revolving Loans (a) to pay costs and
expenses incurred in connection with the closing of this Agreement and the
transactions contemplated hereby, (b) to pay interest, costs, and expenses
incurred in connection with this Agreement, (c) to issue Letters of Credit
and to repay reimbursement obligations related thereto, and (d) to finance
ongoing general working capital needs and Capital Expenditures (in each case,
not otherwise prohibited by this Agreement) of the Obligated Parties in
the ordinary course of business, and shall not use any portion of the Revolving
Loan proceeds, directly or indirectly, (x) to fund a personal loan to or
for the benefit of a director or executive officer of any Obligated Party or
for any purpose that is prohibited by the Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204,
116 Stat. 745), (y) to buy or carry any Margin Stock, to repay or 

 

98

 

otherwise
refinance indebtedness of any of the Borrowers or others incurred to buy or
carry any Margin Stock, to extend credit for the purpose of buying or carrying
any Margin Stock, or to acquire any security in any transaction that is subject
to Sections 13 or 14 of the Exchange Act, or (z) for any purpose that
is prohibited by any Requirement of Law. 
The Borrowers shall use the net cash proceeds of the Term Loans to repay
not less than $47,000,000 of Revolving Loans (with no corresponding permanent
reduction of Revolving Credit Commitments) and to pay fees, costs and expenses
incurred in connection with the making of the Term Loans and the other transactions
contemplated by the amendment and restatement of the First Amended and Restated
Loan and Security Agreement pursuant to this Agreement.

 

Section 8.23                               Lenders as Depository. 
Each Obligated Party shall maintain one or both of BofA and Wachovia as
its principal depository, including for the maintenance of operating,
administrative, cash management, collection activity, and other deposit
accounts for the conduct of its business. 
Without limitation of the foregoing, each Obligated Party shall use and
maintain its deposit accounts, securities accounts and cash management systems
in a manner reasonably satisfactory to the Agents.

 

Section 8.24                               Guaranties of the Obligations. 
Each Obligated Party, including any Person that becomes a Borrower or a
Guarantor after the Closing Date pursuant to the terms of this Agreement, shall
guarantee payment and performance of the Obligations (other than Obligations
owing by such Obligated Party) pursuant to a Guaranty Agreement, duly executed
by each such Obligated Party.

 

Section 8.25                               Additional Collateral; Further Assurances.

 

(a)                                  Subject to
Requirements of Law, each Obligated Party shall, unless the Majority Revolving
Lenders (or after the Revolving Facility Payment In Full, the Majority Term
Lenders) otherwise consent in writing, cause each Subsidiary of Ahern to become
a Guarantor.

 

(b)                                 Upon request of
either of the Agents, each Obligated Party shall (i) grant Liens to the
Collateral Agent, for the benefit of the Credit Providers, pursuant to such
agreements, certificates, documents, and instruments as such Agent, as the case
may be, may reasonably deem necessary and deliver such property, agreements,
certificates, documents, and instruments as such Agent, as the case may be, may
request to perfect the Liens of the Collateral Agent in any property of such
Obligated Party that constitutes Collateral, (ii) execute a Guaranty
Agreement as required by Section 8.24, and (iii) in connection
with the foregoing requirements, or either of them, deliver to the Agents all
items of the type required by Section 9.1 (as applicable) and such
other items as either Agent may reasonably request.  Upon execution and delivery of such Loan
Documents and other agreements, certificates, documents, and instruments, each
such Person shall automatically become a Guarantor hereunder and thereupon
shall have all of the rights, benefits, duties, and obligations in such
capacity under the Loan Documents.

 

(c)                                  Without
limiting the foregoing, each Obligated Party shall, and shall cause each of
Ahern’s Subsidiaries that is required to become an Obligated Party pursuant to
the terms of this Agreement to, execute and deliver, or cause to be executed
and 

 

99

 

delivered,
to the Agents such documents and agreements, and shall take or cause to be
taken such actions as either of the Agents may, from time to time, reasonably
request to carry out the terms and conditions of this Agreement and the other
Loan Documents.

 

Section 8.26                               Changes in Accounting Treatment.

 

(a)                                  No Borrower
shall, without the prior written consent of each of the Agents, change any
accounting treatment for, or method of valuation of, its Inventory or its
Transportation Equipment, including with respect to the method of depreciation
of Inventory or Transportation Equipment, from that in effect on the Original
Closing Date; provided that a Borrower may make such changes as are
required by GAAP.

 

(b)                                 No Borrower
shall, without the prior written consent of each of the Agents, change in any
respect from that in effect on the Original Closing Date and consistent with
past practices the manner or method in which such Borrower keeps its books and
records or makes entries with respect to any of its ledger accounts “Equipment
Down Long Term”, “Rebate Accrual” or “Rent Purchase Option” or any items
recorded therein, including without limitation and in any event, any change
which would in any manner affect the type or amount of any item that would or
should be recorded in any such general ledger account; provided that a
Borrower may make such changes as are required by GAAP.

 

(c)                                  Notwithstanding
the proviso in either clause (a) or (b) of this Section 8.26,
unless otherwise agreed to in writing by the Agents and the Revolving Lenders, the
Borrowing Base and all related definitions (including, without limitation, Net
Book Value and Reserves) shall continue to be determined as if no such change
had been made.

 

Section 8.27                               [Intentionally Omitted].

 

Section 8.28                               Acquired Real Estate.  From and
after the Closing Date, in the event that (i) any Obligated Party acquires
any Real Estate in fee interest or (ii) at the time any Person becomes a
Guarantor, such Person owns or holds any Real Estate in fee interest (any such
Real Estate described in the foregoing clause (i) or (ii) being
an “Additional Mortgaged Property”),
such Obligated Party will deliver to the Agents:

 

(a)                                  A fully
executed and notarized Mortgage in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Obligated Party in such Additional Mortgaged Property;

 

(b)                                 A boundary
survey prepared and certified to the Collateral Agent by a credentialed surveyor acceptable to the Agents,

 

(c)                                  A mortgagee’s policy of title insurance, or, in the Agents’ discretion, a
commitment for the issuance of such title insurance, containing only such
exceptions as may be acceptable to the Agents, such insurance to be in an
amount equal to 110% of the fair market value of such parcel of Real Estate,

 

100

 

(d)                                 An appraisal prepared by a credentialed independent appraiser acceptable
to each of the Agents, satisfying Requirements of Law and indicating whether or
not such Real Estate is located within an area that has been identified by the
Director of the Federal Emergency Management Agency as a Special Flood Hazard
Area, and

 

(e)                                  Such other
information, documentation, and certifications, including an environmental
assessment, as may be reasonably requested by either of the Agents.

 

Section 8.29                               Ranking.  Each
Obligated Party shall ensure that, at all times, all Obligations shall rank in
right of payment either pari  passu or senior to all other Debt of
the Obligated Parties.

 

Section 8.30                               Kubota and Other Vendors. 
No Inventory manufactured, sold or consigned by Kubota Tractor
Corporation or Kubota Tractor Corporation, USA or consigned by any other vendor
to any Obligated Party shall be rented by an Obligated Party to a customer of
such Obligated Party unless and until such Obligated Party shall have purchased
such Inventory and paid the purchase price for such Inventory in full.

 

Section 8.31                               Other Debt Limitations.  No Obligated
Party shall (i) enter into or permit to exist any Credit Facilities (as
defined in the Second Lien Debt Agreement) other than this Agreement or (ii) issue
or permit to exist any Parity Lien Debt (as defined in the Second Lien Debt
Agreement) other than Second Lien Debt or designate, in an officer’s
certificate or otherwise, any Debt as Parity Lien Debt for purposes of the
Second Lien Debt Agreement.

 

Section 8.32                               Compliance with and Amendments to Second Lien Debt
Agreement.  Each Obligated Party shall comply at all
times and in all material respects with the terms and provisions of the Second
Lien Debt Agreement.  Without limitation
of any restrictions in Section 8.13(b), no Obligated Party shall (i) permit
the Second Lien Debt Agreement to be amended or (ii) request a waiver of
any provision of the Second Lien Debt Agreement, in each instance under clause
(i) or (ii) above, that would be materially adverse to the
interests of the Term Lenders in the reasonable judgment of the Term Lenders or
the interests of the Revolving Lenders in the reasonable judgment of the
Revolving Lenders (it being understood and agreed that any amendment,
modification or waiver of Sections 4.09(b)(1) and 4.10 of the Second
Lien Debt Agreement would be materially adverse to the interests of the Term
Lenders and the interests of the Revolving Lenders).

 

ARTICLE 9

 

CONDITIONS OF LENDING

 

Section 9.1                                     Conditions Precedent to Making of Loans on the Closing
Date.  The obligation of the Revolving Lenders to
make any Revolving Loans on the Closing Date and of the Term Lenders to make
the Term Loans on the Closing Date, and the obligation of the Agents to cause
the Letter of Credit Issuer to issue any Letter of Credit on the Closing Date,
are subject to the following conditions precedent having been satisfied in a
manner satisfactory to each Agent and each Lender.

 

101

 

(a)                                  This Agreement
shall have been executed and delivered by the Borrowers, the other Obligated
Parties, the Majority Lenders (under and as defined in the First Amended and
Restated Loan and Security Agreement), the Term Lenders and the Agents.

 

(b)                                 The Agents
shall have received (i) a duly executed amendment to the Intercreditor
Agreement, in form and substance satisfactory to the Agents and the Lenders,
increasing the $175,000,000 amount in the definition of “First Lien Obligations”
contained therein to $396,000,000 and (ii) a duly executed supplement to
the Second Lien Debt Agreement, in form and substance satisfactory to the
Agents and the Lenders, increasing the $175,000,000 amount in Section 4.09(b)(1) thereof
to $396,000,000.

 

(c)                                  The Agents
shall have received each of the following from each Obligated Party, all of
which shall be satisfactory in form and substance to each of the Agents and the
Lenders:

 

(i)                                     copies of the
Organization Certificate of such Obligated Party, with all amendments thereto,
each certified by the appropriate Governmental Authority of the jurisdiction of
such Obligated Party’s formation, incorporation, or organization (as
applicable) certified by the secretary, general partner, or comparable
authorized representative of such Obligated Party as being true, correct,
complete, and in effect on the Closing Date;

 

(ii)                                  copies of the
Management Agreement of such Obligated Party certified by the secretary,
general partner, or comparable authorized representative of such Obligated
Party as being true, correct, complete, and in effect on the Closing Date;

 

(iii)                               copies of duly
approved Resolutions authorizing the execution and delivery of this Agreement,
the Term Loan Notes and the other Loan Documents entered into in connection
with this Agreement to which such Obligated Party is a party, and, with respect
to the Borrowers, authorizing the Borrowings, certified by the secretary,
general partner, or comparable authorized representative of such Obligated
Party as being true, correct, complete, and in effect on the Closing Date;

 

(iv)                              a certificate
evidencing the existence of such Obligated Party, and certificates evidencing
the good standing and tax status of such Obligated Party in the jurisdiction of
its organization and in each other jurisdiction in which it is required to be
qualified as a foreign business entity to transact its business as presently
conducted; and

 

(v)                                 a certificate
of incumbency and specimen signatures with respect to each individual
authorized to execute and deliver this Agreement and the other Loan Documents
on behalf of such Obligated Party, and any other individual executing any
document, certificate, or instrument to be delivered in connection with this
Agreement and the other Loan Documents and, in the case of each Borrower, to
request Borrowings.

 

102

 

(d)                                 The Agents
shall have received, in form and substance satisfactory to each Agent, each of
the following:

 

(i)                                    with respect to
any Letter of Credit to be issued, all documentation required by Section 2.4,
duly executed by a Responsible Officer of the applicable Borrower;

 

(ii)                                 (A) an
amendment to the Fee Letter among the Administrative Agent, the Collateral
Agent and the Borrowers duly executed by such parties modifying certain defined
terms used therein and (B) the other Fee Letter duly executed by the
Administrative Agent and the Borrowers;

 

(iii)                              a certificate
of the Borrowers executed by a Responsible Officer of each Borrower:

 

(A)                              specifying the
account of the Borrowers that is the Funding Account,

 

(B)                                attaching a
certified copy of the Second Lien Debt Agreement and all amendments and
supplements thereto, and

 

(C)                                certifying to
such other factual matters as may be reasonably requested by either Agent or
any Lender;

 

(iv)                             such amendments
to the other Loan Documents duly executed by the requisite parties as either
Agent shall request in order to secure the Term Loan Obligations by the
Collateral and to effectuate the other modifications contemplated by the
amendment and restatement of the First Amended and Restated Loan and Security
Agreement pursuant to this Agreement;

 

(v)                                the pro forma
balance sheet required by Section 7.6(c);

 

(vi)                             evidence of the
cancellation, upon the making of the Term Loans, of Second Lien Debt in the
aggregate principal amount required under Section 2.3(a);

 

(vii)                          UCC-3 financing
statements and such other instruments, in form and substance satisfactory to
each Agent, as shall be necessary to terminate all existing UCC filings on the
property of each of the Obligated Parties that are not Permitted Liens, and
satisfactory evidence that the Collateral Agent has a valid, exclusive (except
for Permitted Liens), and perfected first priority (except for Permitted Liens
that according to the terms of this Agreement are permitted to have priority
over the Agent’s Liens) Lien as of the Closing Date in the Collateral as
security for the Obligations, to the extent any such Liens may be perfected
under the UCC (but excluding any Liens perfected solely by possession, but only
to the extent neither of the Agents has requested possession of such
Collateral), in each case in form and substance satisfactory to each of the
Agents; provided that upon either of the Agent’s request, the Obligated
Parties shall provide any 

 

103

 

additional
agreement, document, instrument, certificate, or other item relating to any
other Collateral as may be required for perfection under any Requirement of
Law;

 

(viii)                        a Borrowing
Base Certificate that calculates the Borrowing Base as of the end of the
Business Day immediately preceding the Closing Date;

 

(ix)                                satisfactory
evidence that all filings, consents, or approvals with or of the owners of any
Capital Stock of any Obligated Party, any Governmental Authority, or any other
third party (including, without limitation, holders of the Second Lien Debt)
have been made or obtained, as applicable; and

 

(x)                                   such other
agreements, certificates, documents, and instruments as either Agent or any
Lender may reasonably request.

 

(e)                                  The Agents
shall have received signed opinions of counsel for the Obligated Parties,
opining as to such matters in connection with the transactions contemplated by
this Agreement as either of the Agents may reasonably request, each such
opinion to be in form, scope, and substance satisfactory to the Agents, the
Lenders, and their respective counsel.

 

(f)                                    After giving
effect to all Borrowings on the Closing Date and payment of all fees and
expenses due hereunder or due with respect to the other transactions
contemplated under the Transaction Documents, and with all of the Borrowers’
indebtedness, liabilities, and obligations current, the Unused Availability
shall not be less than $40,000,000.

 

(g)                                 All
representations and warranties made hereunder and in the other Loan Documents
shall be true and correct.

 

(h)                                 The Borrowers
shall have paid (i) all fees and expenses of the Agents and the Attorney
Costs incurred in connection with this Agreement and any of the other Loan
Documents to be executed in connection with this Agreement and the transactions
contemplated thereby to the extent invoiced and (ii) all fees payable to the
Lenders on the Closing Date (including, without limitation, the fees payable
under Sections 3.6, 3.7 and 3.8 on the Closing Date) (or
shall have made provision for the direct payment of all such fees, expenses and
Attorney Costs out of the proceeds of any Borrowing to be funded on the Closing
Date).

 

(i)                                     No Default or
Event of Default shall exist or would exist after giving effect to the
Borrowings to be made on the Closing Date.

 

(j)                                     [Intentionally
Omitted].

 

(k)                                  All proceedings
taken by the Obligated Parties in connection with the execution of this
Agreement, the other Transaction Documents, and all documents and papers
relating thereto shall be satisfactory in form, scope, and substance to the
Agents and the Lenders.

 

104

 

(l)                                     Without
limiting the generality of the items described above, each of the Obligated
Parties and each other Person guaranteeing payment of any of the Obligations
shall have delivered or caused to be delivered to the Agents (in form and
substance reasonably satisfactory to each of the Agents), the financial
statements, instruments, resolutions, documents, agreements, certificates,
opinions, and other items required by either of the Agents and the Lenders.

 

(m)                              Since December 31,
2008  there shall not have occurred any
event, and no circumstances shall exist, that could reasonably be expected to
result in a Material Adverse Effect.

 

(n)                                 There shall
exist no action, suit, investigation, litigation or proceeding pending, or to
the knowledge of any of the Obligated Parties, threatened in any court or
before any arbitrator or governmental instrumentality that (i) either of
the Agents has determined could reasonably be expected to have a Material
Adverse Effect or (ii) purports to adversely affect any of the Loan
Documents or other Transaction Documents or any of the transactions
contemplated thereby in any material respect.

 

(o)                                 The Agents
shall be satisfied that Ahern shall receive net cash proceeds of at least
$47,000,000 from the issuance of the Term Loans, all of which net cash proceeds
shall be applied to repay Revolving Loans.

 

The acceptance by the Borrowers of any Loans made or
Letters of Credit issued on the Closing Date shall be deemed to be a
representation and warranty made by each of the Obligated Parties to the effect
that all of the conditions precedent to the making of such Loans or issuance of
such Letters of Credit have been satisfied, with the same effect as delivery to
the Agents and the Lenders of a certificate signed by a Responsible Officer of
each of the Obligated Parties, dated the Closing Date, to such effect.  Execution and delivery to either of the
Agents by a Lender of a counterpart of this Agreement shall be deemed
confirmation by such Lender that (1) all conditions precedent in this Section 9.1
have been fulfilled to the satisfaction of such Lender, (2) the decision
of such Lender to execute and deliver to either of the Agents an executed
counterpart of this Agreement was made by such Lender independently and without
reliance on either of the Agents or any other Lender as to the satisfaction of
any condition precedent set forth in this Section 9.1, and (3) all
documents sent to such Lender for approval, consent, or satisfaction were
acceptable to such Lender.  Execution and
delivery to either of the Agents by the Majority Lenders under and as defined
in the First Amended and Restated Loan and Security Agreement of counterparts
of this Agreement shall be deemed to constitute confirmation by the
Non-Executing Revolving Lenders that (1) all conditions precedent in this Section 9.1
have been fulfilled to the satisfaction of the Non-Executing Revolving Lenders
and (2) all documents sent to the Non-Executing Revolving Lenders for
approval, consent, or satisfaction were acceptable to the Non-Executing
Revolving Lenders.

 

Section 9.2                                     Conditions Precedent to Each Loan. 
The obligation of the Revolving Lenders or the Term Lenders, as the case
may be, to make each Loan, including any Loans on the Closing Date, and the
obligations of the Agents to cause the Letter of Credit Issuer to issue any
Letter of Credit shall be subject to the further conditions precedent that on
and as of the date of any such Borrowing the following statements shall be
true, and the request or deemed request 

 

105

 

by the
Borrowers of any Borrowing shall be deemed to be a statement by each of the
Obligated Parties to the effect set forth in clause (a), clause (b),
clause (c), clause (d) and clause (e) following
with the same effect as the delivery to the Agents of a certificate signed by a
Responsible Officer of each of the Obligated Parties, dated the date of such
extension of credit, stating that:

 

(a)                                  the
representations and warranties contained in this Agreement and the other Loan
Documents are correct in all material respects on and as of the date of such
Borrowing as though made on and as of such date, other than any such
representation or warranty that relates to a specified prior date and except to
the extent the Agents and the Lenders have been notified in writing by the
Obligated Parties that any representation or warranty is not correct and the
requisite Lenders (as provided in Article 13) have explicitly
waived in writing compliance with such representation or warranty;

 

(b)                                 no event or
circumstance exists, or would result from such Borrowing, that constitutes a
Default or an Event of Default;

 

(c)                                  no event or
circumstance exists, or would result from such Borrowing, that has had, or
could reasonably be expected to have, a Material Adverse Effect;

 

(d)                                 the proposed
Borrowing (other than in the case of Term Loans) does not exceed the Unused
Availability prior to giving effect to such Borrowing and will not require a
payment under the third sentence of Section 4.1(a); and

 

(e)                                  the proposed
Borrowing does not violate the borrowing or debt incurrence limits set forth in
any of the Second Lien Debt Documents and is permitted to be incurred and
secured by all applicable Secured Debt Documents (as defined in the Second Lien
Debt Agreement);

 

provided that the foregoing
conditions precedent are not conditions to any Revolving Lender (i) participating
in or reimbursing BofA (individually or in its capacity as the Administrative
Agent, as applicable) for such Revolving Lender’s Pro Rata Share of any
Non-Ratable Loan or Agent Advance made in accordance with the provisions of Section 2.2(i) or
Section 2.2(j) or (ii) participating in any Letter of
Credit in accordance with the provisions of Section 14.16(b).

 

ARTICLE 10

 

SECURITY

 

Section 10.1                               Grant of Lien.  As security
for the Obligations, each
Obligated Party hereby grants to the Collateral Agent, for the benefit of the
Credit Providers, a continuing security interest in, lien on, pledge of,
collateral assignment of, and right of setoff against, all of the following
property and assets of such Obligated Party, whether now owned or existing or
hereafter acquired or arising, regardless of where located:

 

(a)                                  Accounts;

 

(b)                                 Inventory;

 

106

 

(c)                                  contract
rights, including Assigned Contracts and rights under leases of personal
property whether as lessor or lessee (including any option to purchase
thereunder);

 

(d)                                 Chattel Paper;

 

(e)                                  Documents;

 

(f)                                    Instruments;

 

(g)                                 Supporting
Obligations and Letter-of-Credit Rights;

 

(h)                                 General
Intangibles (including payment intangibles and Software);

 

(i)                                     Goods;

 

(j)                                     Equipment;

 

(k)                                  Investment
Property;

 

(l)                                     money, cash,
and cash equivalents;

 

(m)                              Deposit
Accounts, credits, and balances with and other claims against any financial
institution with which such Obligated Party maintains deposits, including any
Clearing Accounts;

 

(n)                                 a Hughes model
369D helicopter bearing manufacturer’s serial number 790544D and U.S.
registration number N58341, together with one (1) Allison
Model 250-C20B helicopter engine bearing manufacturer’s serial number
CAE-832068, which has less than 750 rated take off horsepower, and five (5) Main
Rotor Blades bearing manufacturer’s serial numbers 8231, 8310, 8311, 8314 and
8235, respectively, and all available operating, repair, and maintenance
records pertaining to the foregoing;

 

(o)                                 books, records,
and other property related to or referring to any of the foregoing, including
books, records, account ledgers, data processing records, computer software,
and other property and General Intangibles at any time evidencing or relating
to any of the foregoing;

 

(p)                                 the commercial
tort claims described in Schedule 7.26 and from time to time
disclosed to the Agents pursuant to Section 6.2(o); and

 

(q)                                 any and all
accessions and additions to, substitutions for, and replacements, products, and
proceeds of any of the foregoing, including, but not limited to, proceeds of
any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.

 

All of the foregoing, together with any Real Estate
covered by any Mortgage and all other property of any of the Obligated Parties
in which either of the Agents or any Lender may at any 

 

107

 

time be granted a Lien as collateral for any of the
Obligations, whether or not the Lien of either of the Agents or any Lender in
any thereof has been perfected, is herein collectively referred to as the “Collateral.”  Notwithstanding anything contained herein or
in any other Loan Document to the contrary, (i) Collateral shall not
include Excluded Assets and (ii) cash collateral held by either Agent with
respect to any Letters of Credit or any Obligations relating thereto
(including, without limitation, any Supporting Cash Deposit or any cash
collateral provided under Section 4.3(a), clause sixth of Section 4.6(b) or
clause (iv) of Section 11.2(b)) shall not secure
or be applied to the payment of any Term Loan Obligations and proceeds or
payments under any Supporting Letters of Credit shall not be applied to the
payment of any Term Loan Obligations.

 

Section 10.2                               Perfection and Protection of Security Interest.

 

(a)                                  Actions By the
Obligated Parties.  Each
Obligated Party shall, at the expense of the Borrowers, perform all steps
reasonably requested by either of the Agents at any time to perfect, maintain,
protect, and enforce the Agent’s Liens, including, as applicable:  (i) executing, delivering, and filing
and recording of the Mortgage(s), the Proprietary Rights Security Agreements
and the Aircraft Mortgage and authorizing the filing of financing or
continuation statements, and amendments thereof, in form and substance
reasonably satisfactory to the Agents; (ii) delivering to the Collateral
Agent warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued and certificates of
title covering any portion of the Collateral for which certificates of title
have been issued indicating the Collateral Agent as the lienholder thereon; (iii) at
any time during the existence of an Event of Default, transferring Inventory to
warehouses or other locations designated by the Collateral Agent; (iv) placing
notations on such Obligated Party’s books of account to disclose the Agent’s
Liens; and (v) taking such other steps as are deemed necessary or
desirable by either of the Agents to maintain and protect the Agent’s Liens.

 

(b)                                 Delivery of
Collateral.  Upon the
Administrative Agent’s or the Collateral Agent’s request, each Obligated Party
shall promptly deliver to the Collateral Agent all Collateral consisting of
negotiable Documents, certificated securities (accompanied by stock powers
executed in blank), Chattel Paper, and Instruments.

 

(c)                                  Landlords and
Bailees  Each Obligated Party will use
its best efforts in good faith to provide to the Collateral Agent upon the
Administrative Agent’s or the Collateral Agent’s request, an executed
Collateral Waiver Agreement (i) from each landlord of leased Real Estate
on which any Collateral is located and (ii) from each Person that is not
an Obligated Party and is in possession of any Collateral (other than a
customer of a Borrower in possession of an item or items of Inventory leased to
such customer by such Borrower in the ordinary course of such Borrower’s
business), in each case, without the payment of fees or giving of other
consideration to such landlord or other Person, as applicable.  In the event that any Collateral Waiver
Agreement requested by either of the Agents pursuant to this Section 10.2(c) is
not provided, in lieu of such delivery, either of the Agents may, in its
discretion, establish a Reserve as contemplated in the definitions of Eligible
Inventory and Eligible Transportation Equipment with respect to any Collateral
located on any leased Real Estate or in the possession of any third party that
is not an Obligated Party for which the Collateral Agent has not received 

 

108

 

such
executed Collateral Waiver Agreement, and/or exclude such Collateral from the
determination of the Borrowing Base.

 

(d)                                 Control
Agreements.  Upon the
Administrative Agent’s or the Collateral Agent’s request, each Obligated Party
shall obtain authenticated control agreements from each issuer of
uncertificated securities, securities intermediary, or commodities intermediary
issuing or holding any financial assets or commodities to or for such Obligated
Party.

 

(e)                                  Letter of
Credit Agreements.  If any Obligated
Party is or becomes the beneficiary of any letter of credit arising from the
sale or other disposition of Collateral, such Obligated Party shall promptly
notify the Agents thereof and, upon either of the Agent’s request, enter into a
tri-party agreement (in form and substance reasonably satisfactory to the
Agents) with the Collateral Agent and the issuer and/or the confirmation bank
with respect to all Letter-of-Credit Rights thereunder assigning such
Letter-of-Credit Rights to the Collateral Agent and directing all payments
thereunder to a Clearing Account.

 

(f)                                    Electronic
Chattel Paper.  In
accordance with the UCC (or other applicable Requirement of Law) and to the
extent requested by either of the Agents, each Obligated Party shall take all
steps reasonably necessary to grant the Collateral Agent control of all of such
Obligated Party’s electronic chattel paper and all “transferable records” as
defined in the Uniform Electronic Transactions Act.

 

(g)                                 Deposit
Accounts  In
accordance with the UCC (or other applicable Requirement of Law) and to the
extent requested by either of the Agents, each Obligated Party shall take all
steps reasonably necessary to grant the Collateral Agent control of all of such
Obligated Party’s Deposit Accounts, including delivery of such Deposit Account
Control Agreements as either of the Agents may request.

 

(h)                                 Financing
Statements.  Each
Obligated Party hereby irrevocably authorizes each of the Agents at any time
and from time to time to file in, transmit to, or communicate with any filing
office any financing statements and amendments thereto that (i) indicate
the Collateral (A) as “all assets” of such Obligated Party, or words of
similar effect, regardless of whether any particular asset included in the
Collateral falls within the scope of Article 9 of the UCC, or (B) as
being of an equal or lesser scope or with greater detail and (ii) contain
any other information required by Part 5 of Article 9 of the UCC for
the sufficiency or filing office acceptance of any financing statement or
amendment, including (A) whether such Obligated Party is an organization,
the type of organization, any organization identification number issued to such
Obligated Party, and any employer or taxpayer identification number issued to
such Obligated Party and (B) in the case of a financing statement filed as
a fixture filing or indicating any Collateral as as-extracted collateral or
timber to be cut, a sufficient description of real property to which such
Collateral relates.  Each Obligated Party
agrees to furnish any such information to the Agents promptly upon
request.  Each Obligated Party also
ratifies its authorization for each of the Agents to file any like financing
statements or amendments thereto if filed prior to the date hereof.

 

109

 

(i)                                     Commercial Tort
Claims.  With respect to each
commercial tort claim required to be disclosed by Section 6.2(o),
unless otherwise consented in writing by the Agents, the applicable Obligated
Party shall enter into documentation satisfactory to the Agents to grant to the
Collateral Agent a first priority perfected Lien in such commercial tort claim.

 

(j)                                     Confirmations.  From time to time, each Obligated Party
shall, upon the Administrative Agent’s or the Collateral Agent’s request,
execute and deliver confirmatory written instruments pledging to the Collateral
Agent, for the benefit of the Credit Providers, the Collateral, but such
Obligated Party’s failure to do so shall not affect or limit any security
interest or any other rights of the Collateral Agent, the Administrative Agent
or any other Credit Provider in and to the Collateral with respect to such
Obligated Party.  As long as this
Agreement is in effect and until all Obligations have been fully satisfied, the
Agent’s Liens shall continue in full force and effect in all Collateral
(whether or not deemed eligible for the purpose of calculating the Unused
Availability or as the basis for any advance, loan, extension of credit, or
other financial accommodation).

 

(k)                                  Terminations
and Amendments Not Authorized.  Each Obligated Party acknowledges that it is
not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement filed by either of the Agents
in connection with this Agreement or any other Loan Document without the prior
written consent of the Agents and agrees that it will not do so without the
prior written consent of the Agents, subject to such Obligated Party’s rights
under Section 9-509(d)(2) of the UCC.

 

Section 10.3                               Location of Collateral.  Each
Obligated Party represents and warrants to each of the Agents and the Lenders
that, as of the Closing Date, Schedule 10.3 contains a correct and
complete list of (a) the location of such Obligated Party’s chief
executive office, (b) each location of its books and records, (c) each
location and address where any Collateral is held (other than any location or
address of any Inventory that as of the Closing Date is in the possession of a
customer of a Borrower that is leasing such Inventory from such Borrower in the
ordinary course of such Borrower’s business) and (d) with respect to each location referenced in clause (c) preceding
where any Collateral is held by a representative, agent, warehouseman, or bailee,
the name and address of such representative, agent, warehouseman, or bailee and
the cost of such Inventory and Transportation Equipment and the net book value
of Inventory and Fixed Assets at such location. 
Each Obligated Party covenants and agrees that it will not maintain any
Collateral (other than (i) Transportation Equipment or (ii) Inventory
which is in the possession of, or in transit to or from, a customer of a
Borrower that is leasing such Inventory from such Borrower and Inventory in
transit from one location on Schedule 10.3 (or such other location
identified to the Agents in accordance with this Section 10.3) to
another such location in the ordinary course of such Borrower’s business) at
any location other than those locations listed for such Obligated Party in Schedule 10.3,
otherwise change or add to any of the locations listed for such Obligated Party
in Schedule 10.3, or change the location of its chief executive
office from the location identified in Schedule 10.3 unless, in any
such case, it gives each of the Agents at least 30 days prior written notice
thereof and authorizes the filing of any and all financing statements and
executes any other documents that either of the Agents reasonably request in 

 

110

 

connection
therewith; provided, however, that if a Borrower enters into a
lease for a new retail branch, such Borrower shall notify the Agents in writing
thereof on or prior to entering into such lease and such Borrower shall not
maintain any Collateral at such leased location until it has delivered to the
Agents an executed Collateral Waiver Agreement from the landlord of such
premises or, in lieu of such Collateral Waiver Agreement, if either Agent so
requests, a Reserve shall be established in the manner contemplated in clause (j) of
the definition of “Eligible Inventory” and/or clause (h) of the
definition of “Eligible Transportation Equipment”.  Without limiting the foregoing, each
Obligated Party represents that all of its Inventory (other than Inventory in
transit and Inventory which is in the possession of a customer of a Borrower
that is leasing such Inventory from such Borrower in the ordinary course of
such Borrower’s business) will be, located either (x) on premises owned by
such Obligated Party, (y) on premises leased by such Obligated Party, provided
that the Agents have received an executed Collateral Waiver Agreement from the
landlord of such premises to the extent required by Section 10.2(c) (but
subject to the proviso of the immediately preceding sentence), or (z) in
the possession of a representative, agent, warehouseman, consignee, or bailee, provided
that the Agents have received an executed Collateral Waiver Agreement from the
applicable warehouseman, representative, agent, consignee, or bailee to the
extent required by Section 10.2(c). 
Each Obligated Party represents and warrants to each of the Agents and
the Lenders that all Transportation Equipment is based out of a location listed
in Schedule 10.3 or, so long as it gives each of the Agents at least 30
days prior written notice thereof, another retail branch of an Obligated Party
located in the United States.

 

Section 10.4                               Appraisals.

 

(a)                                  The Agents
shall, once each Fiscal Quarter, engage Rouse Asset Services or another
appraiser acceptable to the Agents to conduct and deliver (i) an Inventory
Appraisal of the Inventory of each Borrower consisting of spare parts and
merchandise inventory, (ii) an Inventory Appraisal of the Inventory of
each Borrower (other than Inventory consisting of spare parts and merchandise
inventory) and (iii) an Equipment Appraisal of the Transportation
Equipment of each Borrower, each such Inventory Appraisal and Equipment
Appraisal to be in form and scope satisfactory to the Agents and using a
methodology to determine orderly liquidation value reasonably requested by the
Agents.  In addition, each Obligated
Party will permit the Collateral Agent and its representatives to conduct
quarterly appraisals of any and all of the Collateral.

 

(b)                                 Notwithstanding
the provisions of clause (a) of this Section 10.4,
whenever an Event of Default exists, either of the Agents may, and at the
direction of the Majority Revolving Lenders (or after the Revolving Facility
Payment In Full, the Majority Term Lenders), the Agents shall, engage an
appraiser acceptable to the Agents to conduct and deliver appraisals of any or
all of the Collateral (if directed by the Majority Revolving Lenders (or after
the Revolving Facility Payment In Full, the Majority Term Lenders), of such
Collateral as specified in such direction), each such appraisal to be in form
and scope satisfactory to the Agents and using a methodology reasonably
requested by the Agents.

 

(c)                                  The Borrowers
agree, jointly and severally, to pay to the Agents on demand the cost of each
appraisal conducted pursuant to this Section 10.4.

 

111

 

Section 10.5                               Accounts.

 

(a)                                  Representations.  Each Obligated Party hereby represents and
warrants, with respect to its Accounts, that: 
(i) each existing Account represents, and each future Account will
represent, a bona  fide sale or lease and delivery of goods by
such Obligated Party, or rendition of services by such Obligated Party, in the
ordinary course of such Obligated Party’s business; (ii) each existing
Account is, and each future Account will be, for a liquidated amount payable by
the Account Debtor thereon on the terms set forth in the invoice therefor or in
the schedule thereof delivered to the Agents, without any offset, deduction,
defense, or counterclaim except those known to such Obligated Party and
disclosed to the Agents pursuant to this Agreement; (iii) no payment will
be received with respect to any Account, and no credit, discount, or extension,
or any agreement therefor, will be granted on any Account, except as reported
to the Agents in Borrowing Base Certificates delivered in accordance with this
Agreement; (iv) each copy of an invoice delivered to either of the Agents
by such Obligated Party will be a genuine copy of the original invoice sent to
the Account Debtor named therein; and (v) all goods described in any
invoice representing a sale or lease of goods will have been delivered to the
Account Debtor and all services of such Obligated Party described in each
invoice will have been performed.

 

(b)                                 Dating Terms.  No Obligated Party will re-date any invoice
or sale or lease or make sales or leases on extended dating beyond that
customary in such Obligated Party’s business or extend or modify any Account
except in the ordinary course of business. 
If any Obligated Party becomes aware of any matter materially adversely
affecting the collectibility of any Account or the Account Debtor therefor,
including information regarding the Account Debtor’s creditworthiness, such
Obligated Party will exclude such Account from Eligible Accounts and, with
respect to any such Account Debtor that is obligated on Accounts owing to any
Obligated Party, in an aggregate amount greater than $250,000, promptly so advise the Agents.

 

(c)                                  Notes and
Instruments.  Without the
prior written consent of the Agents, (i) during the existence of any
Default or Event of Default, no Obligated Party will accept any note or other
instrument (except a check or other instrument for the immediate payment of
money) with respect to any Account and (ii) at any time other than as
provided in clause (i) preceding no Obligated Party will
accept notes or other instruments in any Fiscal Year in excess of $100,000 for all Accounts or accept
notes or other instruments in excess of $250,000
in the aggregate at any time outstanding during the term of this
Agreement.  Any such instrument accepted
by any Obligated Party with respect to any Account shall be considered as
evidence of the Account and not payment thereof and such Obligated Party will
promptly deliver such instrument to the Collateral Agent, endorsed by such
Obligated Party to the Collateral Agent in a manner satisfactory in form and
substance to the Agents.  Regardless of
the form of presentment, demand, or notice of protest with respect thereto,
delivery of any such note or other instrument to the Collateral Agent does not
constitute payment of the Obligations.

 

(d)                                 Disputes and
Claims.  Each Obligated Party shall
notify the Agents promptly of all disputes and claims in excess of $250,000 with any Account Debtor, and 

 

112

 

agrees
to settle, contest, or adjust such dispute or claim at no expense to either of
the Agents or any other Credit Provider. 
No discount, credit, or allowance shall be granted to any such Account
Debtor without the Agents’ prior written consent, except for discounts,
credits, and allowances made or given in the ordinary course of the applicable
Obligated Party’s business when no Event of Default exists.  Upon either of the Agent’s request, each
Obligated Party shall send the Agents a copy of credit memoranda.
Notwithstanding the foregoing, each Obligated Party that is a Borrower shall
promptly report that credit on Borrowing Base Certificates submitted by the
Obligated Parties.  Each of the Agents
may at all times when an Event of Default exists, settle or adjust disputes and
claims directly with Account Debtors for amounts and upon terms that such Agent
shall consider advisable and, in all cases, the applicable Agent will credit
the Loan Account with the net amounts received by such Agent in payment of any
Accounts.

 

(e)                                  Returned
Inventory.  If an
Account Debtor returns any Inventory to any Obligated Party for any reason when
no Event of Default exists (other than Inventory leased by an Obligated Party
in the ordinary course of its business that is returned to such Obligated Party
by the applicable lessee), then such Obligated Party shall promptly determine
the reason for such return and shall issue a credit memorandum to the Account
Debtor in the appropriate amount.  Each
Obligated Party shall promptly report to the Agents any such return involving
an amount in excess of $250,000.  Each such report shall indicate the reasons
for the return and the location and condition of the returned Inventory.  In the event any Account Debtor returns
Inventory to any Obligated Party for any reason when an Event of Default exists
(other than Inventory leased by an Obligated Party in the ordinary course of its
business that is returned to such Obligated Party by the applicable lessee),
such Obligated Party, upon the request of either of the Agents, shall:  (i) hold the returned Inventory in trust
for the Agents; (ii) segregate all such returned Inventory from all of
such Obligated Party’s other property; (iii) dispose of the returned
Inventory solely according to the Agents’ written instructions; and (iv) to
the extent lawfully permitted, not issue any credits or allowances with respect
thereto without the Agents’ prior written consent.  All returned Inventory shall be subject to
the Agent’s Liens thereon.  Whenever any
Inventory is returned (other than Inventory leased by an Obligated Party in the
ordinary course of its business that is returned to such Obligated Party by the
applicable lessee), the related Account shall be deemed ineligible to the
extent of the amount owing by the Account Debtor with respect to such returned
Inventory and such returned Inventory shall not be Eligible Inventory, in each
instance, except to the extent such returned Inventory is Inventory (other than
spare parts Inventory) held for lease in the ordinary course of an Obligated
Party’s business that is marked with an identifiable serial number or is
Inventory held for sale that was returned for reasons other than the quality of
the Inventory and is still readily marketable to other Persons.

 

(f)                                    Leases.  Each lease of Inventory by an Obligated Party
to one of its customers is entered into in the ordinary course of business of
such Obligated Party and constitutes the legal, valid and binding obligation of
such Obligated Party and, to the best of each Obligated Party’s knowledge, the
customer party thereto.  No such lease (i) contravenes
any laws, rules or regulations applicable thereto (including, without
limitation, to the extent applicable, laws, rules and regulations relating
to consumer 

 

113

 

protection,
fair credit billing, fair credit reporting, truth in lending, equal credit
opportunity, fair debt collection practices and privacy) and the Obligated
Party that is party thereto is not in violation of any such law, rule or
regulation with respect thereto, (ii) requires the customer party thereto
to consent to the transfer, assignment or pledge of any of the rights of such
Obligated Party under such lease or (iii) contains or is otherwise subject
to a confidentiality provision that purports to restrict the ability of the
Collateral Agent or the Administrative Agent to exercise its rights under this
Agreement with respect to such lease, including, without limitation, its rights
to review such lease or to enforce such lease. 
No Obligated Party shall, without the prior written consent of the
Agents, (i) amend, modify or supplement in any material respect its forms
of leases of Inventory from that in effect on the Original Closing Date except
for those amendments, modifications or supplements made in order to comply with
changes in applicable law or (ii) enter into a lease of Inventory which is
materially different from one of its forms of lease in existence on the
Original Closing Date (as such form may be amended, modified or supplemented in
compliance with clause (i) above).

 

Section 10.6                               Collection of Accounts; Payments.

 

(a)                                  [Intentionally
Omitted].

 

(b)                                 Collections.  Each Obligated Party shall collect its
Accounts and other Collateral in the ordinary course of its business consistent
with past practice.  Each Obligated Party
shall promptly (in any event within one Business Day of receipt thereof)
deposit all such payments (except as permitted in clause (c) below)
and receipts, and all other proceeds of Collateral received by it, in their
original form, duly endorsed in blank (if applicable) into a Clearing Account
or deliver such payments and receipts to the Collateral Agent in their original
form, duly endorsed in blank (if applicable), as either of the Agents may
direct.  Each Obligated Party shall
receive any and all proceeds of Accounts and other Collateral as the Collateral
Agent’s trustee.  All collections
received directly by any Obligated Party or either Agent, and all funds in any
Clearing Account or other account to which such collections are deposited shall
be subject to the Collateral Agent’s sole control and withdrawals by any Obligated
Party shall not be permitted.

 

(c)                                  Accounts.  Each Clearing Account of any Obligated Party
shall be established with BofA or a Clearing Bank reasonably acceptable to the
Agents and, except as set forth in the next sentence, subject to a Deposit Account
Control Agreement.  No Obligated Party
shall maintain any Clearing Account or Deposit Account except with BofA or
subject to a Deposit Account Control Agreement, except those Clearing Accounts
and Deposit Accounts existing on the Closing Date and listed on Schedule
7.23 that are not maintained with BofA; provided that with respect
to any such account, the Obligated Parties shall deliver a Deposit Account
Control Agreement with respect to any such account within 45 days of a request
therefor by the Administrative Agent.  No
Obligated Party shall maintain any lockbox except with BofA or Wachovia.

 

(d)                                 Cash Sales or
Rentals.  If sales or rentals of
Inventory are made or services are rendered for cash, the applicable Obligated
Party shall, within one Business Day of receipt, deliver to the Collateral
Agent or deposit into a Clearing Account the cash that 

 

114

 

such
Obligated Party receives; provided that the foregoing shall not apply to
cash in an amount not to exceed $10,000 in the aggregate for all Obligated
Parties at any time.

 

(e)                                  Payments.  All payments received by either of the Agents
at a bank account designated by any of them will be the Collateral Agent’s sole
property for the benefit of the Credit Providers and will be credited to the
Loan Account (conditional upon final collection) after allowing one (1) Business
Day for collection, including immediately available funds, as required by Section 4.3;
provided that, except during the existence of an Event of Default, such
payments shall be deemed to be credited to the Loan Account immediately upon
receipt for purposes of (i) determining the Unused Availability, (ii) calculating
the Unused Line Fee, and (iii) calculating the amount of interest accrued
thereon solely for purposes of determining the amount of interest to be
distributed by the Administrative Agent to the Lenders (but not the amount of
interest payable by the Borrowers). 
During the existence of any Event of Default, either of the Agents may, in
its sole discretion, require that only payments representing final collections
be credited to the Loan Account for the purposes set forth in clause (i),
clause (ii), and clause (iii) preceding.

 

Section 10.7                               Inventory; Perpetual Inventory. 
Each Obligated Party represents and warrants and agrees that all of the
Inventory owned by such Obligated Party that is included in Eligible Inventory
is and will be held for sale or lease, or is to be furnished in connection with
the rendition of services or held as spare parts Inventory, in each case, in
the ordinary course of such Obligated Party’s business, and is and will be fit
for such purposes.  Each Obligated Party
will keep its Inventory in good and marketable condition, except for damaged,
obsolete or defective goods arising in the ordinary course of such Obligated
Party’s business.  No Obligated Party
will, without the prior written consent of the Agents, acquire or accept any
Inventory on consignment or approval, except that Ahern may accept inventory on
consignment from Kubota Tractor Corporation and other vendors, so long as (i) the
aggregate amount of such consigned inventory held by all of the Obligated
Parties does not exceed $2,000,000 at any one time and (ii) none of such
consigned inventory is rented by any Obligated Party to any of its
customers.  Each Obligated Party agrees
that all Inventory produced by such Obligated Party in the U.S. will be
produced in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations, and orders thereunder.  Each Obligated Party will conduct cycle
counts of its Inventory such that all of its Inventory shall be counted (though
at varying times) at least once per Fiscal Year and, during the existence of an
Event of Default, at such other times as either of the Agents requests.  Each Obligated Party will maintain a
perpetual inventory reporting system at all times.  Each Obligated Party, at its own expense,
shall make available to the Agents upon request the results of each physical
verification, if any, which such Obligated Party may in its discretion have
made, or caused any other Person to have made on its behalf, of all or any
portion of its Inventory.  No Obligated
Party will, without the Agents’ written consent, sell any Inventory on a
bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment,
or other repurchase or return basis.  No
Obligated Party will permit any of its Inventory to become a fixture with
respect to Real Estate or (except for spare parts Inventory other than Eligible
Spare Parts Inventory) to become an accession with respect to other personal
property with respect to which Real Estate or personal property the Collateral
Agent does not have a Lien.  No Obligated
Party will, without the Agents’ prior written consent, alter or remove any
identifying symbol or number on any of such Obligated Party’s Inventory
constituting Collateral.

 

115

 

Section 10.8                                Equipment.

 

(a)                                  Changes to
Equipment.  Each
Obligated Party shall promptly inform the Agents of any material additions to
or deletions from such Obligated Party’s Equipment and shall indicate if any
such material additions include any Equipment that is subject to any
certificate of title law of the U.S. or any state.  No Obligated Party will permit any of its
Equipment to become a fixture with respect to Real Estate or to become an
accession with respect to other personal property with respect to which Real
Estate or personal property the Collateral Agent does not have a Lien.  No Obligated Party will, without the Agents’
prior written consent, alter or remove any identifying symbol or number on any
of such Obligated Party’s Equipment constituting Collateral.  Except as set forth in Section 8.9,
no Obligated Party shall, without the Majority Revolving Lenders’ (or after the
Revolving Facility Payment In Full, the Majority Term Lenders’) prior written
consent, sell, license, lease as a lessor, or otherwise dispose of any of such
Obligated Party’s Equipment.

 

(b)                                 Certificates of
Title.  Each Obligated Party shall (i) as
soon as practicable after the date hereof, in the case of Equipment now owned
in which a security interest is perfected by a notation on the certificate of
title or similar evidence of the ownership of such goods and (ii) within
30 days of acquiring any other similar Equipment, in each case, cause the
Collateral Agent, for the benefit of the Credit Providers, to be named as
lienholder on any such certificate of title or other evidence of ownership and
deliver to the Collateral Agent any and all certificates of title of such
Equipment reflecting such lien.

 

Section 10.9                                Assigned Contracts. 
Each Obligated Party shall fully perform all of its obligations under
each of the Assigned Contracts, and shall enforce all of its rights and
remedies thereunder, in each case, as it deems appropriate in its business
judgment; provided that no Obligated Party shall take any action or fail
to take any action with respect to its Assigned Contracts that would cause the
termination of a material Assigned Contract. 
Without limiting the generality of the foregoing, each Obligated Party
shall take all action necessary or appropriate to permit, and shall not take
any action that would have any materially adverse effect upon, the full
enforcement of all indemnification rights under its Assigned Contracts.  Each Obligated Party shall notify the Agents
in writing, promptly after such Obligated Party becomes aware thereof, of any
event or fact that could give rise to a material claim by it for
indemnification under any of its Assigned Contracts, and shall diligently
pursue such right and report to the Agents on all further developments with
respect thereto.  Each Obligated Party
shall deposit into a Clearing Account or remit directly to the Administrative
Agent, for application to the Obligations in such order as the Majority
Revolving Lenders (or after the Revolving Facility Payment In Full, the
Majority Term Lenders) shall determine (unless such order is otherwise
expressly provided herein, in which case in the order so provided), all amounts
received by such Obligated Party as indemnification or otherwise pursuant to
its Assigned Contracts.  If any Obligated
Party shall fail after either of the Agent’s demand to pursue diligently any
right under such Obligated Party’s Assigned Contracts, or if an Event of
Default then exists, either of the Agents may, and at the direction of the
Majority Revolving Lenders (or after the Revolving Facility Payment In Full,
the Majority Term Lenders) shall, directly enforce such right in the name of
such Agent or in such Obligated Party’s name and may enter into such
settlements or 

 

116

 

other
agreements with respect thereto as either of the Agents or the Majority
Revolving Lenders (or after the Revolving Facility Payment In Full, the
Majority Term Lenders), as applicable, shall determine.  In any suit, proceeding, or action brought by
either of the Agents under any Assigned Contract for any sum owing thereunder
or to enforce any provision thereof, each Obligated Party shall indemnify and
hold the Agents and the other Credit Providers harmless from and against all
expense, loss, or damage suffered by reason of any defense, setoff,
counterclaims, recoupment, or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by any Obligated Party of any obligation
thereunder or arising out of any other agreement, indebtedness, or liability at
any time owing from any Obligated Party to or in favor of such obligor or its
successors.  All such obligations of any
Obligated Party shall be and remain enforceable only against such Obligated
Party and shall not be enforceable against the Agents or any of the other
Credit Providers.  Notwithstanding any
provision hereof to the contrary, each Obligated Party shall at all times
remain liable to observe and perform all of its duties and obligations under
its Assigned Contracts, and the Collateral Agent’s, the Administrative Agent’s
or any Credit Provider’s exercise of any of their respective rights with
respect to the Collateral shall not release any Obligated Party from any of
such duties and obligations.  None of the
Collateral Agent, the Administrative Agent or any other Credit Provider shall
be obligated to perform or fulfill any Obligated Party’s duties or obligations
under its Assigned Contracts or to make any payment thereunder, or to make any
inquiry as to the nature or sufficiency of any payment or property received by
it thereunder or the sufficiency of performance by any party thereunder, or to
present or file any claim, or to take any action to collect or enforce any
performance, any payment of any amounts, or any delivery of any property.

 

Section 10.10                          Documents, Instruments, and Chattel Paper.  Each
Obligated Party represents and warrants that (a) all Documents,
Instruments, and Chattel Paper describing, evidencing, or constituting
Collateral, and all signatures and endorsements thereon, are and will be
complete, valid, and genuine, and (b) all goods evidenced by Documents,
Instruments, Letter-of-Credit Rights, and Chattel Paper are and will be owned
by the applicable Obligated Party, free and clear of all Liens other than
Permitted Liens.  If any Obligated Party
retains possession of any Chattel Paper or Instruments, such Chattel Paper and
Instruments shall (i) if acquired by an Obligated Party prior to the
Closing Date, be marked with the legend required by Section 10.10
of the First Amended and Restated Loan and Security Agreement and (ii) if
acquired by an Obligated Party on or after the Closing Date, be marked with the
following legend:  “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
Wachovia Bank, National Association, as Collateral Agent, for the benefit of
the Agents and the other Credit Providers pursuant to that certain Second
Amended and Restated Loan and Security Agreement, dated as of January 8,
2010, among Ahern Rentals, Inc. and certain of its affiliates, the
Collateral Agent, the Administrative Agent, and the lending institutions party
thereto.”  No Obligated Party will,
without the prior written consent of the Agents, modify, amend or alter in any
respect the terms and conditions of any material Instrument included in the
Collateral, nor forgive any indebtedness evidenced by any such Instrument.

 

Section 10.11                          Right to Cure. 
Either of the Agents may, in its discretion, and the Agents shall, at
the direction of the Majority Revolving Lenders (or after the Revolving
Facility Payment In Full, the Majority Term Lenders), pay any amount or do any
act required of any Obligated Party hereunder or under any other Loan Document
in order to preserve, protect, maintain, or enforce the Obligations, the
Collateral, or the Agent’s Liens, and that any Obligated 

 

117

 

Party
fails to pay or do, including payment of any judgment against any Obligated
Party, any insurance premium, any warehouse charge, any finishing or processing
charge, any landlord’s, bailee’s or consignee’s claim, and any other Lien upon
or with respect to the Collateral.  All
payments that either of the Agents make under this Section 10.11
and all out-of-pocket costs and expenses that either of the Agents pay or incur
in connection with any action taken by it hereunder shall be payable by the
Borrowers in accordance with Section 15.7 and, prior to the
Revolving Facility Payment In Full, shall be charged to the Borrowers’ Loan
Account as a Revolving Loan.  Any payment
made or other action taken by either of the Agents under this Section 10.11
shall be without prejudice to any right to assert an Event of Default hereunder
and to proceed thereafter as herein provided.

 

Section 10.12                          Power of Attorney. 
Each Obligated Party hereby appoints the Administrative Agent and the
Collateral Agent and the Administrative Agent’s and the Collateral Agent’s
designees as such Obligated Party’s attorney, with power:  (a) to endorse or sign such Obligated
Party’s name on any checks, notes, acceptances, money orders, or other forms of
payment or security that come into the Collateral Agent’s, the Administrative
Agent’s or any Lender’s possession; (b) to sign such Obligated Party’s
name on any invoice, bill of lading, warehouse receipt, or other negotiable or
non-negotiable Document constituting Collateral, on drafts against customers,
on assignments of Accounts, on notices of assignment, financing statements and
other public records and to file any such financing statements by electronic
means with or without a signature as authorized or required by applicable law
or filing procedure; (c) during the existence of any Event of Default, to
notify the post office authorities to give the Collateral Agent access to any
post office or mailboxes into which mail addressed to such Obligated Party is
delivered and to receive, open, and dispose of all mail addressed to such
Obligated Party; (d) to send requests for verification of Accounts to customers
or Account Debtors; (e) during the existence of any Event of Default, to
complete in such Obligated Party’s name, the Administrative Agent’s name or the
Collateral Agent’s name, any order, sale, lease or transaction, obtain the
necessary Documents in connection therewith, and collect the proceeds thereof; (f) to
clear Inventory through customs in such Obligated Party’s name, the
Administrative Agent’s name, the Collateral Agent’s name, or the name of the
Administrative Agent’s designee or the Collateral Agent’s designee, and to sign
and deliver to customs officials powers of attorney in such Obligated Party’s
name for such purpose; (g) to the extent, if any, that such Obligated
Party’s authorization given in Section 10.2(h) is not
sufficient, and without otherwise limiting such authorization, to file such
financing statements with respect to this Agreement, with or without such
Obligated Party’s signature, as either of the Agents may deem appropriate and
to execute in such Obligated Party’s name such financing statements and
amendments thereto and continuation statements that may require such Obligated
Party’s signature; (h) during the existence of any Event of Default, to
endorse such Obligated Party’s name on all applications, documents, papers, and
instruments necessary or reasonably desirable for either of the Agents in the
use of such Obligated Party’s Proprietary Rights; (i) during the existence
of any Event of Default, to grant or issue any exclusive or non-exclusive
license under such Obligated Party’s Proprietary Rights to any Person; (j) during
the existence of an Event of Default, to assign, convey, or otherwise transfer
title in or Dispose of any of such Obligated Party’s Proprietary rights to any
Person; and (k) to do all other things reasonably necessary to carry out
the terms of this Agreement.  Each
Obligated Party ratifies and approves all acts of such attorney.  None of the Administrative Agent, the
Collateral Agent or any other Credit Provider will be liable for any acts or
omissions or for any error of judgment or mistake of fact 

 

118

 

or law
except for their gross negligence or willful misconduct.  This power, being coupled with an interest,
is irrevocable until this Agreement has been terminated and the Obligations
have been fully and irrevocably satisfied.

 

Section 10.13                          The Collateral Agent’s, the
Administrative Agent’s and the Lenders’ Rights, Duties, and Liabilities.

 

(a)                                  The Obligated
Parties’ Liability for the Collateral.  Each Obligated Party assumes all
responsibility and liability arising from or relating to the use, sale, lease,
license, or other disposition of the Collateral.  The Obligations shall not be affected by any
failure of either of the Agents or any other Credit Provider to take any steps
to perfect the Agent’s Liens or to collect or realize upon any of the
Collateral, nor shall loss of or damage to any of the Collateral release any
Obligated Party from any of the Obligations. 
During the existence of any Event of Default, the Collateral Agent may
(but shall not be required to), and at the direction of the Majority Revolving
Lenders (or after the Revolving Facility Payment In Full, the Majority Term
Lenders) shall, without notice to or consent from any Obligated Party, sue upon
or otherwise collect, extend the time for payment of, modify or amend the terms
of, compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take or
omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or
any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of any
Obligated Party for the Obligations or under this Agreement or any other
agreement now or hereafter existing between the Collateral Agent, the
Administrative Agent and/or any other Credit Provider and such Obligated Party.

 

(b)                                 The Obligated
Parties’ Liability Under Contracts and Licenses.  It is expressly agreed by each Obligated
Party that, anything herein to the contrary notwithstanding, such Obligated
Party shall remain liable under each of its contracts and each of its licenses
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder.  None of the
Collateral Agent, the Administrative Agent or any other Credit Provider shall
have any obligation or liability under any contract or license by reason of or
arising out of this Agreement or the granting herein of a Lien thereon or the
receipt by the Collateral Agent, the Administrative Agent or any other Credit
Provider of any payment relating to any contract or license pursuant hereto.  None of the Collateral Agent, the
Administrative Agent or any other Credit Provider shall be required or
obligated in any manner to perform or fulfill any of the obligations of any
Obligated Party under or pursuant to any contract or license, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any contract or license, or to present or file any claims, or to take any
action to collect or enforce any performance or the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.

 

(c)                                  Notification of
Account Debtors.  Without
limiting Section 11.2, at any time during the existence of an Event
of Default (or if any rights of setoff (other than 

 

119

 

setoffs
against an Account arising under the contract giving rise to the same
Account) or contra accounts may be asserted with respect to the following),
the Collateral Agent may, without prior notice to any Obligated Party, and upon
the request of either of the Agents each Obligated Party shall, notify Account
Debtors and other Persons obligated on the Collateral that the Collateral Agent
has a security interest therein, and that payments shall be made directly to
the Collateral Agent, for the benefit of the Collateral Agent and the other
Credit Providers.  Once any such notice
has been given to any Account Debtor or other Person obligated on the Collateral,
no Obligated Party shall give any contrary instructions to such Account Debtor
or other Person without the Agents’ prior written consent.

 

(d)                                 Information
Regarding Accounts and Account Debtors.  The Collateral Agent and the Administrative
Agent may at any time in the name of the Collateral Agent or the Administrative
Agent, as applicable, or in the name of any Obligated Party, or in the name of
the Collateral Agent’s or the Administrative Agent’s nominee or designee,
communicate with each Obligated Party’s Account Debtors, parties to contracts,
and obligors in respect of Instruments to verify with such Persons, to the
Collateral Agent’s or the Administrative Agent’s, as applicable, satisfaction,
the existence, amount, and terms of Accounts, payment intangibles, Instruments,
or Chattel Paper.  If an Event of Default
exists, each Obligated Party, at its own expense, shall cause the independent
certified public accountants then engaged by such Obligated Party to prepare
and deliver to each of the Agents (with sufficient copies to the Administrative
Agent for distribution to each Lender) at any time and from time to time
promptly upon either of the Agent’s request the following reports with respect
to such Obligated Party:  (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as such Agent may
request.

 

(e)                                  No Obligation
of the Agents. 
Notwithstanding anything in this Agreement to the contrary, each
Obligated Party agrees that neither of the Agents shall have any obligation to
take any steps necessary to preserve rights in any of the Proprietary Rights of
any Obligated Party against any other Person, provided that each of the
Agents may do so at its option during the existence of any Event of Default in
accordance with Section 10.14(f).

 

Section 10.14                          Patent, Trademark, and Copyright
Collateral.

 

(a)                                  Representations.  This Agreement is effective to create a valid
and continuing Lien on and, upon filing of appropriate financing statements
pursuant to the UCC, perfected Liens in favor of the Collateral Agent, on the
Proprietary Rights of each Obligated Party and such perfected Liens are
enforceable as against any and all creditors of such Obligated Party.  Upon filing of all such appropriate financing
statements pursuant to the UCC, all action necessary to protect and perfect the
Collateral Agent’s Lien on each Obligated Party’s Proprietary Rights under
Requirements of Law shall have been duly taken. 
Upon filing the Proprietary Rights Security Agreements with the United
States Copyright Office or Unites States Patent and Trademark Office, as
applicable, the Agent’s Liens will be enforceable against any purchaser of the
Proprietary Rights covered thereby.

 

120

 

(b)                                 Notices to the
Agents.  Each Obligated Party shall
notify the Collateral Agent and the Administrative Agent promptly upon such
Obligated Party obtaining knowledge that any application or registration
relating to any patent, trademark, or copyright (now or hereafter existing) may
become abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office, or any court) regarding such Obligated Party’s ownership
of any patent, trademark, or copyright, its right to register the same, or to
keep and maintain the same.

 

(c)                                  Additional
Agreements.  In no event
shall any Obligated Party, either directly or through any agent, employee,
licensee, or designee, file an application for the registration of any patent,
trademark, or copyright with the United States Patent and Trademark Office, the
United States Copyright Office, or any similar Governmental Authority, or enter
into any new license as licensor with respect to any patent, trademark, or
copyright, without giving the Agents prior written notice thereof, and, upon
request of either of the Agents, such Obligated Party shall execute and deliver
such Proprietary Rights Security Agreements or other documents as either of the
Agents may request to evidence the Agent’s Liens on such patent, trademark, or
copyright, and the General Intangibles of such Obligated Party relating thereto
or represented thereby.

 

(d)                                 Further Actions.  Each Obligated Party shall take all actions
necessary or requested by either of the Agents to maintain and pursue each
application, to obtain the relevant registration and to maintain the
registration of each of such Obligated Party’s material Proprietary Rights (now
or hereafter existing), including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings.

 

(e)                                  Notices of
Infringement.  In the
event that any of the Proprietary Rights that are Collateral are infringed
upon, or misappropriated or diluted by a third party, each Obligated Party
shall notify the Agents promptly after such Obligated Party learns
thereof.  Each Obligated Party shall,
unless it shall reasonably determine that such Proprietary Rights that are
Collateral are in no way material to the conduct of its business or operations,
promptly sue for infringement, misappropriation, or dilution and to recover any
and all damages for such infringement, misappropriation, or dilution, and shall
take such other actions as either of the Agents shall deem appropriate under
the circumstances to protect such Proprietary Rights that are Collateral.

 

(f)                                    Suits by the
Agents.  Without limiting Section 11.2,
during the existence of any Event of Default, each of the Agents shall have the
right, but shall not be obligated, to bring suit in the name of the Collateral
Agent or the Administrative Agent, as applicable, to enforce the Proprietary
Rights and, if either of the Agents shall commence any such suit, each
Obligated Party shall, at the request of such Agent, do any and all lawful acts
and execute any and all proper documents reasonably required by such Agent in
aid of such enforcement.  Each Obligated
Party shall, upon demand, promptly reimburse each of the Agents for all costs
and expenses incurred by such Person in the 

 

121

 

exercise
of its rights under this Section 10.14(f) (including Attorney
Costs and other fees and expenses of other professionals).

 

Section 10.15                          Indemnification. 
In any suit, proceeding, or action brought by the Collateral Agent, the
Administrative Agent or any other Credit Provider relating to any Collateral
for any sum owing with respect thereto or to enforce any rights or claims with
respect thereto, each Obligated Party will save, indemnify, and keep the Agents
and the other Credit Providers harmless from and against all expense (including
Attorney Costs and other reasonable attorneys’ fees and expenses), loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment, or
reduction of liability whatsoever of the Account Debtor or other Person
obligated on the Collateral, arising out of a breach by any Obligated Party of
any obligation thereunder or arising out of any other agreement, indebtedness,
or liability at any time owing to, or in favor of, such obligor or its
successors from any Obligated Party, provided that no Obligated Party
shall be liable to any Credit Provider for the payment of any portion of such
amount to the extent determined in a final, nonappealable judgment by a court
of competent jurisdiction to have resulted from such Credit Provider’s own
gross negligence or willful misconduct. 
All such obligations of each Obligated Party shall be and remain
enforceable against and only against such Obligated Party and shall not be
enforceable against the Collateral Agent, the Administrative Agent, any Lender
or any other Credit Provider.

 

Section 10.16                          Grant of License to Use Proprietary
Rights.  For the purpose of enabling the Collateral
Agent to exercise rights and remedies under Section 11.2 or under
any other Loan Document or applicable Requirement of Law (including in order to
take possession of, hold, preserve, process, assemble, prepare for sale, market
for sale, sell, or otherwise dispose of Collateral) at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Obligated Party hereby grants to the Collateral Agent, for the
benefit of the Agents and the other Credit Providers, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to such Obligated Party) to use, license, or sublicense any
Proprietary Rights now owned or hereafter acquired by such Obligated Party, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof.

 

Section 10.17                          Limitation on the Agents’ and the Lenders’
Duty in Respect of the Collateral.  The
Collateral Agent, the Administrative Agent and each other Credit Provider shall
use reasonable care with respect to the Collateral in its possession or under
its control.  None of the Collateral
Agent, the Administrative Agent or any other Credit Provider shall have any
other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of the Collateral Agent, the
Administrative Agent or such other Credit Provider, or any income thereon or as
to the preservation of rights against prior parties or any other rights pertaining
thereto.

 

Section 10.18                          Miscellaneous.

 

(a)                                  Reinstatement.  The Agent’s Liens on the Collateral granted
pursuant to this Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against any Obligated Party
for liquidation or reorganization, 

 

122

 

should
any Obligated Party become insolvent or make an assignment for the benefit of
any creditor or creditors or should a receiver or trustee be appointed for all
or any significant part of any Obligated Party’s assets, and shall continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to any
Requirement of Law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of any of the Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made.  In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.

 

(b)                                 Benefit.  All Liens granted or contemplated hereby
shall be for the benefit of the Collateral Agent, the Administrative Agent and
the other Credit Providers, and all proceeds or payments realized from
Collateral in accordance herewith shall be applied to the Obligations in accordance
with the terms of Section 4.6.

 

(c)                                  Limitations.  The Liens granted pursuant to Section 10.1
in each Obligated Party’s, other than Ahern’s, Collateral shall secure a
maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder and the Liens granted hereby subject to avoidance as a
fraudulent transfer or conveyance under any Requirement of Law, in each case
after giving effect to all other liabilities and obligations of such Obligated
Party, contingent or otherwise, that are relevant under such laws, and after
giving effect to the value, as assets (as determined under the applicable
provisions of such laws), of any rights of such Obligated Party to
contribution, indemnity, and/or subrogation from any other Obligated Party or
other Person pursuant to any Requirement of Law or any agreement providing for
an equitable allocation among such Obligated Party, any other Obligated Party,
and any other such Person of their respective obligations hereunder.

 

ARTICLE
11

 

DEFAULT; REMEDIES

 

Section 11.1                                Events of Default. 
It shall constitute an event of default (“Event of Default”) if
any one or more of the following shall occur for any reason:

 

(a)                                  any failure by
the Borrowers to pay the principal of or interest or premium on any of the
Obligations or any fee or other amount owing under any Loan Document when due,
whether upon demand  or otherwise;

 

(b)                                 any
representation or warranty made or deemed made by any Obligated Party in any
Loan Document, any Financial Statement, or any certificate furnished by any
Obligated Party at any time to either of the Agents or any Lender shall prove
to be untrue in any material respect as of the date on which made, deemed made,
or furnished;

 

123

 

(c)                                  any default
shall occur in the observance or performance of

 

(i)                                     any of the
covenants and agreements contained in Section 6.2, clauses (a) through
(e), and (k), Section 8.1(c), Section 8.2,
Section 8.5, Sections 8.9 through 8.24, Sections 8.26
through 8.28, Section 8.31 or Article 10;

 

(ii)                                  any of the
covenants and agreements contained in Section 6.2 (except as
specified in clause (i) preceding), Section 6.3 or
Section 8.1, clauses (a) and (b), and such
default shall continue for three (3) Business Days or more after the
earlier of any Obligated Party acquiring actual knowledge of such default and
any Obligated Party receiving notice from any Agent, any Lender or any
Affiliate of any Lender of such default; or

 

(iii)                               any of the
other covenants or agreements contained in this Agreement other than as
referenced in Section 11.1(a), Section 11.1(b), and clause (i) and
clause (ii) preceding, any other Loan Document, or any other
agreement entered into at any time to which any Obligated Party and either of
the Agents or any Revolving Lender are party (including in respect of any Bank
Products) and such default shall continue for 20 days or more after the earlier
of any Obligated Party acquiring actual knowledge of such default and any
Obligated Party receiving notice from any Agent, any Lender or any Affiliate of
any Lender of such default;

 

(d)                                 any default
shall occur with respect to (i) the Second Lien Debt or (ii) any Debt
(other than the Obligations) of any one or more of the Obligated Parties
in an outstanding principal amount that, individually or in the aggregate,
exceeds $500,000, or under any
agreement or instrument under or pursuant to which any such Debt (under clause (i) or
(ii) above) may have been issued, created, assumed, or guaranteed
by any Obligated Party, and such default shall continue for more than the
period of grace, if any, therein specified, if the effect thereof (with or
without the giving of notice or further lapse of time or both) is to accelerate
or to permit the holders of any such Debt to accelerate, the maturity of any
such Debt, or any such Debt shall be declared due and payable or be required to
be prepaid (other than by a regularly scheduled required prepayment) prior to
the stated maturity thereof, or any such Debt shall not be paid on the stated
maturity date thereof;

 

(e)                                  any Obligated
Party or DFA LLC shall (i) file a voluntary petition in bankruptcy or file
a voluntary petition or an answer or otherwise commence any action or
proceeding seeking reorganization, arrangement, or readjustment of its debts or
for any other relief under the Bankruptcy Code or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or consent
to, approve of, or acquiesce in, any such petition, action, or proceeding, (ii) apply
for or acquiesce in the appointment of a receiver, assignee, liquidator,
sequestrator, custodian, monitor, trustee, or similar officer for it or for all
or any part of its property, (iii) make an assignment for the benefit of
its creditors, or (iv) be unable generally to pay its debts as they become
due;

 

124

 

 

(f)                                    an involuntary
petition or proposal shall be filed or an action or proceeding otherwise
commenced seeking reorganization, arrangement, consolidation, or readjustment
of the debts of any Obligated Party or DFA LLC or for any other relief under
the Bankruptcy Code or under any other bankruptcy or insolvency act or law,
state or federal, now or hereafter existing and such petition or proceeding
shall not be dismissed within 60 days after the filing or commencement
thereof or an order of relief (or comparable order under any other Requirement
of Law) against any Obligated Party or DFA LLC shall be entered with respect
thereto;

 

(g)                                 a receiver,
assignee, liquidator, sequestrator, custodian, monitor, trustee, or similar
officer for any Obligated Party or DFA LLC or for all or any part of its
property shall be appointed or a warrant of attachment, execution, or similar
process shall be issued against any part of the property of any Obligated Party
or DFA LLC;

 

(h)                                 any Obligated
Party shall file a certificate of dissolution under any Requirement of Law or
shall be liquidated, dissolved, or wound-up (except in a transaction allowed
under Section 8.9) or shall commence or have commenced against it
any action or proceeding for dissolution, winding-up, or liquidation, or shall
take any action in furtherance thereof (except in connection with a transaction
allowed under Section 8.9);

 

(i)                                     all or any
material part of the property of any Obligated Party is nationalized,
expropriated, condemned, recalled, seized, or otherwise appropriated, or
custody or control of such property or of any Obligated Party is assumed by any
Governmental Authority or any court of competent jurisdiction at the instance
of any Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;

 

(j)                                     one or more
judgments, orders, decrees (including out-of-court settlements), or arbitration
or mediation awards is entered against any Obligated Party involving liability
in the aggregate for any or all of the Obligated Parties as to any single,
related, or unrelated series of transactions, incidents, or conditions, of $500,000 or more, and any such
judgment, order, or decree remains unsatisfied, unvacated, and unstayed pending
appeal for a period of 30 days after the entry thereof;

 

(k)                                  any loss,
theft, damage, or destruction of any item or items of Collateral or other
property of any Obligated Party occurs that is not adequately covered by
insurance and could reasonably be expected to result in a Material Adverse
Effect;

 

(l)                                     there is filed
against any Obligated Party any action, suit, or proceeding under any federal
or state racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit, or proceeding (i) is not
dismissed within 120 days and (ii) could reasonably be expected to result
in the confiscation or forfeiture of any material portion of the Collateral;

 

(m)                               for any reason
any Loan Document ceases to be in full force and effect (other than in
accordance with its terms or the terms hereof or with the written consent of 

 

125

 

the
Agents and the Majority Revolving Lenders (or after the Revolving Facility
Payment In Full, the Majority Term Lenders)) or any Lien with respect to any
material portion of the Collateral intended to be secured thereby ceases to be,
or is not, valid, perfected, and prior to all other Liens (other than Permitted
Liens that are expressly permitted to have priority over the Agent’s Liens) or
is terminated, revoked or declared void (other than in accordance with its
terms or the terms thereof or with the written consent of the Agents and the
Majority Revolving Lenders (or after the Revolving Facility Payment In Full,
the Majority Term Lenders)) or for any reason any Loan Document is terminated,
revoked, or declared void (other than in accordance with its terms or the terms
hereof or with the written consent of the Agents and the Majority Revolving Lenders
(or after the Revolving Facility Payment In Full, the Majority Term Lenders))
or is challenged by any Obligated Party or any other party thereto;

 

(n)                                 (i) an
ERISA Event shall occur with respect to any Pension Plan or Multiemployer Plan
that has resulted in, or could reasonably be expected to result in, liability
of any Obligated Party under Title IV of ERISA to such Pension Plan, such
Multiemployer Plan, or the PBGC in an aggregate amount in excess of $500,000; (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $500,000; or (iii) any Obligated Party or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$100,000;

 

(o)                                 there occurs a
Change of Control;

 

(p)                                 there occurs
any event or events that, individually or in the aggregate, results in a
Material Adverse Effect;

 

(q)                                 [Intentionally
Omitted];

 

(r)                                    any default
shall occur with respect to any Debt of DFA LLC in an outstanding principal
amount that, individually or in the aggregate, exceeds $3,000,000, or under any agreement or instrument under or pursuant
to which any such Debt may have been issued, created, assumed, or guaranteed by
DFA LLC or any Obligated Party, and such default is a payment default and such
payment default shall continue for more than the period of grace, if any,
therein specified, or the holders of any such Debt shall have accelerated the
maturity of such Debt or have declared such Debt due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof, or any such Debt shall not be paid on the stated maturity
date thereof; or

 

(s)                                  failure by the
Second Lien Agent under the Second Lien Debt Agreement or any lender, agent or
trustee under any of the Refinancing Second Lien Debt Documents to comply in
any material respect with, or any breach in any material respect by any such
Person of, any terms or conditions of the Intercreditor Agreement or, in the
case of the lenders and agents under any of the Refinancing Second Lien Debt
Documents, any intercreditor agreement entered into by any such lenders and
agents with either of the Agents.

 

126

 

Section 11.2                                Remedies.

 

(a)                                  During the
existence of any Default or Event of Default, either of the Agents may, in its
discretion, and the Agents shall, at the direction of the Majority Revolving
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on any Obligated Party:  (i) reduce the Maximum Revolver Amount,
or the advance rates against the Net Amount of Eligible Accounts, Eligible
Transportation Equipment and/or Eligible Inventory used in computing the
Borrowing Base and/or any other advance rates or amounts used in computing the
Borrowing Base (including increasing the amount of any Reserve); (ii) restrict
the amount of or refuse to make Revolving Loans; and (iii) instruct the
Letter of Credit Issuer to restrict or refuse to provide Letters of Credit.

 

(b)                                 During the
existence of any Event of Default, the Administrative Agent or the Collateral Agent,
as applicable, shall, at the direction of the Majority Revolving Lenders (or
after the Revolving Facility Payment In Full, the Majority Term Lenders, but
only with respect to clauses (iii) and (v) below), do
one or more of the following:  (i) take
any of the actions described in clause (a) preceding, at any
time or times and in any order, without notice to or demand on any Obligated
Party; (ii) terminate the Revolving Credit Commitments, the obligation of
the Revolving Lenders to make Revolving Loans under this Agreement, and the
obligation of the Agents to cause the Letter of Credit Issuer to issue any
Letter of Credit hereunder; (iii) declare all of the Obligations to be
immediately due and payable (except for Obligations under Hedge Agreements or
with respect to other Bank Products, which remedy shall be governed by the
terms and conditions contained in such Hedge Agreements or the respective
documents governing other Bank Products); provided, however, that
upon the occurrence of any Event of Default described in Section 11.1(e),
Section 11.1(f), Section 11.1(g), or Section 11.1(h),
the Revolving Credit Commitments shall automatically and immediately expire and
all Obligations shall automatically become immediately due and payable without
notice or demand of any kind; (iv) require the Obligated Parties to
provide cash collateral in an amount equal to 105% of all Obligations
(contingent or otherwise) outstanding with respect to Letters of Credit; and (v) pursue
its other rights and remedies under the Loan Documents and any Requirement of
Law.  Notwithstanding the foregoing,
prior to the Revolving Facility Payment In Full, if an Event of Default shall
occur and be continuing for 180 or more consecutive days, the Administrative
Agent, at the direction of the Majority Term Lenders, shall declare all of the
Obligations to be immediately due and payable (except for Obligations under
Hedge Agreements or with respect to other Bank Products, which remedy shall be
governed by the terms and conditions contained in such Hedge Agreements or in
the respective documents governing other Bank Products) and commence (if not
already commenced) and pursue its other rights and remedies under the Loan
Documents and any applicable law in a commercially reasonable manner (it being
understood and agreed that no Term Lender shall have the right to direct the
manner or order of the exercise of rights or remedies and each of the
Administrative Agent and the Collateral Agent may exercise its rights and
remedies all in such order and in such manner as it shall determine in its sole
discretion).

 

127

 

(c)                                  During the
existence of any Event of Default:  (i) the
Collateral Agent shall have, for the benefit of the Credit Providers, in
addition to all other rights of the Credit Providers, the rights and remedies
of a secured party under the Loan Documents and the UCC; (ii) the
Collateral Agent may, at any time, take possession of the Collateral and keep
it on any Obligated Party’s premises, at no cost to the Credit Providers, or
remove any part of the Collateral to such other place or places as the
Collateral Agent may desire, or any Obligated Party shall, upon the Collateral
Agent’s demand, at such Obligated Party’s cost, assemble the Collateral and
make it available to the Collateral Agent at a place reasonably convenient to
the Collateral Agent; (iii) the Collateral Agent or the Collateral Agent’s
designee may notify the Obligated Parties’ Account Debtors that the Obligated
Parties’ Accounts have been assigned to the Collateral Agent and of the Agent’s
Lien therein, and may collect such Accounts directly and charge the collection
costs and expenses to the Loan Account as a Revolving Loan:  and (iv) the Collateral Agent may sell
and deliver any Collateral at public or private sales, for cash, upon credit,
or otherwise, at such prices and upon such terms as the Collateral Agent deems
advisable, in its sole discretion, and may, if the Collateral Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement
at the time and place of sale or of such postponed or adjourned sale without
giving a new notice of sale.  Without in
any way requiring notice to be given in the following manner, each Obligated
Party agrees that any notice by the Collateral Agent of sale, disposition, or
other intended action hereunder or in connection herewith, whether required by
the UCC or otherwise, shall constitute reasonable notice to the Obligated
Parties if such notice is mailed by registered or certified mail, return
receipt requested, postage prepaid, or is delivered personally against receipt,
at least ten days prior to such action to the Obligated Parties’ address
specified in or pursuant to Section 15.8.  If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Collateral Agent, Administrative Agent or the Lenders
receive payment, and if the buyer defaults in payment, the Collateral Agent may
resell the Collateral without further notice to any Obligated Party.  In the event the Collateral Agent seeks to
take possession of all or any portion of the Collateral by judicial process,
each Obligated Party irrevocably waives the posting of any bond, surety, or
security with respect thereto that might otherwise be required, any demand for
possession prior to the commencement of any suit or action to recover the
Collateral, and any requirement that the Collateral Agent retains possession
and not dispose of any Collateral until after trial or final judgment.  Each Obligated Party agrees that the
Collateral Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person.  In addition to any license granted pursuant
to Section 10.16, the Collateral Agent is hereby granted a license
or other right to use, without charge, each Obligated Party’s labels, patents,
copyrights, name, trade secrets, trade names, trademarks, and advertising
matter, or any similar property, in completing production of, advertising, or
selling any Collateral, and each Obligated Party’s rights under all licenses
and all franchise agreements shall inure to the Collateral Agent’s benefit for
such purpose.  The proceeds of sale shall
be applied first to all expenses of sale, including Attorney Costs, and then to
the Obligations as provided in Section 4.6(b).  The Collateral Agent will return any excess
to the Obligated Parties, except as required by the Intercreditor 

 

128

 

Agreement
or as a court of competent jurisdiction shall otherwise direct, and the
Obligated Parties shall remain liable for any deficiency.

 

(d)                                 Without
limiting the generality of the foregoing, each Obligated Party expressly agrees
that, during the existence of any Event of Default, the Collateral Agent,
without demand of performance or other demand, advertisement, or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon any Obligated Party or any other Person (all and each of
which demands, advertisements, and notices are hereby expressly waived to the
maximum extent permitted by the UCC and other applicable law), may forthwith
enter upon the premises of any Obligated Party where any Collateral is located
through self-help, without judicial process, without first obtaining a final
judgment or giving such Obligated Party or any other Person notice and
opportunity for a hearing on the Collateral Agent’s claim or action and may
collect, receive, assemble, process, appropriate, and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, license,
assign, give an option or options to purchase, or sell or otherwise dispose of
and deliver said Collateral (or contract to do so), or any part thereof, in one
or more parcels at a public or private sale or sales, at any exchange at such
prices as the Collateral Agent may deem acceptable, for cash or on credit or
for future delivery without assumption of any credit risk.  The Collateral Agent or any other Credit
Provider shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase for
the benefit of the Collateral Agent and/or one or more of the other Credit
Providers, the whole or any part of said Collateral so sold, free of any right
or equity of redemption, which equity of redemption each Obligated Party hereby
releases.  Such sales may be adjourned
and continued from time to time with or without notice.  The Collateral Agent shall have the right to
conduct such sales on any Obligated Party’s premises or elsewhere and shall
have the right to use each Obligated Party’s premises without charge for such
time or times as the Collateral Agent deems necessary or advisable.

 

(e)                                  Each Obligated
Party further agrees, at the Collateral Agent’s request, to assemble the
Collateral and make it available to the Collateral Agent at a place or places
designated by the Collateral Agent that are reasonably convenient to the
Collateral Agent and such Obligated Party, whether at such Obligated Party’s
premises or elsewhere.  Until the
Collateral Agent is able to effect a sale, lease, or other disposition of the
Collateral, the Collateral Agent shall have the right to hold or use the
Collateral, or any part thereof, to the extent that it deems appropriate for
the purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by the Collateral Agent. 
The Collateral Agent shall have no obligation to any Obligated Party to
maintain or preserve the rights of such Obligated Party as against third
parties with respect to any Collateral while such Collateral is in the
possession of the Collateral Agent.  The
Collateral Agent may, if it so elects, seek the appointment of a receiver or
keeper to take possession of the Collateral, or any part thereof, and to
enforce any of the Collateral Agent’s remedies (for the benefit of the
Collateral Agent and the other Credit Providers), with respect to such appointment
without prior notice or hearing as to such appointment.  The Collateral Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization,
or sale to the Obligations as provided in Section 4.6(b), and only
after so paying over such net proceeds, and after the payment by the Collateral

 

129

 

Agent
of any other amount required by any provision of law (and subject to the terms
of the Intercreditor Agreement or a decision, order or ruling of a court of
competent jurisdiction), need the Collateral Agent account for the surplus, if
any, to the applicable Obligated Party. 
To the maximum extent permitted by applicable law, each Obligated Party
waives all claims, damages, and demands against the Collateral Agent or any
other Credit Provider arising out of the repossession, retention, or sale of
the Collateral except to the extent resulting from the gross negligence or
willful misconduct of the Collateral Agent or such other Credit Provider as
determined in a final, nonappealable judgment by a court of competent
jurisdiction.  Each Obligated Party
agrees that ten days prior notice by the Collateral Agent of the time and place
of any public sale or of the time after which a private sale may take place is
reasonable notification of such matters. 
Each Obligated Party shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Obligations, including any attorneys’ fees or other expenses incurred by
the Collateral Agent or any other Credit Provider to collect such deficiency.

 

(f)                                    Except as
otherwise specifically provided herein or in the other Loan Documents, each
Obligated Party hereby waives presentment, demand, protest, or any notice (to
the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.

 

(g)                                 To the extent
that applicable law imposes duties on the Collateral Agent to exercise remedies
in a commercially reasonable manner, each Obligated Party acknowledges and
agrees that it is not commercially unreasonable for the Collateral Agent (i) to
fail to incur expenses reasonably deemed significant by the Collateral Agent to
prepare Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for disposition,
(ii) if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on
or any adverse claims against Collateral, (iv) to exercise collection
remedies against Account Debtors and other Persons obligated on Collateral
directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in
the same business as such Obligated Party, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets
of the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (ix) to dispose of
assets in wholesale rather than retail markets, (x) to disclaim
disposition warranties, such as title, possession, or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Collateral
Agent against risks of loss, collection, or disposition of Collateral or to
provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by
the Collateral Agent, to obtain the services of other brokers, investment
bankers, consultants, and other professionals to 

 

130

 

assist
the Collateral Agent in the collection or disposition of any of the
Collateral.  Each Obligated Party
acknowledges that the purpose of this Section 11.2(g) is to
provide non-exhaustive indications of what actions or omissions by the
Collateral Agent would not be commercially unreasonable in the Collateral Agent’s
exercise of remedies against the Collateral and that other actions or omissions
by the Collateral Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this Section 11.2(g).  Without limiting the foregoing, nothing
contained in this Section 11.2(g) shall be construed to grant
any rights to any Obligated Party or to impose any duties on the Collateral
Agent that would not have been granted or imposed by this Agreement or by
Requirement of Law in the absence of this Section 11.2(g).

 

(h)                                 Without
limiting Section 10.12(c), during the existence of an Event of
Default, each Obligated Party, at the Collateral Agent’s request, shall execute
and deliver to the Collateral Agent such documents as the Collateral Agent
shall require to grant the Collateral Agent access to any post office box in
which collections of Accounts are received.

 

(i)                                     During the
existence of an Event of Default, the Obligated Parties will, at the Collateral
Agent’s request, with respect to all Inventory financed by Letters of Credit,
instruct all suppliers, carriers, forwarders, customs brokers, warehouses, or
others receiving or holding cash, checks, Inventory, documents, or instruments
in which the Collateral Agent holds a security interest to deliver them to the
Collateral Agent and/or subject to the Collateral Agent’s order, and if they
shall come into any Obligated Party’s possession, to deliver them, upon
request, to the Collateral Agent in their original form.  The Obligated Parties shall also, at the
Collateral Agent’s request, during the existence of an Event of Default,
designate the Collateral Agent as the consignee on all bills of lading and
other negotiable and non-negotiable documents or cause all such documents to
designate the applicable Obligated Party as the consignee subject to the Agent’s
Liens.

 

(j)                                     During the
existence of an Event of Default, each Obligated Party hereby waives all rights
to notice and hearing prior to the exercise by the Collateral Agent of the
Collateral Agent’s rights to repossess the Collateral without judicial process
or to replevy, attach, or levy upon the Collateral without notice or hearing.

 

Section 11.3                                Term Lender Purchase Option.

 

(a)                                  The
Administrative Agent agrees that it will provide the Term Lenders prompt
written notice of the first time the Aggregate Revolver Outstandings shall
become $90,000,000 or less (such notice, the “Revolver Outstandings Notice”).  Following delivery by the Administrative
Agent to the Term Lenders of the Revolver Outstandings Notice, the Term Lenders
shall have the option, exercisable no later than five Business Days after
delivery of the Revolver Outstandings Notice, to purchase all (but not less
than all) of the Revolving Obligations from the Credit Providers holding same
(such Credit Providers, together with the Agents, the “Revolving Obligation
Credit Providers”) and to assume all (but not less than all) of the
commitments and other obligations of the Revolving Obligation Credit Providers
under the Loan Documents (other than the obligations of the Administrative
Agent under this Section 11.3 and obligations of the 

 

131

 

Revolving
Obligation Credit Providers under Hedge Agreements and other Bank Products)
(such commitments and other obligations to be assumed, the “Assumed
Obligations”).  The Term Lenders
electing to purchase Revolving Obligations and assume Assumed Obligations
pursuant to this Section 11.3 (the “Purchasing Parties”)
shall exercise such option through delivery of written notice (a “Purchase
Notice”) to the Administrative Agent, which notice shall irrevocably
obligate the Purchasing Parties to purchase the Revolving Obligations and
assume the Assumed Obligations.  The
Administrative Agent shall promptly deliver to each Revolving Lender a copy of
each Purchase Notice received by it. 
Each Purchasing Party shall participate in such purchase and assumption
on a Purchasing Party Pro Rata Basis (as hereafter defined).  For purposes of this Section 11.3,
“Purchasing Party Pro Rata Basis” means, with respect to a Purchasing
Party, the percentage obtained by dividing the aggregate principal amount of
Term Loans held by such Purchasing Party by the aggregate principal amount of
Term Loans held by all the Purchasing Parties. 
The foregoing purchase and assumption option shall be irrevocable once
exercised, including, without limitation, in the event that the Aggregate
Revolver Outstandings shall exceed $90,000,000 on the Purchase Date (as defined
below).  The Agents, the Revolving
Lenders and the other Revolving Obligation Credit Providers shall have no
obligation at any time prior to the consummation of the purchase and assumption
to forgo providing any financial accommodations to any of the Borrowers or
other Obligated Parties but after the purchase and assumption option has been
timely exercised in accordance with the terms hereof and until the earliest of
the consummation of the purchase and assumption, the Purchase Date or the
revocation or termination of the purchase and assumption option, the Agents
shall not commence any foreclosure or other action to sell or otherwise realize
upon Collateral (it being agreed that the foregoing shall not prohibit either
Agent from applying any Collateral or proceeds of Collateral received by it to
the payment or cash collateralization of Revolving Obligations).  For the avoidance of doubt, (i) there
shall be only one purchase and assumption option under this Section 11.3,
(ii) only one Revolver Outstandings Notice will be delivered under this Section 11.3
and (iii) if the Purchasing Parties do not timely exercise the above
purchase and assumption option or any of the Purchasing Parties does not timely
comply with its obligations to purchase its share of all of the Revolving
Obligations and assume its share of all of the Assumed Obligations (so that all
Revolving Obligations are purchased and all Assumed Obligations are assumed on
the Purchase Date in accordance with the terms hereof), the purchase and
assumption option hereunder shall be irrevocably revoked and terminated.

 

(b)                                 On the date
specified by the Administrative Agent (which date shall not be later than ten
Business Days after the date of the Revolver Outstandings Notice and no earlier
than six Business Days after the date of the Revolver Outstandings Notice) (the
“Purchase Date”), the Revolving Obligation Credit Providers shall sell
and assign to the Purchasing Parties, and the Purchasing Parties shall purchase
and assume from the Revolving Obligation Credit Providers, all of the
respective Revolving Obligations and Assumed Obligations of the Revolving
Obligation Credit Providers.  The
Purchasing Parties shall be irrevocably and unconditionally obligated to effect
such purchase and assumption on the terms herein on the Purchase Date.  The Obligated Parties and the other parties
hereto hereby agree that each Revolving Obligation Credit Provider shall have
the right, at any time after any Purchase Notice is delivered by a Term Lender
to the 

 

132

 

Administrative
Agent, to terminate any and all Hedge Agreements and other Bank Products
extended or provided by it to any Obligated Party, all without any liability to
such Revolving Obligation Credit Provider and notwithstanding anything to the
contrary contained in any such Hedge Agreement or any document governing any
such other Bank Product.

 

(c)                                  The Purchasing
Parties shall (i) on the Purchase Date (A) pay to the Administrative
Agent, on behalf of the relevant Revolving Obligation Credit Providers, as the
purchase price therefor the full amount of all the Revolving Obligations then
outstanding and unpaid (including in any event (1) all outstanding
principal of the Revolving Obligations, (2) all accrued and unpaid
interest (including interest accruing on or after the commencement of a
bankruptcy or similar proceeding by or against any Obligated Party, whether or
not a claim for such interest is, or would be, allowed in such proceeding), (3) all
fees, breakage costs (to the extent actually incurred), matured indemnification
obligations and expenses, including reasonable attorneys’ fees and legal
expenses owing under the Loan Documents, (4) all unreimbursed amounts
drawn under any Letters of Credit, but excluding the undrawn amount of any outstanding
Letters of Credit, and (5) all amounts owing to either of the Agents and
any of the other Revolving Obligation Credit Providers with respect to any
Hedge Agreements or other Bank Products extended or provided to any Obligated
Party (including, in any event, all amounts owing with respect to any Hedge
Agreements or other Bank Products extended or provided to any Obligated Party
terminated on or prior to the Purchase Date)) and (B) furnish cash
collateral to the Administrative Agent, on behalf of the relevant Revolving
Obligation Credit Providers, in an amount equal to the sum of (1) an
amount equal to 105% of the aggregate undrawn amount of all Letters of Credit
outstanding on the Purchase Date; provided that such amount shall be held by
the Administrative Agent as collateral for the obligations arising in
connection with a drawing under any such Letters of Credit and fees and
expenses related thereto (and applied to satisfy such obligations as they
become due) and (2) for each Hedge Agreement or other Bank Product
extended or provided to any Obligated Party not terminated on or prior to the
Purchase Date, an amount reasonably determined by the Revolving Obligation
Credit Party party to or otherwise providing such Hedge Agreement or other Bank
Product to be necessary to collateralize its credit risk arising out of such
Hedge Agreement or other Bank Product, (ii) upon and after the Purchase
Date, reimburse the Revolving Obligation Credit Providers within five Business
Days of written demand for any loss, cost, damage or expense (including
reasonable attorneys’ fees and legal expenses) related to any checks or other
payments provisionally credited to the Revolving Obligations and/or as to which
any of the Revolving Obligation Credit Providers have not yet received final
payment, (iii) if the cash collateral under clause (i)(B)(2) above
with respect to any Hedge Agreement or other Bank Product is less than the
amount owing by the relevant Obligated Party under or with respect to such
Hedge Agreement or other Bank Product, after the Purchase Date reimburse the
applicable Revolving Obligation Credit Provider within five Business Days of
written demand for any such deficiency, (iv) upon and after the Purchase
Date, within five Business Days after the written request from the
Administrative Agent, reimburse the Revolving Obligation Credit Providers in
respect of matured indemnification obligations of each Obligated Party under
any of the Loan Documents and (v) on the Purchase Date, assume all of the
Assumed Obligations.  Each 

 

133

 

of
the Purchasing Parties shall fund its Purchasing Party Pro Rata Basis of any
payment required to be made under this clause (c) and shall
assume its Purchasing Party Pro Rata Basis of the Assumed Obligations.

 

(d)                                 Such purchase
price and cash collateral shall be remitted on the Purchase Date by wire
transfer in United States dollars and in immediately available funds to the
Administrative Agent to such bank account of the Administrative Agent as the
Administrative Agent may designate in writing to the Purchasing Parties for
such purpose.  The Administrative Agent
shall, promptly following its receipt thereof, distribute the amounts received
by it in respect of such purchase price to the relevant Revolving Obligation
Credit Providers, pro rata according to the respective Revolving Obligations
owing to the Revolving Obligation Credit Providers sold pursuant to this Section 11.3.  Interest shall be calculated to (and
including) the day on which such purchase and assumption shall occur if the
amounts so paid by the Purchasing Parties to the bank account designated by the
Administrative Agent are all received in such bank account prior to 12:00 noon,
New York time, and interest shall be calculated to and including the next
Business Day if any of the amounts so paid by the Purchasing Parties to the
bank account designated by the Administrative Agent are received in such bank
account later than 12:00 noon, New York time.

 

(e)                                  Such purchase
and assumption shall be expressly made without representation or warranty of
any kind by the Revolving Obligation Credit Providers as to the Revolving
Obligations, the Assumed Obligations, the Collateral or otherwise and without
recourse to the Revolving Obligation Credit Providers, except that each
Revolving Obligation Credit Provider shall represent and warrant to the
Purchasing Parties on the Purchase Date immediately before giving effect to the
purchase and assumption that:  (i) such
Revolving Obligation Credit Provider owns its portion of the Revolving
Obligations to be sold by it under this Section 11.3 free and clear
of any liens or encumbrances and (ii) such Revolving Obligation Credit
Provider has the right to sell its portion of the Revolving Obligations to be
sold by it under this Section 11.3 and its sale is duly authorized
by all necessary action on its part.  The
terms of such purchase and assumption shall be set forth in documentation
prepared by counsel to the Administrative Agent (at the reasonable expense of
the Purchasing Parties to be paid on the Purchase Date as part of the purchase
price) which is mutually acceptable to each of the Administrative Agent, the
other Revolving Obligation Credit Providers and the Purchasing Parties and
consistent with the terms hereof.  The
purchase and assumption documentation shall contain an unconditional waiver by
the Purchasing Parties and the Obligated Parties of all claims against the
Revolving Obligation Credit Providers arising out of the Loan Documents and the
transactions contemplated thereby and an unconditional release and discharge of
the Revolving Obligation Credit Providers of all Assumed Obligations
(including, without limitation, any commitment or agreement to provide or
arrange any financial accommodations to any Obligated Party under this
Agreement).  Each Revolving Obligation
Credit Provider shall retain all rights to indemnification provided in the Loan
Documents for all periods prior to the purchase of the Revolving Obligations
pursuant to this Section 11.3.

 

134

 

 

(f)                                    Each of the
parties hereto (x) agrees that the provisions of Section 13.2
shall not apply to the purchase and assumption contemplated by this Section 11.3
and (y) consents to such purchase and assumption.

 

(g)                                 The obligations
of the Revolving Obligation Credit Providers to sell and assign their
respective Revolving Obligations and Assumed Obligations under this Section 11.3
are several and not joint and several. 
If a Revolving Obligation Credit Provider breaches its obligation to
sell its Revolving Obligations or assign its Assumed Obligations under this Section 11.3
(a “Defaulting Revolving Obligation Credit Provider”), no other
Revolving Obligation Credit Provider will be obligated to purchase or assume
the Defaulting Revolving Obligation Credit Provider’s Revolving Obligations or
Assumed Obligations for resale or assignment to the Purchasing Parties.  A Revolving Obligation Credit Provider that
complies with this Section 11.3 will not be in default of this Section 11.3
or otherwise be deemed liable for any action or inaction of any Defaulting
Revolving Obligation Credit Provider; provided that nothing in this
clause (g) will require the Purchasing Parties to purchase less than all
of the Revolving Obligations to be sold under this Section 11.3.

 

ARTICLE
12

 

TERM AND TERMINATION

 

Section 12.1                                Term and Termination.

 

(a)                                  The term of
this Agreement shall end on the Stated Term Loan Termination Date unless sooner
terminated in accordance with the terms hereof. 
Either of the Agents may, and upon direction from the Majority Revolving
Lenders (or after the Revolving Facility Payment In Full, the Majority Term
Lenders) the Agents shall, terminate this Agreement, without notice to the
Obligated Parties, during the existence of an Event of Default.  Upon the effective date of termination of
this Agreement for any reason whatsoever, all Obligations (including all unpaid
principal, accrued and unpaid interest, and any early termination or prepayment
fees, but excluding indemnification obligations to the extent no claim with
respect thereto has been asserted and remains unsatisfied) shall become
immediately due and payable, the Revolving Lenders shall have no obligation to
make any Revolving Loans, the Agents shall have no obligation to cause the
Letter of Credit Issuer to issue any Letter of Credit, and the Borrowers shall
immediately arrange for the cancellation and return of all Letters of Credit
then outstanding or delivery to the Collateral Agent of a Supporting Cash
Deposit or a Supporting Letter of Credit in accordance with Section 2.4(g).  Notwithstanding the termination of this
Agreement, until all Obligations are indefeasibly paid and performed in full,
the Obligated Parties shall remain bound by the terms of this Agreement and the
other Loan Documents and shall not be relieved of any of their Obligations
hereunder or thereunder, and the Agents and the Lenders shall retain all their
rights and remedies hereunder and thereunder (including the Agent’s Liens in
and all rights and remedies with respect to all then existing and
after-acquired or after-arising Collateral).

 

135

 

(b)                                 Notwithstanding
the payment in full of the Obligations, the Agents shall not be required to
terminate the Agent’s Liens in any of the Collateral unless, with respect to
any loss or damage either of the Agents or any Lender may incur as a result of
the dishonor or return of any payment items applied to the Obligations, the
Agents shall have received either (i) a written agreement, executed by the
Obligated Parties and any other Person deemed financially responsible by the
Agents and whose loans or other advances to the Borrowers, or any of them, are
used in whole or in part to satisfy the Obligations, indemnifying the Agents
and the other Credit Providers from any such loss or damage or (ii) such
monetary reserves and Liens on the Collateral for such period of time as the
Agents, in their reasonable credit judgment, may deem necessary to protect the
Agents and the other Credit Providers from any such loss or damage.  The provisions of Section 2.4(f),
Section 2.5, Section 4.7, Article 5, this Section 12.1(b),
Section 14.7, Section 14.16(d), Section 15.7,
Section 15.11, and all indemnification obligations of any of the
Obligated Parties shall in all events survive any termination of the
Commitments or this Agreement.

 

ARTICLE
13

 

AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

 

Section 13.1                                Amendments and Waivers.

 

(a)                                  Except as
specified in clause (b) following, no amendment or waiver of
any provision of this Agreement or any other Loan Document (other than Hedge
Agreements), and no consent with respect to any departure by any Obligated
Party therefrom, shall be effective unless such amendment, modification, or
consent is in writing, signed by the Majority Lenders or, in the case of any
amendment or waiver of, or any consent with respect to, any provision of Section 8.21
or any provision of the Intercreditor Agreement or the GE Intercreditor
Agreement, the Majority Lenders and both Agents, and, in each case, the
Obligated Parties that are party thereto, and then any such amendment, waiver,
or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

(b)                                 Unless it is in
writing and signed by all of the Lenders and the Obligated Parties that are
party thereto and acknowledged by the Agents, no amendment, waiver, or consent
shall do any of the following:

 

(i)                                     increase (other
than pursuant to an Incremental Commitment Agreement or an assignment under Section 13.2)
or extend the Commitment of any Lender;

 

(ii)                                  amend the
second sentence of Section 2.2(a);

 

(iii)                               increase the
Maximum Revolver Amount, the Letter of Credit Subfacility or the Dollar amount
set forth in the first sentence of Section 2.2(j),  in each
instance, in excess of the respective amount set forth on the Closing Date,
except as permitted in accordance with the terms of this Agreement;

 

136

 

(iv)                              postpone or
delay any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees (other than fees payable to BofA,
Wachovia, the Administrative Agent or the Collateral Agent solely for such
Person’s benefit), or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document;

 

(v)                                 reduce the
principal of, or the rate of interest specified herein on any Loan, or any fees
or other amounts payable hereunder or under any other Loan Document;

 

(vi)                              change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans that is required for the Lenders, or any of them, to take any action
hereunder;

 

(vii)                           change the
definition of Borrowing Base, Blocked Availability Amount, Eligible Accounts,
Eligible Inventory, Eligible Rental and Sale Equipment, Eligible Spare Parts
Inventory, Eligible Transportation Equipment or Unused Availability in a manner
that would result in an increase in Unused Availability;

 

(viii)                        change the
definition of Majority Lenders;

 

(ix)                                amend this Section 13.1
or any provision of this Agreement providing for consent or other action by all
of the Lenders;

 

(x)                                   other than as
permitted by Section 14.11, release any Guaranties of the
Obligations or release Collateral;

 

(xi)                                amend Section 4.6(b);
or

 

(xii)                             expressly
subordinate the payment of any Obligation to any other Debt;

 

provided that (A) no amendment,
waiver, or consent shall, unless in writing and signed by the Administrative
Agent, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document, (B) no amendment, waiver, or consent
shall, unless in writing and signed by BofA and Wachovia, acting in their
respective capacities as the Letter of Credit Issuer, affect the rights or
duties of the Letter of Credit Issuer under this Agreement or any other Loan
Document related to any Letter of Credit issued or to be issued by it, (C) no
amendment, waiver, or consent shall, unless in writing and signed by the
Collateral Agent, affect the rights or duties of the Collateral Agent under
this Agreement or any other Loan Document, (D) Schedule 1.1(A) may
be amended from time to time by the Agents alone to reflect assignments of
Commitments in accordance with this Agreement and as contemplated by Section 2.1(c),
(E) any Loan Document relating to Bank Products may be amended by the
applicable Obligated Parties and the Person providing such Bank Products
without the approval or consent of any other Lender, the Administrative Agent
or the Collateral Agent, (F) except as specified for in clause (i) preceding,
no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver, or consent hereunder and (G) amendments and
modifications to the 

 

137

 

Collateral Documents in connection with the
provision of any Incremental Commitments by Incremental Lenders may be made as
contemplated in Section 2.1(c)(ii) (with the consent of the
Administrative Agent and/or the Collateral Agent, as appropriate).

 

(c)                                  If any fees are
paid to the Lenders as consideration for amendments, waivers, or consents with
respect to this Agreement, at the Agents’ election, such fees may be paid only
to those Lenders that agree to such amendments, waivers, or consents within the
time specified for submission thereof.

 

(d)                                 If, in
connection with any proposed amendment, waiver, or consent requiring the
consent of all of the Lenders, the consent of the Majority Lenders is obtained
but the consent of the other Lenders is not obtained (any such Lender whose
consent is not obtained being referred to as a “Non-Consenting Lender”),
then, if neither BofA nor Wachovia (in its individual capacity as a Lender) is
a Non-Consenting Lender, at the Obligated Parties’ request either or both of
BofA or Wachovia (in its individual capacity as a Lender) or an Eligible
Assignee shall, subject to the requirements of Section 13.2(a),
have the right (but not the obligation) to purchase from each Non-Consenting
Lender, and each Non-Consenting Lender agrees that it shall sell, such
Non-Consenting Lender’s Loans and Commitments for an amount equal to the
aggregate outstanding principal balances thereof plus all accrued interest and fees with respect thereto
through the date of sale pursuant to one or more Assignment and Acceptances,
without premium or discount.

 

Section 13.2                                Assignments; Participations.

 

(a)                                  Any Lender (the
“assigning Lender”) may, with the written consent of the Agents (which
consent shall not be unreasonably withheld or delayed) and if no Default or
Event of Default exists with the written consent of the Borrowers (which
consent shall not be unreasonably withheld or delayed), assign and delegate to
one or more Eligible Assignees (provided that no consent of the Agents
or the Borrowers shall be required in connection with any assignment and
delegation (i) by an assigning Lender to an Affiliate of the assigning
Lender or to another Lender or (ii) of Term Loans to an Eligible Assignee
that is a bank, financial institution or other entity which extends credit or
buys term loans in the ordinary course of its business (but excluding any
competitor of the Borrowers)) (each, an “Assignee”) all, or any ratable
part of all, of the Revolving Credit Commitment (if any), the Loans and the
other rights and obligations of the assigning Lender hereunder, in a minimum
amount of $10,000,000 and integral amounts of $5,000,000 in excess thereof (provided
that, unless the assigning Lender has assigned and delegated all of its Loans
and Revolving Credit Commitment, no such assignment and/or delegation shall be
permitted unless, after giving effect thereto, the assigning Lender retains a
Revolving Credit Commitment (or, with respect to a Term Lender, Term Loans or,
with respect to a Revolving Lender after the termination of the Revolving
Credit Commitments, Revolving Loans) in a minimum amount of $10,000,000); provided,
further, that the Obligated Parties and the Agents may continue to deal
solely and directly with the assigning Lender in connection with the interest
so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, shall have been given to Ahern and the 

 

138

 

Agents
by the assigning Lender and the Assignee, (ii) the assigning Lender and
the Assignee shall have delivered to Ahern and the Agents an Assignment and
Acceptance substantially in the form of Exhibit F (an “Assignment
and Acceptance”), together with, in the case of delivery to the
Administrative Agent, any Term Loan Note subject to such assignment, and (iii) the
assigning Lender or the Assignee has paid to each of the Agents a processing
fee in the amount of Three Thousand Five Hundred Dollars ($3,500).  If applicable, the Borrowers agree to
promptly execute and deliver new Term Loan Notes and replacement Term Loan
Notes as reasonably requested by the Administrative Agent to evidence
assignments of Term Loans in accordance herewith.

 

(b)                                 From and after
the date that the Agents notify the assigning Lender that they have received an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, if applicable, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations, including, but not
limited to (if applicable), the obligation to participate in Letters of Credit,
have been assigned to the Assignee pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Term Lender or a Revolving Lender,
as applicable, under the Loan Documents and (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by the assigning Lender pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of the assigning Lender’s
rights and obligations under this Agreement, the assigning Lender shall cease
to be a party hereto).

 

(c)                                  By executing
and delivering an Assignment and Acceptance, the assigning Lender thereunder
and the Assignee thereunder confirm to and agree with each other and the other
parties hereto as follows:  (i) other
than as provided in such Assignment and Acceptance, the 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 any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement or any
other Loan Document furnished pursuant hereto or the attachment, perfection, or
priority of any Lien granted by any of the Obligated Parties to the Collateral
Agent or any Lender in the Collateral; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Obligated Parties or the performance or observance
by the Obligated Parties of any of their respective obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
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; (iv) such
Assignee will, independently and without reliance upon either of the Agents,
the assigning Lender, or any other Lender, and based on such documents and
information as such Assignee shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such Assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as administrative agent or
collateral agent, as applicable, on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent or the Collateral
Agent, as 

 

139

 

applicable,
by the terms hereof, together with such powers, including the discretionary
rights and incidental powers, as are reasonably incidental thereto; (vi) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Term Lender or Revolving Lender, as applicable; (vii) such
Assignee represents and warrants that it is an Eligible Assignee; and (viii) if
the subject assignment relates to an assignment of all or a portion of a
Revolving Credit Commitment or of Revolving Loans, such Assignee represents and
warrants that it is not a Term Lender, a Second Lien Lender or any affiliate of
either of them or, if it is a Term Lender, a Second Lien Lender or any
affiliate of either of them, it represents and warrants in the Assignment and
Acceptance which of those Persons it is.

 

(d)                                 Immediately
upon satisfaction of the requirements of Section 13.2(a), this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Revolving Credit Commitments arising therefrom.  The Revolving Credit Commitment allocated to
each Assignee shall reduce the Revolving Credit Commitment of the assigning
Lender pro  tanto.

 

(e)                                  Any Lender (the
“originating Lender”) may at any time sell to one or more Participants
participating interests in any Loans, the Revolving Credit Commitment of the
originating Lender, and the other interests of the originating Lender hereunder
and under the other Loan Documents; provided that (i) the
originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the
originating Lender shall remain solely responsible for the performance of such
obligations, (iii) the Obligated Parties and the Agents shall continue to
deal solely and directly with the originating Lender in connection with the
originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document except for the matters set forth in, in the case of a Lender that is a
Revolving Lender, Section 13.1(b)(i), Section 13.1(b)(ii),
and Section 13.1(b)(iii) and, in the case of a Lender that is
a Term Lender, Section 13.3(b)(i), and (v) all amounts payable
by the Borrowers hereunder shall be determined as if the originating Lender had
not sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement.

 

(f)                                    Notwithstanding
any other provision in this Agreement, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and
interest in this Agreement in favor of any Federal Reserve Bank in accordance
with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31
C.F.R. §203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.

 

140

 

(g)                                 Notwithstanding
anything to the contrary contained herein or in any other Loan Document, any
Term Lender, any Second Lien Lender or any affiliate of either of them
(excluding in any event any such Person that is a Revolving Lender on the
Closing Date) that after the Closing Date acquires, by assignment or otherwise,
any Revolving Credit Commitment or any Revolving Loans (such Person, a “Dual
Lender”) shall, for purposes of voting or consenting to matters with
respect to the Loan Documents and determining Pro Rata Shares, be deemed not to
hold any Revolving Credit Commitments, any Revolving Loans or any other
Revolving Obligations; provided, however, that the Administrative
Agent may agree in writing in its sole discretion that the provisions of this Section 13.2(g) shall
not apply to a Dual Lender that (x) is not itself a Second Lien Lender at
the time such Dual Lender first acquires any Revolving Credit Commitment or any
Revolving Loans and (y) is an Eligible Assignee under clause (i) of
such definition that is a commercial bank, commercial finance company or other
asset-based lender that provides asset-based revolving credit loans in the
ordinary course of its business (and not a hedge fund).

 

(h)                                 Notwithstanding
any other provision of this Section 13.2, if an assigning Lender
desires pursuant to this Section 13.2 to assign to a Second Lien
Lender or any affiliate thereof (other than (x) any Person that is a Revolving
Lender on the Closing Date or (y) Liberty Harbor Master Fund I, L.P. (“Liberty
Harbor”)) (such Second Lien Lender or affiliate intended to be party to
such assignment, the “Intended Assignee”) all or any portion of such
assigning Lender’s Revolving Credit Commitment and/or Revolving Loans, such
assigning Lender will be required to provide written notice thereof (the “ROFR
Notice”) to Liberty Harbor and each Agent not less than two (2) Business
Days prior to the intended date of such assignment and provide Liberty Harbor
with a right of first refusal, as set forth in this Section 13.2(h),
with respect to the assignment of such Revolving Credit Commitment and
Revolving Loans intended to be assigned by such assigning Lender.  The ROFR Notice shall set forth all of the
material terms of the proposed assignment to the Intended Assignee (including
the amount of the Revolving Credit Commitment to be assigned by the assigning
Lender, the aggregate amount or percentage of the Revolving Loans of the
assigning Lender to be assigned by the assigning Lender and any other economic
terms relevant to such proposed assignment, including any discounts to be
realized or fees to be paid) and shall be accompanied by an Assignment and
Acceptance between such assigning Lender and Liberty Harbor for such assignment
reflecting such terms to be executed by Liberty Harbor.  Upon receipt of a ROFR Notice and related
Assignment and Acceptance, Liberty Harbor will have the right to purchase such Revolving
Credit Commitment and Revolving Loans of the assigning Lender on the terms set
forth in such ROFR Notice and such Assignment and Acceptance, which right may
only be exercised with respect to all of the Revolving Credit Commitment and
Revolving Loans being offered pursuant to such ROFR Notice and Assignment and
Acceptance, exercisable by Liberty Harbor by: (i) delivering written
notice thereof to the assigning Lender and the Agents (the “Election Notice”)
within three (3) Business Days after receipt of such ROFR Notice; (ii) executing
and delivering to the assigning Lender (with a copy to each Agent) the
Assignment and Acceptance for such assignment provided by the assigning Lender
with the ROFR Notice and delivering to the assigning Lender and the Agents all
information, notices and other documents required under this Section 13.2
to assign such Revolving Credit Commitment and Revolving 

 

141

 

Loans
(collectively with such Assignment and Acceptance, the “Assignment Materials”),
within ten (10) Business Days after delivery of the Election Notice (or
such later time as agreed to by the assigning Lender in its sole discretion as
notified in writing to Liberty Harbor and each Agent); and (iii) consummating
the assignment within ten (10) Business Days after delivery of the
Election Notice (or such later time as agreed to by the assigning Lender in its
sole discretion as notified in writing to Liberty Harbor and each Agent) (the “ROFR
Closing Date”).  If Liberty Harbor
fails to timely deliver an Election Notice and/or timely execute and/or deliver
the Assignment Materials and/or timely consummate the assignment it shall be
deemed to have irrevocably waived its rights under this Section 13.2(h) with
respect to such ROFR Notice.

 

If
Liberty Harbor timely delivers an Election Notice and timely executes and/or
delivers the Assignment Materials as required above, the closing of the
assignment shall be on the ROFR Closing Date therefor.  As a condition to the effectiveness of the
assignment on such ROFR Closing Date (i) Liberty Harbor shall pay or cause
to be paid to the assigning Lender in immediately available funds all amounts
required to be paid under the Assignment Materials or otherwise agreed between
the assigning Lender and Liberty Harbor and (ii) either the assigning
Lender or Liberty Harbor shall have paid to each Agent the processing fee
payable to such Agent pursuant to Section 13.2(a).  If the conditions required under the
preceding sentence are not satisfied on the ROFR Closing Date, then Liberty
Harbor shall be deemed to have irrevocably waived its rights under this Section 13.2(h) with
respect to such assignment.  Any such
assignment shall be subject to the requirements of this Section 13.2
(including, without limitation, those in clause (a) thereof).  Each of the Agents and the Borrowers hereby
consents to any assignment to Liberty Harbor contemplated by this clause (h),
but subject to clause (g) above.

 

If
Liberty Harbor waives (or is deemed to have waived) its right to acquire the
Revolving Credit Commitment and Revolving Loans offered by the assigning Lender
in a given ROFR Notice, the Revolving Credit Commitment and Revolving Loans
offered by the assigning Lender may be sold by the assigning Lender to the
Intended Assignee, on the same terms offered to Liberty Harbor in the ROFR
Notice, at any time during the next thirty (30) Business Day period subsequent
to the expiration of the three (3) Business Day period for Liberty Harbor
to respond to the ROFR Notice.

 

In
determining if an assigning Lender must comply with this Section 13.2(h) with
respect to an assignment of all or a portion of its Revolving Credit Commitment
and/or Revolving Loans to an Assignee, such assigning Lender shall be entitled
to rely conclusively on any representation and warranty made by such Assignee
in the relevant Assignment and Acceptance or in a certificate of such Assignee
as to whether or not such Assignee is a Second Lien Lender or any affiliate
thereof.

 

Nothing
contained herein shall limit the right of either Agent or the Borrowers under
this Section 13.2 to object to any assignment to any Second Lien
Lender or any of its affiliates of all or any portion of the Revolving Credit
Commitment and/or Revolving Loans of a Revolving Lender.

 

142

 

Section 13.3                                Amendments and
Waivers - Additional Voting Requirements.

 

(a)                                  In addition to
the requirements set forth in Section 13.1, unless it is in writing
and signed by all of the Revolving Lenders, no amendment or waiver of any provision
of this Agreement or any other Loan Document (other than Hedge Agreements or
any other agreements for any Bank Products), and no consent with respect to any
departure by any Obligated Party therefrom, shall do any of the following:

 

(i)                                     change the
percentage of the Revolving Credit Commitments or of the aggregate unpaid
principal amount of the Revolving Loans or any other Revolving Obligations that
is required for the Revolving Lenders, or any of them, to take any action
hereunder;

 

(ii)                                  change the
definition of Majority Revolving Lenders or Supermajority Revolving Lenders;

 

(iii)                               amend this Section 13.3
or any other provision of this Agreement providing for consent or other action
by all of the Revolving Lenders, by the Supermajority Revolving Lenders, by the
Majority Revolving Lenders or by the Majority Lenders; or

 

(iv)                              reduce the
Supplemental Blocked Availability Amount below $20,000,000.

 

(b)                                 In addition to
the requirements set forth in Section 13.1, unless it is in writing
and signed by all of the Term Lenders, no amendment or waiver of any provision
of this Agreement or any other Loan Document (other than Hedge Agreements or
any other agreements for any Bank Products), and no consent with respect to any
departure by any Obligated Party therefrom, shall do any of the following:

 

(i)                                     increase or
extend the Term Loan Commitment of any Term Lender or increase (other than
pursuant to an assignment under Section 13.2) the Term Loan of any
Term Lender;

 

(ii)                                  postpone or
delay any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Term Lenders
(or any of them) hereunder or under any other Loan Document;

 

(iii)                               reduce the
principal of, or the rate of interest specified herein on, any Term Loan, or
any fees (including, without limitation, the Early Term Loan Prepayment Fee or
any fees payable to the Term Lenders pursuant to Section 13.3(f))
or other amounts constituting Term Loan Obligations payable hereunder or under
any other Loan Document;

 

(iv)                              change the
percentage of the Term Loan Commitments or of the aggregate unpaid principal
amount of the Term Loans that is required for the Term Lenders, or any of them,
to take any action hereunder;

 

143

 

(v)                                 change the
definition of Majority Term Lenders;

 

(vi)                              amend this Section 13.3
or any other provision of this Agreement providing for consent or other action
by all of the Term Lenders or by the Majority Term Lenders;

 

(vii)                           other than as
permitted by Section 14.11, after the Revolving Facility Payment In
Full release any Guaranties of the Obligations or release Collateral;

 

(viii)                        expressly
subordinate the payment of any Term Loan Obligation to any other Debt; or

 

(ix)                                amend Section 10.1
or any other provision of this Agreement, in each instance under this clause (ix), to provide
that the grant of the Collateral hereunder (other than Collateral described in
the last sentence of Section 10.1) shall not equally and ratably
secure the Term Loan Obligations.

 

(c)                                  In addition to
the requirements set forth in Section 13.1, unless it is in writing
and signed by all of the Lenders, no amendment or waiver of any provision of
this Agreement or any other Loan Document (other than Hedge Agreements or any
other agreements for any Bank Products), and no consent with respect to any
departure by any Obligated Party therefrom, shall do any of the following:

 

(i)                                     change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans or other Obligations that is required for the Lenders, or any of
them, to take any action hereunder (other than any change to the definitions of
Majority Revolving Lenders, Majority Term Lenders or Supermajority Revolving
Lenders);

 

(ii)                                  change the
definition of Lender or Majority Lenders;

 

(iii)                               amend this Section 13.3
or any other provision of this Agreement providing for consent or other action
by all of the Lenders; or

 

(iv)                              amend Section 4.6(b) or Section 4.6(e).

 

(d)                                 In addition to
the requirements set forth in Section 13.1, unless it is in writing
and signed by the Majority Term Lenders, no provision of the Intercreditor
Agreement may be amended or waived and no amendment or waiver of any provision
of this Agreement or any other Loan Document (other than Hedge Agreements or
any other agreements for any Bank Products), and no consent with respect to any
departure by any Obligated Party therefrom, shall do any of the following:

 

(i)                                     shorten any
date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Term Lenders (or any of
them) hereunder or under any other Loan Document;

 

144

 

 

(ii)                                  extend the
Stated Revolving Termination Date beyond the Stated Term Loan Termination Date;

 

(iii)                               modify Section 8.21(a), Section 8.32,
the last sentence of Section 11.2(b), Section 11.3, Section 13.2(g)
or (h) or Section 14.11(a);

 

(iv)                              permit the payment
of cash Distributions by Ahern to its shareholders (other than Permitted
Distributions as such definition is in effect on the Closing Date);

 

(v)                                 increase the
aggregate Revolving Credit Commitments to an amount greater than $350,000,000
or create any new tranche of loans under this Agreement (it being agreed that
loans made at any time under the revolving credit facility provided hereunder
are not a new tranche of loans under this Agreement);

 

(vi)                              modify either
of the last two paragraphs of Section 6.2;

 

(vii)                           reduce the
Supplemental Blocked Availability Amount below $10,000,000 or reduce the
Blocked Availability Amount; or

 

(viii)                        modify clause
(ii) of the definition of Eligible Assignee or Section 13.2,
in each instance, in a manner that imposes additional restrictions on the
ability of the Term Lenders to assign Term Loans.

 

(e)                                  In addition to
the requirements set forth in Section 13.1, unless it is in writing
and signed by the Supermajority Revolving Lenders, no amendment or waiver of
any provision of this Agreement or any other Loan Document (other than Hedge
Agreements or any other agreements for any Bank Products), and no consent with
respect to any departure by any Obligated Party therefrom, shall reduce the
Supplemental Blocked Availability Amount below $30,000,000 (but any reduction
of the Supplemental Blocked Availability Amount below $20,000,000 shall be
governed by clause (a) above (and if reduced below
$10,000,000, additionally by clause (d) above) and not this clause (e)).

 

(f)                                    If any fees are
paid to the applicable Lenders as consideration for amendments, waivers, or
consents with respect to this Agreement, at the Agents’ election, such fees may
be paid only to those applicable Lenders that agree to such amendments,
waivers, or consents within the time specified for submission thereof.  If any fees are paid to all of the Revolving
Lenders (solely in their capacities as such and in no other capacities) as
consideration for an amendment, waiver or consent pursuant to Section 13.1
or Section 13.3(a) and such amendment, waiver or consent does
not additionally require the signature of any Term Lenders under this Section 13.3,
such fees shall also be paid to the Term Lenders in the same proportion as
payable to consenting Revolving Lenders as if the Term Lenders were consenting
Revolving Lenders in respect of such amendment, waiver or consent.  In addition to the requirements set forth in Section 13.1,
the immediately preceding sentence of this clause (f) may not
be amended or waived without the consent of the Majority Term Lenders.

 

145

 

(g)                                 If, in
connection with any proposed amendment, waiver, or consent:

 

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

 

(ii)                                  requiring the
consent of all Revolving Lenders or the Supermajority Revolving Lenders, the
consent of the Majority Revolving Lenders is obtained, or

 

(iii)                               requiring the
consent of all Term Lenders, the consent of the Majority Term Lenders is
obtained,

 

then,
if neither BofA nor Wachovia (in its individual capacity as a Lender) is a
Non-Consenting Lender Party, at the Obligated Parties’ request either or both
of BofA or Wachovia (in its individual capacity as a Lender) or an Eligible
Assignee shall, subject to the requirements of Section 13.2(a),
have the right (but not the obligation) to purchase from each Non-Consenting
Lender Party, and each Non-Consenting Lender Party agrees that it shall sell,
such Non-Consenting Lender Party’s Loans and Commitments for an amount equal to
the aggregate outstanding principal balances thereof plus all accrued interest and fees with respect thereto
through the date of sale pursuant to one or more Assignment and Acceptances,
without premium or discount.

 

(h)                                 For the
avoidance of doubt and without limiting clause (B) of the
proviso to Section 13.1(b), no amendment, waiver or consent to this
Agreement shall, unless in writing and signed by the Letter of Credit Issuer,
either (A) modify any of Section 2.4(g), clause (ii) of
the last sentence of Section 10.1 or the last sentence of Section 14.9
or (B) release any Letter of Credit Security (as defined in Section 14.9)
after the Revolving Facility Payment In Full except in accordance with Section 14.11(a) as
in effect on the Closing Date.

 

ARTICLE
14

 

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

Section 14.1                                Appointment and Authorization.

 

(a)                                  Each Lender
hereby irrevocably appoints and designates each of BofA, acting in its capacity
as the Administrative Agent, and Wachovia, acting in its capacity as the
Collateral Agent, as its agent under this Agreement and the other Loan
Documents, and each Lender hereby irrevocably authorizes the Collateral Agent
and the Administrative Agent to take such action on such Lender’s behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to the
Collateral Agent or the Administrative Agent, as applicable, by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  Each of
the Collateral 

 

146

 

Agent
and the Administrative Agent agrees to act as such on the express conditions
contained in this Article 14. 
Other than as expressly provided in Section 14.10 and Section 14.11,
the provisions of this Article 14 are solely for the benefit of the
Collateral Agent, the Administrative Agent and the other Credit Providers, and
no Obligated Party shall have any rights as a third party beneficiary of any of
the provisions contained herein. 
Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agents shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
either of the Agents have or be deemed to have any fiduciary relationship with
any Lender or Participant, and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against either of the
Agents.  Without limiting the generality
of the foregoing sentence, the use of the term “agent” in this Agreement or any
other Loan Document with reference to the Collateral Agent or the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable
law.  Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.  Except as expressly otherwise provided in
this Agreement, each of the Collateral Agent and the Administrative Agent shall
have and may use its sole discretion with respect to exercising or refraining
from exercising any discretionary rights or taking or refraining from taking
any actions that the Collateral Agent or the Administrative Agent is expressly
entitled to take or assert under this Agreement and the other Loan Documents,
including (as applicable) (i) the determination of the applicability of
ineligibility criteria with respect to the calculation of the Borrowing Base, (ii) the
making of Agent Advances pursuant to Section 2.2(j), and (iii) the
exercise of remedies pursuant to Section 11.2, and any action so
taken or not taken shall be deemed consented to by the Lenders.

 

(b)                                 The Letter of
Credit Issuer shall act on behalf of the Revolving Lenders with respect to any
Letters of Credit issued hereunder and the agreements and documents associated
therewith.  The Letter of Credit Issuer
shall have all of the benefits and immunities (i) provided to the Agents
in this Article 14 with respect to any acts taken or omissions
suffered by the Letter of Credit Issuer in connection with Letters of Credit
issued by it, or proposed to be issued by it, and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Administrative Agent”, “Collateral Agent” or “Agent”, as the
case may be, as used in this Article 14 included the Letter of
Credit Issuer with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the Letter of Credit Issuer.

 

Section 14.2                                Delegation of Duties. 
Each of the Collateral Agent and the Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees, or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties.  Neither Agent shall be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects as long as such selection was made without gross negligence or
willful misconduct.

 

Section 14.3                                Liability of the Agents. 
None of the Agent-Related Persons shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this 

 

147

 

Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any
Credit Provider or Participant for any recital, statement, representation, or
warranty made by any Obligated Party or any Affiliate of any Obligated Party,
or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement, or other document referred
to or provided for in, or received by the Collateral Agent or the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability, or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Obligated Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lender or Participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books, or records of any Obligated
Party or any Obligated Party’s Affiliates.

 

Section 14.4                                Reliance by the Agents. 
Each of the Agents shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, or telephone message, electronic mail message, statement, or
other document or conversation believed by the Collateral Agent or the
Administrative Agent to be genuine and correct and to have been signed, sent, or
made by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to any Obligated Party or any of their respective
Affiliates), independent accountants and other experts selected by the
Collateral Agent or the Administrative Agent. 
Each of the Agents shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Lenders, the Majority
Revolving Lenders, the Majority Term Lenders, the Supermajority Revolving
Lenders, all the Lenders, all the Revolving Lenders or all the Term Lenders, as
appropriate, as the Collateral Agent or the Administrative Agent deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action.  The Collateral Agent and the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Revolving Lenders or,
after the Revolving Facility Payment In Full, the Majority Term Lenders (or all
Lenders, all Revolving Lenders, all Term Lenders, the Majority Lenders or the
Supermajority Revolving Lenders, as appropriate, if so required by Article 13)
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders.  For
purposes of determining compliance with the conditions specified in Section 9.1,
each Lender that has executed and delivered this Agreement shall be deemed to
have consented to, approved, or accepted, or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by,
or acceptable or satisfactory to, a Lender unless each Agent shall have
received written notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

Section 14.5                                Notice of Default. 
Neither Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, other than the failure of the 

 

148

 

Borrowers
to make any payment of principal, interest, fees, or expenses required to be
paid to it for the benefit of the Credit Providers, unless the Collateral Agent
or the Administrative Agent, as applicable, shall have received written notice
from an Obligated Party or a Lender referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default.”  The Collateral Agent or the
Administrative Agent, as applicable, will notify the Lenders of its receipt of
any such notice.  The Collateral Agent
and/or the Administrative Agent, as applicable, shall take such action with
respect to such Default or Event of Default as may be directed by the Majority
Revolving Lenders (or the Majority Lenders or the Majority Term Lenders, as
applicable) in accordance with Article 11; provided that
unless and until the Collateral Agent or the Administrative Agent, as
applicable, has received any such direction, the Collateral Agent or the
Administrative Agent, as applicable, may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable or in the best interest of the
Credit Providers.

 

Section 14.6                                Credit Decision. 
Each Lender acknowledges that none of the Agent-Related Persons has made
any representation or warranty to such Lender, and that no act by the
Collateral Agent or the Administrative Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of the
Obligated Parties and their Affiliates (or any of them), shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether any Agent-Related Person has
disclosed material information in its possession.  Each Lender represents to the Agents that
such Lender has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as such Lender has deemed
appropriate, made its own appraisal of an investigation into the business,
prospects, operations, property, financial and other condition, and
creditworthiness of the Obligated Parties and their Affiliates, and any
Requirement of Law relating to the transactions contemplated hereby, and such
Lender has made its own decision to enter into this Agreement and to extend
credit to the Borrowers hereunder.  Each
Lender also represents that it will, independently and without reliance upon
any Agent-Related Person and based on such documents and information as such
Lender shall deem appropriate at the time, continue to make its own credit
analysis, appraisals, and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition, and creditworthiness of the Obligated
Parties and their Affiliates.  Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by either of the Agents (as applicable), neither Agent shall
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition, or creditworthiness of any Obligated Party or any of their
Affiliates that may come into the possession of any of the Agent-Related
Persons.

 

Section 14.7                                Indemnification. 
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, THE
LENDERS SHALL, UPON DEMAND, INDEMNIFY THE AGENT-RELATED PERSONS (TO THE EXTENT
NOT REIMBURSED BY OR ON BEHALF OF THE OBLIGATED PARTIES AND WITHOUT LIMITING
THE OBLIGATION OF THE OBLIGATED PARTIES TO DO SO), IN ACCORDANCE WITH THEIR PRO
RATA SHARES, AND HOLD HARMLESS EACH AGENT-RELATED PERSON FROM AND AGAINST ANY
AND ALL INDEMNIFIED 

 

149

 

LIABILITIES
(AS SUCH TERM IS DEFINED IN SECTION 15.11(a)); PROVIDED THAT
NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO ANY AGENT-RELATED PERSON OF ANY
PORTION OF SUCH INDEMNIFIED LIABILITIES TO THE EXTENT DETERMINED IN A FINAL,
NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH AGENT-RELATED PERSON’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED,
FURTHER, THAT NO ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE
MAJORITY REVOLVING LENDERS OR, IF REQUIRED BY THE TERMS OF THIS AGREEMENT, THE
LENDERS, THE REVOLVING LENDERS, THE TERM LENDERS, THE MAJORITY LENDERS, THE SUPERMAJORITY
REVOLVING LENDERS OR THE MAJORITY TERM LENDERS SHALL BE DEEMED TO CONSTITUTE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT FOR PURPOSES OF THIS SECTION.  Without limitation of the foregoing, each
Lender shall reimburse the Collateral Agent and the Administrative Agent upon
demand for its Pro Rata Share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Collateral Agent or the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the
Collateral Agent or the Administrative Agent is not reimbursed for such
expenses by or on behalf of the Borrowers. 
The undertaking in this Section 14.7 shall survive the
termination of the Commitments, payment of all Obligations hereunder, and the
resignation or replacement of the Collateral Agent or the Administrative Agent.

 

Section 14.8                                The Collateral Agent and the
Administrative Agent in their Individual Capacity. 
Each of BofA and Wachovia and their respective Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with any Obligated Party
and its Affiliates as though such Person were not the Administrative Agent, the
Letter of Credit Issuer or the Collateral Agent hereunder, as applicable, and
without notice to or consent of the Lenders. 
The Lenders acknowledge that, pursuant to such activities, each of BofA
and Wachovia and its respective Affiliates may receive information regarding
any Obligated Party, its Affiliates, and Account Debtors (including information
that may be subject to confidentiality obligations in favor of any such
Obligated Party or Affiliate), and the Lenders acknowledge that BofA and
Wachovia shall be under no obligation to provide such information to the
Lenders.  With respect to its Loans, each
of BofA and Wachovia as a Lender shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the Administrative Agent, the Letter of Credit Issuer or the Collateral
Agent, as applicable, and the terms “Lender” and “Lenders” include each of BofA
and Wachovia in its individual capacity.

 

Section 14.9                                Successor Agents. 
Each Agent may resign as an Agent (the “resigning Agent”) upon at
least 30 days’ prior notice to the other Agent, the Lenders and the Obligated
Parties (and any such resignation by BofA or Wachovia shall also constitute its
resignation as the Letter of Credit Issuer hereunder with respect to Letters of
Credit to be issued after its resignation (the “resigning Letter of Credit
Issuer”)).  In the event BofA or
Wachovia sells all of its Commitment and Loans, such Person shall resign as an
Agent; provided that if such sale by 

 

150

 

BofA
or Wachovia is as part of a sale, transfer, or other disposition by such Person
of substantially all of its loan portfolio, such Person shall resign as an
Agent and such purchaser or transferee shall become its successor
Administrative Agent and/or Collateral Agent, as applicable, hereunder.  Subject to the foregoing, if either Agent
resigns under this Agreement, then (i) effective upon the effective date
of the resignation of the resigning Agent, the remaining Agent shall act (and
hereby agrees to act) as the sole Administrative Agent and Collateral Agent for
the Lenders or (ii) if there is no remaining Agent at such time, the
Majority Revolving Lenders (or after the Revolving Facility Payment In Full,
the Majority Term Lenders) shall appoint from among the Lenders the successor
sole Administrative Agent and Collateral Agent (any Person being appointed
pursuant to this clause (ii) as successor to the resigning
Agent being referred to in this Section as the “successor Agent,”
and any such appointment prior to the Revolving Termination Date shall also
constitute appointment of such successor Agent as the Letter of Credit Issuer
hereunder with respect to Letters of Credit to be issued after such appointment
(the “successor Letter of Credit Issuer”)) for the Lenders that shall be
consented to by the Borrowers at all times other than during the existence of a
Default or an Event of Default (such consent not to be unreasonably withheld or
delayed).  If no successor Agent has
accepted appointment as the Administrative Agent and Collateral Agent for the
Lenders prior to the effective date of the resignation of the resigning Agent
at a time when there is no other Agent, the resigning Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all the
duties of the Agents hereunder until such time, if any, as the Majority
Revolving Lenders (or after the Revolving Facility Payment In Full, the
Majority Term Lenders) appoint the successor sole Administrative Agent and
Collateral Agent as provided for in this Section 14.9.  Upon the remaining Agent becoming the
Administrative Agent and Collateral Agent for the Lenders (as provided in clause (i) of
the second preceding sentence) or the acceptance by the successor Agent of its
appointment as the successor Agent hereunder (as provided in clause (ii) of
the second preceding sentence), (a) the remaining Agent or such successor
Agent, as applicable, shall succeed to all the rights, powers, and duties of
each of the Administrative Agent, the Collateral Agent and, if and to the
extent applicable, the resigning Letter of Credit Issuer, (b) the
respective terms “Administrative Agent”, “Collateral Agent” and, if and to the
extent applicable, “Letter of Credit Issuer” shall mean the remaining Agent or
such successor Agent (as applicable) and, if and to the extent applicable, such
successor Letter of Credit Issuer, (c) the resigning Agent’s appointment,
rights, powers, and duties as an Agent shall be terminated, and (d) if and
to the extent applicable, the resigning Letter of Credit Issuer’s appointment,
rights, powers, and duties as the Letter of Credit Issuer shall be terminated
without any other or further act or deed on the part of the resigning Letter of
Credit Issuer, the remaining Agent or any Lender, other than the obligation of
the remaining Agent or the successor Letter of Credit Issuer, as applicable, to
issue Letters of Credit in substitution for the Letters of Credit, if any,
issued by the resigning Letter of Credit Issuer outstanding at the time of such
succession or to make other arrangements satisfactory to the resigning Letter
of Credit Issuer to effectively assume the obligations of the resigning Letter
of Credit Issuer with respect to its Letters of Credit.  After any resigning Agent’s resignation
hereunder as an Agent, the provisions of this Article 14, Section 15.7,
and Section 15.11 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement.  Notwithstanding the
foregoing, if (x) on or after the Revolving Facility Payment In Full, the
Collateral Agent shall resign while holding any Supporting Letters of Credit or
any Supporting Cash Deposit or other cash collateral for the payment of any
Obligations relating to Letters of Credit (collectively the 

 

151

 

foregoing,
the “Letter of Credit Security”), (y) the resigning Collateral
Agent is not also acting as the Administrative Agent (or if so acting, is
resigning as the Administrative Agent at the same time as it is resigning as
the Collateral Agent) and (z) the resigning Collateral Agent was, at any
time prior to the Revolving Facility Payment In Full, a Letter of Credit
Issuer, a Revolving Lender or any affiliate of any thereof and the then
Administrative Agent (if not the same Person as the resigning Collateral Agent)
was not, at any time prior to the Revolving Facility Payment In Full, a Letter
of Credit Issuer, a Revolving Lender or any affiliate of any thereof, then:

 

(a)                                  notwithstanding
such resignation, the resigning Collateral Agent may, at its election exercised
in its notice of resignation delivered under this Section 14.9,
continue to act as the Collateral Agent solely with respect to the Letter of
Credit Security (the Collateral Agent solely in such capacity, the “Letter
of Credit Collateral Agent”) and as such (i) shall retain all of the
rights, powers and duties of the Collateral Agent with respect to the Letter of
Credit Security and the successor Collateral Agent, if any, to the resigning
Collateral Agent shall not succeed to such rights, powers and duties with
respect to the Letter of Credit Security and (ii) the provisions of this Article 14,
Section 15.7 and Section 15.11 shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it
acted as the Collateral Agent under this Agreement (including, without limitation,
with respect to the Letter of Credit Security after it resigned hereunder as
Collateral Agent for all other purposes);

 

(b)                                 if the
resigning Collateral Agent does not make the election described in clause (a),
its notice of resignation shall, concurrently with being delivered as provided
under this Section 14.9, be additionally delivered to each Letter
of Credit Issuer (if other than such retiring Collateral Agent or a recipient
of such notice otherwise) any of whose Letters of Credit are outstanding at
such time; and

 

(c)                                  if clause (b) shall
be applicable and there are outstanding any Letters of Credit issued by one or
more Letter of Credit Issuers other than the resigning Collateral Agent, each
such Letter of Credit Issuer may, at its election exercised by delivering
written notice thereof to the resigning Collateral Agent, the other Agent, the
other Letter of Credit Issuers and Ahern within 10 Business Days of its receipt
of the notice of resignation described in clause (a), agree to act as
the Letter of Credit Collateral Agent, in which case (i) if more than one
Letter of Credit Issuer timely makes such election, the Letter of Credit Issuer
so making such election with the greatest undrawn amount of outstanding Letters
of Credit issued by it shall become the Letter of Credit Collateral Agent, (ii) the
resigning Collateral Agent shall, upon the effective date of its resignation,
deliver the Letter of Credit Security to the Letter of Credit Collateral Agent,
(iii) upon the effective date of the resignation of the resigning
Collateral Agent and its compliance with clause (ii), the Letter of
Credit Collateral Agent shall succeed to all the rights, powers and duties of
the Collateral Agent with respect to the Letter of Credit Security and the
successor Collateral Agent, if any, to the resigning Collateral Agent shall not
succeed to such rights, powers and duties with respect to the Letter of Credit
Security.

 

152

 

Section 14.10                          Withholding Tax.

 

(a)                                  If any Lender
is a “foreign corporation, partnership, or trust” within the meaning of the
Code and such Lender claims exemption from, or a reduction of, U.S. withholding
tax under Sections 1441 or 1442 of the Code, such Lender agrees with and in
favor of the Agents, to deliver to the Agents and Ahern:

 

(i)                                     if such Lender
claims an exemption from, or a reduction of, withholding tax under a U.S. tax
treaty, two properly completed and executed IRS Form W-8BEN before the
payment of any interest in the first calendar year during which interest may be
paid under this Agreement (and thereafter as reasonably requested by the
Administrative Agent, the Collateral Agent or Ahern, but only if such Lender is
then lawfully permitted to do so);

 

(ii)                                  if such Lender
claims that interest paid under this Agreement is exempt from U.S. withholding
tax because it is effectively connected with a U.S. trade or business of such
Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Lender during which interest may be paid under this Agreement (and thereafter
as reasonably requested by the Administrative Agent, the Collateral Agent or
Ahern, but only if such Lender is then lawfully permitted to do so), and IRS Form W-9;
and

 

(iii)                               such other form
or forms as may be required under the Code or other laws of the U.S. as a
condition to exemption from, or reduction of, U.S. withholding tax.

 

Such
Lender agrees to promptly notify the Agents and Ahern of any change in
circumstances that would modify or render invalid any claimed exemption or
reduction.

 

(b)                                 If any Lender
claims exemption from, or reduction of, withholding tax under a U.S. tax treaty
by providing IRS Form W-8BEN and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations owing
to such Lender, such Lender agrees to notify the Agents and Ahern of the
percentage amount in which it is no longer the beneficial owner of Obligations
owing to such Lender.  To the extent of
such percentage amount, the Agents and the Borrowers will treat such Lender’s
IRS Form W-8BEN as no longer valid.

 

(c)                                  If any Lender
claiming exemption from U.S. withholding tax by filing IRS Form W-8ECI
with the Agents sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.

 

(d)                                 If any Lender
is entitled to a reduction in the applicable withholding tax, the
Administrative Agent, the Collateral Agent or any Borrower, as appropriate, may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction.  If the forms or other 

 

153

 

documentation
required by clause (a) preceding are not delivered to the
Agents and Ahern, then the applicable Agent or any Borrower, as appropriate,
may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax.

 

(e)                                  If the IRS or
any other Governmental Authority of the U.S. or other jurisdiction asserts a
claim that an Agent or any Borrower did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Agents or any Borrower of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify each of the Agents and any Borrower
fully for all amounts paid, directly or indirectly, by any of them as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to either of the Agents or the
Borrowers under this Section 14.10, together with all costs and
expenses (including Attorney Costs).  The
obligation of the Lenders under this clause (e) shall survive
the payment of all Obligations and the resignation or replacement of either
Agent.

 

Section 14.11                          Collateral Matters.

 

(a)                                  The Credit
Providers hereby irrevocably authorize the Collateral Agent to release any
Guarantor that is permitted to wind-up, dissolve, liquidate, or merge out of
existence under Section 8.9, and to release any Agent’s Liens upon
any Collateral (i) upon (A) termination of the Commitments, (B) termination
or collateralization as provided in Section 2.4(g) of all
outstanding Letters of Credit (whether or not any of such obligations are due),
and (C) the Borrowers’ payment and satisfaction in full of all Loans and
other Obligations (other than indemnification obligations to the extent no
claim with respect thereto has been asserted and remains unsatisfied), (ii) constituting
property being sold or disposed of if the Obligated Party selling or disposing
of such property certifies to the Agents that the sale or disposition is made
in compliance with Section 8.9 (and the Agents may rely
conclusively on any such certification, without further inquiry), (iii) constituting
property in which no Obligated Party owned any interest at the time the Lien
was granted or at any time thereafter, or (iv) constituting property
leased to an Obligated Party under a lease that has expired or been terminated
in a transaction permitted under this Agreement.  Except as provided above, the Collateral Agent
will not release any of the Agent’s Liens without the prior written
authorization of the Majority Revolving Lenders (or after the Revolving
Facility Payment In Full, the Majority Term Lenders); provided that the
Collateral Agent may, in its discretion with the prior written authorization of
the Administrative Agent, release the Agent’s Liens on Collateral valued in the
aggregate not in excess of $1,000,000 during each Fiscal Year without the prior
written authorization of any Lender and the Collateral Agent may release the
Agent’s Liens on Collateral valued in the aggregate not in excess of $5,000,000
during each Fiscal Year with the prior written authorization of the Majority
Revolving Lenders (or after the Revolving Facility Payment In Full, the Majority
Term Lenders) and the Administrative Agent; and provided, further
that, notwithstanding the immediately preceding sentence, after the Revolving
Facility Payment In Full the Collateral Agent may not release the Agent’s Lien
on any cash collateral provided under any of 

 

154

 

Section 2.4(g), Section 4.3(a),
clause sixth of Section 4.6(b) or Section 11.2(b) securing
the payment of any Obligations with respect to any Letters of Credit without
the prior written consent of the Administrative Agent, the Majority Revolving
Lenders and the Letter of Credit Issuer except to pay any Obligations secured
thereby or upon the termination or cancellation of all Letters of Credit and
the payment in full of all Obligations with respect to all Letters of
Credit.  Upon request by either of the
Agents or the Obligated Parties at any time, the Credit Providers will confirm
in writing the Collateral Agent’s authority to release any Guarantor and any of
the Agent’s Liens upon particular types or items of Collateral in accordance
with the terms of this Section 14.11.

 

(b)                                 Upon receipt by
the Collateral Agent of any authorization required pursuant to Section 14.11(a) from
the Majority Revolving Lenders (or after the Revolving Facility Payment In
Full, the Majority Term Lenders) and/or the Administrative Agent (or as
provided in the second proviso in the second sentence of Section 14.11(a),
the Administrative Agent, the Majority Revolving Lenders and the Letter of
Credit Issuer), as appropriate, of the Collateral Agent’s authority to release
any Agent’s Liens upon particular types or items of Collateral, and upon at
least five Business Days prior written request by the Obligated Parties, the
Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the Agent’s
Liens upon such Collateral; provided that (i) the Collateral Agent
shall not be required to execute any such document on terms that, in the Collateral
Agent’s opinion, would expose the Collateral Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of the Obligated Parties
in respect of) all interests retained by the Obligated Parties, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.

 

(c)                                  Neither of the
Agents shall have any obligation whatsoever to any of the Credit Providers to
assure that the Collateral exists or is owned by any of the Obligated Parties
or is cared for, protected, or insured or has been encumbered, or that the
Agent’s Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights,
authorities, and powers granted or available to either of the Agents pursuant
to any of the Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission, or event related thereto, each of the
Agents may act in any manner it may deem appropriate, in its sole discretion,
given such Agent’s own interest in the Collateral in its capacity as one of the
Lenders and that neither of the Agents shall have any other duty or liability
whatsoever to any Credit Provider as to any of the foregoing.

 

(d)                                 Upon receipt by
the Collateral Agent of any proceeds of Collateral, the Collateral Agent shall
promptly turn all such proceeds over to the Administrative Agent for
application in accordance with Section 4.6(b).

 

155

 

 

Section 14.12                        Restrictions on Actions by Lenders; Sharing of
Payments.

 

(a)                                  Each of the
Credit Providers agrees that it shall not, without the express consent of the
Majority Revolving Lenders (or after the Revolving Facility Payment In Full,
the Majority Term Lenders), and that it shall, to the extent it is lawfully
entitled to do so, upon the request of the Majority Revolving Lenders (or after
the Revolving Facility Payment In Full, the Majority Term Lenders), setoff
against the Obligations, any amounts owing by such Credit Provider to any
Obligated Party or any accounts of any Obligated Party now or hereafter
maintained with such Credit Provider. 
Each of the Credit Providers further agrees that it shall not, unless
specifically requested to do so by the Agents, take or cause to be taken any
action to enforce its rights under this Agreement or any other Loan Document or
against any Obligated Party, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.

 

(b)                                 If at any time
or times any Credit Provider shall receive (i) by payment, foreclosure,
setoff, or otherwise, any proceeds of Collateral or any payments with respect
to the Obligations owing to such Credit Provider arising under, or relating to,
this Agreement or the other Loan Documents, except for any such proceeds or
payments received by such Credit Provider from either of the Agents pursuant to
the terms of this Agreement, or (ii) payments from either of the Agents in
excess of such Credit Provider’s ratable portion of all such distributions by
the Agents with respect to the applicable Obligations, such Credit Provider
shall promptly (A) turn the same over to the Administrative Agent, in
kind, and with such endorsements as may be required to negotiate the same to
the Administrative Agent, or in same day funds, as applicable, for the account
of all of the applicable Credit Providers and for application to the applicable
Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase,
without recourse or warranty, an undivided interest and participation in the
applicable Obligations owed to the other applicable Credit Providers so that
such excess payment received shall be applied among the applicable Credit
Providers in accordance with the terms of this Agreement; provided that
if all or part of such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be rescinded
in whole or in part, as applicable, and the applicable portion of the purchase
price paid therefor shall be returned to such purchasing party, but without
interest except to the extent that such purchasing party is required to pay
interest in connection with the recovery of the excess payment.

 

Section 14.13                        Agency for Perfection.  Each Credit
Provider hereby appoints each other Credit Provider as agent for the purpose of
perfecting Liens, for the benefit of the Credit Providers, in assets that, in
accordance with Article 9 of the UCC or any other Requirement of Law, can
be perfected only by possession.  Should
any Credit Provider (other than the Collateral Agent) obtain possession of any
such Collateral, such Credit Provider shall notify the Collateral Agent
thereof, and, promptly upon the Collateral Agent’s request therefor, shall
deliver such Collateral to the Collateral Agent or otherwise deal with such
Collateral in accordance with the Collateral Agent’s instructions.

 

156

 

Section 14.14                        Payments by Agents to the Lenders. 
All payments to be made by either of the Agents to the Credit Providers
shall be made by bank wire transfer or internal transfer of immediately
available funds to each Credit Provider pursuant to transfer instructions
delivered in writing to the Agents on or prior to the Closing Date (or if such
Credit Provider is an Assignee, delivered with or in the applicable Assignment
and Acceptance), or pursuant to such other transfer instructions as each party
may designate for itself by written notice to the Agents.  Concurrently with each such payment, the
applicable Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, interest, or fees on the Revolving
Loans, Term Loans, the Letters of Credit, or otherwise.  Unless the Agents receive notice from the
Borrowers prior to the date on which any payment is due to any Credit Provider
that the Borrowers will not make such payment in full as and when required,
each of the Agents may assume that the Borrowers have made such payment in full
to the applicable Agent on such date in immediately available funds and the
applicable Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each applicable Credit Provider on such due date an
amount equal to the amount then due such Credit Provider.  If and to the extent the Borrowers have not
made such payment in full to the applicable Agent, each applicable Credit
Provider shall repay to such Agent on demand such amount distributed to such
Credit Provider, together with interest thereon at the Federal Funds Rate for
each day from the date such amount is distributed to such Credit Provider until
the date repaid.

 

Section 14.15                        Settlement.

 

(a)                                  Each Revolving
Lender’s funded portion of the Revolving Loans is intended by the Revolving
Lenders to be equal at all times to such Revolving Lender’s Pro Rata Share of
the outstanding Revolving Loans. 
Notwithstanding such agreement, the Agents, BofA, Wachovia, and the
Revolving Lenders agree (which agreement shall not be for the benefit of or
enforceable by the Obligated Parties or the Term Lenders) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, including the Non-Ratable
Loans and the Agent Advances, shall take place on a periodic basis in
accordance with the following provisions:

 

(i)                                     The
Administrative Agent shall request settlement (a “Settlement”) with the
Revolving Lenders on at least a weekly basis, or on a more frequent basis at
its election, (A) on behalf of BofA, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C) with
respect to collections received, in each case, by notifying the Revolving
Lenders of such requested Settlement by telecopy, telephone, or other similar
form of transmission, of such requested Settlement, no later than 1:30 p.m.
(New York time) on the date of such requested Settlement (the “Settlement
Date”).  In its discretion, the
Administrative Agent may on any Settlement Date permit Non-Ratable Loans in an
aggregate principal amount not to exceed One Million Dollars ($1,000,000) to
remain outstanding, while requiring Settlement of the other outstanding
Non-Ratable Loans.  Each Revolving Lender
(other than BofA, in the case of the Non-Ratable Loans, and the Administrative
Agent, in the case of the Agent Advances) shall transfer the amount of
such Revolving Lender’s Pro Rata Share of the outstanding principal amount of
the Non-Ratable Loans and 

 

157

 

Agent
Advances with respect to which Settlement is requested to the Administrative
Agent to such account of the Administrative Agent as the Administrative Agent
may designate, not later than 4:00 p.m. (New York time), on the Settlement
Date applicable thereto.  Settlements
shall occur during the continuation of a Default or an Event of Default and
whether or not the applicable conditions precedent set forth in Article 9
have then been satisfied.  Such amounts
transferred to the Administrative Agent shall be applied against the amounts of
the applicable Non-Ratable Loan or Agent Advance for which the Administrative
Agent has requested Settlement and, together with the portion of such
Non-Ratable Loan or Agent Advance representing BofA’s (in its individual
capacity or as the Administrative Agent, as appropriate) Pro Rata Share
thereof, shall constitute Revolving Loans of such Revolving Lenders,
respectively.  If any such amount is not
transferred to the Administrative Agent by any Revolving Lender on the
Settlement Date applicable thereto, the Administrative Agent shall be entitled
to recover such amount on demand from such Revolving Lender together with
interest thereon at the Federal Funds Rate for the first three days from and
after the Settlement Date and thereafter at the Interest Rate then applicable
to Base Rate Revolving Loans (Y) on behalf of BofA, with respect to each
outstanding Non-Ratable Loan and (Z) for itself, with respect to each
Agent Advance.

 

(ii)                                  Notwithstanding
the foregoing, not more than one Business Day after demand is made by the
Administrative Agent (whether before or after the occurrence of a Default or an
Event of Default and regardless of whether it has requested a Settlement with
respect to a Non-Ratable Loan or Agent Advance), each other Revolving Lender (A) shall
irrevocably and unconditionally purchase and receive from BofA or the
Administrative Agent, as applicable, without recourse or warranty, an undivided
interest and participation in such Non-Ratable Loan or Agent Advance equal to
such Revolving Lender’s Pro Rata Share of such Non-Ratable Loan or Agent
Advance, and (B) if Settlement has not previously occurred with respect to
such Non-Ratable Loans or Agent Advances, upon demand by BofA or the
Administrative Agent, as applicable, shall pay to BofA or the Administrative
Agent, as applicable, as the purchase price of such participation an amount equal
to 100% of such Revolving Lender’s Pro Rata Share of such Non-Ratable Loans or
Agent Advances.  If such amount is not in
fact transferred to BofA or the Administrative Agent, as applicable, by any
Revolving Lender, BofA or the Administrative Agent, as applicable, shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest thereon at the Federal Funds Rate for the first three days from
and after such demand and thereafter at the Interest Rate then applicable to
Base Rate Revolving Loans.

 

(iii)                               From and after
the date, if any, on which any Revolving Lender purchases an undivided interest
and participation in any Non-Ratable Loan or Agent Advance pursuant to clause (ii) preceding,
the Administrative Agent shall promptly distribute to such Revolving Lender,
such Revolving Lender’s Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral 

 

158

 

received
by the Administrative Agent in respect of such Non-Ratable Loan or Agent
Advance.

 

(iv)                              Between
Settlement Dates, to the extent no Agent Advances are outstanding, the
Administrative Agent may pay over to BofA any payments received by the
Administrative Agent which in accordance with the terms of this Agreement would
be applied to the reduction of the Revolving Loans, for application to the
Revolving Loans of BofA, including Non-Ratable Loans.  If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to the Revolving Loans of BofA (other than to Non-Ratable Loans or Agent
Advances in which a Revolving Lender has not yet funded its purchase of a
participation pursuant to clause (ii) preceding), as provided
for in the previous sentence, BofA shall pay to the Administrative Agent, for
the accounts of the Revolving Lenders, to be applied to the outstanding
Revolving Loans of such Revolving Lenders, an amount such that each Revolving
Lender shall, upon receipt of such amount, have, as of such Settlement Date,
its Pro Rata Share of the Revolving Loans. 
During the period between Settlement Dates, BofA with respect to
Non-Ratable Loans, the Administrative Agent with respect to Agent Advances, and
each Revolving Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the actual average
daily amount of funds employed by BofA, the Administrative Agent and the other
Revolving Lenders.

 

(v)                                 Unless the
Administrative Agent has received written notice from a Revolving Lender to the
contrary, the Administrative Agent may assume that the applicable conditions
precedent set forth in Article 9 have been satisfied on any Funding
Date for a Revolving Loan or Non-Ratable Loan. 
Unless the Administrative Agent has received written notice from a
Revolving Lender to the contrary or the Administrative Agent has actual
knowledge to the contrary (based solely on the Borrowing Base Certificate most
recently delivered to it), the Administrative Agent may assume that the
requested Borrowing will not exceed the Unused Availability on any Funding Date
for a Revolving Loan or Non-Ratable Loan.

 

(b)                                 The Lenders’
Failure to Perform.  All
Revolving Loans (other than Non-Ratable Loans and Agent Advances) shall be made
by the Revolving Lenders simultaneously and in accordance with their Pro Rata
Shares.  It is understood that (i) no
Revolving Lender shall be responsible for any failure by any other Revolving
Lender to perform its obligation to make any Revolving Loans hereunder, nor
shall any Revolving Credit Commitment of any Revolving Lender be increased or
decreased as a result of any failure by any other Revolving Lender to perform
its obligation to make any Revolving Loans hereunder, (ii) no failure by
any Revolving Lender to perform its obligation to make any Revolving Loans
hereunder shall excuse any other Revolving Lender from its obligation to make
any Revolving Loans hereunder, and (iii) the obligations of each Revolving
Lender hereunder shall be several, not joint and several.

 

159

 

(c)                                  Defaulting
Lenders.  Unless the Administrative
Agent receives notice from a Lender on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, at least one Business Day
prior to the date of such Borrowing, that such Lender will not make available
as and when required hereunder to the Administrative Agent such Lender’s Pro
Rata Share of such Borrowing, the Administrative Agent may assume that each
Lender has made such amount available to it in immediately available funds on
the Funding Date.  Furthermore, the
Administrative Agent may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount. 
If any Lender has not transferred its full Pro Rata Share to the
Administrative Agent in immediately available funds and if the Administrative
Agent has transferred a corresponding amount to the Borrowers on the Business
Day following such Funding Date, the applicable Lender shall make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate for that day.  A notice by the
Administrative Agent submitted to any Lender with respect to amounts owing
shall be conclusive, absent manifest error. 
If each Lender’s full Pro Rata Share is transferred to the
Administrative Agent as required, the amount transferred to the Administrative
Agent shall constitute such Lender’s Revolving Loan or Term Loan, as
applicable, for all purposes of this Agreement. 
If any such amount is not transferred to the Administrative Agent on the
Business Day following the Funding Date, the Administrative Agent will notify
the Borrowers of such failure to fund and, upon demand by the Administrative
Agent, the Borrowers shall pay such amount to the Administrative Agent for its
account, together with interest thereon for each day elapsed since the date of
such Borrowing at a rate per annum equal to the Interest Rate applicable at the
time to the Revolving Loans or Term Loans, as applicable, comprising that
particular Borrowing.  The failure of any
Lender to make any Loan on any Funding Date (any such Lender, prior to the cure
of such failure, being referred to herein as a “Defaulting Lender”)
shall not relieve any other Lender of its obligation hereunder to make a Loan
on such Funding Date.  No Lender shall be
responsible for any other Lender’s failure to advance such other Lenders’ Pro
Rata Share of any Borrowing.

 

(d)                                 Retention of
Defaulting Lender’s Payments.  Neither of the Agents shall be obligated to
transfer to a Defaulting Lender any payments made by any Borrower to such Agent
for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled
to the sharing of any payments hereunder. 
Amounts payable to a Defaulting Lender shall instead be paid to or
retained by the Administrative Agent.  In
its discretion with respect to a Defaulting Lender that is a Revolving Lender,
the Administrative Agent may loan the Borrowers the amount of all such payments
received or retained by it for the account of such Defaulting Lender.  Any amounts so loaned to the Borrowers shall
bear interest at the rate applicable to Base Rate Revolving Loans and for all other
purposes of this Agreement shall be treated as if they were Revolving
Loans.  For purposes of voting or
consenting to matters with respect to the Loan Documents and determining Pro
Rata Shares, a Defaulting Lender shall be deemed not to be a “Lender.”  Until a Defaulting Lender that is a Revolving
Lender cures its failure to fund its Pro Rata Share of any Borrowing (i) such
Defaulting Lender shall not be entitled to any portion of the Unused Line Fee
and (ii) the Unused Line Fee shall accrue in favor of the Revolving
Lenders that have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Revolving Lenders
ratably based upon their relative 

 

160

 

Revolving
Credit Commitments.  This Section shall
remain effective with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations under this
Agreement.  The terms of this Section shall
not be construed to increase or otherwise affect the Commitment of any Lender,
or relieve or excuse the performance by any Borrower of its duties and
obligations hereunder.

 

(e)                                  Removal of
Defaulting Lender.  At the
Borrowers’ request, each Agent (acting in its individual capacity as a Lender)
or an Eligible Assignee reasonably acceptable to the Agents and the Borrowers
shall have the right (but not the obligation) to purchase from any Defaulting
Lender, and each Defaulting Lender shall, upon such request, sell and assign to
such Agent (acting in its individual capacity as a Lender) or such Eligible
Assignee (as applicable), all of the Defaulting Lender’s outstanding Loans and
Commitments hereunder.  Such sale shall
be consummated promptly after the applicable Agent or one or more of the
Borrowers, as applicable, has arranged for a purchase by such Agent (acting in
its individual capacity as a Lender) or an Eligible Assignee (as applicable)
pursuant to an Assignment and Acceptance, and at a price equal to the outstanding
principal balance of the Defaulting Lender’s Loans, plus accrued interest and fees (excluding the Unused Line Fee
to the extent not required to be paid to the Defaulting Lender pursuant to Section 14.15(d)),
without premium or discount.

 

Section 14.16                        Letters of Credit; Intra-Revolving Lender Issues.

 

(a)                                  Notice of
Letter of Credit Balance.  On
each Settlement Date, either or both of the Agents shall notify each Revolving
Lender of the issuance of any Letters of Credit since the prior Settlement
Date.

 

(b)                                 Participations
in Letters of Credit.

 

(i)                                     Purchase of
Participations.  Immediately
upon issuance of any Letter of Credit in accordance with Section 2.4(d),
each Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest and
participation equal to such Revolving Lender’s Pro Rata Share of the face
amount of such Letter of Credit in connection with the issuance of such Letter
of Credit (including all obligations of the Borrower for whose account such
Letter of Credit was issued, and any security therefor or guaranty pertaining
thereto).

 

(ii)                                  Sharing of
Reimbursement Obligation Payments.  Whenever the Administrative Agent receives a
payment from a Borrower on account of reimbursement obligations in respect of a
Letter of Credit as to which the Administrative Agent has previously received
for its account or the account of the Letter of Credit Issuer payment from a
Revolving Lender, the Administrative Agent shall pay to such Revolving Lender
such Revolving Lender’s Pro Rata Share of such payment from such Borrower.  Each such payment shall be made by the
Administrative Agent on the next Settlement Date.

 

161

 

(iii)                               Documentation.  Upon the request of any Revolving Lender, the
Letter of Credit Issuer shall furnish to either of the Agents and such Agent
shall furnish to such Revolving Lender copies of any Letter of Credit,
reimbursement agreements executed in connection therewith, applications for any
Letter of Credit, and such other documentation relating to such Letter of
Credit as may reasonably be requested by such Revolving Lender.

 

(iv)                              Obligations
Irrevocable.  The
obligation of each Revolving Lender to make payments to the Administrative
Agent with respect to any Letter of Credit or with respect to its participation
therein or with respect to the Revolving Loans made as a result of a drawing
under a Letter of Credit and the obligation of the Borrowers to make payments
to the Administrative Agent, for the account of the Revolving Lenders, with
respect to any Letter of Credit shall be irrevocable and shall not be subject
to any qualification or exception whatsoever, including any of the following
circumstances:

 

(A)                              any lack of
validity or enforceability of this Agreement or any of the other Loan
Documents;

 

(B)                                the existence
of any claim, setoff, defense, or other right that any Borrower may have at any
time against a beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may be acting),
any Lender, either Agent, the Letter of Credit Issuer, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transactions between such Borrower or any other Person and the
beneficiary named in any Letter of Credit);

 

(C)                                any draft,
certificate, or other document presented under any Letter of Credit proving to
be forged, fraudulent, invalid, or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

 

(D)                               the surrender
or impairment of any security for the performance or observance of any of the
terms of any of the Loan Documents;

 

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

 

(F)                                 the failure of
the Borrowers to satisfy the applicable conditions precedent set forth in Article 9.

 

(v)                                 Claims Against
Letter of Credit Issuer. 
Nothing in this Section 14.16 shall prohibit a Revolving
Lender from seeking to recover any payment made by such Revolving Lender to or
for the benefit of the Letter of Credit Issuer that constituted reimbursement
of (or the funding of its Pro Rata Share of) a drawing under a Letter of Credit,
the honor of which drawing 

 

162

 

constitutes
the gross negligence or willful misconduct of the Letter of Credit Issuer as
determined by a court of competent jurisdiction in a final nonappealable judgment.

 

(c)                                  Recovery or
Avoidance of Payments; Refund of Payments in Error.  In the event any payment by or on behalf of
any Borrower received by the Administrative Agent with respect to any Letter of
Credit and distributed by the Administrative Agent to the Revolving Lenders on
account of their respective participations therein is thereafter set aside,
avoided, or recovered from the Administrative Agent or the Letter of Credit
Issuer in connection with any receivership, liquidation, or bankruptcy
proceeding, the Revolving Lenders shall, upon demand by the Administrative
Agent, pay to the Administrative Agent their respective Pro Rata Shares of such
amount set aside, avoided, or recovered, together with interest at the rate
required to be paid by the Administrative Agent or the Letter of Credit Issuer
upon the amount required to be repaid by it. 
Unless the Administrative Agent receives notice from the Borrowers prior
to the date on which any payment is due to the Revolving Lenders that the
Borrowers will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrowers have made such payment in
full to it on such date in immediately available funds and the Administrative
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Revolving Lender on such due date an amount equal to the
amount then due such Revolving Lender. 
If and to the extent the Borrowers have not made such payment in full to
the Administrative Agent, each Revolving Lender shall repay to the
Administrative Agent on demand such amount distributed to such Revolving
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Revolving Lender until the date
repaid.

 

(d)                                 Indemnification
by the Lenders.  To the
extent not reimbursed by the Borrowers and without limiting the obligations of
the Borrowers hereunder, the Revolving Lenders agree to indemnify the Letter of
Credit Issuer ratably in accordance with their respective Pro Rata Shares for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys’ fees) or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Letter of Credit Issuer in any way relating to or arising
out of any Letter of Credit or the transactions contemplated thereby or any
action taken or omitted by the Letter of Credit Issuer under any Letter of
Credit or any Loan Document in connection therewith; provided that no
Revolving Lender shall be liable for any of the foregoing to the extent
determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the Letter of Credit Issuer’s own gross
negligence or willful misconduct. 
Without limiting the foregoing, each Revolving Lender agrees to
reimburse the Letter of Credit Issuer promptly upon demand for its Pro Rata
Share of any costs or expenses payable by any Borrower to the Letter of Credit
Issuer to the extent that the Letter of Credit Issuer is not promptly
reimbursed for such costs and expenses by a Borrower.  The agreement contained in this Section shall
survive payment in full of all other Obligations.

 

Section 14.17                        Concerning the Collateral and the Related Loan
Documents.  Each Lender authorizes and directs the
Collateral Agent and the Administrative Agent, as applicable, to enter 

 

163

 

into
the other Loan Documents, for the benefit and obligation of the Credit
Providers.  Each Lender agrees that any
action taken by the Collateral Agent, the Administrative Agent, the Majority
Lenders, the Majority Revolving Lenders, the Majority Term Lenders or the
Revolving Lenders, as applicable, in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Collateral
Agent, the Administrative Agent, the Majority Lenders, the Majority Revolving
Lenders,  the Majority Term Lenders or
the Revolving Lenders, as applicable, of their respective powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.  The Lenders acknowledge that the Revolving
Loans (including the Agent Advances and the Non-Ratable Loans), Term Loans,
Bank Products, and all interest, fees, and expenses hereunder constitute one
Debt, secured pari passu by all of the Collateral, subject to the order of
distribution of payments set forth in Section 4.6.

 

Section 14.18                        Field Audit and Examination Reports; Disclaimer by
Revolving Lenders.  By signing or otherwise being bound by this
Agreement, each Revolving Lender:

 

(a)                                  is deemed to
have requested that each Agent furnish such Revolving Lender, promptly after it
becomes available, a copy of each field audit or examination report (each, a “Report”
and collectively, the “Reports”) prepared by or on behalf of such
Agent;

 

(b)                                 expressly
agrees and acknowledges that none of BofA, Wachovia or either of the Agents (i) makes
any representation or warranty as to the accuracy of any Report or (ii) shall
be liable for any information contained in any Report;

 

(c)                                  expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the applicable Agent, BofA or Wachovia, or any other Person
performing any audit or examination will inspect only specific information
regarding the Obligated Parties and will rely significantly upon the Obligated
Parties’ books and records, as well as on representations of the Obligated
Parties’ personnel;

 

(d)                                 agrees to keep
all Reports confidential and strictly for its internal use, and not to
distribute except to its Participants, or use any Report in any other manner;
and

 

(e)                                  without
limiting the generality of any other indemnification provision contained in
this Agreement, agrees:  (i) to hold
each of the Agents and any such other Person preparing a Report harmless from
any action the indemnifying Revolving Lender may take or conclusion the
indemnifying Revolving Lender may reach or draw from any Report in connection
with any loans or other credit accommodations that the indemnifying Revolving
Lender has made or may make to the Obligated Parties, or the indemnifying
Revolving Lender’s participation in, or the indemnifying Revolving Lender’s
purchase of, a loan or loans to the Obligated Parties; and (ii) to pay and
protect, and indemnify, defend, and hold each of the Agents and any such other
Person preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including Attorney Costs) incurred
by such Agent and any

 

164

 

such
other Person preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying
Revolving Lender.

 

Section 14.19                        Relation Among the Lenders. 
The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein
in the case of the Collateral Agent and the Administrative Agent) authorized to
act for, any other Lender.

 

Section 14.20                        Administrative Agent May File Proofs of Claim. 
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition, or other
judicial proceeding relative to any Obligated Party, or any other Person party
to any Loan Document, the Administrative Agent (irrespective of whether the
principal of any Loan or Obligation relating to Letters of Credit shall then be
due and payable as herein expressed or by declaration or otherwise and
irrespective of whether either of the Agents shall have made any demand on the
Obligated Parties or such other Person) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

 

(a)                                  to file and
prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, Obligations relating to Letters of Credit, and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Agents and the Lenders (including any claim for the reasonable compensation,
expenses, disbursements, and advances of the Administrative Agent, the
Collateral Agent and the Lenders, and their respective agents and counsel, and
all other amounts due the Administrative Agent, the Collateral Agent and the
Lenders under Section 3.4 through Section 3.7 and Section 15.7)
allowed in such judicial proceeding; and

 

(b)                                 to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator, or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements, and advances of the Administrative Agent and its agents and
counsel (including Attorney Costs), and any other amounts due to the
Administrative Agent under Section 3.4 through Section 3.7
and Section 15.7.  Nothing
contained in this Section shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment, or composition affecting the
Obligations or the rights of any Lender, or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

 

Section 14.21                        Co-Lead
Arrangers and Syndication Agent.  Each of the
Co-Lead Arrangers and the Syndication Agent, solely in its capacity as such,
shall have no obligations, liabilities, responsibilities or duties under this
Agreement or any other Loan Document. 
Without limiting the foregoing, the Co-Lead Arrangers and the
Syndication Agent shall have no fiduciary relationship with any Credit Provider
and each Credit Provider acknowledges that it has not 

 

165

 

relied,
and will not rely, on either of the Co-Lead Arrangers or the Syndication Agent
in deciding to enter into this Agreement or any other Loan Document or in
taking or not taking action hereunder or thereunder.

 

Section 14.22                        Revolving Loans and Letters of Credit in Excess of
Unused Availability.  Notwithstanding anything herein to the
contrary (including, without limitation, Section 2.2(a)), none of
BofA, any of the other Revolving Lenders, the Administrative Agent or the Letter
of Credit Issuer shall have any liability to the Term Lenders if BofA, any
other Revolving Lender, the Administrative Agent or the Letter of Credit Issuer
makes a Revolving Loan to a Borrower or issues or causes the issuance of a
Letter of Credit for the account of a Borrower in excess of the Unused
Availability or if prior to or after giving effect thereto the Aggregate
Revolver Outstandings exceeds or would exceed the Borrowing Base, in each
instance, so long as immediately after giving effect to the making of such
Revolving Loan or the issuance of such Letter of Credit the Aggregate Revolver
Outstandings do not exceed $350,000,000.

 

ARTICLE
15

 

MISCELLANEOUS

 

Section 15.1                              No Waivers; Cumulative Remedies. 
No failure by the Collateral Agent, the Administrative Agent or any
Lender to exercise any right, remedy, or option under this Agreement, any other
Loan Document, or any present or future supplement hereto or thereto, or in any
other agreement between or among any Obligated Party and the Collateral Agent,
the Administrative Agent and/or any Lender, or delay by the Collateral Agent,
the Administrative Agent or any Lender in exercising the same, will operate as
a waiver thereof, nor shall any single or partial exercise of any right,
remedy, or option hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or option.  Subject to Article 13, no waiver
by the Collateral Agent, the Administrative Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated.  No waiver by the Collateral
Agent, the Administrative Agent or any of the Lenders on any occasion shall
affect or diminish the Collateral Agent’s, the Administrative Agent’s and each
Lender’s rights thereafter to require strict performance by the Obligated
Parties of any provision of this Agreement. 
The Administrative Agent, the Collateral Agent and the Lenders may
proceed directly to collect the Obligations without any prior recourse to the
Collateral.  The Collateral Agent’s, the
Administrative Agent’s and each Lender’s rights under this Agreement will be
cumulative and not exclusive of any other right or remedy that the Collateral
Agent, the Administrative Agent or any Lender may have.

 

Section 15.2                              Severability.  The
illegality or unenforceability of any provision of this Agreement, any other
Loan Document, or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement, any other Loan Document, or any instrument or
agreement required hereunder.

 

Section 15.3                              Governing Law; Choice of Forum; Service of Process.

 

(a)                                  THIS AGREEMENT
SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE 

 

166

 

WITH
THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS, PROVIDED
THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE
EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF
THE UCC) OF THE STATE OF NEW YORK; PROVIDED THAT THE PARTIES HERETO
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)                                 ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE U.S. LOCATED IN THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE OBLIGATED PARTIES, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT,
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. 
EACH OF THE OBLIGATED PARTIES, THE COLLATERAL AGENT, THE ADMINISTRATIVE
AGENT, AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT, OR INSTRUMENT RELATED
HERETO OR THERETO.  NOTWITHSTANDING THE
FOREGOING (i) THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT AND THE
LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
OBLIGATED PARTY OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE
COLLATERAL AGENT, THE ADMINISTRATIVE AGENT OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (ii) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY
APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.

 

(c)                                  EACH OBLIGATED
PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO SUCH OBLIGATED PARTY AT ITS ADDRESS
SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID.  NOTHING CONTAINED
HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.

 

Section 15.4                              Waiver of Jury Trial.  EACH
OBLIGATED PARTY, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, AND EACH OTHER
CREDIT 

 

167

 

PROVIDER
IRREVOCABLY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY
ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT, OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE.  EACH OF THE OBLIGATED
PARTIES, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, AND EACH OTHER CREDIT
PROVIDER AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY.  WITHOUT
LIMITING THE FOREGOING, EACH OF THE PARTIES FURTHER AGREES THAT ITS RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 15.4
AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

Section 15.5                              Survival of Representations and Warranties. 
All representations and warranties of the Obligated Parties contained in
this Agreement and the other Loan Documents shall survive the execution, delivery,
and acceptance thereof by the parties, notwithstanding any investigation by the
Collateral Agent, the Administrative Agent or the Lenders or their respective
agents.

 

Section 15.6                              Other Security and Guaranties. Each of the Collateral Agent and the Administrative
Agent may, without notice or demand and without affecting the Obligated Parties’
obligations hereunder, from time to time (a) take from any Person and hold
collateral (other than the Collateral) for the payment of all or any part
of the Obligations and exchange, enforce, or release such collateral or any
part thereof and (b) accept and hold any endorsement or guaranty of
payment of all or any part of the Obligations and release or substitute any
such endorser or guarantor (other than any Guarantor), or any Person who has
given any Lien in any other collateral as security for the payment of all or
any part of the Obligations, or any other Person in any way obligated to pay
all or any part of the Obligations.

 

Section 15.7                              Fees and Expenses.  Each Borrower
agrees to pay to each of the Collateral Agent and the Administrative Agent, for
its account, on demand, all reasonable costs and expenses that the Collateral
Agent or the Administrative Agent pays or incurs in connection with the
negotiation, preparation, syndication, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan
Documents, including:  (a) Attorney
Costs; (b) costs and expenses (including Attorney Costs) for any
amendment, supplement, waiver, consent, or subsequent closing in connection
with any of the Loan Documents and the transactions contemplated thereby; (c) costs
and expenses of lien and title searches,
title insurance, and environmental audits; (d) taxes, fees, and
other charges for recording the
Mortgages and the Aircraft Mortgage, filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent’s
Liens (including costs and expenses paid or incurred by the Collateral Agent or
the Administrative Agent in connection with the 

 

168

 

consummation
of this Agreement); (e) sums paid or incurred to pay any amount or take
any action required of any Obligated Party under the Loan Documents that such
Obligated Party fails to pay or take; (f) costs of all Inventory
Appraisals, Equipment Appraisals and other appraisals (in each case, whether
conducted by an internal or external appraiser), and costs of two field
examinations and two environmental audits per year (except that after the
occurrence and during the continuation of an Event of Default, the Borrowers
shall pay the costs of all field examinations and environmental audits),
inspections, and verifications of the Collateral and other due diligence, including
travel, lodging, and meals for field examinations and inspections of the
Collateral and the Obligated Parties’ operations by such Agent, plus such Agent’s then customary
charge for field examinations and audits and the preparation of reports thereof
(such charge for each Agent is currently $1,000 per day (or portion thereof) for each Person retained
or employed by such Agent with respect to each field examination or
audit) performed or prepared at any time; and (g) costs and expenses
of forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Clearing Accounts, and costs and expenses of
preserving and protecting the Collateral. 
In addition, the Borrowers agree to pay (i) to the Collateral Agent
and the Administrative Agent, for its benefit, on demand, all costs and
expenses incurred by the Collateral Agent or the Administrative Agent
(including Attorney Costs), and (ii) to the Lenders, for their benefit, on
demand, all reasonable and actual fees, expenses, and disbursements incurred by
(x) the Revolving Lenders for one law firm retained by the Revolving
Lenders and (y) the Term Lenders for one law firm retained by the Term
Lenders, in each case, paid or incurred during the existence of an Event of
Default to obtain payment of the Obligations, enforce the Agent’s Liens, sell
or otherwise realize upon the Collateral, and otherwise enforce the provisions
of the Loan Documents, or to defend any claims made or threatened against the
Collateral Agent, the Administrative Agent or any Lender arising out of the
transactions contemplated hereby (including preparations for and consultations
concerning any such matters).  The
foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers.  All of the foregoing costs and expenses shall
be charged to the Loan Account as Revolving Loans as described in Section 4.5.  The agreements in this Section 15.7
shall survive payment of all other Obligations.

 

Section 15.8                              Notices and Information.

 

(a)                                  Except as
otherwise provided herein, all notices, demands, and requests that any party is
required or elects to give to any other party shall be in writing, or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (i) upon personal delivery thereof,
including, but not limited to, delivery by overnight mail or courier service, (ii) four
days after it shall have been mailed by U.S. mail, first class, certified or
registered, with postage prepaid, or (iii) in the case of notice by such a
telecommunications device, when properly transmitted and confirmed, in each
case addressed to the party to be notified as follows:

 

169

 

If to the Administrative Agent:

 

Bank of America, N.A.

335 Madison Avenue

New York, NY  10017

Attention:  Richard Levenson

Telecopy No.:  (646) 556-0260

 

If to the Collateral Agent:

 

Wachovia Bank, National
Association

2450 Colorado Ave.

Suite 3000 W.

Santa Monica, CA  90404

Attention:  Krista Wade

Telecopy No.:  (704) 715-0343

 

If to any Obligated Party:

 

c/o Ahern Rentals, Inc.

4241 S. Arville Street

Las Vegas, Nevada  89103

Attention:  Chief Financial Officer

Telecopy No.:  (702) 367-7652

 

If to any Lender:

 

to the address of such
Lender set forth on the signature pages of this Agreement or on the most
recent Assignment and Acceptance to which such Lender is a party,

 

or
to such other address as each party may designate for itself by like notice.

 

(b)                                 The Obligated
Parties hereby agree that any notice required or permitted to be given by the
Agents hereunder may be given by either of the Agents.

 

(c)                                  Loan Documents
may be transmitted and/or signed by facsimile or electronic transmission (in
pdf format).  The effectiveness of any
such Loan Documents and signatures shall, subject to Requirements of Law, have
the same force and effect as manually signed originals and shall be binding on
the Obligated Parties, the Agents, the Lenders, and all other parties to the
Loan Documents.  Either of the Agents may
also require that any such documents and signatures be confirmed by a manually
signed original thereof, provided that the failure to request or deliver
the same shall not limit the effectiveness of any facsimile or electronic
transmission document or signature.

 

(d)                                 The Agents and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic notices in lieu of written Notices of Borrowing and Notices 

 

170

 

of
Continuation/Conversion) purportedly given by or on behalf of any Obligated
Party even if (i) such notices were not made in a manner specified herein,
(ii) such notices were incomplete or were not preceded or followed by any
other form of notice specified herein, or (iii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof.  The Obligated Parties shall indemnify each
Credit Provider from all losses, costs, expenses, and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
an Obligated Party.  All telephonic
notices to and other communications with the Collateral Agent or the
Administrative Agent may be recorded by such Agent, and each of the parties
hereto hereby consents to such recording.

 

(e)                                  Notwithstanding
anything in this Agreement or any other Loan Document to the contrary, each
Obligated Party agrees to use its best efforts to provide all Communications
(as defined below) to each of the Agents in an electronic/soft medium in a
format acceptable to the Collateral Agent or the Administrative Agent, as
applicable, to the e-mail addresses specified by it to Ahern from time to
time.  As used in this Section 15.8
“Communications” means all information, documents and other materials that any
Obligated Party is obligated to furnish to the Collateral Agent or the
Administrative Agent pursuant to this Agreement or any other Loan Document,
including all notices, requests, Financial Statements, financial and other
reports, certificates, and other information materials, but excluding
any such information, documents, or materials that (i) relate to any
request for a Borrowing or a continuation or a conversion of any existing Loan
(including any election of an interest rate or the duration of an Interest
Period), (ii) relate to the payment of any principal or other amount due
under this Agreement or any other Loan Document prior to the scheduled date
therefor, (iii) provide notice of any Default or Event of Default; or (iv) are
required to be delivered to satisfy any condition set forth in Section 9.1
or Section 9.2.  The
Collateral Agent and the Administrative Agent may, in its sole discretion,
require that the Obligated Parties provide any of the information provided in
electronic/soft medium also in written or printed form.

 

(f)                                    Each Obligated
Party and each Credit Provider agrees that each of the Agents may make the Loan
Documents and the Communications, together with other information relating to
the Obligated Parties and their business and assets, including Borrowing Base
Certificates, appraisals, and Reports, (all such other information being
referred to collectively in this Section 15.8 as the “Other
Information”), available to the Credit Providers by posting on Intralinks
or a substantially similar electronic transmission system (each such system
being referred to in this Section 15.8 as a “Platform”).  Each Obligated Party (i) acknowledges
that the distribution of material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks
associated with such distribution and (ii) agrees that posting of the
Communications and Other Information to a Platform will not in any event
constitute a breach of the confidentiality provisions of Section 15.16.

 

(g)                                 EACH PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE.”  THE
AGENT-RELATED PERSONS DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF ANY LOAN
DOCUMENTS, COMMUNICATIONS, OR 

 

171

 

OTHER
INFORMATION POSTED BY ANY AGENT-RELATED PERSON TO ANY PLATFORM, OR THE ADEQUACY
OF ANY PLATFORM, AND THE AGENT-RELATED PERSONS AND THE OTHER CREDIT PROVIDERS
EXPRESSLY DISCLAIM ANY LIABILITY FOR ERRORS OR OMISSIONS IN ANY LOAN DOCUMENTS,
COMMUNICATIONS, OR OTHER INFORMATION AS POSTED ON ANY PLATFORM.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR
STATUTORY (INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS) IS MADE BY THE AGENT-RELATED PERSONS OR ANY OTHER
CREDIT PROVIDER IN CONNECTION WITH THE LOAN DOCUMENTS, COMMUNICATIONS, OR OTHER
INFORMATION OR ANY PLATFORM.  IN NO EVENT
SHALL ANY AGENT-RELATED PERSON OR ANY OTHER CREDIT PROVIDER HAVE ANY LIABILITY
TO ANY OBLIGATED PARTY OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND (INCLUDING
DIRECT OR INDIRECT DAMAGES, SPECIAL DAMAGES, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOSSES OR EXPENSES (WHETHER IN CONTRACT, TORT OR OTHERWISE)) ARISING
OUT OF ANY PERSON’S TRANSMISSION OF LOAN DOCUMENTS, COMMUNICATIONS, OR OTHER
INFORMATION THROUGH THE INTERNET, OR POSTING OR FAILURE TO POST ANY LOAN
DOCUMENTS, COMMUNICATIONS, OR OTHER INFORMATION ON ANY PLATFORM, EXCEPT TO THE
EXTENT DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH PERSON’S OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.

 

(h)                                 Subject to the
last sentence of clause (e) preceding, the Collateral Agent
and the Administrative Agent each agrees that the receipt of the Communications
by it at its e-mail address specified to the Obligated Parties from time to
time shall constitute effective delivery of the Communications to the
Collateral Agent or the Administrative Agent, as the case may be, for purposes
of this Agreement.  Each Lender agrees
that notice to it (as provided in the following sentence) specifying that the
Communications and the Other Information have been posted to a Platform shall
constitute effective delivery of the Communications and the Other Information
to such Lender for purposes of this Agreement. 
Each Lender agrees (i) to notify the Collateral Agent and the
Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail addresses to
which the foregoing notice may be sent by electronic transmission and (ii) that
the foregoing notice may be sent to such e-mail address.

 

(i)                                     Notwithstanding
anything in this Agreement or any other Loan Document to the contrary, each
Agent agrees that any notice of a Default delivered by such Agent to any
Obligated Party shall be effected through personal delivery (including, but not
limited to, delivery by overnight mail or courier service), registered mail or
by a telecommunications device.

 

172

 

Section 15.9                              Waiver of Notices.  Unless
otherwise expressly provided herein, each Obligated Party waives presentment,
notice of demand or dishonor, protest as to any instrument, notice of intent to
accelerate any of the Obligations, and notice of acceleration of any of the
Obligations, as well as any and all other notices to which it might otherwise
be entitled.  No notice to or demand on
any Obligated Party that the Collateral Agent, the Administrative Agent or any
Lender may elect to give shall entitle any Obligated Party to any or further
notice or demand in the same, similar, or other circumstances.

 

Section 15.10                        Binding Effect.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the respective representatives, successors, and assigns of the parties hereto; provided
that no interest herein may be assigned by any Obligated Party without the
prior written consent of the Agents and the Lenders.

 

Section 15.11                        Indemnity of the Credit Providers by the Obligated
Parties.

 

(a)                                  EACH OBLIGATED
PARTY AGREES TO DEFEND, INDEMNIFY, AND HOLD THE AGENT-RELATED PERSONS, EACH
CREDIT PROVIDER, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
COUNSEL, REPRESENTATIVES, AGENTS, AND ATTORNEYS-IN-FACT (EACH, AN “INDEMNIFIED
PERSON”) HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES,
EXPENSES, AND DISBURSEMENTS (INCLUDING ATTORNEY COSTS AND REASONABLE LEGAL
COSTS AND EXPENSES OF THE OTHER CREDIT PROVIDERS) OF ANY KIND OR NATURE
WHATSOEVER THAT MAY AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT
OF THE LOANS AND THE TERMINATION, RESIGNATION, OR REPLACEMENT OF THE COLLATERAL
AGENT OR THE ADMINISTRATIVE AGENT OR REPLACEMENT OF ANY OTHER CREDIT
PROVIDER) BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH PERSON
IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR ANY OTHER AGREEMENT, INSTRUMENT, OR DOCUMENT CONTEMPLATED BY OR
REFERRED TO HEREIN OR THEREIN, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY INDEMNIFIED PERSON UNDER OR IN
CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH RESPECT TO ANY
INVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING ANY BANKRUPTCY, INSOLVENCY,
OR OTHER PROCEEDING, AND ANY APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE LOANS, OR THE USE OF THE PROCEEDS
OF THE LOANS, WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO (ALL THE
FOREGOING, COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED
THAT NO OBLIGATED PARTY SHALL HAVE ANY OBLIGATION HEREUNDER TO ANY INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES TO THE EXTENT DETERMINED IN A
FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH INDEMNIFIED PERSON’S OWN GROSS NEGLIGENCE OR WILLFUL 

 

173

 

MISCONDUCT.  THE AGREEMENTS IN THIS SECTION 15.11(a) SHALL
SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.

 

(b)                                 EACH OBLIGATED
PARTY AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT AND THE LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY OR
INDIRECTLY ARISING OUT OF THE USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE OF A
HAZARDOUS SUBSTANCE RELATING TO ANY OBLIGATED PARTY’S OPERATIONS, BUSINESS, OR
PROPERTY.  THIS INDEMNITY WILL APPLY
WHETHER THE HAZARDOUS SUBSTANCE IS ON, UNDER, OR ABOUT ANY OBLIGATED PARTY’S
PROPERTY OR OPERATIONS OR PROPERTY LEASED TO ANY OBLIGATED PARTY.  THE INDEMNITY INCLUDES BUT IS NOT LIMITED TO
ATTORNEY COSTS AND REASONABLE LEGAL COSTS AND EXPENSES OF THE CREDIT PROVIDERS
(INCLUDING ENVIRONMENTAL ASSESSMENTS). 
THE INDEMNITY EXTENDS TO THE AGENTS AND THE OTHER CREDIT PROVIDERS,
THEIR AFFILIATES, SUBSIDIARIES, AND ALL OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, SUCCESSORS, ATTORNEYS, AND ASSIGNS.  AS USED IN THIS CLAUSE (b), “HAZARDOUS
SUBSTANCES” MEANS ANY SUBSTANCE, MATERIAL, OR WASTE THAT IS OR BECOMES
DESIGNATED OR REGULATED AS “TOXIC,” “HAZARDOUS,” “POLLUTANT,” OR “CONTAMINANT”
OR A SIMILAR DESIGNATION OR REGULATION UNDER ANY FEDERAL, STATE, OR LOCAL LAW
(WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR OTHERWISE) OR JUDICIAL
OR ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING PETROLEUM OR NATURAL
GAS.  THIS INDEMNITY WILL SURVIVE
REPAYMENT OF ALL OTHER OBLIGATIONS.

 

Section 15.12                          Limitation of Liability. 
NO CLAIM MAY BE MADE BY ANY OBLIGATED PARTY, THE COLLATERAL AGENT,
THE ADMINISTRATIVE AGENT, ANY OTHER CREDIT PROVIDER, OR ANY OTHER PERSON
AGAINST ANY OBLIGATED PARTY, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT,
ANY OTHER CREDIT PROVIDER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE,
COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND
EACH OBLIGATED PARTY, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, AND EACH
OTHER CREDIT PROVIDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY
CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.

 

Section 15.13                        Final Agreement.  This
Agreement and the other Loan Documents are intended by the Obligated Parties,
the Agents, and the Lenders to be the final, complete, and

 

174

 

exclusive
expression of the agreement between them. 
This Agreement and the other Loan Documents supersede any and all prior
oral or written agreements relating to the subject matter hereof and thereof
(including, without limitation, the terms of the Original Loan and Security
Agreement and the First Amended and Restated Loan and Security Agreement).  No modification, rescission, waiver, release,
or amendment of any provision of this Agreement or any other Loan Document
shall be made, except in accordance with Article 13.

 

Section 15.14                          Counterparts. 
This Agreement may be executed in any number of counterparts, and by the
Collateral Agent, the Administrative Agent, each Lender, and each Obligated
Party in separate counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.  Signature pages to this Agreement may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the
same document and a telecopy or electronic transmission (in pdf format) of any
such executed signature page shall be valid as an original.

 

Section 15.15                          Right of Setoff. 
In addition to any rights and remedies of the Lenders provided by law,
if an Event of Default exists or any or all of the Loans have been accelerated,
each Lender is authorized at any time and from time to time, without prior
notice to any Obligated Party, any such notice being waived by the Obligated
Parties to the fullest extent permitted by law, to setoff and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of any Obligated
Party against any and all Obligations owing to such Lender, now or hereafter
existing, irrespective of whether or not either Agent or such Lender shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured. 
Each Lender agrees promptly to notify the Obligated Parties and the
Agents after any such setoff and application made by such Lender; provided
that the failure to give such notice shall not affect the validity of such
setoff and application.  NOTWITHSTANDING
THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SETOFF, BANKER’S LIEN, OR
THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY OBLIGATED PARTY HELD OR
MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE MAJORITY
REVOLVING LENDERS (OR AFTER THE REVOLVING FACILITY PAYMENT IN FULL, THE
MAJORITY TERM LENDERS).

 

Section 15.16                          Confidentiality.

 

(a)           Each Obligated Party
hereby consents that the Collateral Agent, the Administrative Agent and each
Lender may issue and disseminate to the public general information describing
the credit accommodation entered into pursuant to this Agreement, including the
name and address of the Obligated Parties and a general description of the
Obligated Parties’ business and may use each Obligated Party’s name in
advertising and other promotional material.

 

(b)           Each Lender
severally agrees to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information identified as “confidential”
or “secret” by any Obligated Party and provided to the Collateral Agent, the
Administrative Agent or such Lender by or on behalf of any Obligated Party
under 

 

175

 

this
Agreement or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other
than as a result of disclosure by the Collateral Agent, the Administrative
Agent or a Lender or (ii) was or becomes available on a nonconfidential
basis from a source other than an Obligated Party, provided that such
source is not bound by a confidentiality agreement with an Obligated Party
known to the Collateral Agent, the Administrative Agent or such Lender; provided,
however, that the Collateral Agent, the Administrative Agent and any
Lender may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Collateral Agent, the
Administrative Agent or such Lender is subject or in connection with an
examination of the Collateral Agent, the Administrative Agent or such Lender by
any such Governmental Authority, (B) pursuant to subpoena or other court
process, (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law, (D) to the extent reasonably required
in connection with any litigation or proceeding (including any bankruptcy
proceeding) to which the Collateral Agent, the Administrative Agent, any
Lender or any of their respective Affiliates may be party, (E) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document, (F) to the Collateral Agent’s,
the Administrative Agent’s or such Lender’s independent auditors, accountants, attorneys,
and other professional advisors, (G) to any prospective Participant or
Assignee, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the
same extent required of the Agents and the Lenders hereunder, (H) as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which any Obligated Party is party or is deemed
party with the Collateral Agent, the Administrative Agent or such Lender, and (I) to
its Affiliates.  Any Person required to
maintain the confidentiality of information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord to its own confidential information.

 

Section 15.17                          USA Patriot Act Notice. 
Each Lender and each Agent (for itself and not on behalf of any Lender)
hereby notifies the Obligated Parties that pursuant to the requirements of the
Patriot Act, such Credit Provider is required to obtain, verify, and record
information that identifies the Obligated Parties, which information includes
the name and address of the Obligated Parties and other information that will
allow such Credit Provider to identify the Obligated Parties in accordance with
the Patriot Act.

 

Section 15.18                          Joint and Several Liability. 
All Loans, upon funding, shall be deemed to be jointly funded to and
received by the Borrowers.  Each Borrower
jointly and severally agrees to pay, and shall be jointly and severally liable
under this Agreement for, all Obligations, regardless of the manner or amount
in which proceeds of Loans are used, allocated, shared, or disbursed by or
among the Borrowers themselves, or the manner in which either Agent and/or any
Lender accounts for such Loans or other extensions of credit on its books and
records.  Each Borrower shall be liable
for all amounts due to either of the Agents and/or any Lender under this Agreement,
regardless of which Borrower actually receives Loans or other extensions of
credit hereunder or the amount of such Loans and extensions of credit received
or the manner in which such Agent and/or such Lender accounts for such Loans or
other extensions of credit on its books and records.  Each Borrower’s Obligations with respect to
Loans and other extensions of credit 

 

176

 

made
to it, and such Borrower’s Obligations arising as a result of the joint and
several liability of such Borrower hereunder, with respect to Loans made to the
other Borrowers hereunder, shall be separate and distinct obligations, but all
such Obligations shall be primary obligations of such Borrower.  The Borrowers acknowledge and expressly agree
with each Agent and each Lender that the joint and several liability of each
Borrower is required solely as a condition to, and is given solely as
inducement for and in consideration of, credit or accommodations extended or to
be extended under the Loan Documents to any or all of the other Borrowers and
is not required or given as a condition of extensions of credit to such
Borrower.  Each Borrower’s obligations
under this Agreement and as an obligor under a Guaranty Agreement shall be separate
and distinct obligations.  Each Borrower’s
obligations under this Agreement shall, to the fullest extent permitted by law,
be unconditional irrespective of (a) the validity or enforceability,
avoidance, or subordination of any of the Obligations of any other Borrower or
of any promissory note or other document evidencing all or any part of the
Obligations of any other Borrower, (b) the absence of any attempt to
collect any of the Obligations from any other Borrower, any Guarantor, or any
other security therefor, or the absence of any other action to enforce the
same, (c) the waiver, consent, extension, forbearance, or granting of any
indulgence by the Administrative Agent, the Collateral Agent and/or any Lender
with respect to any provision of any instrument evidencing any of the
Obligations of any other Borrower or Guarantor, or any part thereof, or any
other agreement now or hereafter executed by any other Borrower or Guarantor
and delivered to the Administrative Agent, the Collateral Agent and/or any
Lender, (d) the failure by the Collateral Agent, the Administrative Agent
and/or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for any
of the Obligations of any other Borrower or Guarantor, (e) the
Administrative Agent’s, the Collateral Agent’s and/or any Lender’s election, in
any proceeding instituted under the Bankruptcy Code, or the application of Section 1111(b)(2) of
the Bankruptcy Code, (f) any borrowing or grant of a security interest by
any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code, (g) the disallowance of all or any portion of the
Administrative Agent’s, the Collateral Agent’s and/or any Lender’s claim(s) for
the repayment of any of the Obligations of any other Borrower under Section 502
of the Bankruptcy Code, or (h) any other circumstances that might
constitute a legal or equitable discharge or defense of a Guarantor or of any
other Borrower.  With respect to any
Borrower’s Obligations arising as a result of the joint and several liability
of the Borrowers hereunder with respect to Loans or other extensions of credit
made to any of the other Borrowers hereunder, such Borrower waives, until the
Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy that
the Collateral Agent, the Administrative Agent and/or any Lender now has or may
hereafter have against any other Borrower, any endorser or any Guarantor of all
or any part of the Obligations, and any benefit of, and any right to
participate in, any security or collateral given to the Administrative Agent,
the Collateral Agent and/or any other Credit Provider to secure payment of the Obligations
or any other liability of any Borrower to any other Credit Provider.  Upon any Event of Default, either of the
Agents may proceed directly and at once, without notice, against any Borrower
to collect and recover the full amount, or any portion of the Obligations,
without first proceeding against any other Borrower or any other Person, or
against any security or collateral for any of the Obligations.  Each Borrower consents and agrees that
neither the Collateral Agent nor the Administrative Agent shall be under any
obligation to marshal any assets in favor of any Borrower or against or in
payment of any or all of the Obligations.

 

177

 

Section 15.19                          Contribution and Indemnification among
the Obligated Parties.  Each Borrower is obligated to
repay the Obligations as joint and several obligors under this Agreement.  To the extent that any Borrower shall, under
this Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower and to the extent any
other Obligated Party makes any transfer (including any payment, grant,
guaranty, or granting of a Lien) pursuant to this Agreement (any such payment
or transfer being referred to herein as an “Accommodation Payment”),
then the Obligated Party making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other
Obligated Parties in an amount, for each of such other Obligated Parties, equal
to a fraction of such Accommodation Payment, the numerator of which fraction is
such other Obligated Party’s Allocable Amount and the denominator of which is
the sum of the Allocable Amounts of all of the Obligated Parties.  As of any date of determination, the “Allocable
Amount” of each Obligated Party shall be equal to the maximum amount of
liability for Accommodation Payments that could be asserted against such
Obligated Party hereunder without (a) rendering such Obligated Party “insolvent”
within the meaning of Section 101 (32) of the Bankruptcy Code, Section 2
of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the
Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such
Obligated Party with unreasonably small capital or assets, within the meaning
of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5
of the UFCA, or (c) leaving such Obligated Party unable to pay its debts
as they become due within the meaning of Section 548 of the Bankruptcy
Code or Section 4 of the UFTA, or Section 5 of the UFCA.  All rights and claims of contribution,
indemnification, and reimbursement under this Section shall be subordinate
in right of payment to the prior payment in full of the Obligations.  The provisions of this Section shall, to
the extent expressly inconsistent with any provision in any Loan Document,
supersede such inconsistent provision. 
Notwithstanding the foregoing, no provision of this Agreement shall
limit the liability or obligation of any Person (the “subject Person”)
with respect to any indebtedness, liabilities, or obligations of any Subsidiary
of the subject Person.

 

Section 15.20                          Agency of Ahern for Each Other Obligated
Party.  Each of the Obligated Parties (excluding
Ahern) irrevocably appoints Ahern as its agent for all purposes relevant to
this Agreement, including the giving and receipt of notices and execution and
delivery of all documents, instruments, and certificates contemplated herein
(including execution and delivery to the Agents of Borrowing Base Certificates)
and all modifications hereto.  Any
acknowledgment, consent, direction, certification, or other action that might
otherwise be valid or effective only if given or taken by all or any of the
Obligated Parties or acting singly, shall be valid and effective if given or
taken only by Ahern, whether or not any of the other Obligated Parties joins
therein, and the Agents and the Lenders shall have no duty or obligation to
make further inquiry with respect to the authority of Ahern under this Section 15.20,
provided that nothing in this Section 15.20 shall limit the
effectiveness of, or the right of the Agents and the Lenders to rely upon, any
notice, document, instrument, certificate, acknowledgment, consent, direction,
certification, or other action delivered by any Obligated Party pursuant to
this Agreement.

 

Section 15.21                          Additional Borrowers and Guarantors. 
Addition of any Person as a Borrower or a Guarantor to this Agreement is
subject to approval of all of the Revolving Lenders (in the case of a Borrower)
or the Majority Revolving Lenders (in the case of a Guarantor), and 

 

178

 

may be
conditioned upon such requirements as they may determine in their discretion,
including (a) the furnishing of such financial and other information as
any such Lender may reasonably request, (b) approval by all appropriate
approval authorities of each such Lender, and (c) execution and delivery
by the Obligated Parties, such Person, the Agents and the Majority Revolving
Lenders or other requisite Lenders (as appropriate) of such agreements and
other documentation (including a Guaranty Agreement and an amendment to this
Agreement or any other Loan Document), and the furnishing by such Person or any
of the Obligated Parties of such certificates, opinions, and other
documentation, as either of the Agents or any such Lender may reasonably
request.  No Lender shall have any
obligation to approve any such Person for addition as a party to this
Agreement.

 

Section 15.22                          Express Waivers By the Obligated Parties
In Respect of Cross Guaranties and Cross Collateralization. 
Each Obligated Party agrees as follows:

 

(a)           Each Obligated Party
hereby waives:  (i) notice of
acceptance of this Agreement; (ii) notice of the making of any Loans, the
issuance of any Letter of Credit, or any other financial accommodations made or
extended under the Loan Documents or the creation or existence of any
Obligations; (iii) notice of the amount of the Obligations, subject,
however, to such Obligated Party’s right to make inquiry of the Administrative
Agent to ascertain the amount of the Obligations at any reasonable time; (iv) notice
of any adverse change in the financial condition of any other Obligated Party
or of any other fact that might increase such Obligated Party’s risk with
respect to such other Obligated Party under the Loan Documents; (v) notice
of presentment for payment, demand, protest, and notice thereof as to any promissory
notes or other instruments among the Loan Documents; and (vii) all other
notices (except if such notice is specifically required to be given to such
Obligated Party hereunder or under any of the other Loan Documents to which
such Obligated Party is a party) and demands to which such Obligated Party
might otherwise be entitled.

 

(b)           Each Obligated Party
hereby waives the right by statute or otherwise to require any Credit Provider
to institute suit against any other Obligated Party or to exhaust any rights
and remedies that any Credit Provider has or may have against any other
Obligated Party.  Each Obligated Party
further waives any defense arising by reason of any disability or other defense
of any other Obligated Party (other than the defense that the Obligations shall
have been fully and finally performed and indefeasibly paid) or by reason of
the cessation from any cause whatsoever of the liability of any such Obligated
Party in respect thereof.

 

(c)           Each Obligated Party
hereby waives and agrees not to assert against any Credit Provider:  (i) any defense (legal or equitable),
setoff, counterclaim, or claim that such Obligated Party may now or at any time
hereafter have against any other Obligated Party or any other party liable
under any of the Loan Documents; (ii) any defense, setoff, counterclaim,
or claim of any kind or nature available to any other Obligated Party against
any Credit Provider, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity, or enforceability of any of the
Obligations or any security therefor; (iii) any right or defense arising
by reason of any claim or defense based upon an election of remedies by any
Credit Provider under any Requirement of 

 

179

 

Law;
or (iv) the benefit of any statute of limitations affecting any other
Obligated Party’s liability hereunder.

 

(d)           Each Obligated Party
consents and agrees that, without notice to or by such Obligated Party and
without affecting or impairing the obligations of such Obligated Party
hereunder, each of the Agents may (subject to any requirement for consent of
any of the Lenders to the extent required by this Agreement), by action or
inaction:  (i) compromise, settle,
extend the duration or the time for the payment of, or discharge the
performance of, or may refuse to or otherwise not enforce the Loan Documents; (ii) release
all or any one or more parties to any one or more of the Loan Documents or
grant other indulgences to any other Obligated Party in respect thereof; (iii) amend
or modify in any manner and at any time (or from time to time) any of the Loan
Documents; or (iv) release or substitute any Person liable for payment of
any of the Obligations, or enforce, exchange, release, or waive any security
for any of the Obligations or any Guaranty of the Obligations.

 

Each Obligated Party represents and warrants that
such Obligated Party is currently informed of the financial condition of all
other Obligated Parties and all other circumstances that a diligent inquiry
would reveal and that bear upon the risk of nonpayment of the Obligations.  Each Obligated Party further represents and
warrants that such Obligated Party has read and understands the terms and
conditions of the Loan Documents.  Each
Obligated Party agrees that no Credit Provider has any responsibility to inform
any Obligated Party of the financial condition of any other Obligated Party or
of any other circumstances that bear upon the risk of nonpayment or
nonperformance of the Obligations.

 

Section 15.23                          Intercreditor Agreement. 
EACH CREDIT PROVIDER HEREBY GRANTS TO THE COLLATERAL AGENT ALL REQUISITE
AUTHORITY TO ENTER INTO OR OTHERWISE BECOME BOUND BY THE INTERCREDITOR
AGREEMENT (AND AN INTERCREDITOR AGREEMENT ENTERED INTO IN CONNECTION WITH ANY
REFINANCING SECOND LIEN DEBT) AND TO BIND THE CREDIT PROVIDERS THERETO BY THE
COLLATERAL AGENT’S ENTERING INTO OR OTHERWISE BECOMING BOUND THEREBY, AND NO
FURTHER CONSENT OR APPROVAL ON THE PART OF THE CREDIT PROVIDERS IS OR WILL
BE REQUIRED IN CONNECTION WITH THE PERFORMANCE OF THE INTERCREDITOR AGREEMENT
(OR ANY INTERCREDITOR AGREEMENT ENTERED INTO IN CONNECTION WITH ANY REFINANCING
SECOND LIEN DEBT).

 

Section 15.24                          Consent to Amendment of Certain Loan
Documents.  Each of the Lenders and the Agents hereby
consents to the amendments to the other Loan Documents contemplated under Section 9.1.

 

180

 

Section 15.25                          Term Loan Obligations. 
The parties hereto acknowledge that the Term Loan Obligations are not
contractually subordinate in right of payment to the Revolving Obligations and
that the Credit Providers have merely agreed in this Agreement as to the order
of distribution of Collateral and proceeds of Collateral to the various
Obligations.

 

Section 15.26                          Retention of Consultant. 
In the event that Unused Availability shall fall below $15,000,000,
either Agent may, or at the direction of the Majority Revolving Lenders the
Administrative Agent shall, retain (either directly or through its counsel or
other representative) and thereafter maintain for the benefit of the Revolving
Lenders a consultant reasonably satisfactory to the Agents for
contingency/bankruptcy planning and restructuring opportunities (the expense of
which the Borrowers agree to pay); provided that in addition to (and not
in lieu of) retaining and maintaining the foregoing consultant for such
purposes, either Agent may, or at the direction of the Majority Revolving
Lenders the Administrative Agent shall, retain (either directly or through its
counsel or other representative) and thereafter maintain a consultant for the
benefit of the Revolving Lenders reasonably satisfactory to the Agents to
consult with the Agents and the Revolving Lenders on a limited scope reasonably
determined by the Administrative Agent (the expense of which the Borrowers also
agree to pay).  Any written information
provided by such consultant to the Agents or the Revolving Lenders that the
Agents and their respective counsel determine are not protected by the attorney-client
privilege as to the Revolving Lenders shall be provided to any Term Lender upon
its written request to both Agents.

 

Section 15.27                          Reaffirmation and Grant of Security
Interests.

 

(a)           Each Obligated Party
hereby acknowledges that it has (i) guarantied the Obligations (other
than, in the case of a Borrower, such Borrower’s Obligations) and (ii) created,
under Section 10.1 and under certain of the other Loan Documents to
which it is a party, Liens in favor of the Collateral Agent, for the benefit of
the Credit Providers, on certain Collateral to secure its Obligations
hereunder.  Each Obligated Party hereby
acknowledges that it has reviewed the terms and provisions of this Agreement
and consents to the amendment and restatement of the First Amended and Restated
Loan and Security Agreement effected pursuant to this Agreement.  Each Obligated Party hereby (i) confirms
that each Loan Document to which it is a party or is otherwise bound continues
to be in full force and effect as amended hereby (if applicable) and all
Collateral encumbered thereby will continue to secure, to the fullest extent
possible in accordance with the Loan Documents and subject to the last sentence
of Section 10.1, the payment and performance of the Obligations,
including without limitation the payment and performance of all such
Obligations, which are joint and several obligations of each Obligated Party
now or hereafter existing, and (ii) subject to the last sentence of Section 10.1,
grants to the Collateral Agent, for the benefit of the Credit Providers, a
continuing lien on and security interest in and to such Obligated Party’s
right, title and interest in, to and under all Collateral as collateral
security for the prompt payment and performance in full when due of the Obligations
(whether at stated maturity, by acceleration or otherwise).

 

(b)           Each Obligated Party
acknowledges and agrees that any of the Loan Documents to which it is a party
or otherwise bound shall continue in full force and effect 

 

181

 

as
amended hereby (if applicable) and that all of its Obligations thereunder shall
be valid and enforceable and shall not be impaired or limited by the execution
or effectiveness of the amendment and restatement of the First Amended and
Restated Loan and Security Agreement. 
Each Obligated Party represents and warrants that all representations
and warranties contained in the Loan Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Closing Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete
in all material respects on and as of such earlier date.

 

Section 15.28         Amendment
and Restatement.

 

It is the intention of each of the parties hereto
that the First Amended and Restated Loan and Security Agreement be amended and
restated so as to preserve the perfection and priority of all security
interests securing indebtedness and obligations of the Obligated Parties under
the First Amended and Restated Loan and Security Agreement and that all
indebtedness and obligations of the Borrowers and the other Obligated Parties
hereunder and thereunder shall be equally and ratably secured by the Loan
Documents (except as otherwise provided in the last sentence of Section 10.1)
and that this Agreement does not constitute a novation of the obligations and
liabilities of the Obligated Parties existing under the First Amended and
Restated Loan and Security Agreement. 
The parties hereto further acknowledge and agree that this Agreement
constitutes an amendment of the First Amended and Restated Loan and Security
Agreement made under and in accordance with the terms of Section 13.1 of
the First Amended and Restated Loan and Security Agreement.  In addition, unless specifically amended
hereby, each of the Loan Documents and the Exhibits and Schedules to the First
Amended and Restated Loan and Security Agreement shall continue in full force
and effect and that, from and after the Closing Date, all references to the “Loan
Agreement” contained therein shall be deemed to refer to this Agreement.

 

[Remainder
of page intentionally left blank]

 

182

 

IN WITNESS WHEREOF, the parties have entered into
this Agreement on the date first above written.

 

	
   

  	
  OBLIGATED
  PARTIES:

  
	
   

  	
   

  
	
   

  	
  AHERN
  RENTALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Howard L. Brown

  
	
   

  	
  Name:

  	
  Howard
  L. Brown

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

183

 

	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N. A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert Scalzitti

  
	
   

  	
  Name:

  	
  Robert
  Scalzitti

  
	
   

  	
  Title:

  	
  Vice President

  

 

184

 

	
   

  	
  COLLATERAL
  AGENT:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL 

  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Bradford

  
	
   

  	
  Name:

  	
  Mark
  Bradford

  
	
   

  	
  Title:

  	
  Vice President

  

 

185

 

	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert Scalzitti

  
	
   

  	
  Name:

  	
  Robert
  Scalzitti

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank
  of America, N.A.

  
	
   

  	
  335
  Madison Avenue

  
	
   

  	
  New
  York, New York 10017

  
	
   

  	
  Attn:
  Richard Levenson

  
	
   

  	
  Telecopy: (646) 556-0260

  

 

186

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL 

  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Bradford

  
	
   

  	
  Name:

  	
  Mark
  Bradford

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Wachovia
  Bank, National Association

  
	
   

  	
  2450
  Colorado Ave.

  
	
   

  	
  Suite 3000
  W.

  
	
   

  	
  Santa
  Monica, CA 90404

  
	
   

  	
  Attn:
  Krista Wade

  
	
   

  	
  Telecopy: (704) 715-0343

  

 

187

 

	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lance Shaffer

  
	
   

  	
  Name:

  	
  Lance
  Shaffer

  
	
   

  	
  Title:

  	
  V.P.

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  
	
   

  	
  1675
  Broadway, 2nd Floor

  
	
   

  	
  Denver,
  Colorado 80202

  
	
   

  	
  Attn:
  Lance Schaffer

  
	
   

  	
  Telecopy: (720) 904-4370

  

 

188

 

	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thanwantie Somar

  
	
   

  	
  Name:

  	
  Thanwantie
  Somar

  
	
   

  	
  Title:

  	
  AVP

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  PNC
  Bank, National Association

  
	
   

  	
  340
  Madison Avenue

  
	
   

  	
  New
  York, New York 10173

  
	
   

  	
  Attn:
  Anne Somar

  
	
   

  	
  Telecopy: (212) 752-6097

  

 

189

 

	
   

  	
  COMERICA
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chap Lancaster

  
	
   

  	
  Name:

  	
  Chap
  Lancaster

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Comerica
  Bank

  
	
   

  	
  Heavy
  Equipment Group

  
	
   

  	
  1717
  Main Street, 4th Floor

  
	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
  Attn:
  Chad Lancaster

  
	
   

  	
  Telecopy: (214) 462-4250

  

 

190

 

	
   

  	
  BANK
  OF ARIZONA N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Rodgers

  
	
   

  	
  Name:

  	
  Michael
  Rodgers

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank
  of Arizona N.A.

  
	
   

  	
  Construction &
  Industrial Equipment Lending Group

  
	
   

  	
  5956
  Sherry Lane

  
	
   

  	
  Suite 1100

  
	
   

  	
  Dallas,
  Texas 75225

  
	
   

  	
  Attn:
  Michael Rodgers

  
	
   

  	
  Telecopy: (214) 987-8892

  

 

191

 

	
   

  	
  WELLS
  FARGO FOOTHILL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Bradford

  
	
   

  	
  Name:

  	
  Mark
  Bradford

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Wells
  Fargo Foothill, LLC

  
	
   

  	
  2450
  Colorado Ave.

  
	
   

  	
  Suite 3000
  W.

  
	
   

  	
  Santa
  Monica, California 90404

  
	
   

  	
  Attn:
  Krista Wade

  
	
   

  	
  Telecopy: (866) 615-7803

  

 

192

 

	
   

  	
  CAPITAL
  ONE LEVERAGE FINANCE 

  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nick Malatestinic

  
	
   

  	
  Name:

  	
  Nick
  Malatestinic

  
	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Capital
  One Leverage Finance Corp.

  
	
   

  	
  265
  Broadhollow Road

  
	
   

  	
  Melville,
  N.Y. 11746

  
	
   

  	
  Attn:
  Robert Wallace

  
	
   

  	
  Telecopy:
  (631) 531-2791

  

 

193

 

	
   

  	
  REGIONS
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Louis McKinley

  
	
   

  	
  Name:

  	
  Louis
  McKinley

  
	
   

  	
  Title:

  	
  Attorney in Fact

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Regions
  Bank

  
	
   

  	
  599
  Lexington Avenue

  
	
   

  	
  New
  York, New York 10022

  
	
   

  	
  Attn:
  Louis McKinley

  
	
   

  	
  Telecopy:
  (212) 935-7458

  

 

194

 

	
   

  	
  BANK
  MIDWEST, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank
  Midwest, N.A.

  
	
   

  	
  1111
  Main, Suite 1600

  
	
   

  	
  Kansas
  City, MO 64105

  
	
   

  	
  Attn:
  Matthew Mayer

  
	
   

  	
  Telecopy:
  (816) 412-2065

  

 

195

 

	
   

  	
  LIBERTY
  HARBOR MASTER FUND I, 

  L.P.

  
	
   

  	
  By:
  Liberty Harbor I GP, LLC, its general 

  partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan
  Lamm

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  Liberty
  Harbor Master Fund I, L.P.

  
	
   

  	
  32
  Old Slip

  
	
   

  	
  New
  York, New York 10005

  
	
   

  	
  Attn:
  Thomas Secor

  
	
   

  	
  Telecopy: (212) 428-1505

  

 

196

 

	
   

  	
  GOLDMAN SACHS HIGH
  YIELD FUND

  
	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan
  Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

	
   

  	
  GOLDMAN
  SACHS COLLECTIVE TRUST HIGH YIELD IMPLEMENTATION VEHICLE

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

	
   

  	
  THE
  REGENTS OF THE UNIVERSITY OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
				

 

 

	
   

  	
  GOLDMAN
  SACHS PALMETTO STATE  CREDIT FUND, L.P.

  
	
   

  
	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

	
   

  	
  GOLDMAN
  SACHS HIGH YIELD FUND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  295
  Chipeta Way 4th Floor

  
	
   

  	
  Salt
  Lake City, Utah 84108

  
	
   

  	
  Attn:
   Craig D. Gill

  
	
   

  	
  gsam-asset-servicing@gs.com
  

  
	
   

  	
  Telecopy:
   (212) 428-9406

  

 

 

	
   

  	
  GOLDMAN
  SACHS COLLECTIVE  TRUST HIGH YIELD IMPLEMENTATION
  VEHICLE

  
	
   

  
	
   

  	
   

  
	
   

  	
  By:
   Goldman Sachs Asset Management, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  295
  Chipeta Way 4th Floor

  
	
   

  	
  Salt
  Lake City, Utah 84108

  
	
   

  	
  Attn:
  Craig D. Gill

  
	
   

  	
  gsam-asset-servicing@gs.com

  
	
   

  	
  Telecopy:
  (212) 428-9406

  

 

 

	
   

  	
  THE
  REGENTS OF THE UNIVERSITY OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  Goldman
  Sachs Asset Management, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  295
  Chipeta Way 4th Floor

  
	
   

  	
  Salt
  Lake City, Utah 84108

  
	
   

  	
  Attn:
  Craig D. Gill

  
	
   

  	
  gsam-asset-servicing@gs.com
  

  
	
   

  	
  Telecopy:
  (212) 428-9406

  

 

 

	
   

  	
  GOLDMAN
  SACHS PALMETTO STATE CREDIT FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  Goldman Sachs Asset Management, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Lamm

  
	
   

  	
  Name:

  	
  Jonathan Lamm

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  295
  Chipeta Way 4th Floor 

  
	
   

  	
  Salt
  Lake City, Utah 84108

  
	
   

  	
  Attn:
  Craig D. Gill

  
	
   

  	
  gsam-asset-servicing@gs.com
  

  
	
   

  	
  Telecopy:
  (212) 428-9406Exhibit 10.9.1

 

2010 Senior Management Incentive Bonus Plan

 

Participants:          Marc D. Grodman, MD, CEO

Howard
Dubinett, COO

Charles
T. Todd, Sr. VP Marketing & Sales

Amar
Kamath, VP Marketing

Warren
Erdmann, VP Operations

Nick
Cetani, VP Laboratory Director

Ron Rayot, VP

Chris Smith, VP

Sam
Singer, CFO

Sally
Howlett, VP Billing

Nick
Papazicos, VP Financial Operations

James
Weisberger, MD, CMO

Maryanne
Amato, Director, Genpath

Cory
Fishkin, COO CareEvolve

John Compton, CSO, GeneDx

Sherri Bale, CCO GeneDx

Richard
L. Faherty, CIO

 

Proposed
Plan:

 

A.                                                          The Senior
Management Incentive Bonus Plan (the “Plan”) will be based on two (2) separate
financial calculations.  The first
formula will be based on “Operating Income” as a percent of “Net Revenues”
pursuant to the Consolidated Financial Statements of the Company.  The second formula will be based on the
percentage increase of “Operating Income” from fiscal 2009 to fiscal 2010
pursuant to the Consolidated Financial Statements of the Company.

 

B.                                                            There will be
one class of participation.

 

C.                                                            Calculations
for the first portion of the program will be as follows:

 

1.               Operating
Income shall consist of the Total Operating Income (hereinafter referred to as “TOI”)
for the Entire Company including all divisions and subsidiaries.

2.              In the event that TOI shall
be equal to or greater than 10.75%, then and in such event, the participants
will be entitled to a bonus based on the participant’s annual gross wages
including any CPI adjustment paid to him or her in fiscal 2010 exclusive of any
bonus, option exercise, auto or airplane usage expense charge-back, or other
unearned revenue (“Annual Gross Wages”), pursuant to the following schedule:

 

	
  If TOI is greater than

  	
   

  	
  and less than

  	
   

  	
  Percent Bonus

  	
   

  
	
  10.74

  	
  %

  	
  11.26

  	
  %

  	
  4

  	
  %

  
	
  11.24

  	
  %

  	
  11.76

  	
  %

  	
  6

  	
  %

  
	
  11.74

  	
  %

  	
  12.26

  	
  %

  	
  8

  	
  %

  
	
  12.24

  	
  %

  	
  12.76

  	
  %

  	
  10

  	
  %

  

 

3.               The maximum
bonus to be paid under this portion of the program will be 10% of the Annual
Gross Wages paid to the participant in fiscal 2010 regardless of TOI.

 

D.                                                           Calculations
for the second portion of the program will be as follows:

 

1.                                       Operating
Income will consist of Operating Income before interest and taxes for the
Entire Company including all divisions and subsidiaries.

2.                                       Percentage
increase on a year over year basis will be determined by subtracting the
Operating Income as reported in the Company’s Consolidated Financial Statements
for the 2009 fiscal year (“Base Year”) from the Operating Income as reported in
the Company’s Consolidated Financial Statements for the 2010 fiscal year (“Current
Year”).  This will result in a difference
(“Diff”).  The Diff will be divided by
the Base Year to determine the percentage of change (“PC”) in Operating Income between
the Base Year and the Current Year.

3.                                       In the event
that the PC is positive (an increase) and equal to or greater than 25%, then
and in such event, each participant will be entitled to a bonus based on the
participant’s Annual Gross Wages pursuant to the following schedule:

 

	
  If PC is greater than

  	
   

  	
  and less than

  	
   

  	
  Percent Bonus

  	
   

  
	
  24.99

  	
  %

  	
  30.01

  	
  %

  	
  6

  	
  %

  
	
  29.99

  	
  %

  	
  35.01

  	
  %

  	
  9

  	
  %

  
	
  34.99

  	
  %

  	
  40.01

  	
  %

  	
  12

  	
  %

  
	
  39.99

  	
  %

  	
  N/A

  	
   

  	
  15

  	
  %

  

 

4.                                       The maximum
bonus to be paid under this portion of the program will be 15% of Annual Gross
Wages regardless of Operating Income.

 

E.                                            The two
portions shall be calculated separately and shall not be dependent on each
other.  Participants may earn a bonus
from either or both financial calculations. 
Regardless, however, of the Company achievements, the maximum bonus to
be paid under the Plan will be 25% of Annual Gross Wages in fiscal 2010.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]