Document:

exv10w1

 

Exhibit 10.1              

EXECUTION COPY

$150,000,000

TERM CREDIT AGREEMENT

DATED AS OF AUGUST 18, 2006

AMONG

NEWPARK RESOURCES, INC., A DELAWARE CORPORATION,

AS BORROWER,

THE LOAN PARTIES,

THE LENDERS FROM TIME TO TIME PARTIES HERETO ,

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT

AND

WILMINGTON TRUST COMPANY

AS COLLATERAL AGENT

 

J.P. MORGAN SECURITIES INC.,

AS SOLE LEAD ARRANGER AND SOLE BOOKRUNNER

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II THE FACILITY
	 	 	17	 
	 
	 	 	 	 
	2.1. The Facility
	 	 	17	 
	2.2. Ratable Loans
	 	 	18	 
	2.3. Repayment of Loans
	 	 	18	 
	2.4. Minimum Amount of Each Advance
	 	 	18	 
	2.5. Funding Account
	 	 	18	 
	2.6. Reliance Upon Authority; No Liability
	 	 	18	 
	2.7. Conversion and Continuation of Outstanding Advances
	 	 	18	 
	2.8. Telephonic Notices
	 	 	19	 
	2.9. Notification of Advances, Interest Rates and Repayments
	 	 	19	 
	2.10. Fees
	 	 	19	 
	2.11. Interest Rates
	 	 	19	 
	2.12. Eurodollar Advances Post Default; Default Rates
	 	 	20	 
	2.13. Interest Payment Dates; Interest and Fee Basis
	 	 	20	 
	2.14. Voluntary Prepayments
	 	 	20	 
	2.15. Mandatory Prepayments
	 	 	21	 
	2.16. Termination of Commitments and the Facility
	 	 	22	 
	2.17. Method of Payment
	 	 	23	 
	2.18. Apportionment, Application, and Reversal of Payments
	 	 	23	 
	2.19. [Intentionally Omitted.]
	 	 	23	 
	2.20. Indemnity for Returned Payments
	 	 	23	 
	2.21. Noteless Agreement; Evidence of Indebtedness
	 	 	24	 
	2.22. Lending Installations
	 	 	24	 
	2.23. Non-Receipt of Funds by the Administrative Agent
	 	 	24	 
	 
	 	 	 	 
	ARTICLE III YIELD PROTECTION; TAXES
	 	 	25	 
	 
	 	 	 	 
	3.1. Yield Protection
	 	 	25	 
	3.2. Changes in Capital Adequacy Regulations
	 	 	26	 
	3.3. Availability of Types of Advances
	 	 	26	 
	3.4. Funding Indemnification
	 	 	26	 
	3.5. Taxes
	 	 	26	 
	3.6. Lender Statements; Survival of Indemnity
	 	 	28	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT
	 	 	29	 
	 
	 	 	 	 
	4.1. Effectiveness
	 	 	29	 
	4.2. Credit Extension
	 	 	30	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	31	 
	 
	 	 	 	 
	5.1. Existence and Standing
	 	 	31	 
	5.2. Authorization and Validity
	 	 	31	 
	5.3. No Conflict; Government Consent
	 	 	31	 
	5.4. Security Interest in Collateral
	 	 	32	 
	5.5. Financial Statements
	 	 	32	 
	5.6. Material Adverse Change
	 	 	33	 

i

 

	 	 	 	 	 
	 	 	Page
	5.7. Taxes
	 	 	33	 
	5.8. Litigation and Contingent Obligations
	 	 	33	 
	5.9. Capitalization and Subsidiaries
	 	 	33	 
	5.10. ERISA
	 	 	33	 
	5.11. Accuracy of Information
	 	 	33	 
	5.12. Regulation U
	 	 	34	 
	5.13. No Defaults, etc
	 	 	34	 
	5.14. Compliance With Laws
	 	 	34	 
	5.15. Ownership of Properties
	 	 	34	 
	5.16. Environmental Matters
	 	 	34	 
	5.17. Investment Company Act
	 	 	34	 
	5.18. Bank Accounts
	 	 	34	 
	5.19. Intellectual Property Rights
	 	 	34	 
	5.20. Solvency
	 	 	35	 
	5.21. Post-Retirement Benefits
	 	 	35	 
	5.22. Common Enterprise
	 	 	35	 
	5.23. Labor Disputes
	 	 	35	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS
	 	 	36	 
	 
	 	 	 	 
	6.1. Financial and Collateral Reporting
	 	 	36	 
	6.2. Use of Proceeds
	 	 	37	 
	6.3. Notices
	 	 	37	 
	6.4. Conduct of Business
	 	 	38	 
	6.5. Taxes
	 	 	39	 
	6.6. Payment of Indebtedness and Other Liabilities
	 	 	39	 
	6.7. Insurance
	 	 	39	 
	6.8. Compliance with Laws
	 	 	40	 
	6.9. Maintenance of Properties and Intellectual Property Rights
	 	 	40	 
	6.10. Inspection
	 	 	40	 
	6.11. Additional Real Property Requirements
	 	 	41	 
	6.12. Collateral Access Agreements and Real Estate Purchases
	 	 	41	 
	6.13. Deposit Account Control Agreements
	 	 	41	 
	6.14. Additional Collateral; Further Assurances
	 	 	41	 
	6.15. Dividends
	 	 	42	 
	6.16. Indebtedness
	 	 	43	 
	6.17. Merger
	 	 	45	 
	6.18. Sale of Assets
	 	 	45	 
	6.19. Investments and Acquisitions
	 	 	45	 
	6.20. Liens
	 	 	46	 
	6.21. Affiliate Transactions
	 	 	48	 
	6.22. Amendments to Agreements
	 	 	48	 
	6.23. Prepayment of Indebtedness; Senior Subordinated Debt
	 	 	48	 
	6.24. Financial Contracts
	 	 	49	 
	6.25. Financial Covenants
	 	 	49	 
	6.26. Rate Management Transactions
	 	 	49	 
	 
	 	 	 	 
	ARTICLE VII DEFAULTS
	 	 	49	 
	 
	 	 	 	 
	ARTICLE VIII REMEDIES; WAIVERS AND AMENDMENTS
	 	 	52	 
	 
	 	 	 	 
	8.1. Remedies
	 	 	52	 
	8.2. Waivers by Loan Parties
	 	 	53	 

ii

 

	 	 	 	 	 
	 	 	Page
	8.3. Amendments
	 	 	53	 
	8.4. Preservation of Rights
	 	 	55	 
	 
	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS
	 	 	55	 
	 
	 	 	 	 
	9.1. Survival of Representations
	 	 	55	 
	9.2. Governmental Regulation
	 	 	55	 
	9.3. Headings
	 	 	55	 
	9.4. Entire Agreement
	 	 	55	 
	9.5. Several Obligations; Benefits of this Agreement
	 	 	56	 
	9.6. Expenses; Indemnification
	 	 	56	 
	9.7. Numbers of Documents
	 	 	57	 
	9.8. Accounting
	 	 	57	 
	9.9. Severability of Provisions
	 	 	57	 
	9.10. Nonliability of Lenders
	 	 	57	 
	9.11. Confidentiality
	 	 	58	 
	9.12. Nonreliance
	 	 	59	 
	9.13. Disclosure
	 	 	59	 
	9.14. Acknowledgements
	 	 	59	 
	 
	 	 	 	 
	ARTICLE X THE AGENTS
	 	 	59	 
	 
	 	 	 	 
	10.1. Appointment
	 	 	59	 
	10.2. Delegation of Duties
	 	 	59	 
	10.3. Exculpatory Provisions
	 	 	59	 
	10.4. Reliance by Agent
	 	 	60	 
	10.5. Notice of Default
	 	 	60	 
	10.6. Non-Reliance on Agents and Other Lenders
	 	 	60	 
	10.7. Indemnification
	 	 	61	 
	10.8. Administrative Agent in Its Individual Capacity
	 	 	61	 
	10.9. Successor Agent
	 	 	61	 
	10.10. Collateral Agent
	 	 	62	 
	10.11. Execution of Loan Documents
	 	 	62	 
	 
	 	 	 	 
	ARTICLE XI SETOFF; RATABLE PAYMENTS
	 	 	63	 
	 
	 	 	 	 
	11.1. Setoff
	 	 	63	 
	11.2. Ratable Payments
	 	 	63	 
	 
	 	 	 	 
	ARTICLE XII SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS
	 	 	63	 
	 
	 	 	 	 
	ARTICLE XIII NOTICES
	 	 	66	 
	 
	 	 	 	 
	13.1. Notices; Effectiveness; Electronic Communications
	 	 	66	 
	13.2. Change of Address, Etc
	 	 	67	 
	 
	 	 	 	 
	ARTICLE XIV COUNTERPARTS
	 	 	67	 
	 
	 	 	 	 
	ARTICLE XV GUARANTY
	 	 	67	 
	 
	 	 	 	 
	15.1. Guaranty
	 	 	67	 
	15.2. Guaranty of Payment
	 	 	68	 
	15.3. No Discharge or Diminishment of Guaranty
	 	 	68	 
	15.4. Defenses Waived
	 	 	69	 
	15.5. Rights of Subrogation
	 	 	69	 

iii

 

	 	 	 	 	 
	 	 	Page
	15.6. Reinstatement; Stay of Acceleration
	 	 	70	 
	15.7. Information
	 	 	70	 
	15.8. Termination
	 	 	70	 
	15.9. Taxes
	 	 	70	 
	15.10. Severability
	 	 	70	 
	15.11. Contribution
	 	 	71	 
	15.12. Lending Installations
	 	 	71	 
	15.13. Liability Cumulative
	 	 	71	 
	 
	 	 	 	 
	ARTICLE XVI CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL
	 	 	71	 
	 
	 	 	 	 
	16.1. GOVERNING LAW
	 	 	71	 
	16.2. Submission To Jurisdiction; Waivers
	 	 	71	 
	16.3. WAIVERS OF JURY TRIAL
	 	 	72	 

iv

 

	 	 	 
	PRICING SCHEDULE
	 	 
	EXHIBIT A
	 	CONVERSION/CONTINUATION NOTICE
	EXHIBIT B
	 	NOTE
	EXHIBIT C
	 	FORM OF OPINION
	EXHIBIT D
	 	COMPLIANCE CERTIFICATE
	EXHIBIT E
	 	JOINDER AGREEMENT
	EXHIBIT F
	 	ASSIGNMENT AND ASSUMPTION
	SCHEDULE 5.8
	 	LITIGATION AND CONTINGENT OBLIGATIONS
	SCHEDULE 5.9
	 	CAPITALIZATION AND SUBSIDIARIES
	SCHEDULE 5.15
	 	OWNERSHIP OF PROPERTIES
	SCHEDULE 5.23
	 	LABOR MATTERS
	SCHEDULE 6.7
	 	INSURANCE EXCEPTIONS
	SCHEDULE 6.11
	 	MORTGAGED REAL PROPERTY
	SCHEDULE 6.16
	 	INDEBTEDNESS
	SCHEDULE 6.19
	 	OTHER INVESTMENTS
	SCHEDULE 6.20
	 	LIENS

v

 

CREDIT AGREEMENT

     This Credit Agreement, dated as of August 18, 2006, among Newpark Resources, Inc., a Delaware
corporation, as the Company and as the Borrower, the other Loan Parties, the Lenders, JPMorgan
Chase Bank, N.A., as the Administrative Agent and Wilmington Trust Company, as the Collateral
Agent.

RECITALS

     WHEREAS, the Company desires to refinance or repurchase (the “Refinancing”) (a) the
Company’s $125,000,000
85/8% Senior Subordinated Notes, Series A and Series B, each due 2007 and each
as issued under the Indenture (the “Senior Subordinated Notes”) and (b) certain other
Indebtedness and to pay related transaction fees and expenses;

     WHEREAS, in connection with the Refinancing, the Company has requested that the Lenders make
available a senior secured credit facility and the Lenders have agreed to provide such a facility
subject to the terms and conditions set forth herein;

     WHEREAS, the Borrower and the other Loan Parties have agreed to secure all of their
obligations under the Loan Documents by granting to the Collateral Agent, for the benefit of the
Agents and Lenders, a security interest in and lien upon the Collateral as set forth in the
Collateral Documents; and

     WHEREAS, the Guarantors have agreed to guarantee all of the Obligations of the Borrower under
the Loan Documents to the Agents and the Lenders as set forth in the Guaranty;

     NOW, THEREFORE, in consideration of these premises and the terms and conditions set forth in
this Agreement, and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I

DEFINITIONS

     As used in this Agreement:

     “Account” shall have the meaning given to such term in the Security Agreement.

     “Account Debtor” means any Person obligated on an Account.

     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which any Loan Party (a) acquires any going business
or all or substantially all of the assets of any Person, whether through purchase of assets, merger
or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of votes) of the Capital
Stock of a Person which has ordinary voting power for the election of directors or other similar
management personnel of a Person (other than Capital Stock having such power only by reason of the
happening of a contingency) or a majority of the outstanding Capital Stock of a Person.

 

 

     “Administrative Agent” means JPMorgan Chase Bank, N.A., together with its affiliates,
as the administrative agent for the Lenders under this Agreement and the other Loan Documents,
together with any of its successors.

     “Advance” means a borrowing hereunder, (a) made by some or all of the Lenders on the
same Borrowing Date, or (b) converted or continued by the Lenders on the same date of conversion or
continuation, consisting, in either case, of the aggregate amount of the several Loans of the same
Type and, in the case of Eurodollar Loans, for the same Interest Period.

     “Affiliate” of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person. A Person shall be deemed to control
another Person if the controlling Person owns 10% or more of any class of the voting Capital Stock
of the controlled Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.

     “Agents” means, collectively, the Administrative Agent and the Collateral Agent.

     “Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as
reduced from time to time pursuant to the terms hereof, which Aggregate Commitment shall initially
be in the amount of $150,000,000.

     “Aggregate Credit Exposure” means, at any time, the aggregate of the Credit Exposure
of all the Lenders.

     “Agreement” means this Credit Agreement, as it may be amended or modified and in
effect from time to time.

     “Alternate Base Rate” means, for any day, a rate of interest per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the higher of (a) the Prime Rate for such
day or (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.
Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.

     “Applicable Margin” means, with respect to Advances of any Type at any time, the
percentage rate per annum which is applicable at such time with respect to Advances of such Type as
set forth in the Pricing Schedule.

     “Applicable Prepayment Percentage” means, for any Fiscal Year, (i) 50% or (ii) if the
Consolidated Leverage Ratio as of the last day of such Fiscal Year is equal to or less than 2.0 to
1.0 but greater than 1.5 to 1.0, 25% or (iii) if the Consolidated Leverage Ratio as of the last day
of such Fiscal Year is equal to or less than 1.5 to 1.0, 0%.

     “Approved Fund” is defined in subsection (b) of Article XII.

     “Arranger” means JPMorgan Securities, Inc. and its successors, in its capacity as Lead
Arranger and Sole Book Runner.

     “Article” means an article of this Agreement unless another document is specifically
referenced.

     “Assignee” is defined in subsection (b) of Article XII.

2

 

     “Assignment and Assumption” means an Assignment and Assumption, substantially in the
form of Exhibit F.

     “Authorized Officer” means any of John R. Dardenne, Paul L. Howes or Eric M.
Wingerter.

     “Availability Period” means the period from and including the Closing Date to the
earlier of September 29, 2006 and the date of termination of the Commitments.

     “Bankruptcy Code” means Title 11 of the U.S. Code (11 U.S.C. § 101 et
seq.) as amended, reformed, or otherwise modified from time to time, and any rule or
regulation issued thereunder.

     “Borrower” means the Company.

     “Borrowing Date” means the date on which the Loans are made hereunder.

     “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close, provided, that with
respect to notices and determinations in connection with, and payments of principal and interest
on, Eurodollar Advances or Eurodollar Loans, such day is also a day for trading by and between
banks in U.S. dollar deposits in the interbank eurodollar market.

     “Capital Expenditures” means, without duplication, any expenditure or commitment to
expend money for any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared
in accordance with GAAP.

     “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 and any and all warrants, rights
or options to purchase any of the foregoing.

     “Capitalized Lease” of a Person means any lease of Property by such Person as lessee
which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.

     “Capitalized Lease Obligations” of a Person means the aggregate amount of the
obligations of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with GAAP.

     “Cash Equivalent Investments” means (a) short-term obligations of, or fully guaranteed
by, the U.S., (b) commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s, (c)
demand deposit accounts maintained in the ordinary course of business with any domestic office of
any commercial bank organized under the laws of the U.S. or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000, and (d) certificates of
deposit issued by and time deposits with any domestic office of any commercial bank organized under
the laws of the U.S. or any State thereof that has a combined capital and surplus and undivided
profits of not less than $500,000,000; provided that, in each case, the same provides for payment
of both principal and interest (and not principal alone or interest alone) and is not subject to
any contingency regarding the payment of principal or interest.

     “Change in Control” means the acquisition by any Person, or two or more Persons acting
in concert, of beneficial ownership (within the meaning of Rule 13d3 of the Securities and Exchange

3

 

Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares
of voting Capital Stock of the Borrower.

     “Closing Date” means the date of this Agreement.

     “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise
modified from time to time, and any rule or regulation issued thereunder.

     “Collateral” means any and all Property covered by the Collateral Documents and any
and all other Property of any Loan Party, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of the Collateral Agent, on behalf of
itself and the Lenders, to secure the Obligations.

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

     “Collateral Agent” means Wilmington Trust Company, together with its successors and
assigns, as the collateral agent for the benefit of the Agents and Lenders under this Agreement and
the other Loan Documents.

     “Collateral Documents” means, collectively, the Intercreditor Agreement, the Security
Agreement, the Mortgages and any other documents granting a Lien upon the Collateral as security
for payment of the Obligations.

     “Commitment” means, for each Lender, the obligation of such Lender to make Loans to
the Borrower in an aggregate amount not exceeding the amount set forth in the Commitment
Schedule or as set forth in any Assignment and Assumption that has become effective pursuant to
Article XII, as such amount may be modified from time to time pursuant to the terms hereof.
The original aggregate amount of the Commitments is $150,000,000.

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

     “Company” means Newpark Resources, Inc., a Delaware corporation.

     “Compliance Certificate” is defined in Section 6.1(e).

     “Conduit Lender” means any special purpose corporation organized and administered by
any Lender for the purpose of making Loans otherwise required to be made by such Lender and
designated by such Lender in a written instrument; provided, that the designation by any Lender of
a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan
under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to
deliver all consents and waivers required or requested under this Agreement with respect to its
Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any
greater amount pursuant to Section 3.1, 3.2, 3.4, 3.5 or
9.6 than the designating Lender would have been entitled to receive in respect of the
extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment.

4

 

     “Consolidated Capital Expenditures” means, with reference to any period, the Capital
Expenditures of the Company and its Subsidiaries calculated on a consolidated basis for such
period.

     “Consolidated EBITDA” means Consolidated Net Income plus, to the extent
deducted in determining Consolidated Net Income, (a) Consolidated Interest Expense, (b) expense for
taxes paid or accrued, net of tax refunds, (c) depreciation, (d) amortization, (e) any non-cash
Capital Stock based compensation expenses and (f) non-recurring non-cash charges, minus, to
the extent included in Consolidated Net Income, extraordinary gains (as determined in accordance
with GAAP) realized other than in the ordinary course of business, all calculated for the Company
and its Subsidiaries on a consolidated basis.

     “Consolidated Fixed Charges” means, with reference to any period, without duplication,
cash Consolidated Interest Expense, plus prepayments and scheduled principal payments on
Indebtedness (other than with respect to (a) the revolving loans under the Existing Credit
Agreement, (b) the repayment of the Senior Subordinated Notes, (c) the repayment of the RBS
Facility, and (d) the repayment of the Term A Loans and the Supplemental Term Loans (as such terms
are defined in the Existing Credit Agreement)) made during such period, plus expense for
taxes paid in cash, plus dividends or distributions paid in cash, plus repurchases or
redemptions of Capital Stock paid in cash, plus Capitalized Lease payments, plus
cash contributions to any Plan, all calculated for the Company and its Subsidiaries on a
consolidated basis.

     “Consolidated Interest Expense” means, with reference to any period, the interest
expense of the Company and its Subsidiaries calculated on a consolidated basis for such period.

     “Consolidated Leverage Ratio” means the ratio, determined as of the end of each Fiscal
Quarter of the Company for the applicable Test Period, of (a) Consolidated Total Debt on such day
to (b) Consolidated EBITDA for such Test Period.

     “Consolidated Net Income” means, with reference to any period, the net income (or
loss) of the Company and its Subsidiaries calculated on a consolidated basis for such period;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary of the Company or is merged into or consolidated with the Company
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of
the Company) in which the Company or any of its Subsidiaries has an ownership interest, except to
the extent that any such income is actually received by the Company or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of the
Company to the extent that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual obligation (other than
under any Loan Document) or Requirement of Law applicable to such Subsidiary.

     “Consolidated Total Debt” means, at any date, the aggregate principal amount of all
Indebtedness of the Company and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.

     “Contingent Obligation” of a Person means any agreement, undertaking or arrangement by
which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay
contract or the obligations of any such Person as general partner of a partnership with respect to
the liabilities of the partnership.

5

 

     “Controlled Group” means all members of a controlled group of corporations or other
business entities and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code.

     “Conversion/Continuation Notice” is defined in Section 2.7.

     “Copyrights” shall have the meaning given to such term in the Security Agreement.

     “Credit Exposure” means, as to any Lender at any time, an amount equal to (a) until
the Borrowing Date, the amount of its Commitment at such time and (b) thereafter, the aggregate
principal amount of its Loans outstanding at such time.

     “Credit Extension” means the making of an Advance hereunder.

     “Default” means an event which but for the lapse of time or the giving of notice, or
both, would constitute an Event of Default.

     “Deferred Prepayment Date” is defined in Section 2.15(c).

     “Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Agents, among any Loan Party, a banking institution holding such
Loan Party’s funds, and the Collateral Agent with respect to collection and control of all deposits
and balances held in a deposit account maintained by any Loan Party with such banking institution.

     “Document” shall have the meaning given to such term in the Security Agreement.

     “Domestic Subsidiary” means any Subsidiary which is organized under the laws of the
U.S. or any state of the U.S.

     “Effective Date” means the date that the conditions precedent set forth in Article
IV are satisfied.

     “Environmental Laws” means any and all federal, state, local and foreign statutes,
laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental
restrictions relating to (a) the protection of the environment, (b) the effect of the environment
on human health, (c) emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (d) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.

     “Equipment” has the meaning specified in the Security Agreement.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any rule or regulation issued thereunder.

     “Eurodollar Advance” means an Advance which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.

     “Eurodollar Base Rate” means, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan or a Eurodollar Advance, the rate per annum determined on the basis
of the rate for

6

 

deposits in U.S. dollars for a period equal to such Interest Period commencing on the first
day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 a.m., London
time, two Business Days prior to the beginning of such Interest Period. In the event that such
rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the
“Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available
service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the Administrative Agent is offered
U.S. dollar deposits at or about 11:00 a.m., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.

     “Eurodollar Loan” means a Loan which, except as otherwise provided in Section
2.12, bears interest at the applicable Eurodollar Rate.

     “Eurodollar Rate” means, with respect to a Eurodollar Advance or a Eurodollar Loan for
the relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate
applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus (b) the
Applicable Margin.

     “Event of Default” means an event described in Article VII.

     “Excess Cash Flow” means, for any Fiscal Year of the Company, the excess, if any, of
(a) the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) the
amount of all non-cash charges (including depreciation and amortization) deducted in arriving at
such Consolidated Net Income and (iii) the aggregate net amount of non cash loss on the disposition
of property by the Company and its Subsidiaries during such Fiscal Year (other than sales of
inventory in the ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income over (b) the sum, without duplication, of (i) the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Company and its Subsidiaries in cash during such fiscal year on account of Capital
Expenditures (excluding the principal amount of Indebtedness incurred in connection with such
expenditures), (iii) the aggregate amount of all prepayments of the Loans during such Fiscal Year,
(iv) the aggregate amount of all regularly scheduled principal payments of Funded Debt (including
the Loans) of the Company and its Subsidiaries made during such Fiscal Year (other than in respect
of any revolving credit facility to the extent there is not an equivalent permanent reduction in
commitments thereunder) and (v) the aggregate net amount of non-cash gain on the disposition of
property by the Company and its Subsidiaries during such fiscal year (other than sales of inventory
in the ordinary course of business), to the extent included in arriving at such Consolidated Net
Income.

     “Excess Cash Flow Payment” is defined in Section 2.15(c).

     “Excluded Taxes” means, in the case of each Lender or applicable Lending Installation
and each Agent, taxes imposed on its overall revenue or net income, and franchise taxes imposed on
it, by (a) the jurisdiction under the laws of which such Lender or such Agent is incorporated or
organized or (b) the jurisdiction in which the such Agent’s or such Lender’s principal executive
office or such Lender’s applicable Lending Installation is located.

     “Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

     “Existing Credit Agreement” means the Amended and Restated Credit Agreement, dated as
of February 25, 2004, among the Company, each of the other Borrowers party thereto, the Loan
Parties party

7

 

thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A. (successor
by merger to Bank One, N.A. (Main Office Chicago)), for itself, as Lender, and as agent for the
Lenders, as amended or modified and in effect from time to time.

     “Facility” means the term loan facility described in Section 2.1 hereof to be
provided to the Borrower on the terms and conditions set forth in this Agreement.

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

     “Fee Letter” is defined in Section 2.10(b).

     “Fee Payment Date” means (a) the third Business Day following the last day of each
March, June, September and December and (b) any other date on which the Commitments are fully
utilized or terminate.

     “Financial Contract” of a Person means (a) any exchange-traded or over-the-counter
futures, forward, swap or option contract or other financial instrument with similar
characteristics, or (b) any Rate Management Transaction.

     “Fiscal Month” means any of the monthly accounting periods of the Company.

     “Fiscal Quarter” means any of the quarterly accounting periods of the Company, ending
on March 31, June 30, September 30 and December 31 of each year.

     “Fiscal Year” means any of the annual accounting periods of the Company ending on
December 31 of each year.

     “Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each
Fiscal Quarter of the Company for the applicable Test Period, of (a) Consolidated EBITDA
minus the unfinanced portion of Consolidated Capital Expenditures to (b) Consolidated Fixed
Charges, all calculated for the Company and its Subsidiaries on a consolidated basis.

     “Floating Rate” means, for any day, a rate per annum equal to (a) the Alternate Base
Rate for such day plus (b) the Applicable Margin, in each case changing when and as the
Alternate Base Rate changes.

     “Floating Rate Advance” means an Advance which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.

     “Floating Rate Loan” means a Loan which, except as otherwise provided in Section
2.12, bears interest at the Floating Rate.

     “Foreign Intercompany Note” is defined in Section 6.19(g).

     “Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

8

 

     “Form 8-K Filings” means the filings of the Company with the United States Securities
and Exchange Commission on Form 8-K dated April 17, 2006, May 1, 2006 and June 29, 2006.

     “Form 10-K” means, for any Fiscal Year, the Company’s annual report on Form 10-K (or
any successor form) and the accompanying consolidated financial statements filed with the
Securities and Exchange Commission.

     “Form 10-Q” means, for any Fiscal Quarter, the Company’s quarterly report on Form 10-Q
(or any successor form) and the accompanying consolidated financial statements filed with the
Securities and Exchange Commission.

     “Funded Debt” means, as to any Person, all Indebtedness of such Person that matures
more than one year from the date of its creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one year from such date
or arises under a revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including all current
maturities and current sinking fund payments in respect of such Indebtedness whether or not
required to be paid within one year from the date of its creation and, in the case of the Company,
Indebtedness in respect of the Loans, the loans under the Existing Credit Agreement and the Senior
Subordinated Debt.

     “Funding Account” is defined in Section 2.5.

     “GAAP” means generally accepted accounting principles as in effect from time to time,
applied in a manner consistent with that used in preparing the financial statements referred to in
Section 5.5.

     “Guaranteed Obligations” is defined in Section 15.1.

     “Guarantor” means each Loan Party (other than the Borrower), any other Person who
becomes a Loan Party pursuant to a Joinder Agreement, any other Person who executes a Guaranty and
their respective successors and assigns.

     “Guaranty” means Article XV of this Agreement and each separate guaranty, in form and
substance satisfactory to the Administrative Agent, as it may be amended or modified and in effect
from time to time.

     “Indebtedness” of a Person means such Person’s (a) obligations for borrowed money, (b)
obligations representing the deferred purchase price of Property or services (other than accounts
payable arising in the ordinary course of such Person’s business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d) obligations which
are evidenced by notes, acceptances, or other instruments, (e) obligations of such Person to
purchase securities or other Property arising out of or in connection with the sale of the same or
substantially similar securities or Property or any other Off-Balance Sheet Obligations, (f)
Capitalized Lease Obligations, (g) Contingent Obligations for which the underlying transaction
constitutes Indebtedness under this definition, (h) the maximum available stated amount of all
letters of credit or bankers’ acceptances created for the account of such Person and, without
duplication, all reimbursement obligations with respect to letters of credit, (i) Rate Management
Transactions/Net Mark-to-Market Exposure under all Rate Management Transactions, (j) obligations of
such Person under any Sale and Leaseback Transaction, (k) obligations under any liquidated earn-out
and (l) any other obligation for borrowed money or other financial accommodation which in
accordance with GAAP would be shown as a liability on the consolidated balance sheet of such
Person.

9

 

     “Indenture” means that certain Indenture, dated December 17, 1997, among the Company,
certain Subsidiaries of the Company, as guarantors and U.S. Bank, N.A., as trustee, as in effect on
the Effective Date.

     “Intellectual Property Rights” means, with respect to any Person, all of such Person’s
Patents, Copyrights, Trademarks, and Licenses, all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations and continuations-in-part of any of the
foregoing, and all rights to sue for past, present, and future infringement of any of the
foregoing.

     “Intercompany Notes” is defined in Section 6.16(e).

     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the
date hereof, among the Collateral Agent, the agent under the Existing Credit Agreement, the Company
and the other Loan Parties parties thereto, as the same may be amended, restated or otherwise
modified from time to time.

     “Interest Period” means, with respect to any Eurodollar Loan or Eurodollar Advance,
(a) initially, the period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan or Eurodollar Advance and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar Loan or Eurodollar Advance and
ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not later than 11:00 a.m., New York City time, on the date that is
three Business Days prior to the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are subject to the
following:

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

     (ii) the Borrower may not select an Interest Period that would extend beyond the
Maturity Date;

     (iii) 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 a calendar month; and

     (iv) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.

     “Inventory” has the meaning specified in the Security Agreement.

     “Investment” of a Person means any (a) loan, advance, extension of credit (other than
accounts receivable arising in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person, (b) stocks, bonds, mutual funds, partnership interests,
notes, debentures, securities or other Capital Stock owned by such Person, (c) any deposit accounts
and certificate of deposit owned by such Person, and (d) structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.

10

 

     “Joinder Agreement” is defined in Section 6.14(a).

     “Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

     “Lending Installation” means, with respect to a Lender or the Administrative Agent,
the office, branch, subsidiary or Affiliate of such Lender or the Administrative Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.22.

     “Licenses” shall have the meaning given to such term in the Security Agreement.

     “Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).

     “Loan Documents” means this Agreement, any Notes, the Collateral Documents and all
other agreements, instruments, documents and certificates identified in Section 4.1
executed and delivered to, or in favor of, any Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements
and all other written matter whether heretofore, now or hereafter executed by or on behalf of any
Loan Party, or any employee of any Loan Party, and delivered to the any Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other modifications thereto,
and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.

     “Loan Parties” means the Borrower, the Borrower’s Domestic Subsidiaries and any other
Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors
and assigns.

     “Loans” means, with respect to a Lender, such Lender’s loans made pursuant to
Article II (or any conversion or continuation thereof).

     “Material Adverse Effect” means a material adverse effect on (a) the business,
Property, condition (financial or otherwise), results of operations, or prospects of the Borrower
and its Subsidiaries taken as a whole, (b) the Collateral, or the Collateral Agent’s Liens (on
behalf of the Agents and the Lenders) on the Collateral or the priority of such Liens or (c) the
validity or enforceability of any of the Loan Documents or the rights or remedies of the Agents or
the Lenders thereunder.

     “Material Indebtedness” means Indebtedness in an outstanding principal amount of
$5,000,000 or more in the aggregate (or the equivalent thereof in any currency other than U.S.
dollars).

     “Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or which provides for the incurrence of Indebtedness in an
amount which would constitute Material Indebtedness (whether or not an amount of Indebtedness
constituting Material Indebtedness is outstanding thereunder).

     “Maturity Date” means August 18, 2011.

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

11

 

     “Mortgages” means any mortgage, deed of trust or other agreement which conveys or
evidences a Lien in favor of the Collateral Agent, for the benefit of the Agents and the Lenders,
on real Property of any Loan Party, including any amendment, modification or supplement thereto.

     “Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Company or any member of the Controlled Group is a
party to which more than one employer is obligated to make contributions.

     “Net Cash Proceeds” means, if in connection with (a) an asset disposition, cash
proceeds net of (i) commissions and other reasonable and customary transaction costs, fees and
expenses properly attributable to such transaction and payable by such Loan Party in connection
therewith (in each case, paid to non-Affiliates), (ii) transfer taxes, (iii) amounts payable to
holders of senior Liens on such asset (to the extent such Liens constitute Permitted Liens
hereunder), if any, and (iv) an appropriate reserve for income taxes in accordance with GAAP
established in connection therewith, (b) the issuance or incurrence of Indebtedness, cash proceeds
net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in connection therewith or, (c)
an equity issuance, cash proceeds net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith.

     “Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the
excess (if any) of all unrealized losses over all unrealized profits of such Person arising from
Rate Management Transactions. As used in this definition, “unrealized losses” means the fair
market value of the cost to such Person of replacing such Rate Management Transaction as of the
date of determination (assuming the Rate Management Transaction were to be terminated as of that
date), and “unrealized profits” means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such Rate Management
Transaction were to be terminated as of that date).

     “Ninety-Day Average Availability” means, for any day, the sum of the Availability (as
such term is defined in the Existing Credit Agreement) for each of the immediately preceding 90
days divided by 90.

     “Non-Consenting Lender” is defined in Section 8.3(e).

     “Non-U.S. Lender” is defined in Section 3.5(d).

     “Notes” is defined in Section 2.21(d).

     “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Loan Parties to the Lenders or to any Lender, any Agent or any indemnified party
arising under the Loan Documents.

     “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any Sale and Leaseback Transaction which is not a
Capitalized Lease, (c) any indebtedness, liability or obligation under any so-called “synthetic
lease” transaction entered into by such Person, or (d) any indebtedness, liability or obligation
arising with respect to any other transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the balance sheets of such Person,
but excluding from this clause (d) Operating Leases.

12

 

     “Operating Lease” of a Person means any lease of Property (other than a Capitalized
Lease) by such Person as lessee which has an original term (including any required renewals and any
renewals effective at the option of the lessor) of one year or more.

     “Other Taxes” is defined in Section 3.5(b).

     “Participant” is defined in subsection (c) of Article XII.

     “Patents” shall have the meaning given to such term in the Security Agreement.

     “Payment Date” means (a) with respect to interest payments due on any Floating Rate
Loan, the last day of each March, June, September and December to occur while such Loan is
outstanding and the Maturity Date and (b) with respect to interest payments due on any Eurodollar
Loan, (i) the last day of the applicable Interest Period, and (ii) in the case of any Interest
Period in excess of three months, the day which is three months after the first day of such
Interest Period, and (iii) the Maturity Date.

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

     “Permitted Acquisitions” means Acquisitions, in each case, to the extent (a) the
cumulative aggregate cash consideration (defined as total net cash to be paid, plus Indebtedness
and Contingent Obligations to be assumed in connection with such Acquisition, plus the Acquisition
costs associated with such Acquisitions) is less than $30,000,000 through the Maturity Date and (b)
(i) the acquisition target is in the same or similar line of business as the Company and its
Subsidiaries; (ii) the Company or a Domestic Subsidiary is the surviving entity holding one hundred
percent (100%) of the Capital Stock in the Acquisition target; (iii) no Event of Default or Default
shall exist before or after such Acquisition; (iv) such Acquisition shall be completed in
accordance with applicable laws; (v) the Administrative Agent shall be provided with reasonably
satisfactory opinions with regard to such Acquisition as it may reasonably request; (vi) the terms
of Section 6.14(a) or 6.14(c) as the case may be, are satisfied; (vii) the board of
directors or similar governing body of the Acquisition target approves the Acquisition; and (viii)
both before and (on a pro-forma basis) after giving effect to such Acquisition, (A) the Company’s
Fixed Charge Coverage Ratio shall be equal to or greater than 1.15 to 1.0 and (B) the Company shall
be in compliance with Section 6.25.2.

     “Permitted Liens” is defined in Section 6.20.

     “Person” means any natural person, corporation, firm, joint venture, partnership,
limited liability company, association, enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or instrumentality thereof.

     “Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code as to which a Loan
Party or any member of the Controlled Group may have any liability.

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

     “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase
Bank, N.A. in connection with extensions of credit to debtors).

     “Pro Forma Balance Sheet” is defined in Section 5.5(b).

13

 

     “Projections” is defined in Section 6.1(d).

     “Property” of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

     “Pro Rata Share” means, with respect to any Lender, at any time, the ratio of such
Lender’s Credit Exposure at such time to the Aggregate Credit Exposure of all Lenders at such time.

     “Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered by any Loan Party which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination thereof, whether linked to
one or more interest rates, foreign currencies, commodity prices, equity prices or other financial
measures.

     “RBS Facility” means the $15,000,000 Term Loan Facility among Excalibar Minerals Inc.,
Excalibar Minerals of LA, L.L.C., Newpark Holdings, Inc., Newpark Resources, Inc., Newpark Texas,
L.L.C. and RBS Lombard, Inc.

     “Register” is defined in subsection (b) of Article XII.

     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.

     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve
System.

     “Related Parties” is defined in Section 10.3.

     “Reportable Event” means a reportable event as defined in Section 4043 of ERISA and
the regulations issued under such section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within thirty days of the occurrence of such event, provided however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

     “Required Availability” means (a) for any prepayment under Section 2.15(c)
with regard to the Excess Cash Flow for the 2006 Fiscal Year, $15,000,000 and (b) for any
prepayment under Section 2.15(c) with regard to the Excess Cash Flow for any Fiscal Year
thereafter, $20,000,000.

     “Required Lenders” means Lenders in the aggregate holding at least a majority of the
Aggregate Credit Exposure.

14

 

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

     “Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate
reserve requirement (including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on Eurocurrency liabilities.

     “S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

     “Sale and Leaseback Transaction” means any sale or other transfer of Property by any
Person with the intent to lease such Property as lessee.

     “Schedule” refers to a specific schedule to this Agreement, unless another document is
specifically referenced.

     “Scheduled Prepayment Date” is defined in Section 2.15(c).

     “Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

     “Security Agreement” means that certain Pledge and Security Agreement, dated as of the
date hereof, between the Loan Parties and the Collateral Agent, for the benefit of the Agents and
the Lenders, and any other pledge or security agreement entered into, after the Closing Date by any
other Loan Party (as required by this Agreement or any other Loan Document), or any other Person,
as the same may be amended, restated or otherwise modified from time to time.

     “Senior Subordinated Debt” means (a) the Indebtedness under the Senior Subordinated
Notes and (b) any unsecured notes or debentures of the Company, subordinated to the prior payment
of the Loans and the other obligations under the Loan Documents, that may be issued by the Company
in order to refinance the Senior Subordinated Notes and/or prepay the Loans, provided that (i) the
scheduled amortization and the final maturity shall be at least one year beyond the corresponding
amortization dates and the Maturity Date for the Loans, respectively, and the subordination
provisions shall be at least as favorable to the Lenders as those in the Senior Subordinated Notes,
and the other terms and conditions thereof (including, without limitation, the covenant and event
of default provisions thereof but excluding the interest rate and any call protection provisions)
taken as a whole shall be at least as favorable to the Company and the Lenders as those in the
Senior Subordinated Notes, (ii) no covenant contained in this Agreement or any of the other Loan
Documents would be violated on the proposed issuance date after giving effect to (A) the issuance
of such notes or debentures, (B) the payment of all issuance costs, commissions, discounts,
redemption premiums and other fees and charges associated therewith, (C) the use of proceeds
thereof and (D) the redemption, repayment, retirement and repurchase of all Indebtedness of the
Company and its Subsidiaries to be redeemed, repaid or repurchased in connection therewith and
(iii) substantially final drafts of the documentation governing any such notes or debentures,
showing the terms thereof, shall have been furnished to the Lenders at least 10 days prior to the
date of issuance of such notes or debentures.

     “Senior Subordinated Notes” is defined in the Recitals.

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     “Single Employer Plan” means a Plan maintained by the Company or any member of the
Controlled Group for employees of the Company or any member of the Controlled Group.

     “Specified Adjustments” means the possible adjustments described in the Form 8-K
Filings.

     “Specified Defaults” means the defaults and events of default that have occurred, may
occur, or which are alleged to have occurred under the Senior Subordinated Notes as a result,
directly or indirectly, of the failure of the Company to timely make the 2005 Filings.

     “Subsidiary” of a Person means, any corporation, partnership, limited liability
company, association, joint venture or similar business organization more than 50% of the
outstanding Capital Stock having ordinary voting power of which shall at the time be owned or
controlled by such Person. Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of a Borrower.

     “Substantial Portion” means Property which represents more than 10% of the
consolidated assets of the Company and its Subsidiaries or property which is responsible for more
than 10% of the consolidated net sales or of the consolidated net income of the Company and its
Subsidiaries, in each case, as would be shown in the consolidated financial statements of the
Company and its Subsidiaries as at the beginning of the twelve-month period ending with the month
in which such determination is made (or if financial statements have not been delivered hereunder
for that month which begins the twelve-month period, then the financial statements delivered
hereunder for the quarter ending immediately prior to that month).

     “Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but
excluding Excluded Taxes and Other Taxes.

     “Test Period” means, as of the last day of each Fiscal Quarter, the four (4)
consecutive Fiscal Quarters then ending.

     “Trademarks” shall have the meaning given to such term in the Security Agreement.

     “2005 Filings” means the filing by the Company with the Securities and Exchange
Commission of the audited financial statements for Fiscal Year ended December 31, 2005 and the
other normal quarterly and annual financial statements following December 31, 2005 that are delayed
until the filing of such statements for the 2005 Fiscal Year.

     “Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a
Eurodollar Advance and with respect to any Loan, its nature as a Floating Rate Loan or a Eurodollar
Loan.

     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Texas or any other state the laws of which are required to be applied in connection with the issue
of perfection of security interests.

     “Unfunded Liabilities” means the amount (if any) by which the present value of all
vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value
of all such Plan assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans using PBGC actuarial assumptions for single employer plan
terminations.

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     “Unused Commitment Fee” is defined in Section 2.10(a).

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

     “Wholly-Owned Subsidiary” of a Person means, any Subsidiary all of the outstanding
Capital Stock of which shall at the time be owned or controlled, directly or indirectly, by such
Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person.

     “WTC Fee Schedule” is defined in Section 2.10(c).

     The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.

ARTICLE II

THE FACILITY

     2.1. The Facility. (a) Each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make Loans to the Borrower as set forth below, provided that, after
giving effect to the making of each such Loan, such Lender’s Credit Exposure shall not exceed its
Commitment; provided further, that the Aggregate Credit Exposure shall not exceed the Aggregate
Commitment. The Loans may from time to time be Eurodollar Loans or Floating Rate Loans as
determined by the Borrower and notified to Administrative Agent in accordance with Sections
2.1(c) and 2.7.

     (b) The Loans shall be made in one single drawing during the Availability Period. The
conversion or continuation of a Borrowing under Section 2.7 shall not be considered the making of a
Loan for purposes of this restriction.

     (c) To request the Loans, the Borrower shall give the Administrative Agent irrevocable notice
(which notice must be received by the Administrative Agent prior to 11:00 a.m., New York City time,
(a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Floating Rate Loans.
Such notice shall specify the following information:

	 	(i)	 	the aggregate amount of the requested Loans;
	 
	 	(ii)	 	the date of such Loans, which shall be a
Business Day;
	 
	 	(iii)	 	whether such Loans are to be Floating Rate
Loans or Eurodollar Loans or a combination; and
	 
	 	(iv)	 	in the case of Eurodollar Loans, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term “Interest Period”.

     If no election as to the Type of the Loans is specified, then the requested Loans shall be a
Floating Rate Loans. If no Interest Period is specified with respect to any requested Eurodollar
Loan, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of such notice in accordance with this Section, the Administrative Agent
shall advise

17

 

each Lender of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested borrowing.

     2.2. Ratable Loans. Each Advance made in connection with a Loan shall consist of
Loans made by each Lender in an amount equal to such Lender’s Pro Rata Share.

     2.3. Repayment of Loans. The Loan of each Lender shall be repaid in consecutive
quarterly installments, each of which shall be in an amount equal to such Lender’s Pro Rata Share
of the aggregate installment payable on such date, payable on the last Business Day of March, June,
September and December each year, commencing on December 31, 2006 in an amount equal to 0.25% of
the aggregate initial principal amount of the Loans, with the balance payable in full on the
Maturity Date. Amounts repaid on account of the Loans may not be reborrowed.

     2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the minimum
amount of $5,000,000 and in multiples of $1,000,000 if in excess thereof. Floating Rate Advances
may be in any amount.

     2.5. Funding Account. The Borrower shall deliver to the Administrative Agent, on the
Effective Date, a notice setting forth the deposit account of the Borrower (the “Funding
Account”) to which the Administrative Agent is authorized by the Borrower to transfer the
proceeds of the Advances requested pursuant to this Agreement. The Borrower may designate a
replacement Funding Account from time to time by written notice to the Administrative Agent. Any
designation by the Borrower of the Funding Account must be reasonably acceptable to the
Administrative Agent.

     2.6. Reliance Upon Authority; No Liability. The Administrative Agent is entitled to
rely conclusively on any individual’s request for Advances hereunder, so long as the proceeds
thereof are to be transferred to the Funding Account. The Administrative Agent shall have no duty
to verify the identity of any individual representing himself or herself as a person authorized by
the Borrower to make such request on their behalf. The Administrative Agent shall not incur any
liability to the Borrower as a result of acting upon the notice referred to in Section 2.1 which
the Administrative Agent reasonably believes to have been given by an officer or other person duly
authorized by the Borrower to request Advances on their behalf or for otherwise acting under this
Agreement. The crediting of Advances to the Funding Account shall conclusively establish the
obligation of the Borrower to repay such Advances as provided herein.

     2.7. Conversion and Continuation of Outstanding Advances. Floating Rate Advances
shall continue as Floating Rate Advances unless and until such Floating Rate Advances are converted
into Eurodollar Advances pursuant to this Section 2.7 or are repaid in accordance with this
Agreement. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or was
repaid in accordance with this Agreement or (y) the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at the
end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same
or another Interest Period. Subject to the terms of Section 2.4, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a Eurodollar Advance .
The Borrower shall give the Administrative Agent irrevocable notice in the form of Exhibit A (a
“Conversion/Continuation Notice”) of each conversion of a Floating Rate Advance into a
Eurodollar Advance or continuation of a Eurodollar Advance not later than 11:00 a.m. (New York City
time) at least three Business Days prior to the date of the requested conversion or continuation,
specifying (i) the requested date, which shall be a Business Day, of such conversion or
continuation, (ii) the aggregate amount and Type of the Advance which is to be converted or
continued, and (iii) the amount of

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such Advance which is to be converted into or continued as a
Eurodollar Advance and the duration of the Interest Period applicable thereto.

     2.8. Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Administrative Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting on behalf of the Borrower,
it being understood that the foregoing authorization is specifically intended to allow the
borrowing notice and Conversion/Continuation Notices to be given telephonically. The Borrower
agrees to deliver promptly to the Administrative Agent a written confirmation, if such confirmation
is requested by the Administrative Agent or any Lender, of each telephonic notice signed by an
Authorized Officer of the Borrower. If the written confirmation differs in any material respect
from the action taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error.

     2.9. Notification of Advances, Interest Rates and Repayments. Promptly after receipt
thereof, the Administrative Agent will notify each Lender of the contents of each
Conversion/Continuation Notice, and repayment notice received by it hereunder. The Administrative
Agent will notify each Lender of the interest rate applicable to each Eurodollar Advance promptly
upon determination of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.

     2.10. Fees.

     (a) Unused Commitment Fee. The Borrower agrees to pay to the
Administrative Agent, for the account of each Lender in accordance with such
Lender’s Pro Rata Share, an unused commitment fee at a per annum rate equal to
1.50% on the Commitments determined daily during the period from and including the
Closing Date to but excluding the earlier of (i) the Borrowing Date and (ii) the
date on which the Lenders’ Commitments terminate or expire (the “Unused
Commitment Fee”). The Unused Commitment Fee shall be payable on each Fee
Payment Date.

     (b) Administrative Agent and Arranger Fees. The Borrower agrees to
pay to the Administrative Agent and the Arranger such additional fees as are
specified in the fee letter dated as of August 16, 2006, among the Administrative
Agent, the Arranger and the Borrower (the “Fee Letter”).

     (c) Collateral Agent Fees. The Borrower agrees to pay to the
Collateral Agent such fees as are specified in the fee schedule, dated as of August
16, 2006, between the Collateral Agent and the Borrower (the “WTC Fee
Schedule”).

     2.11. Interest Rates. Each Floating Rate Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date such Advance is made
or is automatically converted from a Eurodollar Advance into a Floating Rate Advance pursuant to
Section 2.7, to but excluding the date it is paid or is converted into a Eurodollar Advance
pursuant to Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such day. Each
Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not including) the last
day of such Interest Period at the interest rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower’s selections under Sections 2.1(c)
and 2.7 and otherwise in accordance with the terms hereof. If at any time Loans are outstanding
with respect to which the Borrower has not delivered a notice to the Administrative Agent
specifying the basis for determining the interest rate applicable thereto, those Loans shall bear
interest at the Floating Rate.

19

 

     2.12. Eurodollar Advances Post Default; Default Rates. Notwithstanding anything to
the contrary contained hereunder, during the continuance of an Event of Default or a Default the
Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any provision of
Section 8.3 requiring unanimous consent of the Lenders to reductions in interest rates), declare
that no Advance may be made as, converted into or continued as a Eurodollar Advance. If all or a
portion of the principal amount of any Loan shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans (whether or not overdue) shall bear
interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant
to Section 2.11 plus 2% per annum from the date of such non-payment until such amount is paid in
full (as well after as before judgment). If all or a portion of any interest payable on any Loan
or any Unused Commitment Fee or other amount payable hereunder shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum equal to the rate then applicable to Floating Rate Loans plus 2% per annum from the
date of such non payment until such amount is paid in full (as well after as before judgment).

     2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Floating Rate Advance and each Eurodollar Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and on any date on which such Advance is
prepaid, whether by acceleration or otherwise. Interest on all Advances and Unused Commitment Fees
shall be calculated for actual days elapsed on the basis of a 360-day year, except that, with
respect to Floating Rate Advances the rate of interest on which is calculated on the basis of the
Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is received prior to noon
(New York City time) at the place of payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and, in the case of a principal payment, such extension of time shall
be included in computing interest in connection with such payment. After giving effect to any Loan,
Advance, continuation, or conversion of any Eurodollar Rate Loan, there may not be more than eight
different Interest Periods in effect hereunder.

     2.14. Voluntary Prepayments.

     (a) The Borrower may from time to time prepay, without penalty or premium
(except as provided in Section 2.14(b)) (i) all or any portion of the
outstanding Floating Rate Advances upon written notice to the Administrative Agent
and (ii) subject to the payment of any funding indemnification amounts required by
Section 3.4, all outstanding Eurodollar Advances, or, in a minimum
aggregate amount of $1,000,000 or any integral multiple of $100,000 in excess
thereof, any portion of the outstanding Eurodollar Advances upon three Business
Days’ prior notice to the Administrative Agent, provided that in each case no such
payment shall be permitted if (i) after giving pro forma effect to such
prepayment, the Ninety-Day Average Availability as of such date is less than
$30,000,000 or (ii) a Default (as such term is defined in the Existing Credit
Agreement) under the Existing Credit Agreement has occurred and is continuing or
would result from such prepayment. Amounts prepaid on account of the Loans pursuant
to Section 2.14 or Section 2.15 may not be reborrrowed.

     (b) Any prepayment under this Section 2.14 effected at any time prior
to the first anniversary of the Closing Date shall be subject to a prepayment
premium equal to 1% of the aggregate Loans so prepaid, which premium shall be
payable on the date of such prepayment.

20

 

     2.15. Mandatory Prepayments.

     (a) Sale of Assets. Subject to the provisions of the Intercreditor
Agreement, immediately upon receipt by the Borrower or any of its Subsidiaries of
the Net Cash Proceeds of any asset disposition (other than sales of inventory
(including wooden and composite mats removed from the Company’s rental fleet and
sold as used mats) in the ordinary course of business and sales the Net Cash
Proceeds of which do not exceed $500,000 in any transaction and $2,500,000 in the
aggregate in any calendar year) the Borrower shall prepay the Loans or shall cause
the applicable Subsidiary to deliver funds to the Administrative Agent for
application to the Loans, in an amount equal to all such Net Cash Proceeds,
provided that if the Borrower shall deliver to the Administrative Agent a
certificate of an Authorized Officer of the Borrower to the effect that the
Borrower and its Subsidiaries intend to apply the Net Cash Proceeds from such asset
disposition (or a portion thereof specified in such certificate), within 270 days
after receipt of such Net Cash Proceeds, to acquire equipment and other assets to
be used in the business of the Borrower and its Subsidiaries, and certifying that
neither an Event of Default under this Agreement nor a Default under the Existing
Credit Agreement has occurred and is continuing, then no prepayment shall be
required pursuant to this Section 2.15(a) in respect of the Net Cash
Proceeds specified in such certificate, except to the extent of any such Net Cash
Proceeds therefrom that have not been applied by the end of such 270-day period, at
which time a prepayment shall be required in an amount equal to the Net Cash
Proceeds that have not been so applied. Any prepayment under this Section
2.15(a) shall be applied pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders.

     (b) Issuance of Debt or Equity. Subject to the provisions of the
Intercreditor Agreement, if the Borrower or any of its Subsidiaries issues Capital
Stock (other than Capital Stock issued to management or employees of the Borrower
or any of its Subsidiaries under any Capital Stock based compensation plan) or the
Borrower or any of its Subsidiaries issues Indebtedness (other than Indebtedness
permitted by Section 6.16), no later than the Business Day following the
date of any Net Cash Proceeds of such issuance, the Borrower shall prepay the Loans
in an amount equal to all such Net Cash Proceeds. Any such prepayment shall be
applied pro rata according to the respective outstanding principal
amounts of the Loans then held by the Lenders.

     (c) Excess Cash Flow. Until the Maturity Date, the Borrower shall
prepay the Loans on the date (the “Scheduled Prepayment Date”) that is five
days after the earlier of (i) the date on which the Borrower’s annual audited
Financial Statements for the immediately preceding Fiscal Year are delivered
pursuant to Section 6.1 or (ii) the date on which such annual audited
Financial Statements were required to be delivered pursuant to Section 6.1,
in an amount (the “Excess Cash Flow Payment”) equal to the Applicable
Prepayment Percentage multiplied by the Company’s Excess Cash Flow for the
immediately preceding Fiscal Year (or, in case of the Fiscal Year ending December
31, 2006, the portion of such Fiscal Year beginning October 1, 2006), provided that
no such prepayment shall be made (i) to the extent that, after giving pro forma
effect to such prepayment, the Ninety-Day Average Availability as of the Scheduled
Prepayment Date is less than the Required Availability or (ii) if a Default (as
such term is defined in the Existing Credit Agreement) under the Existing Credit
Agreement has occurred and is continuing or would result from such prepayment. If
on the Scheduled Prepayment Date all or a portion of the Excess Cash Flow Payment
is not permitted under the foregoing proviso, but on the date (the “Deferred
Prepayment Date”)

21

 

that is 30 days after the Scheduled Prepayment Date a
prepayment is then permitted under the foregoing proviso (with regard to clause (i)
thereof determined based on the Ninety-Day Average Availability as of the Deferred
Prepayment Date), the Borrower shall make the Excess Cash Flow Payment or such
portion thereof not previously paid, as the case may be, on the date that is five
days after the Deferred Prepayment Date. If neither on the Scheduled Prepayment
Date nor on the Deferred Prepayment Date a prepayment is permitted under this
Section 2.15(c), no prepayment shall be owed or made under this Section
2.15(c) with regard to the applicable Fiscal Year (or, in case of the Fiscal
Year ending December 31, 2006, the portion of the Fiscal Year beginning October 1,
2006). Each prepayment under this Section 2.15(c) shall be accompanied by
a certificate signed by the chief financial officer of the Borrower certifying the
manner in which each of the Ninety-Day Average Availability, Excess Cash Flow and
the resulting prepayment were calculated, which certificate shall be in form and
substance reasonably satisfactory to the Administrative Agent. Any such prepayment
shall be applied pro rata according to the respective outstanding
principal amounts of the Loans then held by the Lenders.

     (d) Insurance/Condemnation Proceeds. Subject to the provisions of the
Intercreditor Agreement, any insurance or condemnation proceeds to be applied to
the Loans in accordance with Section 6.7(d) shall be applied pro
rata according to the respective outstanding principal amounts of the Loans
then held by the Lenders.

     (e) Prepayment Premium. Any prepayment under Sections 2.15(a), (b)
and (d) effected at any time prior to the first anniversary of the
Closing Date shall be subject
to a prepayment premium equal to 1% of the aggregate Loans so prepaid, which
premium shall be payable on the date of such prepayment.

     (f) General. Without in any way limiting the foregoing, but subject
to the provisions of the Intercreditor Agreement, immediately upon receipt by any
Loan Party of proceeds of any sale of any Collateral which are required to be
applied to the prepayment of the Loans, the Borrower shall cause such Loan Party to
deliver such proceeds to the Administrative Agent, or deposit such proceeds in a
cash collateral account with the Collateral Agent in accordance with Section
7.2 of the Security Agreement. All of such proceeds shall be applied as set
forth above or otherwise as provided in Section 2.18. Nothing in this
Section 2.15 shall be construed to constitute the Administrative Agent’s or
any Lender’s consent to any transaction that is not permitted by other provisions
of this Agreement or the other Loan Documents.

     2.16. Termination of Commitments and the Facility.

     (a) Without limiting Section 2.3 or Section 8.1, (a) the
Aggregate Commitments shall expire at the end of the Availability Period and (b)
the Aggregate Credit Exposure and all other unpaid Obligations shall be paid in
full by the Borrower on the Maturity Date.

     (b) The Borrower may terminate this Agreement with at least ten Business Days’
prior written notice thereof to the Administrative Agent and the Lenders, upon (i)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon, (ii) to the extent applicable, the payment in full of the
prepayment premium set forth in Section 2.14(b), (iii) the payment in full
of all reimbursable expenses and other

22

 

Obligations together with accrued and unpaid interest thereon, and (iv) the
payment in full of any amount due under Section 3.4.

     2.17. Method of Payment. All payments of the Obligations hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to the Administrative
Agent at the Administrative Agent’s address specified pursuant to Article XIII, or at any other
Lending Installation of the Administrative Agent specified in writing by the Administrative Agent
to the Borrower, by noon (New York City time) on the date when due and shall be applied ratably by
the Administrative Agent among the Lenders. 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. Each payment delivered to the Administrative Agent for
the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in
the same type of funds that the Administrative Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by the Administrative
Agent from such Lender.

     2.18. Apportionment, Application, and Reversal of Payments. Principal and interest
payments shall be apportioned ratably among the Lenders as set forth in this Article II and
payments of the fees shall, as applicable, be apportioned ratably among the Lenders, except for
fees payable solely to the Agents and except as provided in Section 2.10(b). All payments shall be
remitted to the Administrative Agent and all such payments not relating to principal or interest of
specific Loans or not constituting payment of specific fees as specified by the Borrower, and all
proceeds of any Collateral received by the Administrative Agent, shall be applied, ratably, subject
to the provisions of this Agreement and the Intercreditor Agreement, first, to pay any
fees, indemnities, or expense reimbursements including amounts then due to the Agents from the
Borrower (other than principal and interest), second, to pay any fees, indemnities or
expense reimbursements then due to the Lenders from the Borrower, third, to interest then
due and payable on the Loans, fourth, to prepay the scheduled principal installments of the
Loans pro rata according to the respective outstanding principal amounts of the Loans then held by
the Lenders and fifth, to the payment of any other Obligation due to the Agents or any
Lender by the Borrower. Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower, or unless an Event of Default is in existence, neither the
Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar
Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar
Loan or (b) in the event, and only to the extent, that there are no outstanding Floating Rate Loans
and, in any event, the Borrower shall pay the Eurodollar breakage losses in accordance with Section
3.4. The Agents 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.

     2.19. [Intentionally Omitted.]

     2.20. Indemnity for Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Obligations, any Agent or any Lender 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 Agent or such Lender and the Borrower shall be liable to pay to the Agents
and the Lenders, and the Borrower hereby indemnifies the Agents and the Lenders and holds the
Agents and the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 2.20 shall be and remain effective notwithstanding any contrary action
which may have been taken by any Agent or any Lender in reliance upon such payment or application
of proceeds, and any such contrary action so taken shall be without

23

 

prejudice to the Agents’ and the Lenders’ rights under this Agreement 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 2.20 shall survive the termination of this Agreement.

     2.21. Noteless Agreement; Evidence of Indebtedness.

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

     (b) The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Loan extended hereunder, the Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

     (c) The entries maintained in the accounts maintained pursuant to paragraphs
(a) and (b) above shall be prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided however, that the failure of the
Administrative Agent or any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.

     (d) Any Lender may request that its Loans be evidenced by a promissory note in
substantially the form of Exhibit B (a “Note”). In such event, the
Borrower shall prepare, execute and deliver to such Lender such Note payable to the
order of such Lender. Thereafter, the Loans evidenced by such Note and interest on
the foregoing shall at all times (prior to any assignment pursuant to Article
XII) be represented by one or more Notes payable to the order of the payee
named therein, except to the extent that any such Lender subsequently returns any
such Note for cancellation and requests that such Loans once again be evidenced as
described in paragraphs (a) and (b) above.

     2.22. Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation from time to time.
All terms of this Agreement shall apply to any such Lending Installation and the Loans and any
Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending
Installation. Each Lender may, by written notice to the Administrative Agent and the Borrower in
accordance with Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it and for whose account Loan payments are to be made.

     2.23. Non-Receipt of Funds by the Administrative Agent.

     (a) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount available to
the Administrative Agent, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such amount
is not made available to the Administrative Agent by the required time on the
Borrowing

24

 

Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon, at a rate equal to the greater of (i) the
Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation, for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender’s share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Floating Rate Loans, on demand, from the Borrower.

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

ARTICLE III

YIELD PROTECTION; TAXES

     3.1. Yield Protection. If, on or after the Closing Date, the adoption of any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or applicable Lending
Installation with any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:

     (a) subjects any Lender or any applicable Lending Installation to any Taxes,
or changes the basis of taxation of payments (other than with respect to Excluded
Taxes) to any Lender in respect of its Eurodollar Loans, or

     (b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Advances), or

     (c) imposes any other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation of making, funding or maintaining
its Eurodollar Loans, or reduces any amount receivable by any Lender or any
applicable

25

 

Lending Installation in connection with its Eurodollar Loans, or requires any
Lender or any applicable Lending Installation to make any payment calculated by
reference to the amount of Eurodollar Loans held or interest received by it, by an
amount deemed material by such Lender,

and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending
Installation, as the case may be, of making or maintaining its Eurodollar Loans or Commitment or to
reduce the return received by such Lender or applicable Lending Installation, as the case may be,
in connection with such Eurodollar Loans or Commitment, then, within fifteen days of demand by such
Lender, the Borrower shall pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction in amount received.

     3.2. Changes in Capital Adequacy Regulations. If a Lender determines the amount of
capital required or expected to be maintained by such Lender or any Lending Installation of such
Lender, or any corporation controlling such Lender is increased as a result of a Change, then,
within fifteen days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion of such increased
capital which such Lender determines is attributable to this Agreement or its Credit Exposure
hereunder (after taking into account such Lender’s policies as to capital adequacy). “Change”
means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as
defined below) or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. “Risk-Based Capital Guidelines” means (i) the risk-based capital
guidelines in effect in the U.S. on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities outside the U.S.
implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled “International Convergence of Capital Measurements and Capital Standards,”
including transition rules, and any amendments to such regulations adopted prior to the date of
this Agreement.

     3.3. Availability of Types of Advances. If any Lender determines that maintenance of
its Eurodollar Loans at a suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if the Required Lenders
determine that (i) deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available or (ii) the interest rate applicable to Eurodollar Advances does not accurately
reflect the cost of making or maintaining Eurodollar Advances, then the Administrative Agent shall
suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be,
at the Borrower’s option, repaid or converted to Floating Rate Advances, subject to the payment of
any funding indemnification amounts required by Section 3.4.

     3.4. Funding Indemnification. If any payment of a Eurodollar Advance occurs on a date
which is not the last day of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Advance is not made on the date specified by the Borrower
for any reason other than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance.

     3.5. Taxes.

     (a) All payments by the Borrower to or for the account of any Lender or any
Agent hereunder or under any Note shall be made free and clear of and without

26

 

deduction for any and all Taxes. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender or
any Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums payable
under this Section 3.5) such Lender or such Agent (as the case may be)
receives an amount equal to the sum it would have received had no such deductions
been made, (b) the Borrower shall make such deductions, (c) the Borrower shall pay
the full amount deducted to the relevant authority in accordance with applicable
law and (d) the Borrower shall furnish to the Administrative Agent the original
copy of a receipt evidencing payment thereof within thirty days after such payment
is made.

     (b) In addition, the Borrower hereby agrees to pay any present or future stamp
or documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or from the
execution or delivery of, or otherwise with respect to, this Agreement or any Note
(“Other Taxes”).

     (c) The Borrower hereby agrees to indemnify each Agent and each Lender for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by such
Agent or such Lender as a result of its Commitment, any Loans made by it hereunder
or otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
thirty days of the date such Agent or such Lender makes demand therefor pursuant to
Section 3.6.

     (d) Each Lender that is not incorporated under the laws of the U.S. or a state
thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten
Business Days after the date of this Agreement, (i) deliver to the Administrative
Agent two duly completed copies of U.S. Internal Revenue Service Form W-8BEN or
W-8ECI, certifying in either case that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any U.S. federal income
taxes, and (ii) deliver to the Administrative Agent a U.S. Internal Revenue Form
W-8 or W-9, as the case may be, and certify that it is entitled to an exemption
from U.S. backup withholding tax. Each Non-U.S. Lender further undertakes to
deliver to each of the Borrower and the Administrative Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date that
such form expires or becomes obsolete, and (y) after the occurrence of any event
requiring a change in the most recent forms so delivered by it, such additional
forms or amendments thereto as may be reasonably requested by the Borrower or the
Administrative Agent. All forms or amendments described in the preceding sentence
shall certify that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any U.S. federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with respect to it and such
Lender advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of U.S. federal income tax.

     (e) For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to clause (d), above (unless such
failure is

27

 

due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to be provided),
such Non-U.S. Lender shall not be entitled to indemnification under this
Section 3.5 with respect to Taxes imposed by the U.S.; provided that,
should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its failure to deliver a
form required under clause (d), above, the Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover
such Taxes.

     (f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note pursuant
to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at a
reduced rate.

     (g) If the U.S. Internal Revenue Service or any other governmental authority
of the U.S. or any other country or any political subdivision thereof asserts a
claim that the Administrative Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not delivered
or properly completed, because such Lender failed to notify the Administrative
Agent of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction on amounts
payable to the Administrative Agent under this subsection, together with all costs
and expenses related thereto (including attorneys fees and time charges of
attorneys for the Administrative Agent, which attorneys may be employees of the
Administrative Agent). The obligations of the Lenders under this Section
3.5(g) shall survive the payment of the Obligations and termination of this
Agreement.

     3.6. Lender Statements; Survival of Indemnity. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans
to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid
the unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written
statement of such Lender to the Borrower (with a copy to the Administrative Agent) as to the amount
due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate
applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be payable on demand
after receipt by the Borrower of such written statement. The obligations of the Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this
Agreement.

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ARTICLE IV

CONDITIONS PRECEDENT

     4.1. Effectiveness. This Agreement will not become effective unless the Loan Parties
have satisfied each of the following conditions in a manner satisfactory to the Administrative
Agent and the Lenders, and with respect to any condition requiring delivery of any agreement,
certificate, document, or instrument, the Loan Parties shall have furnished to the Administrative
Agent sufficient copies of any such agreement, certificate, document, or instrument for
distribution to the Lenders:

     (a) This Agreement or counterparts hereof shall have been duly executed by
each Loan Party, the Administrative Agent, the Collateral Agent and the Lenders;
and the Administrative Agent shall have received duly executed copies of the Loan
Documents (including the Intercreditor Agreement) and such other documents,
instruments, agreements and legal opinions as the Administrative Agent shall
reasonably request in connection with the transactions contemplated by this
Agreement and the other Loan Documents, each in form and substance reasonably
satisfactory to the Administrative Agent.

     (b) Each Loan Party shall have delivered copies of its articles or certificate
of incorporation, organization or limited partnership, together with all
amendments, and a certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation or organization.

     (c) Each Loan Party shall have delivered copies, certified by its Secretary or
Assistant Secretary, of its by-laws or operating, management or partnership
agreement and of its Board of Directors’ resolutions or the resolutions of its
members and of resolutions or actions of any other body authorizing the execution,
delivery and performance of the Loan Documents to which such Loan Party is a party.

     (d) Each Loan Party shall have delivered an incumbency certificate, executed
by its Secretary or Assistant Secretary (or Secretary or Assistant Secretary of the
general partner of such Loan Party, if applicable), which shall identify by name
and title and bear the signatures of the Authorized Officers and any other officers
such Loan Party authorized to sign the Loan Documents to which such Loan Party is a
party, upon which certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by such Loan Party.

     (e) The Borrower and each other Loan Party shall have delivered a certificate,
signed by the chief financial officer of the Borrower and such other Loan Party, on
the Effective Date (i) stating that, except for the Specified Defaults, no Event of
Default or Default has occurred and is continuing, (ii) stating that the
representations and warranties contained in Article V are true and correct
in all material respects as of such Effective Date, (iii) specifying the deposit
account which shall be used as the Funding Account and (iv) certifying any other
factual matters as may be reasonably requested by the Administrative Agent or any
Lender.

     (f) The Loan Parties shall have delivered a written opinion of the Loan
Parties’ counsel, addressed to the Administrative Agent, the Collateral Agent and
the Lenders in substantially the form of Exhibit C and written opinions of
local counsel in each of Texas and Louisiana.

29

 

     (g) The Borrower shall have delivered any Notes requested by a Lender pursuant
to Section 2.21 payable to the order of each such requesting Lender.

     (h) The Administrative Agent shall have received the results of a recent lien
search in the jurisdictions of organization of each Loan Party, and such search
shall reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.20 or discharged on or prior to the Closing Date
pursuant to documentation satisfactory to the Administrative Agent.

     (i) The Borrower shall have delivered to the Administrative Agent and the
Lenders (i) the Pro Forma Balance Sheet and (ii) unaudited interim consolidated
financial statements of the Company for each Fiscal Month and Fiscal Quarter ended
after December 31, 2005 and more than 30 days prior to the Closing Date.

     (j) The Lenders shall have received satisfactory projections (including a
projected balance sheet, income statement and cash flow statement together with
detailed management assumptions) through 2011.

     (k) The Borrower shall have delivered evidence of insurance coverage in form,
scope, and substance reasonably satisfactory to the Administrative Agent and
otherwise in compliance with the terms of Section 6.7.

     (l) All governmental and third party approvals (including approvals required
in connection with the Existing Credit Agreement) necessary in connection with the
Refinancing, the continuing operations of the Borrower and the other Loan Parties
and the transactions contemplated hereby shall have been obtained on satisfactory
terms and be in full force and effect.

     (m) The Borrower shall have paid all of the fees and expenses owing to the
Agents, the Arranger and the Lenders pursuant to Section 2.10 and
Section 9.6(a) and required to be paid on or before the Closing Date.

     (n) The Facility shall have received a rating from both Moody’s and S&P.

     (o) Each document (including any Uniform Commercial Code financing statement)
required by the Security Agreement or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Collateral Agent, for the benefit of the Agents and the Lenders, a
perfected Lien on the Collateral described therein, prior and superior in right of
any Person (other than with respect to Liens expressly permitted by Section
6.20), shall be in proper form for filing, registration or recordation.

     (p) The Loan Parties shall have delivered such other documents as the
Administrative Agent, any Lender or their respective counsel may have reasonably
requested.

     4.2. Credit Extension. Except as otherwise expressly provided herein, the Lenders
shall not be required to make any Credit Extension if on the Borrowing Date:

     (a) There exists an Event of Default or Default (other than the Specified
Defaults) or an Event of Default or Default (other than the Specified Defaults)
shall

30

 

result from such Credit Extension and the Administrative Agent or the Required
Lenders shall have determined not to make any Credit Extension as a result of such
Event of Default or Default.

     (b) Any representation or warranty contained in Article V is untrue or
incorrect in any material respect as of such Borrowing Date except to the extent
any such representation or warranty is stated to relate solely to an earlier date,
and the Administrative Agent or the Required Lenders shall have determined not to
make any Credit Extension as a result of the fact that such representation or
warranty is untrue or incorrect in any material respect.

     (c) Concurrently with the making of such Credit Extension, the Senior
Subordinated Notes and the Indebtedness under (i) the RBS Facility, (ii) the Term A
Loans (as such term is defined in the Existing Credit Agreement) and (iii) the
Supplemental Term Loans (as such term is defined in the Existing Credit Agreement)
are not redeemed or otherwise paid in full or arrangements satisfactory to the
Administrative Agent therefor have not been made.

     The borrowing by the Borrower hereunder shall constitute a representation and warranty by the
Borrower that the conditions contained in Section 4.1 have been satisfied and that none of
the conditions set forth in Section 4.2 exist as of the Borrowing Date. Any Lender may
require a duly completed Compliance Certificate as a condition to making a Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

     Each Loan Party represents and warrants to the Agents and the Lenders as follows:

     5.1. Existence and Standing. Each Loan Party is a corporation, partnership (in the
case of Subsidiaries only) or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in which its business is
conducted.

     5.2. Authorization and Validity. Each Loan Party has the power and authority and
legal right to execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by each Loan Party of the Loan Documents to
which it is a party and the performance of its obligations thereunder have been duly authorized by
proper proceedings, and the Loan Documents to which such Loan Party is a party constitute legal,
valid and binding obligations of such Loan Party enforceable against such Loan Party in accordance
with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally.

     5.3. No Conflict; Government Consent. Neither the execution and delivery by any Loan
Party of the Loan Documents to which it is a party, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate (a) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on such Loan Party or (b)
any Loan Party’s articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (c) the provisions of any indenture, instrument or agreement to
which any Loan Party is a party or is subject, or

31

 

by which it, or its Property, is bound, or conflict with or constitute a default thereunder,
or result in, or require, the creation or imposition of any Lien in, or on the Property of such
Loan Party pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any governmental or public body
or authority, or any subdivision thereof, which has not been obtained by a Loan Party, is required
to be obtained by any Loan Party in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by the Loan Parties of
the Obligations or the legality, validity, binding effect or enforceability of any of the Loan
Documents.

     5.4. Security Interest in Collateral. The provisions of this Agreement and the other
Loan Documents create legal and valid Liens on all the Collateral in favor of the Collateral Agent,
for the benefit of the Agents and the Lenders, and such Liens constitute perfected and continuing
Liens on the Collateral, securing the Obligations, enforceable against the applicable Loan Party
and all third parties, and having priority over all other Liens on the Collateral, but in the case
of Liens securing the obligations outstanding under the Existing Credit Agreement, subject to the
Intercreditor Agreement, except in the case of (a) Permitted Liens, to the extent any such
Permitted Liens would have priority over the Liens in favor of the Collateral Agent pursuant to any
applicable law or agreement and (b) 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.

     5.5. Financial Statements.

     (a) Other than as described in and qualified by the Form 8-K Filings and
subject to all changes necessitated by the Specified Adjustments that are within
the scope of the Form 8-K Filings but also including other adjustments of an
immaterial nature that may be included in any restated financial statements issued
to reflect the adjustments described in the Form 8-K Filings, (i) the audited
consolidated financial statements of the Company and its Subsidiaries for the
Fiscal Year ended on December 31, 2005, (ii) the unaudited consolidated financial
statements of the Company and its Subsidiaries for the Fiscal Quarter ended on
March 31, 2006 and (iii) the unaudited consolidated financial statements of the
Company and the Subsidiaries for the Fiscal Month ended April 30, 2006 and May 31,
2006, each heretofore delivered to the Lenders were prepared in accordance with
GAAP (as in effect on the date such statements were prepared and except as
described in and qualified by the Form 8-K Filings and subject to all changes
within the scope of the Form 8-K Filings necessitated by the Specified Adjustments)
and fairly present the consolidated financial condition and operations of the
Company and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.

     (b) The unaudited pro forma consolidated balance sheet of the
Company and its consolidated Subsidiaries as at June 30, 2006 (the “Pro Forma
Balance Sheet”), copies of which have heretofore been furnished to each Lender,
has been prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Refinancing, (ii) the Loans to be made and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Company as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial
position of Company and its consolidated Subsidiaries as at June 30, 2006, assuming
that the events specified in the preceding sentence had actually occurred at such
date.

32

 

     (c) The Projections for the Fiscal Year ending December 31, 2006, and the most
recent Projections delivered to the Administrative Agent and the Lenders pursuant
to Section 6.1(d), represent the Borrower’s good faith estimate of the
future financial performance of the Borrower for the period set forth therein.

     5.6. Material Adverse Change. Since December 31, 2005 there has been no change in the
business, Property, prospects, condition (financial or otherwise) or results of operations of the
Loan Parties (other than any changes in the financial condition of the Company resulting from (i)
the matters described in the Form 8-K Filings; (ii) the need to make any or all of the Specified
Adjustments and (iii) the occurrence of the Specified Defaults) which could reasonably be expected
to have a Material Adverse Effect.

     5.7. Taxes. The Loan Parties have filed all U.S. federal tax returns and all other
material tax returns which are required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by any Loan Party, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been provided in accordance
with GAAP and as to which no Lien exists.

     5.8. Litigation and Contingent Obligations. Except as set forth on Schedule 5.8,
there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or,
to the knowledge of any of their officers, threatened against or affecting any Loan Party which
could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which (i) could not reasonably be expected to have a Material Adverse
Effect or (ii) is set forth on Schedule 5.8, no Loan Party has any material contingent obligations
not provided for or disclosed in the financial statements referred to in Section 5.5.

     5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a correct and
complete list of the name and relationship to the Company of each and all of the Company’s
Subsidiaries, (b) the location of the chief executive office of each Loan Party and each of its
Subsidiaries, (c) a true and complete listing of each class of each Loan Party’s authorized Capital
Stock, of which all of such issued shares or interests are validly issued and outstanding and, to
the extent applicable, fully paid, non-assessable and owned beneficially and of record by the
Persons identified on Schedule 5.9, and (d) the type of entity of each Loan Party. With respect to
each Loan Party, Schedule 5.9 also sets forth, as of the Closing Date, the employer or taxpayer
identification number of each Loan Party and the organizational identification number issued by
each Loan Party’s jurisdiction of organization or a statement that no such number has been issued.

     5.10. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in the
aggregate exceed $1,000,000. Neither the Company nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal liability to Multiemployer Plans in
excess of $1,000,000 in the aggregate. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred with respect to
any Plan, neither the Company nor any other member of the Controlled Group has withdrawn from any
Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Plan.

     5.11. Accuracy of Information. No information, exhibit or report furnished by any
Loan Party to any Agent or to any Lender in connection with the negotiation of, or compliance with,
the Loan Documents contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.

33

 

     5.12. Regulation U. No Loan Party is engaged, nor will it engage, principally or as
one of its important activities, in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” as such terms are defined in Regulation U of the
Federal Reserve Board as now and from time to time hereafter in effect (such securities being
referred to herein as “Margin Stock”). No Loan Party owns any Margin Stock, and none of the
proceeds of the Loans or other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or
for any other purpose that might cause any of the Loans or other extensions of credit under this
Agreement to be considered a “purpose credit” within the meaning of Regulations T, U or X of the
Federal Reserve Board. No Loan Party will take or permit to be taken any action that might cause
any Loan Document to violate any regulation of the Federal Reserve Board.

     5.13. No Defaults, etc. No Loan Party is subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse Effect. Except for the
Specified Defaults, no Loan Party is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in (i) any material agreement to which it
is a party or (ii) any material agreement or instrument evidencing or governing Indebtedness.

     5.14. Compliance With Laws. The Loan Parties have complied with all applicable
material statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property.

     5.15. Ownership of Properties. Except as set forth on Schedule 5.15, on the Closing
Date, the Loan Parties will have good title, free of all Liens other than those permitted by
Section 6.20, to all of the Property and assets reflected in the Loan Parties’ most recent
consolidated financial statements provided to the Administrative Agent as owned by the Loan Parties
(subject to any acquisitions or dispositions in the ordinary course of business).

     5.16. Environmental Matters. In the ordinary course of its business, the officers of
each Loan Party consider the effect of Environmental Laws on the business of such Loan Party, in
the course of which they identify and evaluate potential risks and liabilities accruing to such
Loan Party due to Environmental Laws. On the basis of this consideration, the Loan Parties have
concluded that Environmental Laws cannot reasonably be expected to have a Material Adverse Effect.
No Loan Party has received any notice to the effect that its operations are not in compliance with
any of the requirements of applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a release of any toxic
or hazardous waste or substance into the environment, in each case, except to the extent such
notice or investigation and the noted non-compliance or remedial action, as the case maybe, could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     5.17. Investment Company Act. No Loan Party is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

     5.18. Bank Accounts. As of the Closing Date, Exhibit B to the Security Agreement
contains a complete and accurate list of all bank accounts maintained by each Loan Party with any
bank or other financial institution.

     5.19. Intellectual Property Rights. Notwithstanding the retroactive write-off of
certain Intellectual Property Rights in connection with the Specified Adjustments, each Loan Party
owns, or is

34

 

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

     5.20. Solvency.

     (a) Immediately after the consummation of the transactions to occur on the
date hereof and immediately following the making of each Credit Extension, if any,
made on the date hereof and after giving effect to the application of the proceeds
of such Credit Extensions, (a) the fair value of the assets of each Loan Party, at
a fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of each Loan Party; (b) the present fair saleable value of the
Property of each Loan Party will be greater than the amount that will be required
to pay the probable liability of each Loan Party on its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the businesses in which it is
engaged as such businesses are now conducted and are proposed to be conducted after
the date hereof.

     (b) The Borrower does not intend to, nor will the Borrower permit any of its
Subsidiaries to, and the Borrower does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it or any
such Subsidiary and the timing of the amounts of cash to be payable on or in
respect of its Indebtedness or the Indebtedness of any such Subsidiary.

     5.21. Post-Retirement Benefits. The present value of the expected cost of
post-retirement medical and insurance benefits payable by each Loan Party to its employees and
former employees, as estimated by such Loan Party in accordance with procedures and assumptions
deemed reasonable by the Required Lenders, does not exceed $500,000.

     5.22. Common Enterprise. The successful operation and condition of each of the Loan
Parties is dependent on the continued successful performance of the functions of the group of the
Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on
the successful performance and operation of each other Loan Party. Each Loan Party expects to
derive benefit (and its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations
of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Borrower
hereunder, both in their separate capacities and as members of the group of companies. Each Loan
Party has determined that execution, delivery, and performance of this Agreement and any other Loan
Documents to be executed by such Loan Party is within its purpose, will be of direct and indirect
benefit to such Loan Party, and is in its best interest.

     5.23. Labor Disputes. Except as set forth on Schedule 5.23, as of the Closing Date
(a) there is no collective bargaining agreement or other labor contract covering employees of the
Borrower or any of its Subsidiaries, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective bargaining unit of
employees of the Borrower or any of its Subsidiaries or for

35

 

any similar purpose, and (d) there is no pending or (to the best of the Borrower’s knowledge)
threatened, strike, work stoppage, material unfair labor practice claim, or other material labor
dispute against or affecting the Borrower or its Subsidiaries or their employees.

ARTICLE VI

COVENANTS

     Each Loan Party executing this Agreement jointly and severally agrees as to all Loan Parties
that from and after the date hereof and until the Maturity Date or the earlier termination of the
Facility in accordance with Section 2.16:

     6.1. Financial and Collateral Reporting. Each Loan Party will maintain, for itself
and each Subsidiary, a system of accounting established and administered in accordance with GAAP,
and will furnish to the Lenders:

     (a) (i) as soon as available, but in any event within 5 days of the 2005
Filings, and (ii) after the 2005 Filings have been made, on the date of the filing
of Form 10-K with the Securities and Exchange Commission, but in no event later
than ninety days after the close of each Fiscal Year of the Company and its
Subsidiaries, an audit report certified without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the audit,
by independent certified public accountants reasonably acceptable to the Required
Lenders, prepared in accordance with GAAP on a consolidated, including balance
sheets as of the end of such Fiscal Year, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows, accompanied by
(A) any management letter prepared by said accountants and (B) a certificate of
said accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any Event of
Default or Default, or if, in the opinion of such accountants, any Event of Default
or Default shall exist, stating the nature and status thereof;

     (b) after the 2005 Filings have been made on the date of the filing of Form
10-Q with the Securities and Exchange Commission, and in no event later than
forty-five days after the close of the first three quarterly periods of each Fiscal
Year of the Company and its Subsidiaries, a consolidated unaudited balance sheet as
at the close of each such Fiscal Quarter and a consolidated profit and loss and
reconciliation of surplus statement and a statement of cash flows for the period
from the beginning of the applicable Fiscal Year to the end of such Fiscal Quarter,
all certified by its chief financial officer and prepared in accordance with GAAP
(except for exclusion of footnotes and subject to normal year-end audit
adjustments);

     (c) until the 2005 Filings have been made, within thirty days after the close
of each Fiscal Month of the Company and its Subsidiaries, a consolidated unaudited
balance sheet as at the close of each such Fiscal Month and a consolidated profit
and loss and reconciliation of surplus statement, and certain cash flow items
deemed necessary by the Administrative Agent in its discretion, from the beginning
of the applicable Fiscal Year to the end of such Fiscal Month, all prepared in
accordance with GAAP (except for exclusion of footnotes and subject to normal
year-end audit adjustments) and certified by its chief financial officer;

     (d) as soon as available, but not later than thirty days prior to the end of
such Fiscal Year, a copy of the plan and forecast (including a projected
consolidated and

36

 

consolidating balance sheet, income statement and cash flow statement) of the
Company for each Fiscal Quarter of the following Fiscal Year (the
“Projections”) in form reasonably satisfactory to the Administrative Agent;

     (e) together with each of the financial statements required under Sections
6.1(a) and (b), a compliance certificate in substantially the form of
Exhibit D (a “Compliance Certificate”) signed by the chief
financial officer of the Borrower showing the calculations necessary to determine
compliance with this Agreement and stating that no Event of Default or Default
exists, or if an Event of Default or Default exists, stating the nature and status
thereof;

     (f) as soon as practicable and in any event within ten days after the Borrower
knows that any Reportable Event has occurred with respect to any Plan, a statement,
signed by the chief financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with respect thereto;

     (g) as soon as practicable and in any event within ten days after receipt by
any Loan Party, a copy of (i) any material notice or claim to the effect that any
Loan Party is or may be liable to any Person as a result of the release by any Loan
Party, or any other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any material violation of any federal,
state or local environmental, health or safety law or regulation by any Loan Party;

     (h) concurrently with the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished; and promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which any Loan
Party files with the Securities and Exchange Commission;

     (i) such other information (including non-financial information) as the Agents
or any Lender may from time to time reasonably request.

     6.2. Use of Proceeds.

     (a) The Borrower will use the proceeds of the Credit Extensions solely to
refinance or repurchase the Senior Subordinated Notes, refinance other Indebtedness
and to pay related fees and expenses.

     (b) No Loan Party will use any of the proceeds of the Credit Extensions to (i)
purchase or carry any Margin Stock in violation of Regulation U, (ii) repay or
refinance any Indebtedness of any Person incurred to buy or carry any Margin Stock,
or (iii) acquire any security in any transaction that is subject to Section 13 or
Section 14 of the Securities Exchange Act of 1934 (and the regulations promulgated
thereunder).

     6.3. Notices. Each Loan Party will give prompt notice in writing to the Agents and
the Lenders of:

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

37

 

     (b) any other development, financial or otherwise, which could reasonably be
expected to have a Material Adverse Effect;

     (c) receipt of any material written notice that any Loan Party is subject to
any investigation by any governmental entity with respect to any potential or
alleged violation of any applicable Environmental Law which could reasonably be
expected to have a Material Adverse Effect or of imposition of any Lien against any
Property of any Loan Party for any liability with respect to damages arising from,
or costs resulting from, any violation of any Environmental Laws;

     (d) receipt of any notice of litigation commenced or threatened against any
Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Laws; or (vi) involves any product recall;

     (e) any Lien (other than Permitted Liens) or claim made or asserted against
any of the Collateral or any loss, damage or destruction to the Collateral, in each
case in an amount of $500,000 or more, whether or not covered by insurance;

     (f) its decision to change, (i) such Loan Party’s name, organization
identification number, type of entity or its state of incorporation and (ii) the
location where any material Collateral is held or maintained; provided that, in no
event shall the Agents receive notice of such change less than thirty days prior
thereto;

     (g) commencement of any proceedings contesting any tax, fee, assessment, or
other governmental charge in excess of $500,000;

     (h) immediately after becoming aware of any pending or threatened strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
affecting the Borrower or any of its Subsidiaries;

     (i) any notice provided to the trustee of the Holders (as defined in the
Indenture) of the Senior Subordinated Notes under the Indenture, such notice to be
contemporaneously delivered by the Borrower to the Agents and the Lenders; and

     (j) any other matter as the Administrative Agent may reasonably request.

     6.4. Conduct of Business. Each Loan Party will:

     (a) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted;

     (b) do all things necessary to remain duly incorporated or organized, validly
existing and (to the extent such concept applies to such entity) in good standing
as a domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted and where the failure to maintain such authority could
reasonably be expected to have a Material Adverse Effect; and

38

 

     (c) keep adequate books and records with respect to its business activities in
which proper entries, reflecting all financial transactions, are made in a manner
sufficient to permit the preparation of financial statements in accordance with
GAAP (as it may be revised from time to time) and on a basis consistent with the
Financial Statements delivered to the Administrative Agent pursuant to Section
4.1(j) (unless otherwise consented to by Administrative Agent in its
discretion).

     6.5. Taxes. Each Loan Party will timely file complete and correct U.S. federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits, Property or Collateral, except
those which are being contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP. At any time that any Loan Party is
organized as a limited liability company, each such limited liability company that has elected to
be taxed as a partnership will qualify for partnership tax treatment under U.S. federal tax law.

     6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party will pay or discharge when due all Material Indebtedness permitted by Section
6.16 owed by such Loan Party and all other liabilities and obligations due to material men,
mechanics, carriers, warehousemen, and landlords, except that the Loan Parties may in good faith
contest, by appropriate proceedings diligently pursued, any such obligations; provided that, (a)
adequate reserves have been set aside for such liabilities in accordance with GAAP, (b) such
liabilities would not result in aggregate contested liabilities in excess of $5,000,000 at any one
time outstanding, (c) no Lien shall be imposed to secure payment of such liabilities (except for
Liens granted under the Existing Credit Agreement which are subject to the Intercreditor Agreement)
that is superior to the Collateral Agent’s Liens securing the Obligations, (d) none of the
Collateral becomes subject to forfeiture or loss as a result of the contest and (e) such Loan Party
shall promptly pay or discharge such contested liabilities, if any, and shall deliver to the Agents
evidence reasonably acceptable to the Administrative Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such Loan Party or the
conditions set forth in this proviso are no longer met.

     6.7. Insurance.

     (a) Except as set forth on Schedule 6.7, each Loan Party shall at all
times maintain, with financially sound and reputable carriers having a Financial
Strength rating of at least A by A.M. Best Company, insurance against: (i) loss or
damage by fire and loss in transit; (ii) theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; (iii) business interruption; (iv)
general liability and (v) and such other hazards, as is customary in the business
of such Loan Party. All such insurance shall be in amounts, cover such assets and
be under policies reasonably acceptable to the Administrative Agent. The amount of
all insurance required by this Section shall at a minimum comply with applicable
law, including the Flood Disaster Protection Act of 1973, as amended. All premiums
on such insurance shall be paid when due by the applicable Loan Party. If any Loan
Party fails to obtain any insurance as required by this Section, the Collateral
Agent at the direction of the Required Lenders may obtain such insurance at the
Borrower’s expense. By purchasing such insurance, the Collateral Agent shall not
be deemed to have waived any Event of Default or Default arising from any Loan
Party’s failure to maintain such insurance or pay any premiums therefor. No Loan
Party will use or permit any Property to be used in violation of applicable law or
in any manner which might render inapplicable any insurance coverage.

     (b) All insurance policies required under Section 6.7(a) shall (i)
name the Collateral Agent (for the benefit of the Agents and the Lenders) as an
additional insured

39

 

or as loss payee, as applicable, (ii) provide that such policy
and loss payable clauses may
be canceled, amended, or terminated only upon at least thirty days prior
written notice given to the Agents and (iii) be reasonably satisfactory in all
other respects to the Agents.

     (c) The Borrower must give the Administrative Agent prior written notice of
any change in insurance carriers and any new insurance policy shall comply with the
provisions of this Section 6.7 and otherwise be reasonably acceptable to
the Administrative Agent. Without in any way limiting the foregoing, in no event
shall the Borrower change its insurance carrier without first obtaining a loss
payable endorsement in form and substance reasonably satisfactory to the
Administrative Agent.

     (d) Notwithstanding the foregoing, any insurance or condemnation proceeds
received by the Loan Parties (other than (i) insurance or condemnation proceeds
with regard to inventory, (ii) insurance proceeds with regard to business
interruption claims and (iii) insurance or condemnation proceeds which do not
exceed $500,000) shall, subject to the provisions of the Intercreditor Agreement,
be immediately forwarded to the Administrative Agent and the Administrative Agent
may, at its option, apply any such proceeds to the prepayment of the Loans in
accordance with Section 2.15(e), provided that if the Borrower shall
deliver to the Administrative Agent a certificate of an Authorized Officer of the
Borrower to the effect that the Borrower and its Subsidiaries intend to apply the
insurance or condemnation proceeds (or a portion thereof specified in such
certificate), within 270 days after receipt of such proceeds, to acquire equipment
and other assets to be used in the business of the Borrower and its Subsidiaries,
and certifying that neither an Event of Default under this Agreement nor a Default
under the Existing Credit Agreement has occurred and is continuing, then no
prepayment shall be required pursuant to this Section 6.7(d) in respect of
the insurance or condemnation proceeds specified in such certificate, except to the
extent of any such insurance or condemnation proceeds that have not been applied by
the end of such 270-day period, at which time a prepayment shall be required in an
amount equal to the insurance or condemnation proceeds that have not been so
applied.

     6.8. Compliance with Laws. Each Loan Party will comply with all material laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including, without limitation,
all Environmental Laws.

     6.9. Maintenance of Properties and Intellectual Property Rights. Each Loan Party will do all things necessary to (a) maintain, preserve, protect and keep its
Property in good repair, working order and condition, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in connection therewith may be properly
conducted at all times and (b) obtain and maintain in effect at all times all material franchises,
governmental authorizations, Intellectual Property Rights, licenses and permits, which are
necessary for it to own its Property or conduct its business as conducted on the Closing Date.

     6.10. Inspection. Each Loan Party will permit the Agents and the Lenders, by their respective employees,
representatives, advisors and agents, from time to time (but unless an Event of Default has
occurred and is continuing not more frequently than twice per Fiscal Year) upon reasonable prior
notice, to (a) inspect
any of the Property, the Collateral, and the books and financial records of such Loan Party,
(b) examine, audit and make extracts or copies of the books of accounts and other financial records
of such Loan Party and (c) have access to its properties, facilities, the Collateral and its
advisors, officers, directors and employees to discuss the affairs, finances and accounts of such
Loan Party. If an Event of

40

 

Default or a Default has occurred and is continuing, each Loan Party
shall provide such access to each Agent and to each Lender at all times and without advance notice.
Each Loan Party shall promptly make available to each Agent and its counsel originals or copies of
all books and records that such Agent may reasonably request.

     6.11. Additional Real Property Requirements. Within 60 days after the Closing Date (or such longer period as reasonably acceptable to the
Administrative Agent), the Loan Parties shall, at their sole expense, deliver, with respect to each
parcel of real Property listed on Schedule 6.11, a Mortgage on such real Property duly
executed by the appropriate Loan Party in recordable form, an ALTA or other mortgagee’s title
policy (containing such endorsements as reasonably requested by the Administrative Agent), an
opinion of counsel in the state in which such parcel of real Property is located, evidence of
compliance with applicable federal regulations governing loans in areas having special flood
hazards and, if requested by the Administrative Agent, a current ALTA survey thereof (together with
a surveyor’s certificate) and a copy of a Phase I Environmental Report or other similar report,
each in form and substance reasonably satisfactory to the Administrative Agent, provided that, to
the extent any parcel of real Property listed on Schedule 6.11 is leased by any Loan Party
and, pursuant to the terms of the respective lease, the consent of the landlord is required for the
execution and delivery of the Mortgage, the requirements under this Section 6.11 shall have
been complied with if the respective Loan Party uses its commercially reasonable efforts to obtain
such landlord’s consent.

     6.12. Collateral Access Agreements and Real Estate Purchases. Upon request of the Administrative Agent, each Loan Party shall use commercially reasonable
efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, mortgagee
of owned property or bailee or consignee with respect to any warehouse, processor or converter
facility or other location where Collateral is stored or located, which agreement or letter shall
provide access rights, contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee or bailee or consignee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the Administrative Agent. Each Loan
Party shall timely and fully pay and perform its obligations under all leases and other agreements
with respect to each leased location or third party warehouse where any Collateral is or may be
located, except to the extent such obligations being contested in good faith by appropriate
proceedings and with respect to which adequate reserve have been set aside in accordance with GAAP.
To the extent permitted hereunder, if any Loan Party proposes to acquire a fee ownership interest
in real Property with a value of at least $500,000 after the Closing Date, it shall first provide
the Administrative Agent with notice of such proposed acquisition and, if required by the
Administrative Agent, provide to the Administrative Agent a mortgage or deed of trust granting the
Collateral Agent a first priority Lien on such real Property, together with environmental audits,
mortgage title insurance commitment, real property survey, local counsel opinion(s), and, if
required by the Administrative Agent, supplemental casualty insurance and flood insurance, and such
other documents, instruments or agreements reasonably requested by the Administrative Agent, in
each case, in form and substance reasonably satisfactory to the Administrative Agent.

     6.13. Deposit Account Control Agreements. The Loan Parties will provide to the Administrative Agent upon the Administrative Agent’s
request, a Deposit Account Control Agreement duly executed on behalf of each financial institution
holding a deposit account of a Loan Party as set forth in the Security Agreement.

     6.14. Additional Collateral; Further Assurances.

     (a) Subject to applicable law, each Loan Party shall, unless the Required
Lenders otherwise consent, cause each of its Subsidiaries (excluding any Foreign
Subsidiary) formed or acquired after the Closing Date in accordance with the terms
of

41

 

this Agreement to become a party to this Agreement by executing the Joinder
Agreement set forth as Exhibit E hereto (the “Joinder Agreement”).
Upon execution and delivery of such Joinder Agreement, the applicable Loan Party
shall automatically become a Guarantor hereunder and thereupon shall have all of
the rights, benefits and duties, and obligations in such capacity under the Loan
Documents.

     (b) Upon the request of the Administrative Agent, each Loan Party shall (i)
grant Liens to the Collateral Agent, for the benefit of the Agents and the Lenders,
pursuant to such documents as the Administrative Agent may reasonably deem
necessary and deliver such property, documents, and instruments as the
Administrative Agent may reasonably request to perfect the Liens of the Collateral
Agent in any Property of such Loan Party which constitutes Collateral, including
any parcel of real Property located in the U.S. owned or leased by any Loan Party
with a value (in case of leased real Property of the leasehold estate in the land
and any buildings, improvements and other fixtures thereon which are owned by the
lessee) of at least $500,000, and (ii) in connection with the foregoing
requirements, or either of them, deliver to the Administrative Agent and the
Collateral Agent all items of the type required by Sections 4.1 and 6.11
(as applicable).

     (c) Each Loan Party will cause (i) 100% of the issued and outstanding Capital
Stock of each of its Domestic Subsidiaries and (ii) 65% (or such greater percentage
that, due to a change in an applicable law after the date hereof, (1) could not
reasonably be expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for U.S. federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not
reasonably be expected to cause any material adverse tax consequences) of the
issued and outstanding Capital Stock entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in
each Foreign Subsidiary directly owned by such Loan Party or any Domestic
Subsidiary to be subject at all times to a first priority, perfected Lien in favor
of the Collateral Agent pursuant to the terms and conditions of the Loan Documents
or other security documents as the Administrative Agent shall reasonably request.

     (d) Without limiting the foregoing, each Loan Party shall, and shall cause
each of the Loan Parties’ Subsidiaries which is required to become a Loan Party
pursuant to the terms of this Agreement to, execute and deliver, or cause to be
executed and delivered, to the Agents such documents and agreements, and shall take
or cause to be taken such actions as the Agents may, from time to time, reasonably
request to carry out the terms and conditions of this Agreement and the other Loan
Documents.

     6.15. Dividends.

     (a) No Loan Party will declare or pay any dividends or make any distributions
on its Capital Stock (other than dividends or distributions payable in its own
common stock) or redeem, repurchase or otherwise acquire or retire any of its
Capital Stock at any time outstanding, other than with respect to the following:

	 	(i)	 	any Subsidiary may declare and pay dividends or
make distributions to the Company or to a Wholly-Owned Subsidiary of
the Company;

42

 

	 	(ii)	 	at any time after the 2005 Filings have been
made, the Company may repurchase or redeem its Capital Stock from time
to time, not in excess of an aggregate of $10,000,000 from the Closing
Date to the Maturity Date; provided, however, that no repurchase or
redemption may be made unless both before and (on a pro-forma basis)
after giving effect thereto (A) the Company is in compliance with
Section 6.25, (B) the repurchase or redemption is permitted by
the Existing Credit Agreement and (C) no Event of Default or Default
has occurred and is continuing or would result from such repurchase of
redemption;
	 
	 	(iii)	 	any Loan Party may retire Capital Stock if the
retirement (A) consists of a conversion of any class of Capital Stock
into another class of common stock or (B) the sole consideration paid
in connection with such retirement is common stock; and
	 
	 	(iv)	 	each Loan Party may pay dividends or make
distributions to its partners or members in an aggregate amount not
greater than the amount necessary for such partners or members to pay
their actual state and United States federal income tax liabilities in
respect of income earned by such Loan Party.

     (b) No Loan Party shall directly or indirectly enter into or become bound by
any agreement, instrument, indenture or other obligation (other than this
Agreement, the other Loan Documents, the Existing Credit Agreement and the Loan
Documents (as defined in the Existing Credit Agreement) and any indenture pursuant
to which Senior Subordinated Debt permitted by Section 6.16 is issued) that
could directly or indirectly restrict, prohibit or require the consent of any
Person with respect to the payment of dividends or distributions or the making or
repayment of intercompany loans by a Subsidiary of the Borrower to the Borrower.

     6.16. Indebtedness. No Loan Party will, nor will it permit any of its Subsidiaries to, create, incur or suffer to
exist any Indebtedness, except:

     (a) the Obligations;

     (b) Indebtedness existing on the date hereof and described in Schedule
6.16;

     (c) purchase money Indebtedness incurred in connection with the purchase of
any Equipment; provided that, the amount of such purchase money Indebtedness shall
be limited to an amount not in excess of the purchase price of such Equipment and
the aggregate of all such purchase money Indebtedness shall not exceed $10,000,000;

     (d) Indebtedness which represents an extension, refinancing, or renewal of any
of the Indebtedness described in clauses (b), (c), and (m)
hereof; provided that, (i) the principal amount or interest rate of such
Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not
extended to any additional Property of any Loan Party, (iii) no Loan Party that is
not obligated with respect to repayment of such Indebtedness as of the Closing Date
or as of the date such Indebtedness was incurred, whichever is later, is required
to become obligated with respect thereto, (iv) such extension, refinancing or
renewal does not result in a shortening of the average weighted maturity of the
Indebtedness so extended, refinanced, renewed, (v) the terms of any such

43

 

extension, refinancing, or renewal are not less favorable to the obligor thereunder than the
original terms of such Indebtedness and (vi) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must include subordination terms and conditions that are at
least as favorable to the Administrative Agent and the Lenders as those that were
applicable to the refinanced, renewed, or extended Indebtedness;

     (e) Indebtedness owing by the Borrower or any Loan Party to any other Loan
Party with respect to intercompany loans, provided, that upon the request of the
Administrative Agent, the applicable Loan Parties shall have executed and delivered
to the Borrower or the other Loan Party, on the Effective Date, a demand note
(collectively, the “Intercompany Notes”) to evidence any such intercompany
Indebtedness owing at any time by the Borrower or such Loan Party to another Loan
Party, which Intercompany Notes shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall be pledged and delivered to the
Collateral Agent pursuant to the Security Agreement as additional collateral
security for the Obligations;

     (f) Contingent Obligations (i) by endorsement of instruments for deposit or
collection in the ordinary course of business and (ii) consisting of guarantees of
Indebtedness incurred for the benefit of any other Loan Party if the primary
obligation is expressly permitted elsewhere in this Section 6.16, provided
that guarantees of Indebtedness permitted by Section 6.16(i) shall be
subordinated to the same extent as the Senior Subordinated Debt is subordinated to
the Loans;

     (g) Indebtedness arising under Rate Management Transactions (i) required by
Section 6.26 or (ii) otherwise related to the Loans, the loans under the
Existing Credit Agreement or any other Indebtedness permitted by this Section
6.16 and having a Net Mark-to-Market Exposure not exceeding $5,000,000;

     (h) Indebtedness under the Existing Credit Agreement in an amount not to
exceed the lesser of (i) $150,000,000 or (ii) the sum of (x) the Borrowing Base (as
such term is defined in the Existing Credit Agreement as in effect from time to
time and as calculated by the agent under the Existing Credit Agreement in its
reasonable discretion from the perspective of an asset based lender) plus (y) 25%
of such Borrowing Base to cover Protective Advances and Overadvances (as such terms
are defined in the Existing Credit Agreement) and similar advances made by the
agent or any lender under the
Existing Credit Agreement from time to time in their reasonable discretion
from the perspective of an asset based lender;

     (i) Indebtedness consisting of the Senior Subordinated Debt outstanding on the
Closing Date and Indebtedness of the Company in respect of any Senior Subordinated
Debt the net proceeds of which are used to prepay, redeem, retire or repurchase the
outstanding principal amount of the then outstanding Senior Subordinated Notes (if
any) or the Loans hereunder (including any accrued and unpaid interest and any
premiums, fees and expenses, in each case, in connection therewith);

     (j) Indebtedness of any Person that becomes a Subsidiary after the date
hereof, provided that (i) such Indebtedness exists at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such
Person

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becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.16(j) shall not exceed $10,000,000
at any time outstanding;

     (k) Indebtedness of any Foreign Subsidiary to any Person other than the
Borrower or any Subsidiary in an aggregate principal amount not in excess of
$30,000,000 at any time outstanding, provided that such Indebtedness is not
guaranteed by the Borrower or any Loan Party;

     (l) Indebtedness of any Foreign Subsidiary (i) to any Loan Party, provided
that the loan or advance is permitted by Section 6.19(b) or 6.19(g)
or (ii) to any other Foreign Subsidiary; and

     (m) other unsecured Indebtedness in an aggregate principal amount not in
excess of $20,000,000 at any time outstanding.

     6.17. Merger. No Loan Party will merge or consolidate or liquidate with or into any other Person, except (a)
that any Subsidiary of the Borrower may merge into the Borrower or a Wholly-Owned Subsidiary of the
Borrower that is a Loan Party, (b) that any Loan Party (other than the Borrower) may merge with any
other Loan Party, (c) that any Loan Party (other than the Borrower) may liquidate if the Board of
Directors of the Borrower determines in good faith that such liquidation is in the best interests
of the Borrower and is not materially disadvantageous to the Lenders and if any material assets of
such Loan Party are transferred to another Loan Party and (d) in connection with a Permitted
Acquisition, provided that the Loan Party is the surviving entity.

     6.18. Sale of Assets. No Loan Party will lease, sell or otherwise dispose of its Property (including any Capital
Stock owned by it) to any other Person, except:

     (a) sales of Inventory (including wooden and composite mats removed from the
Company’s rental fleet and sold as used mats) in the ordinary course of business;

     (b) the sale or other disposition of Equipment that is obsolete or no longer
useful in such Loan Party’s business;

     (c) the sale or disposition of other assets having a book value not exceeding
$5,000,000 in the aggregate in any Fiscal Year; and

     (d) sales or transfers of assets by a Loan Party to another Loan Party.

Subject to the terms of the Intercreditor Agreement, the Net Cash Proceeds of any sale or
disposition (to the extent such Net Cash Proceeds exceed 500,000) permitted pursuant to this
Section (other than pursuant to Section 6.18(a)) shall be delivered to the Administrative
Agent to the extent required by Section 2.15 and applied to the Obligations as set forth
therein; provided, however, that the Company may retain up to $2,500,000 of un-reinvested Net Cash
Proceeds from any sale or disposition pursuant to this Section in any calendar year.

     6.19. Investments and Acquisitions. No Loan Party will (i) make or suffer to exist any Investments (including without limitation,
loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, (ii)
create any Subsidiary, (iii) become or remain a partner in any partnership or joint venture, or
(iv) make any Acquisition, except:

     (a) Cash Equivalent Investments;

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     (b) Investments in existence on the Closing Date and described in Schedule
6.19;

     (c) Investments consisting of loans or advances made to (i) the executive
officers of such Loan Party on an arms-length basis in the ordinary course of
business consistent with past practices for travel and entertainment expenses and
similar purposes up to a maximum of $25,000 to any employee and up to a maximum of
$75,000 in the aggregate (for all Loan Parties) at any one time outstanding and
(ii) the executive officers of such Loan Party on an arms-length basis in the
ordinary course of business consistent with past practices for relocation expenses
and similar purposes up to a maximum of $300,000 to any employee and up to a
maximum of $1,000,000 in the aggregate (for all Loan Parties) at any one time
outstanding;

     (d) subject to Sections 4.2(a) and 4.4 of the Security Agreement,
Investments comprised of notes payable, or stock or other securities issued by
Account Debtors to such Loan Party pursuant to negotiated agreements with respect
to settlement of such Account Debtor’s Accounts in the ordinary course of business,
consistent with past practices;

     (e) additional Investments in Wholly-Owned Subsidiaries which are Loan
Parties;

     (f) Permitted Acquisitions and the formation of Wholly Owned Subsidiaries of
the Borrower in connection with a Permitted Acquisition;

     (g) in addition to Investments otherwise expressly permitted by this
Section 6.19, Investments in an aggregate amount (valued at cost) not to
exceed $15,000,000 during the term of this Agreement, provided that, to the extent
such Investment is made in the form of a loan or advance to any Foreign Subsidiary,
such Foreign Subsidiary shall have executed and delivered to the Loan Party a
demand note (a “Foreign  Intercompany Note”) to evidence such intercompany Indebtedness, which
Foreign Intercompany Note shall be in form and substance reasonably satisfactory to
the Administrative Agent (a copy of such executed note shall be delivered to
Administrative Agent); and

     (h) the creation of new Wholly-Owned Subsidiaries which become Loan Parties
pursuant to Section 6.14.

     6.20. Liens.

     (a) No Loan Party will create, incur, or suffer to exist any Lien in, of, or
on the Property of such Loan Party, (including, without limitation, the real
Property or marine vessels of such Loan Party) except the following (collectively,
“Permitted Liens”):

	 	(i)	 	Liens for taxes, fees, assessments, or other
governmental charges or levies on the Property of such Loan Party if
such Liens (1) shall not at the time be delinquent or (2) subject to
the provisions of Section 6.6, do not secure obligations in
excess of $1,000,000, are being contested in good faith and by
appropriate proceedings diligently pursued,

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	 	 	 	adequate reserves in accordance with GAAP have been set aside on the books of such Loan
Party, and a stay of enforcement of such Lien is in effect;
	 
	 	(ii)	 	Liens imposed by law, such as carrier’s,
warehousemen’s, and mechanic’s Liens and other similar Liens arising in
the ordinary course of business which secure payment of obligations not
more than ten days past due or which are being contested in good faith
and by appropriate proceedings diligently pursued;
	 
	 	(iii)	 	statutory Liens in favor of landlords of real
Property leased by such Loan Party; provided that, such Loan Party is
current with respect to payment of all rent and other amounts due to
such landlord under any lease of such real Property except to the
extent such amounts are being contested in good faith and by
appropriate proceedings diligently pursued;
	 
	 	(iv)	 	Liens arising out of pledges or deposits under
worker’s compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar legislation
or to secure the performance of bids, tenders, or contracts (other than
for the repayment of Indebtedness) or to secure indemnity, performance,
or other similar bonds for the performance of bids, tenders, or
contracts (other than for the repayment of Indebtedness) or to secure
statutory obligations (other than liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;
	 
	 	(v)	 	utility easements, building restrictions, and
such other encumbrances or charges against real Property as are of a
nature generally existing with respect to properties of a similar
character and which do not in any
material way affect the marketability of such real Property or
interfere with the use thereof in the business of such Loan Party;
	 
	 	(vi)	 	Liens existing on the Closing Date and
described in Schedule 6.20;
	 
	 	(vii)	 	Liens resulting from any extension,
refinancing, or renewal of the related Indebtedness as permitted
pursuant to Section 6.16(d); provided that, the Liens evidenced
thereby are not increased to cover any additional Property not covered
thereby immediately prior to such extension, refinancing or renewal;
	 
	 	(viii)	 	Liens securing purchase money Indebtedness of such Loan Party
permitted pursuant to Section 6.16(c); provided that, such
Liens attach only to the Property which was purchased with the proceeds
of such purchase money Indebtedness and the proceeds thereof;
	 
	 	(ix)	 	(i) Liens in favor of the Collateral Agent
granted pursuant to the Loan Documents and (ii) Liens in favor of the
agent granted pursuant to the Existing Credit Agreement and the other
loan documents (as such term is defined in the Existing Credit
Agreement) so long as the Intercreditor Agreement is in effect;

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	 	(x)	 	Liens securing Indebtedness permitted by
Section 6.16(k); provided that, such Liens only attach to
Property of Foreign Subsidiaries; and
	 
	 	(xi)	 	Liens not otherwise permitted by this
Section 6.20 so long as neither (x) the aggregate outstanding
principal mount of the obligations secured thereby nor (y) the
aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and
all Subsidiaries) $5,000,000 at any one time.

     (b) Other than as provided in the Loan Documents or in connection with the
creation or incurrence of any Indebtedness under Section 6.16(c), no Loan
Party will enter into or become subject to any negative pledge or other restriction
on the right of such Loan Party to grant Liens to the Collateral Agent and the
Lenders on any of its Property; provided that, any such negative pledge or other
restriction entered into in connection with the creation of Indebtedness under
Section 6.16(c) shall be limited to the Property securing such purchase
money Indebtedness.

     6.21. Affiliate Transactions. No Loan Party will enter into any material transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any material payment or transfer
(including, without limitation, any payment or transfer with respect to any fees or expenses for
management services) to, any Affiliate except in the ordinary course of business and pursuant to
the reasonable requirements of such Loan Party’s business and upon fair and reasonable terms no
less favorable to such Loan Party than such Loan Party would obtain in a comparable arms-length
transaction.

     6.22. Amendments to Agreements. No Loan Party will, nor will any Loan Party permit its Subsidiary to, amend or terminate its
articles of incorporation, charter, certificate of formation, by-laws, operating, management or
partnership agreement or other organizational document, except to the extent such amendment is
undertaken to effect a merger or consolidation permitted by Section 6.17.

     6.23. Prepayment of Indebtedness; Senior Subordinated Debt.

     (a) No Loan Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness prior to its scheduled maturity, other than
(i) the Obligations and the obligations under the Existing Credit Agreement; (ii)
Indebtedness secured by a Permitted Lien if the asset securing such Indebtedness
has been sold or otherwise disposed of in accordance with Section 6.18;
(iii) Indebtedness permitted by Section 6.16(d) upon any refinancing
thereof in accordance therewith; (iv) Indebtedness permitted by Section
6.16(e); (v) Indebtedness under the Senior Subordinated Notes repaid in
connection with a refinancing thereof, provided that such refinancing constitutes
Senior Subordinated Debt permitted under Section 6.16(i); (vi) the purchase
or redemption of Senior Subordinated Notes with the proceeds of the Loans; (vii)
the repayment of the RBS Facility with the proceeds of the Loans and (viii) in
respect of the financing of Durabase Composite mats located in Mexico with GE
Commercial Finance.

     (b) No Loan Party shall make any amendment or modification to the Indenture,
or any note or other agreement evidencing or governing any Senior Subordinated Debt
in a manner adverse to the Lenders (other than (i) amendments, supplements or
modifications to the Indenture or such Senior Subordinated Debt which reduce the
interest rate or extend the maturity thereof, (ii) waivers of compliance by the
Company or any of its Subsidiaries with any of the terms or conditions of the
Indenture

48

 

or such Senior Subordinated Debt (except those terms or conditions which
by their terms are for the benefit of the Lenders), or (iii) amendments,
supplements or modifications made in connection with the cure or waiver of the
Specified Defaults).

     6.24. Financial Contracts. No Loan Party shall enter into or remain liable upon any
Financial Contract, except for Rate Management Transactions permitted by Section 6.16(g).

     6.25. Financial Covenants.

          6.25.1. Fixed Charge Coverage Ratio. The Company will not permit the Fixed Charge
Coverage Ratio, determined as of the end of each of the Company’s Fiscal Quarters for the
applicable Test Period, to be less than 1.1 to 1.0.

          6.25.2. Consolidated Leverage Ratio. The Company will not permit the
Consolidated Leverage Ratio, determined as of the end of each of the Company’s Fiscal Quarters for
the applicable Test Period, to be greater than the corresponding ratio set forth below:

	 	 	 	 	 
	 	 	Maximum Consolidated
	Date of Determination	 	Leverage Ratio
	September 30, 2006
	 	 	3.25 to 1.00	 
	December 31, 2006
	 	 	3.00 to 1.00	 
	March 31, 2007
	 	 	3.00 to 1.00	 
	June 30, 2007
	 	 	3.00 to 1.00	 
	September 30, 2007
	 	 	3.00 to 1.00	 
	December 31, 2007 and each Fiscal
Quarter thereafter
	 	 	2.75 to 1.00	 

     6.26. Rate Management Transactions. The Borrower will, within 180 days after the
Borrowing Date, enter into, and thereafter maintain, Rate Management Transactions to the extent
necessary to provide that at least 50% of the aggregate principal amount of the Loans is subject to
either a fixed interest rate or interest rate protection for a period of not less than three years,
which Rate Management Transactions shall have terms and conditions reasonably satisfactory to the
Administrative Agent.

ARTICLE VII

DEFAULTS

     The occurrence of any one or more of the following events shall constitute an “Event of
Default” hereunder:

     (a) any representation or warranty made or deemed made by or on behalf of any
Loan Party to any Lender or any Agent under or in connection with this Agreement,
any other Loan Document, any Credit Extension, or any certificate or information
delivered in connection with any of the foregoing shall be materially false on the
date as of which made;

     (b) nonpayment, when due (whether upon demand or otherwise), of any principal,
interest, fee, or any other obligation owing under any of the Loan Document;

49

 

     (c) the breach by any Loan Party of any of the terms or provisions of
Section 6.2, 6.3(a) or 6.15 through 6.25;

     (d) the breach by any Loan Party (other than a breach which constitutes an
Event of Default under another Section of this Article VII) of any of the
terms or provisions of (i) Section 6.1, 6.3 (other than Section
6.3(a)), 6.4 through 6.14, or 6.26 of this Agreement which is
not remedied within five days from the earlier of (x) the date on which any Loan
Party had actual knowledge of such breach or (y) the date on which such Loan Party
receives written notice from the Administrative Agent or any Lender or (ii) any
other Section of this Agreement which is not remedied within thirty days after the
earlier of (x) the date on which any Loan Party had actual knowledge of such breach
or (y) the date on which such Loan Party receives written notice from the
Administrative Agent or any Lender;

     (e) failure of any Loan Party to pay when due any Material Indebtedness or,
except for the Specified Defaults with respect to the Indenture, a default, breach
or other event occurs under any term, provision or condition contained in any
Material Indebtedness Agreement of any Loan Party, the effect of which default,
breach or other event or condition is to cause, or to permit the holder(s) of such
Material Indebtedness or the lender(s) under any Material Indebtedness Agreement to
cause, such Material Indebtedness to become due prior to its stated maturity or any
commitment to lend under any Material Indebtedness Agreement to be terminated prior
to its stated expiration date; except for any remedies exercised under the
Indenture due to the Specified Defaults, any Material Indebtedness of any Loan
Party shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or any Loan Party shall not pay, or admit in writing its
inability to pay, its debts generally as they become due;

     (f) any Loan Party shall (i) have an order for relief entered with respect to
it under the Bankruptcy Code as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in,
the appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any portion of its Property which constitutes a Substantial
Portion, (iv) institute any proceeding seeking an order for relief under the
Bankruptcy Code as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of debtors or
fail to file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (v) take any corporate or partnership action to
authorize or effect any of the foregoing actions set forth in this subsection
(f) or (vi) fail to contest in good faith any appointment or proceeding
described in subsection (g) below;

     (g) a receiver, trustee, examiner, liquidator or similar official shall be
appointed for any Loan Party or any portion of its Property which constitutes a
Substantial Portion, or a proceeding described in subsection (f)(iv) of
Article VII shall be instituted against any Loan Party and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for a
period of sixty consecutive days;

     (h) any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of any Loan Party which, when taken together with all other Property of
any Loan Party so

50

 

condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion;

     (i) any loss, theft, damage or destruction of any item or items of Collateral
or other property of any Loan Party occurs which could reasonably be expected to
cause a Material Adverse Effect and is not adequately covered by insurance;

     (j) any Loan Party shall fail within thirty days to pay, bond or otherwise
discharge one or more (i) judgments or orders for the payment of money in excess of
$5,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the
aggregate, or (ii) nonmonetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which
judgments or orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;

     (k) any Change in Control shall occur;

     (l) (i) any Unfunded Liabilities of a Single Employer Plan shall exist, (ii) a
Reportable Event shall occur in connection with any Plan; (iii) the Borrower or any
other member of the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to such Multiemployer
Plan; or (iv) the Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan
is in reorganization or is being terminated, within the meaning of Title IV of
ERISA, and in each case in clauses (i) through (iv) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material Adverse
Effect;

     (m) any Loan Party shall (i) be the subject of any proceeding or investigation
pertaining to the release by the any Loan Party or any other Person of any toxic or
hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or clause
(ii), could reasonably be expected to have a Material Adverse Effect;

     (n) the occurrence of any “event of default”, as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of any
Loan Document (other than this Agreement), which default or breach continues beyond
any period of grace therein provided;

     (o) any Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
any Guaranty, or
any Guarantor shall fail to comply with any of the terms or provisions of the
Guaranty to which it is a party, or any Guarantor shall deny that it has any
further liability under any Guaranty to which it is a party, or shall give notice
to such effect;

     (p) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest (or, to the extent provided in the
Intercreditor Agreement, a second priority security interest) in any Collateral
purported to be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral

51

 

Document shall fail to remain in full force or effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document;

     (q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in writing,
or engage in any action or inaction based on any such assertion, that any provision
of any of the Loan Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms);

     (r) any Loan Party is criminally convicted under any law that may reasonably
be expected to lead to a forfeiture (which does not include fines or other payments
of money) of any Property of such Loan Party having a fair market value in excess
of $500,000;

     (s) the 2005 Filings when made contain adjustments that are materially
inconsistent with the Specified Adjustments set forth in the Form 8-K Filings; or

     (t) the 2005 Filings shall not have been made by November 18, 2007.

ARTICLE VIII

REMEDIES; WAIVERS AND AMENDMENTS

     8.1. Remedies.

     (a) If any Event of Default occurs and is continuing, the Administrative Agent
may in its discretion (and at the written request of the Required Lenders, shall)
(i) reduce the Aggregate Commitment, (ii) terminate or suspend the obligations of
the Lenders to make Loans hereunder, (iii) declare all or any portion of the
Obligations to be due and payable, whereupon such Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of any
kind, all of which the Borrower hereby expressly waives, (iv) increase the rate of
interest applicable to the Loans as set forth in this Agreement and (v) exercise,
and cause the Collateral Agent to exercise, any rights and remedies provided to the
Agents under the Loan Documents or at law or equity, including all remedies
provided under the UCC.

     (b) If any Event of Default described in subsections (f) or
(g) of Article VII occurs with respect to any Loan Party, the
obligations of the Lenders to make Loans hereunder shall automatically terminate
and all Obligations shall immediately become due and payable without any election
or action on the part of any Agent or any Lender.

     (c) If, within thirty days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans as a
result of any Event of Default (other than any Event of Default as described in
subsections (f) or (g) of Article VII with respect to the
Borrower) and before any judgment or decree for the payment of the Obligations due
shall have been obtained or entered, the Required Lenders (in their sole
discretion) shall so direct, the Administrative Agent shall, by notice to the
Borrower rescind and annul such acceleration and/or termination.

52

 

     8.2. Waivers by Loan Parties. Except as otherwise provided for in this Agreement or
by applicable law, each Loan Party waives, to the extent permitted by applicable law: (a)
presentment, demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by any Agent on which any
Loan Party may in any way be liable, and hereby ratifies and confirms whatever such Agent may do in
this regard, (b) all rights to notice and a hearing prior to the Collateral Agent’s taking
possession or control of, or to the Collateral Agent’s replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to allowing the
Collateral Agent to exercise any of its remedies, and (c) the benefit of all valuation, appraisal,
marshaling and exemption laws.

     8.3. Amendments.

     (a) Subject to the provisions of this Section 8.3, no amendment, waiver
or modification of any provision of this Agreement or any other Loan Document, and
no consent with respect to any departure by any Loan Party therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders (or
the Administrative Agent with the consent in writing of the Required Lenders) and
the Loan Parties and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

     (b) Notwithstanding subsection (a) above, no such amendment, waiver or
other modification with respect to this Agreement shall:

	 	(i)	 	without the consent of each Lender directly
affected thereby, extend the final maturity of any Loan to a date after
the Maturity Date;
	 
	 	(ii)	 	without the consent of each Lender directly
affected thereby, postpone any regularly scheduled payment of principal
of any Loan or reduce or forgive all or any portion of the principal
amount of any Loan;
	 
	 	(iii)	 	without the consent of each Lender directly
affected thereby, reduce the rate or extend the time of payment of
interest, fees or prepayment premiums payable to the Lenders pursuant
to any Loan Document;
	 
	 	(iv)	 	without the consent of each Lender, reduce the
percentage or number of Lenders specified in the definition of Required
Lenders;
	 
	 	(v)	 	without the consent of each Lender directly
affected thereby, increase the amount of the Aggregate Commitment or
the Commitment of any Lender hereunder;
	 
	 	(vi)	 	without the consent of each Lender, amend this
Section 8.3;
	 
	 	(vii)	 	without the consent of each Lender, release
all or substantially all of the Guarantors, except as otherwise
permitted herein or in the other Loan Documents; or

53

 

	 	(viii)	 	without the consent of each Lender, except as provided in clause
(d) of this Section 8.3 or any Collateral Document, release
all or substantially all of the Collateral.

     (c) Notwithstanding clause (a) above, no amendment of any provision of
this Agreement or any other Loan Document relating to the Agents shall be effective
without the written consent of the applicable Agent. The Administrative Agent may
(i) amend the Commitment Schedule to reflect assignments entered into pursuant to
Article XII, and (ii) waive payment of the fee required under Article
XII without obtaining the consent of any other party to this Agreement.

     (d) The Lenders hereby irrevocably authorize the Collateral Agent to release
or subordinate (as applicable) any Liens granted to the Collateral Agent by the
Loan Parties on any Collateral (i) upon the termination of the Aggregate
Commitment, payment and satisfaction in full in cash of all Obligations, (ii)
constituting Property being sold or disposed of if the Loan Party disposing of such
Property certifies in writing to the Agents that the sale or disposition is made in
compliance with the terms of this Agreement (and the Agents may rely conclusively
on any such certificate, without further inquiry), (iii) constituting Property in
which no Loan Party has at any time during the term of this Agreement owned any
interest, (iv) constituting property leased to a Loan Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement, (v)
owned by or leased to an Loan Party which is subject to a purchase money security
interest or which is the subject of a Capitalized Lease, in either case, entered
into by such Loan Party pursuant to Section 6.16(c), (vi) as required to
effect any sale or other disposition of such Collateral in connection with any
exercise of remedies of the Agents and the Lenders pursuant to Section 8.1
or (vii) as provided in Section 4.2 of the Intercreditor Agreement, upon any
release, sale or disposition of ABL Priority Collateral (as defined in the
Intercreditor Agreement). Upon request by any Agent at any time, the Lenders will
confirm in writing such Agent’s authority to release any Liens upon particular
types or items of Collateral pursuant to this Section 8.3(d). Except as
provided in the preceding sentence, the Collateral Agent will not release any Liens
on Collateral without the prior written authorization of the Required Lenders;
provided that, the Administrative Agent may, in its discretion, instruct the
Collateral Agent to release its Liens on Collateral valued in the aggregate not in
excess of $2,500,000 during any calendar year without the prior written
authorization of the Lenders. Any 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 Loan Parties in respect of) all interests
retained by the Loan Parties, including the proceeds of any sale, all of which
shall continue to constitute part of the Collateral.

     (e) If, in connection with any proposed amendment, waiver or consent
requiring the consent of “each Lender” or “each Lender affected thereby,” the
consent of Lenders holding in the aggregate at least
662/3% of the Aggregate Credit
Exposure is obtained, but the consent of other necessary Lenders is not obtained
(any such Lender whose consent is necessary but not obtained being referred to
herein as a “Non-Consenting Lender”), then the Company may elect, at its
sole cost and expense, to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank or
other entity which is reasonably satisfactory to the Company and the Administrative
Agent shall agree, as of such date, to purchase for cash the Loans and other
Obligations due to the Non-Consenting Lender pursuant to an Assignment and
Assumption and to become a Lender for all purposes

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under this Agreement and to
assume all obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of subsection (b) of Article
XII (provided that the Borrower or the replacement Lender shall pay the
applicable processing and recordation fee) and (ii) the Company shall pay to such
Non-Consenting Lender in same day funds on the day of such replacement (1) all
interest, fees, prepayment premiums (to the extent applicable under Section
2.14(b)) and other amounts then accrued but unpaid to such Non-Consenting
Lender by the Company hereunder to and including the date of termination, including
without limitation payments due to such Non-Consenting Lender under Sections
3.1, 3.2 and 3.5, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Non-Consenting Lender been prepaid
on such date rather than sold to the replacement Lender.

     8.4. Preservation of Rights. No delay or omission of the Lenders or the Agents to
exercise any right under the Loan Documents shall impair such right or be construed to be a waiver
of any Event of Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of an Event of Default or the inability of the Borrower to satisfy
the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence.
Any single or partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Agents and the Lenders until the Obligations have been
paid in full.

ARTICLE IX

GENERAL PROVISIONS

     9.1. Survival of Representations. All representations and warranties of the Loan
Parties contained in this Agreement and the other Loan Documents shall survive the execution and
delivery of the Loan Documents and the making of the Credit Extensions herein contemplated.

     9.2. Governmental Regulation. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or prohibition provided
by any applicable statute or regulation.

     9.3. Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions of the Loan
Documents.

     9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Loan Parties, the Agents and the Lenders and supersede all prior agreements
and understandings among the Loan Parties, the Agents and the Lenders relating to the subject
matter thereof other than those contained in the Fee Letter and the WTC Fee Schedule which shall
survive and remain in full force and effect during the term of this Agreement. THIS WRITTEN
AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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     9.5. Several Obligations; Benefits of this Agreement. The respective obligations of
the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any
other Lender (except to the extent to which the Administrative Agent or the Collateral Agent is
authorized to act as such for the Lenders hereunder). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder.
This Agreement shall not be construed so as to confer any right or benefit upon any Person other
than the parties to this Agreement and their respective successors and assigns, provided however,,
that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall
have the right to enforce such provisions on its own behalf and in its own name to the same extent
as if it were a party to this Agreement.

     9.6. Expenses; Indemnification.

     (a) Expenses. The Borrower shall reimburse the Agents and the
Arranger for all reasonable out-of-pocket expenses (including reasonable fees,
disbursement and other charges of counsel) incurred by the Agents or the Arranger
in connection with the preparation, negotiation, execution, delivery, syndication,
distribution (including, without limitation, via the internet or through a service
such as Intralinks), review, amendment, modification, and administration of the
Loan Documents. The Borrower also agrees to reimburse the Agents, the Arranger and
the Lenders for all out-of-pocket expenses (including the fees and disbursement of
counsel (including the allocated fees and expenses of in-house counsel)) incurred
by the Agents, the Arranger or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed by the Borrower under
this Section include, without limitation, costs and expenses incurred in connection
with:

	 	(i)	 	any consent, waiver or other documents prepared
with respect to any Loan Document and the transactions contemplated
thereby;
	 
	 	(ii)	 	lien and title searches and title insurance;
	 
	 	(iii)	 	taxes, fees and other charges for recording
the Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Collateral Agent’s Liens;
	 
	 	(iv)	 	sums paid or incurred to take any action
required of any Loan Party under the Loan Documents that such Loan
Party fails to pay or take (subject to any contest rights of the Loan
Parties);
	 
	 	(v)	 	any litigation, contest, dispute, proceeding or
action (whether instituted by any Agent, any Lender, any Loan Party or
any other Person and whether as to party, witness or otherwise) in any
way relating to the Collateral, the Loan Documents or the transactions
contemplated thereby; and
	 
	 	(vi)	 	costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and
maintaining the Funding Account and lock boxes, and costs and expenses
of preserving and protecting the Collateral.

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     The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower.

     (b) Indemnification. The Borrower hereby further agrees to indemnify
the Agents, the Arranger, each Lender, their respective Affiliates, and each of
their directors, officers, employees, advisors, trustees and agents against all
losses, claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether or
not any Agent, the Arranger, any Lender or any Affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted from
the breach of contract, gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6
shall survive the termination of this Agreement. WITHOUT LIMITATION OF THE
FOREGOING, IT IS THE INTENTION OF THE BORROWER AND THE BORROWER AGREES THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER)
INDEMNIFIED PARTY.

     9.7. Numbers of Documents. All statements, notices, closing documents, and requests hereunder shall be furnished to
the Administrative Agent with sufficient counterparts so that the Administrative Agent may furnish
one to the Collateral Agent and each of the Lenders.

     9.8. Accounting. Except as provided to the contrary herein, all accounting terms used
herein shall be interpreted and all accounting determinations hereunder shall be made in accordance
with GAAP in a manner consistent with that used in preparing the financial statements referred to
in Section 5.5. If at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and the Borrower, the Administrative Agent or
the Required Lenders shall so request the Administrative Agent, the Lenders and the Loan Parties
shall negotiate in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required Lenders), provided
that, until so amended, such ratio or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and the Borrower shall provide to the Administrative Agent and
the Lenders reconciliation statements showing the difference in such calculation, together with the
delivery of monthly, quarterly and annual financial statements required hereunder.

     9.9. Severability of Provisions. Any provision in any Loan Document that is held to
be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

     9.10. Nonliability of Lenders. The relationship between any Loan Party on the one
hand and the Lenders, and the Agents on the other hand shall be solely that of debtor and creditor.
Neither any Agent, the Arranger, nor any Lender shall have any fiduciary responsibilities to any
Loan Party. Neither

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any Agent, the Arranger, nor any Lender undertakes any responsibility to any
Loan Party to review or inform such Loan Party of any matter in connection with any phase of any
Loan Party’s business or operations. The Loan Parties agree that neither any Agent, the Arranger,
nor any Lender shall have liability to any Loan Party (whether sounding in tort, contract or
otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by the Loan Documents,
or any act, omission or event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses resulted from the
breach of contract, gross negligence or willful misconduct of the party from which recovery is
sought. Neither any Agent, the Arranger, nor any Lender shall have any liability with respect to,
and each Loan Party hereby waives, releases and agrees not to sue for, any special, indirect,
consequential or punitive damages suffered by any Loan Party in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated thereby.

     9.11. Confidentiality. Each Agent and each Lender agrees to hold any confidential
information which it may receive from the Borrower in connection with this Agreement in confidence,
except for disclosure (a) to its Affiliates and trustees and to the Agents and any other Lender and
their respective Affiliates, (b) to legal counsel, accountants, and other professional advisors to
such Lender or to a Transferee, (c) to regulatory
officials, (d) to any Person as required by law, regulation, or legal process, (e) to any
Person in connection with any legal proceeding to which it is a party, (f) to its direct or
indirect contractual counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, (g) permitted by Section 12.4, and (h) to rating
agencies if requested or required by such agencies in connection with a rating relating to the
Credit Extensions hereunder. Without limiting Section 9.4, the Borrower agrees that the terms of
this Section 9.11 shall set forth the entire agreement between the Borrower and each Lender
(including the Agents) with respect to any confidential information previously or hereafter
received by such Lender in connection with this Agreement, and this Section 9.11 shall supersede
any and all prior confidentiality agreements entered into by such Lender with respect to such
confidential information. Notwithstanding anything herein to the contrary, confidential
information shall not include, and each party to any of the Loan Documents and their respective
Affiliates (and the respective partners, directors, officers, employees, advisors, representatives
and other agents of each of the foregoing and their Affiliates) may disclose to any and all
Persons, without limitation of any kind, (i) any information with respect to the U.S. federal and
state income tax treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding such tax treatment, which facts shall not include for this purpose the
names of the parties or any other Person named herein, or information that would permit
identification of the parties or such other Persons, or any pricing terms or other nonpublic
business or financial information that is unrelated to such tax treatment or facts, and (ii) all
materials of any kind (including opinions or other tax analyses) relating to such tax treatment or
facts that are provided to any of the Persons referred to above, and it is hereby confirmed that
each of the Persons referred to above has been authorized to make such disclosures since the
commencement of discussions regarding the transactions contemplated hereby.

     Each Lender acknowledges that information furnished to it pursuant to this Agreement or the
other Loan Documents may include material non-public information concerning the Borrower and its
Affiliates and their related parties or their respective securities, and confirms that it has
developed compliance procedures regarding the use of material non-public information and that it
will handle such material non-public information in accordance with those procedures and applicable
law, including Federal and state securities laws.

     All information, including requests for waivers and amendments, furnished by the Borrower or
any Agent pursuant to, or in the course of administering, this Agreement or the other Loan
Documents will be syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their respective securities.
Accordingly, each

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Lender represents to the Borrower and the Agents that it has identified in its
administrative questionnaire a credit contact who may receive information that may contain material
non-public information in accordance with its compliance procedures and applicable law, including
Federal and state securities laws.

     9.12. Nonreliance. Each Lender hereby represents that it is not relying on or looking
to any Margin Stock for the repayment of the Credit Extensions provided for herein.

     9.13. Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees that
each Agent and the Arranger and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with any of the Loan Parties and their respective
Affiliates.

     9.14. Acknowledgements. Each Loan Party hereby acknowledges that:

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

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

ARTICLE X

THE AGENTS

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

     10.2. Delegation of Duties. The Agents may execute any of their duties under this
Agreement and the other Loan Documents by or through agents or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be
responsible for the negligence or misconduct of any agents or attorneys in fact selected by it with
reasonable care. The exculpatory provisions of this Agreement and of the other Loan Documents
shall apply to any such agent or attorney-in-fact and to their Related Parties (as defined below).

     10.3. Exculpatory Provisions. Neither any Agent nor any of their respective officers,
directors, employees, agents, attorneys in fact, controlling persons or affiliates (collectively,
the “Related Parties”) shall be (i) liable for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan

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Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents or any of their Related Parties under or
in connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder
or thereunder. The Agents shall not be under any obligation to any Lender 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 Loan Party.

     10.4. Reliance by Agent. The Agents and their Related Parties shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy or email message, statement, order or other
document or conversation believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by any Agent. Each
Agent and its Related Parties may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent and its Related Parties 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 written advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders or, in the case of the Collateral Agent, the Administrative Agent)
as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense that may be incurred by it by reason of taking or continuing to
take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a written request of the
Required Lenders (or, if so specified by this Agreement, all Lenders or, in the case of the
Collateral Agent, the Administrative Agent), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.
Each Loan Party will furnish such information reasonably known to it (and subject to applicable
confidentiality restrictions) about the Collateral, the Loan Parties and any other information the
Collateral Agent reasonably deems necessary to exercise any of the rights or powers vested in it by
the Loan Documents as the Collateral Agent may reasonably request from time to time.

     10.5. Notice of Default. No Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless such Agent has received notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that any Agent receives such a
notice, such Agent shall give notice thereof to the Lenders and the other Agent. The Agents shall
take such action with respect to such Default or Event of Default as shall be reasonably directed
in writing by the Required Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement or, in the case of the Collateral Agent,
the Administrative Agent); provided that unless and until any Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

     10.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges
that neither the Agents nor any of their Related Parties have made any representations or
warranties to it and that no act by any Agent hereafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation
or warranty by any Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other

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condition and creditworthiness of the Loan
Parties and their affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be furnished to the Lenders
by any Agent hereunder, no Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party
that may come into the possession of such Agent or any of its officers, directors, employees,
agents, attorneys in fact or affiliates.

     10.7. Indemnification. The Lenders agree to indemnify each Agent in its capacity as
such and any of its Related Parties, as applicable (collectively, the “Lender Indemnitees”)
(to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their
respective Credit Exposure in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance with such Credit
Exposure immediately prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
(including reasonable attorneys fees and expenses) whatsoever that may at any time (whether before
or after the payment of the Loans) be imposed on, incurred by or asserted against such Lender
Indemnitee in any way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by such Lender
Indemnitee under or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted from such Agent
Indemnitee’s gross negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder. Notwithstanding anything herein
to the contrary, no Agent shall be required to act hereunder or to advance funds or otherwise incur
any financial liability in the performance of its duties or the exercise of its rights hereunder
and under any other agreements or documents to which it is a party and shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall receive further assurances to its
satisfaction from the Loan Parties and the Lenders (other than the Agents) of their indemnification
obligations hereunder against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take or refraining from taking any such action.

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

     10.9. Successor Agent. Each Agent may resign as Agent upon 10 days’ notice to the
Lenders and the Borrower. If any Agent shall resign as Agent under this Agreement and the other
Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent
for the Lenders, which successor agent shall (unless an Event of Default under subsection
(b), (f) or (g) of Article

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VII with respect to the Borrower shall have occurred
and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties
of such Agent, and the term “Agent” shall mean such successor agent effective upon such appointment
and approval, and the former Agent’s rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted appointment as
Agent by the date that is 10 days following a retiring Agent’s notice of resignation, the retiring
Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent or the Collateral Agent hereunder, as the
case may be, until such time, if any, as the Required Lenders appoint a successor agent as provided
for above. After any retiring Agent’s resignation as Agent, the provisions of this Article
X and of Section 9.6 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan Documents.

     10.10. Collateral Agent. The Collateral Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the Lenders, from time to
time to take any action with respect to any Collateral or the Loan Documents which may be necessary
to perfect and maintain a perfected security interest in and Liens upon the Collateral granted
pursuant to the Loan Documents. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder or under any of the other Loan
Documents, the Collateral Agent shall have no duty as to any Collateral, as to ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, trades or other matters
relative to any Collateral, whether or not the Collateral Agent is deemed to have knowledge of such
matters, or as to taking of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Collateral (including the filing of UCC Continuation Statements). The
Collateral Agent shall be deemed to have exercised appropriate and due care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which other collateral agents accord similar property.

     10.11. Execution of Loan Documents. The Lenders hereby empower and authorize the
Agents, and the Administrative Agent hereby empowers and authorizes the Collateral Agent, on behalf
of the Lenders (and, the Administrative Agent, as the case may be), to execute and deliver to the
Loan Parties the other Loan Documents and all related agreements, certificates, documents, or
instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents.
Each Lender and each Agent agrees that any action taken by any Agent or the Required Lenders in
accordance with the terms of this Agreement or the other Loan Documents, and the exercise by any
Agent or the Required Lenders 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
and the Agents.

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ARTICLE XI

SETOFF; RATABLE PAYMENTS

     11.1. Setoff. In addition to, and without limitation of, any rights of the Lenders
under applicable law, if any Loan Party becomes insolvent, however evidenced, or any Event of
Default occurs and is continuing any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other Indebtedness at any
time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of
the Borrower may be offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part thereof, shall then be due.

     11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has payment
made to it upon its Credit Exposure (other than payments received pursuant to Section 3.1,
3.2, 3.4 or 3.5) in a greater proportion than that received by any other
Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Aggregate Credit
Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or other protection for
its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon
demand,
to take such action necessary such that all Lenders share in the benefits of such collateral
ratably in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In case any
such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be
made.

ARTICLE XII

SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS

     (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Article XII.

     (b) (i) Subject to the conditions set forth in subsection (b)(ii) below, any Lender may
assign to one or more assignees (each, an “Assignee”) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments and the Loans at
the time owing to it) with the prior written consent of:

     (A) the Borrower (such consent not to be unreasonably withheld or delayed), provided that no
consent of the Borrower shall be required for an assignment to a Lender, an affiliate of a Lender,
an Approved Fund (as defined below) or, if an Event of Default has occurred and is continuing, any
other Person; and

     (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be
required for an assignment of all or any portion of a Loan to a Lender, an affiliate of a Lender or
an Approved Fund.

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

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     (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved
Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or
Loans, the amount of the Commitments or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect to such assignment
is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the
Borrower shall be required if an Event of Default has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any;

     (B) (1) the parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of $3,500 and (2) the
assigning Lender shall have paid in full any amounts owing by it to the Agents; and

     (C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
administrative questionnaire in which the Assignee designates one or more credit contacts to whom
all syndicate-level information (which may contain material non-public information about the
Borrower and its Affiliates and their related parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

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

     (iii) Subject to acceptance and recording thereof pursuant to subsection (b)(iv)
below, from and after the effective date specified in each Assignment and Assumption the Assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 3.1, 3.2, 3.4, 3.5 and 9.6). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Article XII shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (c) of this
Article XII.

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

     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in
subsection (b) of this Article XII and any written consent to such assignment
required by subsection (b) of this Article XII, the Administrative Agent shall
accept such Assignment and Assumption and record the

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information contained therein in the Register.
No assignment shall be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this subsection.

     (c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant
to which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or waiver that (1)
requires the consent of each Lender directly affected thereby pursuant to Section 8.3(b)
and (2) directly affects such Participant. Subject to subsection (c)(ii) of this
Article XII, the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of this
Article XII. To the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 11.1 as though it were a Lender, provided such Participant shall be
subject to Section 11.1 as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under Section
3.1, 3.2 or 3.5 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 3.5 unless such
Participant complies with Section 3.5(d).

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

     (e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue
Notes to any Lender requiring Notes to facilitate transactions of the type described in
subsection (d) above.

     (f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it
may have funded hereunder to its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set forth in subsection (b) of
this Article XII. Each of the Borrower, each Lender and each Agent hereby confirms that it
will not institute against a Conduit Lender or join any other Person in instituting against a
Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any state bankruptcy or similar law, for one year and one day after the payment in full of
the latest maturing commercial paper note issued by such Conduit Lender; provided, however, that
each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage or expense arising out of its inability to institute
such a proceeding against such Conduit Lender during such period of forbearance.

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ARTICLE XIII

NOTICES

     13.1. Notices; Effectiveness; Electronic Communications.

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

	 	(i)	 	if to any Loan Party, at its address or
telecopier number set forth on the signature page hereof;
	 
	 	(ii)	 	if to the Administrative Agent, at

JPMorgan Chase Bank, N.A.

Loan and Agency Services

10 South Dearborn, 19th Floor

Chicago, IL 60603

Attention: Claudia Kech

Telecopy: (312) 385-7096

Email: claudia.kech@jpmchase.com
	 
	 	 	 	with a copy to:

JPMorgan Chase Bank, N.A.

201 St. Charles Avenue, 28th Floor

New Orleans, LA 70170

Attention: Charlie Freel

Telecopy: (504) 623-1638

Email: charlie.freel@chase.com
	 
	 	(iii)	 	if to the Collateral Agent, at

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-1615

Attention: James A. Hanley, Senior Financial Services Officer

Telecopy: (302) 636-4145
	 
	 	(iv)	 	if to a Lender, to it at its address or
telecopier number set forth in its administrative questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of business on the next
Business Day for the recipient). Notices delivered through electronic communications to the
extent provided in paragraph (b) below, shall be effective as provided in said paragraph
(b).

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     (b) Electronic Communications. Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant to procedures
approved by the Administrative Agent or as otherwise determined by the
Administrative Agent, provided that, the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender, has notified the
Administrative Agent that it is incapable of receiving notices under such Article
by electronic communication. Any Agent or any Loan Party may, in its respective
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it or as it otherwise
determines, provided that such determination or approval may be limited to
particular notices or communications. Notwithstanding the foregoing, in every
instance, the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.1(e) to the Administrative Agent.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the sender’s receipt
of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at the opening of
business on the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website address therefor.

     13.2. Change of Address, Etc. Any party hereto may change its address or telecopier
number for notices and other communications hereunder by written notice to the other parties
hereto.

ARTICLE XIV

COUNTERPARTS

     This Agreement may be executed in any number of counterparts, all of which taken together
shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be effective when it has been executed by the Loan
Parties, the Agents, and the Lenders and each party has notified the Administrative Agent by
facsimile transmission or telephone that it has taken such action.

ARTICLE XV

GUARANTY

     15.1. Guaranty. Each Guarantor (other than those that have delivered a separate
Guaranty; each to be referred to in this Article XV as a Guarantor and collectively as the
Guarantors) hereby agrees that it is jointly and severally liable for, and, as primary obligor and
not merely as surety, absolutely and unconditionally guarantees to the Agents and Lenders the
prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Obligations and all costs and expenses including, without limitation, all
court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and
paralegals) and expenses paid or incurred by the Agents and the Lenders in endeavoring to collect
all or any part of the Obligations from, or in prosecuting any action against, the Borrower, any
Guarantor or any other guarantor of all or any part of the Obligations (such

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costs and expenses,
together with the Obligations, collectively the “Guaranteed Obligations”). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part
without notice to or further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal.

     15.2. Guaranty of Payment. This Guaranty is a guaranty of payment and not of
collection. Each Guarantor waives any right to require any Agent or any Lender to sue the Borrower,
any Guarantor, any other guarantor, or any other person obligated for all or any part of the
Guaranteed Obligations, or otherwise to enforce its payment against any collateral securing all or
any part of the Guaranteed Obligations.

     15.3. No Discharge or Diminishment of Guaranty.

     (a) Except as otherwise provided for herein and to the extent provided for
herein, the obligations of each Guarantor hereunder are unconditional and absolute
and not subject to any reduction, limitation, impairment or termination for any
reason (other than the indefeasible payment in full in cash of the Guaranteed
Obligations), including:

	 	(i)	 	any claim of waiver, release, extension,
renewal, settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise;
	 
	 	(ii)	 	any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of or
other person liable for any of the Guaranteed Obligations;
	 
	 	(iii)	 	any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Borrower, any Guarantor, or any
other guarantor of or other person liable for any of the Guaranteed
Obligations, or their assets or any resulting release or discharge of
any obligation of the Borrower, any Guarantor, or any other guarantor
of or other person liable for any of the Guaranteed Obligations; or
	 
	 	(iv)	 	the existence of any claim, setoff or other
rights which any Guarantor may have at any time against the Borrower,
any Guarantor, any other guarantor of the Guaranteed Obligations, any
Agent, any Lender, or any other person, whether in connection herewith
or in any unrelated transactions.

     (b) The obligations of each Guarantor hereunder are not subject to any defense
or setoff, counterclaim, recoupment, or termination whatsoever by reason of the
invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or
otherwise, or any provision of applicable law or regulation purporting to prohibit
payment by the Borrower, any Guarantor or any other guarantor of or other person
liable for any of the Guaranteed Obligations, of the Guaranteed Obligations or any
part thereof.

     (c) Further, the obligations of any Guarantor hereunder are not discharged or
impaired or otherwise affected by:

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	 	(i)	 	the failure of any Agent or any Lender to
assert any claim or demand or to enforce any remedy with respect to all
or any part of the Guaranteed Obligations;
	 
	 	(ii)	 	any waiver or modification of or supplement to
any provision of any agreement relating to the Guaranteed Obligations;
	 
	 	(iii)	 	any release, non-perfection, or invalidity of
any indirect or direct security for the obligations of the Borrower for
all or any part of the Guaranteed Obligations or any obligations of any
other guarantor of or other person liable for any of the Guaranteed
Obligations;

     (d) any action or failure to act by any Agent or any Lender with respect to
any collateral securing any part of the Guaranteed Obligations; and

     (e) any default, failure or delay, willful or otherwise, in the payment or
performance of any of the Guaranteed Obligations, or any other circumstance, act,
omission or delay that might in any manner or to any extent vary the risk of such
Guarantor or that would otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).

     15.4. Defenses Waived. To the fullest extent permitted by applicable law, each
Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any
Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause,
or the cessation from any cause of the liability of the Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality
of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and, to the fullest extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against the Borrower, any Guarantor,
any other guarantor of any of the Guaranteed Obligations, or any other person. Each Agent may, at
its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales,
accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act
with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with the Borrower, any
Guarantor, any other guarantor or any other person liable on any part of the Guaranteed Obligations
or exercise any other right or remedy available to it against the Borrower, any Guarantor, any
other guarantor or any other person liable on any of the Guaranteed Obligations, without affecting
or impairing in any way the liability of such Guarantor under this Guaranty except to the extent
the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent
permitted by applicable law, each Guarantor waives any defense arising out of any such election
even though that election may operate, pursuant to applicable law, to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Guarantor against the
Borrower, any other guarantor or any other person liable on any of the Guaranteed Obligations, as
the case may be, or any security.

     15.5. Rights of Subrogation. No Guarantor will assert any right, claim or cause of
action, including, without limitation, a claim of subrogation, contribution or indemnification that
it has against the Borrower, any Guarantor, any person liable on the Guaranteed Obligations, or any
collateral, until the Loan Parties and the Guarantors have fully performed all their obligations to
the Agents and the Lenders.

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     15.6. Reinstatement; Stay of Acceleration. If at any time any payment of any portion
of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, or reorganization of the Borrower or otherwise, each Guarantor’s
obligations under this Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Agents and the Lenders are in
possession of this Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such
amounts otherwise subject to acceleration under the terms of any agreement relating to the
Guaranteed Obligations shall nonetheless be payable by the Guarantors forthwith on demand by the
Lender.

     15.7. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the
Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each
Guarantor assumes and incurs under this Guaranty, and agrees that neither any Agent nor any Lender
shall have any duty to advise any Guarantor of information known to it regarding those
circumstances or risks.

     15.8. Termination. The Lenders may continue to make loans or extend credit to the
Borrower based on this Guaranty until five days after the Administrative Agent receives written
notice of termination from any Guarantor. Notwithstanding receipt of any such notice, each
Guarantor will continue to be liable to the Lender for any Guaranteed Obligations created, assumed
or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for, all or any part of
that Guaranteed Obligations.

     15.9. Taxes. All payments of the Guaranteed Obligations will be made by each
Guarantor free and clear of and without deduction for or on account of any and all present or
future taxes, levies, imposts, duties, charges, deductions or withholdings of whatever nature
imposed by any governmental authority with respect to such payments, and any and all liabilities
with respect to the foregoing, but excluding Excluded Taxes (collectively, “Taxes”). If any
Guarantor is required by law to deduct any Taxes from or in respect of any sum payable to the
Lenders under this Guaranty, (a) the sum payable must be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this provision) the Lenders receive an amount equal to the sum it would have received had no such
deductions been made, (b) the Guarantors must then make such deductions, and must pay the full
amount deducted to the relevant authority in accordance with applicable law, and (c) the Guarantors
must furnish to the Lender within forty-five days after their due date certified copies of all
official receipts evidencing payment thereof.

     15.10. Severability. The provisions of this Guaranty are severable, and in any action
or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy,
insolvency, reorganization, fraudulent conveyance, fraudulent transfer or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under this Guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount
of such Guarantor’s liability under this Guaranty, then, notwithstanding any other provision of
this Guaranty to the contrary, the amount of such liability shall, without any further action by
the Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding (such highest amount determined
hereunder being the relevant Guarantor’s “Maximum Liability”. This Section with respect to the
Maximum Liability of each Guarantor is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other person
or entity shall have any right or claim under this Section with respect to such Maximum Liability,
except to the extent necessary so that the obligations of any Guarantor hereunder shall not be
rendered voidable under applicable law. Each Guarantor agrees that the

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Guaranteed Obligations may
at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing
this Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing
in this sentence shall be construed to increase any Guarantor’s obligations hereunder beyond its
Maximum Liability.

     15.11. Contribution. In the event any Guarantor (a “Paying Guarantor”) shall
make any payment or payments under this Guaranty or shall suffer any loss as a result of any
realization upon any collateral granted by it to secure its obligations under this Guaranty, each
other Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor
an amount equal to such Non-Paying Guarantor’s “Pro Rata Share” of such payment or payments
made, or losses suffered, by such Paying Guarantor. For purposes of this Article XV, each
Non-Paying Guarantor’s “Pro Rata Share” with respect to any such payment or loss by a
Paying Guarantor shall be determined as of the date on which such payment or loss was made by
reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any contribution hereunder)
or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount
of all monies received by such Non-Paying Guarantor from the Borrower after the date hereof
(whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect
to any right to receive, or obligation to make, any contribution hereunder), or to the extent that
a Maximum Liability has not been determined for any Guarantor, the aggregate amount of all monies
received by such Guarantors from the Borrower after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any Guarantor’s several
liability for the entire amount of the Guaranteed Obligations (up to such Guarantor’s Maximum
Liability). Each of the Guarantors covenants and agrees that its right to receive any contribution
under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment
to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of
both the Agents, the Lenders and the Guarantors and may be enforced by any one, or more, or all of
them in accordance with the terms hereof.

     15.12. Lending Installations. The Guaranteed Obligations may be booked at any Lending
Installation. All terms of this Guaranty apply to and may be enforced by or on behalf of any
Lending Installation.

     15.13. Liability Cumulative. The liability of each Loan Party as a Guarantor under
this Article XV is in addition to and shall be cumulative with all liabilities of each Loan Party
to the Agents and the Lenders under this Agreement and the other Loan Documents to which such Loan
Party is a party or in respect of any obligations of liabilities of the other Loan Parties, without
any limitation as to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

ARTICLE XVI

CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL

     16.1. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

     16.2. Submission To Jurisdiction; Waivers. Each Loan Party hereby irrevocably and
unconditionally:

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

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

     (c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Loan Party at its
address in accordance with Article XIII;

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

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

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

[Signature Pages Follow]

72

 

     IN WITNESS WHEREOF, the Loan Parties, the Lenders and the Administrative Agent have executed
this Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	NEWPARK RESOURCES, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Dardenne
 

	 	 
	 	 	Print Name: John Dardenne	 	 
	 	 	Title: Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	LOAN PARTIES:	 	 
	 
	 	 	 	 	 	 
	 	 	DURA-BASE NEVADA, INC.,	 	 
	 	 	EXCALIBAR MINERALS INC.,	 	 
	 	 	EXCALIBAR MINERALS OF LA., L.L.C.,	 	 
	 	 	NEWPARK DRILLING FLUIDS LABORATORY, INC.,	 	 
	 	 	NEWPARK ENVIRONMENTAL SERVICES, L.L.C.,	 	 
	 	 	NEWPARK ENVIRONMENTAL MANAGEMENT COMPANY, L.L.C.,	 	 
	 	 	NEWPARK HOLDINGS, INC.,	 	 
	 	 	NEWPARK TEXAS, L.L.C.,	 	 
	 	 	SOLOCO, L.L.C.,	 	 
	 	 	SUPREME CONTRACTORS, L.L.C.,	 	 
	 	 	COMPOSITE MAT SOLUTIONS L.L.C.,	 	 
	 	 	NEWPARK ENVIRONMENTAL WATER SOLUTIONS L.L.C.,	 	 
	 	 	NEWPARK WATER TECHNOLOGY PARTNERS L.L.C.,	 	 
	 	 	OLS CONSULTING SERVICES, INC.,	 	 
	 	 	THE LOMA COMPANY, L.L.C.,	 	 
	 	 	MALLARD & MALLARD OF LA., INC., and	 	 
	 	 	SHAMROCK DRILLING FLUIDS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Dardenne
 

	 	 
	 	 	Print Name: John Dardenne	 	 
	 	 	Title: Treasurer	 	 

 

 

	 	 	 	 	 	 	 
	 	 	BATSON MILL, L.P.,	 	 
	 	 	NES PERMIAN BASIN, L.P.,	 	 
	 	 	NEWPARK ENVIRONMENTAL SERVICES OF TEXAS, L.P.,	 	 
	 	 	NEWPARK DRILLING FLUIDS, L.P.	 	 
	 	 	NID, L.P.,	 	 
	 	 	SOLOCO TEXAS, L.P., and	 	 
	 	 	NEWPARK ENVIRONMENTAL SERVICES MISSISSIPPI, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Newpark Holdings, Inc., the general partner of each	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Dardenne
 

	 	 
	 	 	Print Name: John Dardenne	 	 
	 	 	Title: Treasurer	 	 

	 	 	 	 	 
	 	 	NOTICE ADDRESS FOR ALL LOAN PARTIES:
	 	 	c/o Newpark Resources, Inc.
	 	 	3850 North Causeway Blvd., Suite 1770
	 	 	Metairie, Louisiana 70002-1752
	 

	 	Attention:
	 	Mr. John R. Dardenne, Sr., Treasurer
	 

	 	Telephone:
	 	(504) 838-8222
	 

	 	Facsimile:
	 	(504) 833-9506

 

 

	 	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 	 	Individually and as Administrative Agent and Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Spevack	 	 
	 

	 	Name:
	 	 

Gary L. Spevack
	 	 
	 

	 	Title:
	 	Vice President	 	 

 

 

	 	 	 	 	 	 	 
	 	 	COLLATERAL AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY	 	 
	 	 	as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James A. Hanley
 

	 	 
	 

	 	Name:
	 	James A. Hanley	 	 
	 

	 	Title:
	 	Senior Financial Services Officer	 	 

 

 

PRICING SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin
	Pricing	 	 	 	 	 	 	 	Floating Rate
	Level	 	Required Corporate Ratings	 	Eurodollar Advances	 	Advances
	I

	 	At least B1 and B+ (in
each case with stable
outlook or better)
	 	 	3.00	%	 	 	2.00	%
	 
	 	 	 	 	 	 	 	 	 	 
	II

	 	At least B2 and B (in
each case with stable
outlook or better)
	 	 	3.25	%	 	 	2.25	%
	 
	 	 	 	 	 	 	 	 	 	 
	III

	 	Below Level I and II, but
ratings from both Moody’s and S&P
	 	 	3.75	%	 	 	2.75	%
	 
	 	 	 	 	 	 	 	 	 	 
	IV

	 	Rating from Moody’s and/or S&P withdrawn
	 	 	4.25	%	 	 	3.25	%

     The pricing levels set forth above are based upon the then current corporate ratings for the
Company issued by Moody’s and S&P, provided that (a) if the Company has at any time a split rating,
the lower rating shall determine the applicable pricing level and (b) if one or both of the minimum
ratings required by pricing level I or II, as applicable, are issued with an outlook that is not
stable or better, the next higher pricing level shall apply. If an Event of Default shall have
occurred and be continuing as of any date on which the Applicable Margin would otherwise been
adjusted in accordance with this Pricing Schedule, the Applicable Margin shall in no event be
reduced on such date (from the Applicable Margin as in effect prior to such date) until such Event
of Default is cured or waived.exv10w1

 

Exhibit 10.1

8,365,862 Units

PERMIAN BASIN ROYALTY TRUST

Units of Beneficial Interest

UNDERWRITING AGREEMENT

August 17, 2006

Lehman Brothers Inc.

745 Seventh Avenue

New York, New York 10019

Wachovia Capital Markets, LLC

One Wachovia Center

301 South College Street

Charlotte, North Carolina 28288-0604

As Representatives of the several

   Underwriters named in Schedule 1 attached hereto

Ladies and Gentlemen:

          ConocoPhillips, a Delaware corporation (“ConocoPhillips”), together with its indirect, wholly
owned subsidiary Burlington Resources Oil & Gas Company LP, a Delaware limited partnership (“BROG”,
and together with ConocoPhillips, the “Selling Unitholder Parties”), propose to sell an aggregate
of 8,365,862 units (the “Firm Units”) of beneficial interest (the “Units”) of PERMIAN BASIN ROYALTY
TRUST, a trust formed under the laws of the State of Texas (the “Trust”). In addition, the Selling
Unitholder Parties propose to grant to the underwriters (the “Underwriters”) named in Schedule
1 attached to this agreement (this “Agreement”) an option to purchase up to an additional
1,254,879 Units on the terms set forth in Section 3 (the “Option Units”). The Firm Units and the
Option Units, if purchased, are hereinafter collectively called the “Offered Units.” This is to
confirm the agreement concerning the purchase of the Offered Units from the Selling Unitholder
Parties by the Underwriters.

          1. Representations, Warranties and Agreements of the Trust and the Selling Unitholder Parties.
Each of the Trust and the Selling Unitholder Parties represent, warrant and agree that:

     (a) A registration statement on Form S-3 with respect to the Offered Units has (i) been
prepared by the Trust and the Selling Unitholder Parties in conformity with the requirements
of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the
“Commission”) thereunder; (ii) been filed with the Commission under the Securities Act; and
(iii) become effective under the Securities Act. Copies of such registration statement and
any amendment thereto have been delivered or made available to you by the Trust or
ConocoPhillips as the Representatives (the “Representatives”) of

 

2

the Underwriters. As used in this Agreement, “Applicable Time” means 5:45 p.m. (New
York City time) on the date of this Agreement; “Effective Time” means the date and the time
as of which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; “Issuer Free Writing Prospectus”
means each “free writing prospectus” (as defined in Rule 405 of the Rules and Regulations)
prepared by or on behalf, and with the approval, of the Trust or the Selling Unitholder
Parties or used or referred to by the Trust or the Selling Unitholder Parties in connection
with the offering of the Units; “Preliminary Prospectus” means each prospectus included in
such registration statement, or amendments thereto, before such registration statement
became effective under the Securities Act and any prospectus filed with the Commission by
the Trust and the Selling Unitholder Parties with the consent of the Representatives
pursuant to Rule 424(b) of the Rules and Regulations; “Pricing Disclosure Package” means, as
of the Applicable Time, the most recent Preliminary Prospectus, together with each Issuer
Free Writing Prospectus filed or used by the Trust and the Selling Unitholder Parties on or
before the Applicable Time, other than a road show that is an Issuer Free Writing Prospectus
under Rule 433 of the Rules and Regulations; “Registration Statement” means such
registration statement, as amended at the Effective Time, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration statement; and
“Prospectus” means the final prospectus relating to the Units including any prospectus
supplement thereto relating to the Units, as filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations. Any reference to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, any reference to the “most recent
Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement or filed pursuant to Rule 424(b) prior to or on the
date hereof (including, for purposes hereof, any documents incorporated by reference therein
prior to or on the date hereof). Any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any
document filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
after the date of such Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Trust or the Selling Unitholder Parties filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that is incorporated by reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any Preliminary Prospectus or
Prospectus or suspending the effectiveness of the Registration Statement, and no proceeding
for such purpose has been instituted, or to the knowledge of the Trust and the Selling
Unitholder Parties, threatened by the Commission.

     (b) Neither the Trust nor any Selling Unitholder Party was at the time of initial
filing of the Registration Statement and at the earliest time thereafter that any offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Rules and
Regulations) of the Units, is on the date hereof nor will be on the applicable Delivery Date
(as defined in Section 5) an “ineligible issuer” (as defined in Rule 405).

 

3

The Trust and ConocoPhillips have been since the time of initial filing of the
Registration Statement and continue to be eligible to use Form S-3 for the offering of the
Units.

     (c) The Registration Statement conformed and will conform in all material respects at
the Effective Time and on the applicable Delivery Date, and any post-effective amendment to
the Registration Statement filed after the date hereof will conform in all material respects
when filed, to the requirements of the Securities Act and the Rules and Regulations. The
most recent Preliminary Prospectus conformed, and the Prospectus will conform in all
material respects when filed with the Commission pursuant to Rule 424(b) and on the
applicable Delivery Date to the requirements of the Securities Act and the Rules and
Regulations. The Registration Statement, at the Effective Time, and the Prospectus, as of
its date and on the applicable Delivery Date, do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the Prospectus, in the light of
the circumstances under which they were made) not misleading; provided, that no
representation or warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Trust or the Selling Unitholder Parties through the
Representatives by or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 10(f).

     (d) The Pricing Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the price of the Units and disclosures
directly relating thereto will be included on the cover page of the Prospectus; provided
that no representation or warranty is made as to information contained in or omitted from
the Pricing Disclosure Package in reliance upon and in conformity with written information
furnished to the Trust and the Selling Unitholder Parties through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein, which information is
specified in Section 10(f).

     (e) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together with the Pricing
Disclosure Package as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading, except that the price of the Units and disclosures directly relating thereto
will be included on the cover page of the Prospectus.

     (f) Each Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations on the date
of first use, and the Trust and the Selling Unitholder Parties have complied with any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules and
Regulations. Neither the Trust nor the Selling Unitholder Parties have made any offer
relating to the Units that would constitute an Issuer Free Writing Prospectus without the
prior written consent of the Representatives (excluding any road

 

4

show that is a free writing prospectus under Rule 433) . The Trust and the Selling
Unitholder Parties have retained all Issuer Free Writing Prospectuses that were not required
to be filed pursuant to the Rules and Regulations.

          2.1 Representations, Warranties and Agreements of the Trust. The Trust represents, warrants
and agrees that:

     (a) The documents incorporated by reference in the Registration Statement, any
Preliminary Prospectus and the Prospectus from the Trust’s filings with the Commission, when
filed with the Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and none of such
documents contained, or on the applicable Delivery Date will contain, an untrue statement of
a material fact or omitted, or on the applicable Delivery Date, will omit, to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed by the Trust and incorporated by reference in
the Registration Statement and the Prospectus, when filed with Commission, will conform in
all material respects to the requirements of the Securities Act and the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

     (b) The Trust has been duly organized and is validly existing under the laws of its
jurisdiction of organization. The Trust has all power and authority necessary to own or
hold its assets and to conduct the businesses in which it is engaged. The Trust does not
own or control, directly or indirectly, any corporation, association or other entity.

     (c) The Trust has an authorized capitalization as set forth in each of the most recent
Preliminary Prospectus and the Prospectus, and all of the issued Units of the Trust have
been duly authorized and validly issued, are fully paid and non-assessable, conform to the
description thereof contained in each of the most recent Preliminary Prospectus and the
Prospectus and were issued in compliance with federal and state securities laws and not in
violation of any preemptive right, resale right, right of first refusal or similar right.
Except for the rights of the Underwriters pursuant to this Agreement, no options, warrants
or other rights to purchase or exchange any securities for Units are outstanding.

     (d) The Units to be sold by the Selling Unitholder Parties under this Agreement have
been duly authorized and validly issued, are fully paid and non-assessable and conform in
all material respects to the description thereof contained in each of the most recent
Preliminary Prospectus and the Prospectus.

     (e) The Trust has all requisite power and authority to execute, deliver and perform its
obligations under this Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Trust.

 

5

     (f) The execution, delivery and performance of this Agreement by the Trust and the
consummation of the transactions contemplated hereby will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, impose any lien, charge or
encumbrance upon any property or assets of the Trust, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, license or other agreement or instrument
to which the Trust is a party or by which the Trust is bound or to which any of the property
or assets of the Trust is subject; (ii) result in any violation of the provisions of the
organizational documents of the Trust; or (iii) result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties or assets.

     (g) Except for the registration of the Offered Units under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with the purchase
and sale of the Offered Units by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental agency or body having
jurisdiction over the Trust or any of its properties or assets is required for the
execution, delivery and performance of this Agreement by the Trust and the consummation of
the transactions contemplated hereby.

     (h) There are no contracts, agreements or understandings between the Trust and any
person (other than the Selling Unitholder Parties) granting such person the right to require
the Trust to file a registration statement under the Securities Act with respect to any
securities of the Trust owned or to be owned by such person or to require the Trust to
include such securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration statement filed by
the Trust under the Securities Act.

     (i) The Trust has not sold or issued any securities that would be integrated with the
offering of the Offered Units contemplated by this Agreement pursuant to the Securities Act,
the Rules and Regulations or the interpretations thereof by the Commission.

     (j) The Trust has not sustained, since the date of the latest audited financial
statements included or incorporated by reference in the most recent Preliminary Prospectus,
any loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, and since such date, there has not been any change in the
capitalization of the Trust or any adverse change, or any development involving a
prospective adverse change, in or affecting the financial condition, distributable income,
trust corpus, assets, business or prospects of the Trust, in each case except as could not
reasonably be expected to have a material adverse effect on the condition (financial or
otherwise), distributable income, trust corpus, assets, business or prospects of the Trust
(a “Trust Material Adverse Effect”).

     (k) Since the date as of which information is given in the most recent Preliminary
Prospectus and except as may otherwise be described in the most recent

 

6

Preliminary Prospectus, the Trust has not (i) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations that were incurred in the
ordinary course of business or (ii) entered into any material transaction not in the
ordinary course of business.

     (l) The historical financial statements (including the related notes and supporting
schedules) of the Trust included or incorporated by reference in the most recent Preliminary
Prospectus from the Trust’s filings with the Commission comply as to form in all material
respects with the requirements of Regulation S-X under the Securities Act and Staff
Accounting Bulletin Topic 12:E of the Commission promulgated thereunder and present fairly
the financial condition, distributable income and changes in trust corpus of the Trust
purported to be shown thereby at the dates and for the periods indicated and have been
prepared in conformity with accounting principles permitted for royalty trusts by the
Commission pursuant to Staff Accounting Bulletin Topic 12:E applied on a consistent basis
throughout the periods involved, except as otherwise stated therein.

     (m) Deloitte & Touche LLP, who have certified certain financial statements of the
Trust, whose report appears in the most recent Preliminary Prospectus or is incorporated by
reference therein and who have delivered the initial letter referred to in Section 9(f)(1)
hereof, is an independent registered public accounting firm as required by the Securities
Act and the Rules and Regulations.

     (n) Cawley, Gillespie & Associates, Inc., whose report with respect to certain
properties of the Trust appears in the most recent Preliminary Prospectus (or is
incorporated by reference therein), was, as of the date of such report, and is, as of the
date hereof, an independent petroleum engineer with respect to the Trust.

     (o) The Trust has good and defensible title to all real property and good and
marketable title to all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the most recent Preliminary
Prospectus or such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the
Trust; and all assets held under lease by the Trust are held by it under valid, subsisting
and enforceable leases, with such exceptions as do not materially interfere with the use
made and proposed to be made of such assets by the Trust.

     (p) There are no legal or governmental proceedings pending to which the Trust is a
party or of which any property or assets of the Trust is the subject that could reasonably
be expected to have a Trust Material Adverse Effect or could reasonably be expected to have
a material adverse effect on the performance of this Agreement or the consummation of the
transactions contemplated hereby; and to the knowledge of the Trust, no such proceedings are
threatened or contemplated by governmental authorities or others.

     (q) There are no contracts or other documents to which the Trust is a party of a
character required to be described in the Registration Statement, most recent

 

7

Preliminary Prospectus or Prospectus or to be filed as exhibits to the Registration
Statement or incorporated by reference therein that are not described and filed or
incorporated by reference therein as required. To the Trust’s knowledge, no other party to
any such contract, agreement or arrangement has any intention not to render full performance
as contemplated by the terms thereof.

     (r) No relationship, direct or indirect, exists between or among the Trust, on the one
hand, and the trustee, unitholders, customers or suppliers of the Trust, on the other hand,
that is required to be described in the most recent Preliminary Prospectus or the Prospectus
which is not so described.

     (s) The Trust has filed all federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof, subject to permitted extensions, and
has paid all taxes due thereon, and no tax deficiency has been determined adversely to the
Trust, nor does the Trust have any knowledge of any tax deficiency that could reasonably be
expected to have a Trust Material Adverse Effect.

     (t) The Trust is not (i) in violation of its organizational documents, (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, license or other agreement or
instrument to which it is a party or by which it is bound or to which any of its properties
or assets is subject or (iii) in violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over it or its property or
assets or has failed to obtain any license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property or to the
conduct of its business, except in the case of clauses (ii) and (iii), to the extent any
such conflict, breach, violation or default could not, individually or in the aggregate,
reasonably be expected to have a Trust Material Adverse Effect.

     (u) The Trust is not, and as of the applicable Delivery Date and after giving effect to
the offer and sale of the Offered Units will not be, an “investment company” within the
meaning of such term under the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.

     (v) Since the date of the most recent balance sheet of the Trust reviewed or audited by
Deloitte & Touche LLP (i) the Trust is not aware of (A) any significant deficiencies in the
design or operation of internal controls that could adversely affect the ability of the
Trust to record, process, summarize and report financial data, or any material weaknesses in
internal controls or (B) any fraud, whether or not material, that involves management or
other employees who have a significant role in the internal controls of the Trust, and (ii)
since that date, there have been no significant changes in internal controls or in other
factors that could significantly affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

 

8

     (w) The Trust has not distributed and, prior to the later to occur of any Delivery Date
and completion of the distribution of the Offered Units, will not distribute any offering
material in connection with the offering and sale of the Offered Units other than the
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the
Representatives have consented in accordance with Section 1(f) or 6(a)(viii) and any
communication not deemed a “prospectus” by virtue of Rule 134 of the Rules and Regulations.

     (x) The Trust has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of the Trust to facilitate
the sale or resale of the Offered Units.

     (y) The Offered Units have been listed on the New York Stock Exchange.

     (z) The Trust is, and at all times prior was, (i) in compliance with any and all
applicable federal, state, local and foreign laws, regulations, ordinances, rules, orders,
judgments, decrees, permits or other legal requirements relating to the protection of human
health and safety, the environment, natural resources or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), which compliance includes
obtaining, maintaining and complying with all permits and authorizations and approvals
required by Environmental Laws to conduct its businesses and (ii) has not received notice of
any actual or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants, except in
the case of clause (i) or (ii) where such non-compliance with or liability under
Environmental Laws could not, individually or in the aggregate, reasonably be expected to
have a Trust Material Adverse Effect; and the Trust has not been named as a “potentially
responsible party” under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any other similar Environmental Law, except with
respect to any matters that, individually or in the aggregate, could not reasonably be
expected to have a Trust Material Adverse Effect. Except as described in the most recent
Preliminary Prospectus and Prospectus, the Trust is not a party to any proceeding under
Environmental Laws in which a governmental authority is also a party, other than such
proceedings regarding which it is believed no monetary penalties of $100,000 or more will be
imposed.

     (aa) The Trust (i) makes and keeps accurate books and records and (ii) maintains and has
maintained effective internal control over financial reporting as defined in Rule 13a-15
under the Exchange Act and a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with the trustee’s
general or specific authorizations, (B) transactions are recorded as necessary to permit
preparation of the Trust’s financial statements in conformity with applicable accounting
principles permitted for royalty trusts by the Commission pursuant to Staff Accounting
Bulletin 12:E and to maintain accountability for its assets, (C) access to the Trust’s
assets is permitted only in accordance with the trustee’s general or specific authorization
and (D) the recorded accountability for the

 

9

Trust’s assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

     (bb) (i) The Trust has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure controls
and procedures are designed to ensure that the information required to be disclosed by the
Trust in the reports it files or submits under the Exchange Act is accumulated and
communicated to the trustee of the Trust, as appropriate, to allow timely decisions
regarding required disclosure to be made and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for which they were
established.

          Any certificate signed by the trustee of the Trust and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Offered Units shall be deemed a
representation and warranty by the Trust, as to matters covered thereby, to each Underwriter.

          2.2 Representations, Warranties and Agreements of the Selling Unitholder Parties. The Selling
Unitholder Parties represent, warrant and agree that:

     (a) BROG has, and immediately prior to the applicable Delivery Date will have, good and
valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the
New York Uniform Commercial Code (the “UCC”) in respect of, the Units to be sold by the
Selling Unitholder Parties hereunder, free and clear of all liens, encumbrances, equities or
claims;

     (b) Upon payment for the Units to be sold by such Selling Unitholder Parties, delivery
of such Units, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee
as may be designated by The Depository Trust Company (“DTC”), registration of such Units in
the name of Cede or such other nominee and the crediting of such Units on the books of DTC
to securities accounts of the Underwriters (assuming that neither DTC nor any such
Underwriter has notice of any adverse claim (within the meaning of Section 8-105 of the UCC
to such Units), (i) DTC shall be a “protected purchaser” of such Units within the meaning of
Section 8-303 of the UCC, (ii) under Section 8-501 of the UCC, the Underwriters will acquire
a valid security entitlement in respect of such Units and (iii) no action based on any
“adverse claim”, within the meaning of Section 8-102 of the UCC, to such Units may be
asserted against the Underwriters with respect to such security entitlement. For purposes
of this representation, such Selling Unitholder Parties may assume that when such payment,
delivery and crediting occur, (A) such Units will have been registered in the name of Cede
or another nominee designated by DTC, in each case on the Trust’s share registry in
accordance with its organizational documents and applicable law, (B) DTC will be registered
as a “clearing corporation” within the meaning of Section 8-102 of the UCC and (C)
appropriate entries to the accounts of the several Underwriters on the records of DTC will
have been made pursuant to the UCC.

 

10

     (c) Each of the Selling Unitholder Parties has been duly organized, is validly existing
and in good standing under the laws of its jurisdiction of organization and is duly
qualified to do business and in good standing as a foreign corporation or other business
entity in each jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so qualified or in
good standing, individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), distributable income,
assets, management, business or prospects of the Selling Unitholder Parties (a “CP Material
Adverse Effect”). Each of the Selling Unitholder Parties has all power and authority
necessary to own or hold its assets and to conduct the business in which it is engaged.

     (d) The Selling Unitholder Parties have full right, power and authority, corporate or
otherwise, to enter into this Agreement. The execution, delivery and performance of this
Agreement by the Selling Unitholder Parties and the consummation by the Selling Unitholder
Parties of the transactions contemplated hereby do not and will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, license or other
agreement or instrument to which the Selling Unitholder Parties are a party or by which the
Selling Unitholder Parties are bound or to which any of the property or assets of the
Selling Unitholder Parties is subject, (ii) result in any violation of the provisions of the
charter, by-laws or partnership agreement (or similar organizational documents) of the
Selling Unitholder Parties or (iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body having jurisdiction over the
Selling Unitholder Parties or the property or assets of the Selling Unitholder Parties which
breaches or violations, in the case of clauses (i) or (iii), would, individually or in the
aggregate, cause a CP Material Adverse Effect or impede or delay the sale of any Units
contemplated by this Agreement.

     (e) Except for the registration of the Offered Units under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with the purchase
and sale of the Offered Units by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental agency or body having
jurisdiction over the Selling Unitholder Parties or the property or assets of the Selling
Unitholder Parties is required for the execution, delivery and performance of this Agreement
by the Selling Unitholder Parties and the consummation by the Selling Unitholder Parties of
the transactions contemplated hereby.

     (f) This Agreement has been duly and validly authorized, executed and delivered by or
on behalf of the Selling Unitholder Parties.

     (g) The Selling Unitholder Parties have not taken and will not take, directly or
indirectly, any action that is designed to or which has constituted or which could
reasonably be expected to cause or result in the stabilization or manipulation of the price
of any security of the Trust to facilitate the sale or resale of the Offered Units.

 

11

     (h) The documents incorporated by reference in the Registration Statement, any
Preliminary Prospectus and the Prospectus from ConocoPhillips’ filings with the Commission,
when filed with the Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission thereunder, and none of
such documents contained, or on the applicable Delivery Date will contain, an untrue
statement of a material fact or omitted, or on the applicable Delivery Date will omit, to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed by the Selling Unitholder Parties
and incorporated by reference in the Registration Statement, any Preliminary Prospectus and
the Prospectus, when filed with Commission, will conform in all material respects to the
requirements of the Securities Act and the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.

     (i) The historical financial statements (including the related notes and supporting
schedules) of ConocoPhillips included or incorporated by reference in the most recent
Preliminary Prospectus from the Selling Unitholders Parties’ filings with the Commission
comply as to form in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in conformity with accounting principles generally accepted
in the United States applied on a consistent basis throughout the periods involved, except
as otherwise stated therein.

     (j) Ernst & Young LLP, whose report with respect to the financial statements of
ConocoPhillips appears in the most recent Preliminary Prospectus or is incorporated by
reference therein, is an independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations.

     (k) The Selling Unitholder Parties have not sold or issued any securities that would be
integrated with the offering of the Offered Units contemplated by this Agreement pursuant to
the Securities Act, the Rules and Regulations or the interpretations thereof by the
Commission.

     (l) The Selling Unitholder Parties have not distributed and, prior to the later to
occur of any Delivery Date and completion of the distribution of the Offered Units, will not
distribute any offering material in connection with the offering and sale of the Offered
Units other than the Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus to which the Representatives have consented in accordance with Section 1(f) or
6(a)(viii) and any communication not deemed a “prospectus” by virtue of Rule 134 of the
Rules and Regulations.

          Any certificate signed by any officer of the Selling Unitholder Parties and delivered to the
Representatives or counsel for the Underwriters in connection with the offering of the Offered
Units shall be deemed a representation and warranty by such Selling Unitholder Parties, as to
matters covered thereby, to each Underwriter.

 

12

          3. Purchase of the Offered Units by the Underwriters. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Selling
Unitholder Parties hereby agree to sell the Firm Units to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the number of Firm Units set forth
opposite that Underwriter’s name in Schedule 1 hereto.

          In addition, the Selling Unitholder Parties grant to the Underwriters an option to purchase up
to 1,254,879 Option Units, severally and not jointly. Such option will be exercisable in the event
that the Underwriters sell more than the number of Firm Units in the offering and is exercisable as
provided in Section 5 hereof. Each Underwriter agrees, severally and not jointly, to purchase the
number of Option Units (subject to such adjustments to eliminate fractional units as the
Representatives may determine) that bears the same proportion to the total number of Option Units
to be sold on such Delivery Date as the number of Firm Units set forth in Schedule 1 hereto
opposite the name of such Underwriter bears to the total number of Firm Units.

          The price of both the Firm Units and any Option Units purchased by the Underwriters shall be
$14.8216 per unit.

          The Selling Unitholder Parties shall not be obligated to deliver any of the Firm Units or
Option Units deliverable on the applicable Delivery Date, except upon payment for all such Offered
Units to be purchased on such Delivery Date as provided herein.

          4. Offering of Offered Units by the Underwriters. Upon authorization by the Representatives
of the release of the Firm Units, the several Underwriters propose to offer the Firm Units for sale
upon the terms and conditions set forth in the Prospectus.

          5. Delivery of and Payment for the Units. Delivery of and payment for the Firm Units shall be
made at 10:00 A.M., New York City time, on August 23, 2006, or at such other date or place as shall
be determined by agreement between the Representatives and the Selling Unitholder Parties. This
date and time are sometimes referred to as the “Initial Delivery Date.” Delivery of the Firm Units
shall be made to the Representatives for the account of each Underwriter against payment by the
several Underwriters through the Representatives of the respective aggregate purchase prices of the
Firm Units being sold by the Selling Unitholder Parties to or upon the order of the Selling
Unitholder Parties by wire transfer in immediately available funds to the accounts specified by the
Selling Unitholder Parties. Time shall be of the essence, and delivery at the time specified
pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder.
Delivery of the Firm Units shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.

          The option granted in Section 3 will expire 30 days after the date of this Agreement and may
be exercised in whole or from time to time in part by written notice being given to the Selling
Unitholder Parties by the Representatives; provided that if such date falls on a day that is not a
business day, the option granted in Section 3 will expire on the next succeeding business day.
Such notice shall set forth the aggregate number of Option Units as to which the option is being
exercised, the names in which the Option Units are to be registered, the

 

13

denominations in which the shares of Option Units are to be issued and the date and time, as
determined by the Representatives, when the Option Units are to be delivered; provided, however,
that this date and time shall not be earlier than the Initial Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised. The date and time
the Option Units are delivered are sometimes referred to as an “Option Unit Delivery Date,” and the
Initial Delivery Date and any Option Unit Delivery Date are sometimes each referred to as a
“Delivery Date.”

          Delivery of and payment for the Option Units shall be made at the place specified in the first
sentence of the first paragraph of this Section 5 (or at such other place as shall be determined by
agreement between the Representatives and the Selling Unitholder Parties) at 10:00 A.M., New York
City time, on such Option Unit Delivery Date. Delivery of the Firm Units shall be made to the
Representatives for the account of each Underwriter against payment by the several Underwriters
through the Representatives of the aggregate purchase price of the Option Units to or upon the
order of the Selling Unitholder Parties by wire transfer in immediately available funds to the
account(s) specified by the Selling Unitholder Parties. Time shall be of the essence, and delivery
at the time specified pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Delivery of the Option Units shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.

          6. Further Agreements of the Parties. (a) Each of the Trust and Selling Unitholder Parties
agree:

     (i) To prepare the Prospectus in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than
Commission’s close of business on the second business day following the execution
and delivery of this Agreement; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or information
statements required to be filed by it with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection with the
offering or sale of the Offered Units; to advise the Representatives, promptly after
it receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Offered Units for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the Registration Statement,
the Prospectus or any Issuer Free Writing Prospectus or for additional information;
and, in the event of

 

14

the issuance of any stop order or of any order preventing or suspending the use
of the Prospectus or any Free Writing Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;

     (ii) To furnish promptly to each of the Representatives and to counsel for the
Underwriters a conformed copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;

     (iii) To promptly deliver or make available to the Representatives such number
of the following documents as the Representatives shall reasonably request: (A)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; (B) each Issuer Free Writing Prospectus; and (C) any document
incorporated by reference in any Preliminary Prospectus or the Prospectus (excluding
exhibits thereto); and, if the delivery of a prospectus is required at any time
after the Effective Time in connection with the offering or sale of the Offered
Units or any other securities relating thereto and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend or supplement
the Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus that will correct such
statement or omission or effect such compliance;

     (iv) To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Trust, the Selling Unitholder Parties or the Representatives, be
required by the Securities Act or requested by the Commission;

     (v) Until the delivery of a prospectus is no longer required in connection with
the offering or sale of the Offered Units, (i) prior to filing with the Commission
any amendment to the Registration Statement or supplement to the Prospectus, or any
Prospectus pursuant to Rule 424(b) of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing, and (ii) prior to filing with the
Commission any document incorporated by reference in the Prospectus, to furnish a
copy thereof to the Representatives and counsel for the Underwriters;

 

15

     (vi) As soon as practicable after the Effective Time to make generally
available to the Trust’s security holders and to deliver to the Representatives an
earnings statement of the Trust (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations (including, at the option
of the Trust, Rule 158);

     (vii) Promptly from time to time to take such action as the Representatives may
reasonably request to qualify the Offered Units for offering and sale under the
securities laws of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the distribution
of the Offered Units; provided that in connection therewith neither the Trust nor
the Selling Unitholder Parties shall be required to (i) qualify as a foreign
corporation in any jurisdiction in which it would not otherwise be required to so
qualify, (ii) file a general consent to service of process in any such jurisdiction
or (iii) subject itself to taxation in any jurisdiction in which it would not
otherwise be subject;

     (viii) Not to make any offer relating to the Units that would constitute an
Issuer Free Writing Prospectus without the prior written consent of the
Representatives;

     (ix) To retain in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses not required to be filed pursuant to the Rules and Regulations;
and if at any time after the date hereof any events shall have occurred as a result
of which any Issuer Free Writing Prospectus, as then amended or supplemented, would
conflict with the information in the Registration Statement, the most recent
Preliminary Prospectus or the Prospectus or, when considered together with the
information in the most recent Preliminary Prospectus, would include an untrue
statement of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they
were made, not misleading, or, if for any other reason it shall be necessary to
amend or supplement any Issuer Free Writing Prospectus, to notify the
Representatives and, upon their request, to file such document and to prepare and
furnish without charge to each Underwriter as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented Issuer Free
Writing Prospectus that will correct such conflict, statement or omission or effect
such compliance; and

     (x) For a period of 30 days from the date of the Prospectus (the “Lock-Up
Period”), except (a) for Units to be sold to the Underwriters pursuant to the
Underwriting Agreement and (b) for intercompany transfers of Units among the Selling
Unitholder Parties and their wholly owned direct or indirect subsidiaries, (provided
that it shall be a condition to any such transfer that (1) the transferee/donee
agrees to be bound by the terms of this Section 6(a)(x) to the same extent as if the
transferee/donee were a party hereto, (2) no filing by any party (donor, donee,
transferor or transferee) under the Exchange Act, shall be

 

16

required or shall be voluntarily made in connection with such transfer or
distribution (other than a filing on Form 5, Schedule 13D or Schedule 13G (or 13D-A
or 13G-A) made after the expiration of the 30-day period referred to above), (3) no
party (donor, donee, transferor or transferee) shall be required by law (including
without limitation the disclosure requirements of the Securities Act of 1933, as
amended, and the Exchange Act) to make, nor shall any such party agree to
voluntarily make, any public announcement of the transfer or disposition, and (4)
the Selling Unitholder Parties notify the Representatives at least two business days
prior to the proposed transfer or disposition), not to, directly or indirectly, (a)
offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any Units or securities convertible into or
exchangeable for Units (other than the Offered Units), or sell or grant options,
rights or warrants with respect to any Units or securities convertible into or
exchangeable for Units, (b) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such Units, whether any such transaction described in clause
(a) or (b) above is to be settled by delivery of Units or other securities, in cash
or otherwise, (c) file or cause to be filed a registration statement with respect to
any Units or securities convertible, exercisable or exchangeable into Units or any
other securities of the Trust or (d) publicly disclose the intention to do any of
the foregoing, in each case without the prior written consent of the
Representatives, on behalf of the Underwriters;

     (b) Each Underwriter severally agrees that such Underwriter has not used or referred
to, and shall not use or refer to without the prior consent of the Trust and ConocoPhillips,
any “free writing prospectus” (as defined in Rule 405, but excluding any road show that is a
free writing prospectus under Rule 433) in connection with the offering and sale of the
Offered Units.

          7. Further Agreements of the Selling Unitholder Parties. The Selling Unitholder Parties
agree:

     (a) That the Units to be sold by the Selling Unitholder Parties hereunder are subject
to the interest of the Underwriters and that the obligations of the Selling Unitholder
Parties hereunder shall not be terminated by any act of the Selling Unitholder Parties, by
operation of law or the occurrence of any other event, other than by termination of this
Agreement.

     (b) To deliver to the Representatives prior to the Initial Delivery Date a properly
completed and executed United States Treasury Department Form W-8 (if such Selling
Unitholder Party is a non-United States person) or Form W-9 (if such Selling Unitholder
Party is a United States person).

          8. Expenses. The Selling Unitholder Parties agree, whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated, to pay all costs,
expenses, fees and taxes incident to and in connection with (a) the authorization,

 

17

issuance, sale and delivery of the Offered Units and any stamp duties or other taxes payable
in that connection, and the preparation and printing of certificates for the Offered Units; (b) the
preparation, printing and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto, any Preliminary Prospectus, the Prospectus, any Issuer Free
Writing Prospectus and any amendment or supplement thereto; (c) the distribution of the
Registration Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary Prospectus, the Prospectus,
any Issuer Free Writing Prospectus and any amendment or supplement thereto or any document
incorporated by reference therein, all as provided in this Agreement; (d) the production and
distribution of this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the Offered Units; (e) the listing of the Units on the New York
Stock Exchange and/or any other exchange; (f) the qualification of the Offered Units under the
securities laws of the several jurisdictions as provided in Section 6(a)(vii) and the preparation,
printing and distribution of a Blue Sky Memorandum (including related fees and expenses of counsel
to the Underwriters); (g) the investor presentations on any “road show” undertaken in connection
with the marketing of the Offered Units, including, without limitation, expenses associated with
any Internet road show, travel and lodging expenses of the Representatives and officers of the
Selling Unitholder Parties and the cost of any aircraft chartered in connection with the road show;
and (h) all other costs and expenses incident to the performance of the obligations of the Trust
and the Selling Unitholder Parties under this Agreement; provided that, except as provided in this
Section 8 and in Section 13, the Underwriters shall pay their own costs and expenses, including the
costs and expenses of their counsel, any transfer taxes on the Offered Units which they may sell
and the expenses of advertising any offering of the Offered Units made by the Underwriters.

          9. Conditions of Underwriters’ Obligations. The respective obligations of the Underwriters
hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations
and warranties of the Trust and the Selling Unitholder Parties contained herein, to the performance
by the Trust and the Selling Unitholder Parties of their respective obligations hereunder, and to
each of the following additional terms and conditions:

     (a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 6(a)(i); the Trust and the Selling Unitholder Parties shall have complied with all
filing requirements applicable to any Issuer Free Writing Prospectus used or referred to
after the date hereof; no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus or any Issuer Free Writing
Prospectus shall have been issued and no proceeding for such purpose shall have been
initiated or threatened by the Commission; and any request of the Commission for inclusion
of additional information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.

     (b) No Underwriter shall have discovered and disclosed to the Trust or the Selling
Unitholder Parties on or prior to such Delivery Date that the Registration Statement, the
Prospectus or the Pricing Disclosure Package, or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Cravath, Swaine & Moore LLP,
counsel for the Underwriters, is material or omits to state

 

18

a fact which, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

     (c) All corporate and other proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Offered Units, the Registration
Statement, the Prospectus, and any Issuer Free Writing Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the Underwriters, and the
Trust and the Selling Unitholder Parties shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon such matters.

     (d) (1) Thompson & Knight L.L.P. shall have furnished to the Representatives its
written opinion, as counsel to the Trust, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the Representatives,
substantially in the form attached hereto as Exhibit A-1; (2) Nathan P. Murphy, Esq.
shall have furnished to the Representatives his written opinion, as Senior Legal Counsel to
the Selling Unitholder Parties, addressed to the Underwriters and dated such Delivery Date,
in form and substance reasonably satisfactory to the Representatives, substantially in the
form attached hereto as Exhibit A-2; and (3) Andrews Kurth LLP shall have furnished
to the Representatives its written opinion, as counsel to the Trust and the Selling
Unitholder Parties, addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, substantially in the form attached
hereto as Exhibit A-3.

     (e) The Representatives shall have received from Cravath, Swaine & Moore LLP, counsel
for the Underwriters, such opinion or opinions, dated such Delivery Date, with respect to
the issuance and sale of the Offered Units, the Registration Statement, the Prospectus and
the Pricing Disclosure Package and other related matters as the Representatives may
reasonably require, and the Trust and Selling Unitholder Parties shall have furnished to
such counsel such documents as they reasonably request for the purpose of enabling them to
pass upon such matters.

     (f) At the time of execution of this Agreement, the Representatives shall have received
(1) from Deloitte & Touche LLP a letter, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the respective dates as
of which specified financial information is given in the most recent Preliminary Prospectus,
as of a date not more than three days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other matters respecting
the Trust ordinarily covered by accountants’ “comfort letters” to underwriters in connection
with registered public offerings.

 

19

     (g) With respect to the letter of Deloitte & Touche LLP referred to in the preceding
paragraph and delivered to the Representatives concurrently with the execution of this
Agreement (the “initial letter”), the Trust shall have furnished to the Representatives a
letter (the “bring-down letter”) of such accountants, addressed to the Underwriters and
dated such Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than three days
prior to the date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and findings set forth in the
initial letter.

     (h) The Trust shall have furnished to the Representatives a certificate, dated such
Delivery Date, of an authorized officer of the trustee of the Trust stating that:

     (i) The representations, warranties and agreements of the Trust in Section 1
and Section 2.1 are true and correct on and as of such Delivery Date, and the Trust
has complied with all its agreements contained herein and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such
Delivery Date;

     (ii) No stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for that purpose have been instituted or, to the
knowledge of such officer, threatened; and

     (iii) Such officer has carefully examined the Registration Statement and the
Prospectus and the Pricing Disclosure Package and, in his or her opinion, (A)(1) the
Registration Statement, as of the Effective Time, (2) the Prospectus, as of its date
and as of such Delivery Date, and (3) the Pricing Disclosure Package, as of the
Applicable Time, did not and do not contain any untrue statement of a material fact
and did not and do not omit to state a material fact required to be stated therein
or necessary to make the statements therein (except in the case of the Registration
Statement, in the light of the circumstances under which they were made) not
misleading, except in the case of the Pricing Disclosure Package, that the price of
the Offered Units and disclosures directly relating thereto are included on the
cover page of the Prospectus and (B) since the Effective Time, no event has occurred
that should have been set forth in a supplement or amendment to the Registration
Statement, the Prospectus or any Free Writing Prospectus that has not been so set
forth.

     (i) ConocoPhillips shall have furnished to the Representatives a certificate, dated
such Delivery Date, of its Chief Financial Officer or Treasurer stating that:

 

20

     (i) The representations, warranties and agreements of the Selling Unitholder
Parties in Section 1 and Section 2.2 are true and correct on and as of such Delivery
Date, and the Selling Unitholder Parties have complied with all their agreements
contained herein and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Delivery Date;

     (ii) No stop order suspending the effectiveness of the Registration Statement
has been issued; and no proceedings for that purpose have been instituted or, to the
knowledge of such officer, threatened; and

     (iii) Such officer has carefully examined the Registration Statement and the
Prospectus and the Pricing Disclosure Package and, in his or her opinion, (A)(1) the
Registration Statement, as of the Effective Time, (2) the Prospectus, as of its date
and as of such Delivery Date, and (3) the Pricing Disclosure Package, as of the
Applicable Time, did not and do not contain any untrue statement of a material fact
and did not and do not omit to state a material fact required to be stated therein
or necessary to make the statements therein (except in the case of the Registration
Statement, in the light of the circumstances under which they were made) not
misleading, except in the case of the Pricing Disclosure Package, that the price of
the Offered Units and disclosures directly relating thereto are included on the
cover page of the Prospectus and (B) since the Effective Time, no event has occurred
that should have been set forth in a supplement or amendment to the Registration
Statement, the Prospectus or any Free Writing Prospectus that has not been so set
forth.

     (j) (i) The Trust shall not have sustained, since the date of the latest audited
financial statements included or incorporated by reference in the most recent Preliminary
Prospectus, any loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree or (ii) since such date there shall not have been any
change in the capitalization of the Trust or any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise), distributable
income, trust corpus, assets, management, business or prospects of the Trust, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Offered Units being delivered on
such Delivery Date on the terms and in the manner contemplated in the Prospectus.

     (k) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Trust on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the

 

21

United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or financial conditions, including,
without limitation, as a result of terrorist activities after the date hereof (or the effect
of international conditions on the financial markets in the United States shall be such), as
to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed
with the public offering or delivery of the Offered Units being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.

          All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.

          10. Indemnification and Contribution.

     (a) Each of the Trust and the Selling Unitholder Parties shall indemnify and hold
harmless each Underwriter, its directors, officers and employees and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Offered Units), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto, (B) in any Issuer Free Writing Prospectus or in any
amendment or supplement thereto, or (C) in any “road show” (as defined in Rule 433) not
constituting an Issuer Free Writing Prospectus (a “Non-Prospectus Road Show”), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or
supplement thereto or in any Non-Prospectus Road Show, any material fact required to be
stated therein or necessary to make the statements therein not misleading or (iii) any act
or failure to act or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Offered Units or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above (provided
that neither the Trust nor the Selling Unitholder Parties shall be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each Underwriter and each
such director, officer, employee or controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however,

 

22

that neither the Trust nor the Selling Unitholder Parties shall be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any such amendment or supplement thereto or in any
Non-Prospectus Road Show, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Trust or the Selling Unitholder Parties through
the Representatives by or on behalf of any Underwriter specifically for inclusion therein,
which information consists solely of the information specified in Section 10(f). The
foregoing indemnity agreement is in addition to any liability which the Trust or the Selling
Unitholder Parties may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.

     (b) The Selling Unitholder Parties shall also indemnify and hold harmless each
Underwriter, its directors, officers and employees, and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Offered Units), to which that Underwriter, director, officer,
employee or controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is based upon, a
breach of any of the representations or warranties of the Selling Unitholder Parties in
Section 2.2 of this Agreement and shall reimburse each Underwriter, its directors, officers
and employees and each such controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, its directors, officers and employees or
controlling persons in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability that the Selling
Unitholder Parties may otherwise have to any Underwriter or any officer, employee or
controlling person of that Underwriter.

     (c) Each Underwriter, severally and not jointly, shall indemnify and hold harmless (i)
the Trust, the trustee of the Trust and the directors, officers and employees of the Trust
(the “Trust Indemnified Parties”) and (ii) the Selling Unitholder Parties and their
respective directors, officers and employees (the “Selling Unitholder Indemnified Parties”),
and each person, if any, who controls the Trust or any Selling Unitholder Party within the
meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the Trust
Indemnified Parties, Selling Unitholder Indemnified Parties or any such director, officer,
employee or controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto, or any Non-Prospectus Road Show, or
(ii) the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto, or any Non-Prospectus Road

 

23

Show, any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter furnished to the
Trust or the Selling Unitholder Parties through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, which information is limited to the
information set forth in Section 10(f) and shall reimburse the Trust Indemnified Parties,
the Selling Unitholder Indemnified Parties and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Trust Indemnified Parties,
the Selling Unitholder Indemnified Parties or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability that any Underwriter may otherwise have
to the Trust Indemnified Parties, the Selling Unitholder Indemnified Parties or any such
director, officer, employee or controlling person.

     (d) Promptly after receipt by an indemnified party under this Section 10 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under Section 10(a), (b) or (c)
notify the indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under Section 10(a), (b) or (c) except to the extent it
has been materially prejudiced by such failure and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or action
shall be brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume the defense
of such claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representatives shall have the right to employ
counsel to represent jointly the Representatives and those other Underwriters and their
respective directors, officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Trust or any Selling Unitholder Party under this Section 10 if (i)
the Trust, the Selling Unitholder Parties and the Underwriters shall have so mutually
agreed; (ii) the Trust and the Selling Unitholder Parties have failed within a reasonable
time to retain counsel reasonably satisfactory to the Underwriters; (iii) the Underwriters
and their respective directors, officers, employees and controlling persons shall have
reasonably concluded, based on the advice of counsel, that there may be legal defenses
available to them that are different from or in addition to those available to the Trust and
the Selling Unitholder Parties; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the Underwriters or their respective directors,
officers, employees or controlling persons, on the one hand, and the

 

24

Trust and any Selling Unitholder Party, on the other hand, and, based on the advice of
counsel, representation of both sets of parties by the same counsel would be inappropriate
due to actual or potential differing interests between them, and in any such event the fees
and expenses of such separate counsel shall be paid by the Trust and the Selling Unitholder
Parties. No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such claim, action, suit
or proceeding and does not include any findings of fact or admissions of fault or
culpability as to the indemnified party, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of
such settlement or judgment.

     (e) If the indemnification provided for in this Section 10 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 10(a),
10(b) or 10(c) in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such indemnified party
as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits received by the
Trust and the Selling Unitholder Parties, on the one hand, and the Underwriters, on the
other, from the offering of the Offered Units or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative
fault of the Trust and the Selling Unitholder Parties, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions that resulted in
such loss, claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Trust and the
Selling Unitholder Parties, on the one hand, and the Underwriters, on the other, with
respect to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Offered Units purchased under this Agreement (before
deducting expenses) received by the Selling Unitholder Parties, as set forth in the table on
the cover page of the Prospectus, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Offered Units purchased under
this Agreement, as set forth in the table on the cover page of the Prospectus, on the other
hand, bear to the total gross proceeds from the offering of the Offered Units under this
Agreement, as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Trust, the Selling Unitholder Parties or the Underwriters, the
intent of the parties and their relative knowledge, access to

 

25

information and opportunity to correct or prevent such statement or omission. The
Trust, the Selling Unitholder Parties and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 10(e) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to above in this
Section 10(e) shall be deemed to include, for purposes of this Section 10(e), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 10(e), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Units underwritten by it and
distributed to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute as provided in this Section
10(e) are several in proportion to their respective underwriting obligations and not joint.

     (f) The Underwriters severally confirm and the Trust and the Selling Unitholder Parties
acknowledge and agree that the concession and reallowance figures and the paragraph relating
to stabilization by the Underwriters appearing under the caption “Underwriting” in the most
recent Preliminary Prospectus and the Prospectus constitute the only information concerning
such Underwriters furnished in writing to the Trust or the Selling Unitholder Parties by or
on behalf of the Underwriters specifically for inclusion in the Registration Statement, the
Preliminary Prospectus, any Issuer Free Writing Prospectus, any Non-Prospectus Road Show and
the Prospectus.

          11. Defaulting Underwriters. If, on any Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Offered Units that the defaulting Underwriter agreed but failed
to purchase on such Delivery Date in the respective proportions (subject to such adjustments to
eliminate fractional units as the Representatives may determine) which the number of shares of the
Firm Units set forth opposite the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the total number of shares of the Firm Units set forth opposite the names of
all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however, that
the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Offered
Units on such Delivery Date if the total number of shares of the Offered Units which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total
number of shares of the Offered Units to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Offered Units which it agreed to purchase on such Delivery Date pursuant to the terms
of Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters,
or those other underwriters satisfactory to the Representatives who so agree, shall have the right,
but shall not be obligated,

 

26

to purchase, in such proportion as may be agreed upon among them, all the Offered Units to be
purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory
to the Representatives do not elect to purchase the Units that the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement (or, with respect
to any Option Unit Delivery Date, the obligation of the Underwriters to purchase, and of the
Selling Unitholder Parties to sell, the Option Units) shall terminate without liability on the part
of any non-defaulting Underwriter or the Trust or the Selling Unitholder Parties, except that the
Selling Unitholder Parties will continue to be liable for the payment of expenses to the extent set
forth in Sections 8 and 13. As used in this Agreement, the term “Underwriter” includes, for all
purposes of this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto that, pursuant to this Section 11, purchases Offered Units that a
defaulting Underwriter agreed but failed to purchase.

          Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have
to the Trust or the Selling Unitholder Parties for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Offered Units of a defaulting or withdrawing
Underwriter, either the Representatives or the Selling Unitholder Parties may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in the opinion of
counsel for the Selling Unitholder Parties or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.

          12. Termination. The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Trust and the Selling Unitholder Parties
prior to delivery of and payment for the Firm Units if, prior to that time, any of the events
described in Sections 9(j) and 9(k) shall have occurred or if the Underwriters shall decline to
purchase the Offered Units for any reason permitted under this Agreement.

          13. Reimbursement of Underwriters’ Expenses. If the Selling Unitholder Parties shall fail to
tender the Offered Units for delivery to the Underwriters by reason of any failure, refusal or
inability on the part of the Trust or any Selling Unitholder Party to perform any agreement on its
part to be performed, or because any other condition of the Underwriters’ obligations hereunder
required to be fulfilled by the Trust or the Selling Unitholder Parties is not fulfilled, the
Selling Unitholder Parties will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Offered Units, and upon demand the Selling
Unitholder Parties shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 11 by reason of the default of one or more Underwriters, neither the
Trust nor the Selling Unitholder Parties shall be obligated to reimburse any Underwriter on account
of those expenses.

          14. Research Independence. In addition, the Trust and the Selling Unitholder Parties
acknowledge that the Underwriters’ research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject to certain
regulations and internal policies, and that such Underwriters’ research analysts may hold and make
statements or investment recommendations and/or publish research reports with respect to the Trust
and/or the offering that differ from the views of its investment bankers. The

 

27

Trust and the Selling Unitholder Parties hereby waive and release, to the fullest extent
permitted by law, any claims that the Trust or the Selling Unitholder Parties may have against the
Underwriters with respect to any conflict of interest that may arise from the fact that the views
expressed by their independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Trust or the Selling Unitholder Parties
by such Underwriters’ investment banking divisions. The Trust and the Selling Unitholder Parties
acknowledge that each of the Underwriters is a full service securities firm and as such from time
to time, subject to applicable securities laws, may effect transactions for its own account or the
account of its customers and hold long or short positions in debt or equity securities of the
companies which may be the subject of the transactions contemplated by this Agreement.

          15. No fiduciary duty. Notwithstanding any preexisting relationship, advisory or otherwise,
between the parties or any oral representations or assurances previously or subsequently made by
the underwriters, the Trust and the Selling Unitholder Parties acknowledge and agree that:

     (a) nothing herein shall create a fiduciary or agency relationship between the Trust or
Selling Unitholder Parties, on the one hand, and the Underwriters, on the other;

     (b) the Underwriters are not acting as advisors, expert or otherwise, to either the
Trust or the Selling Unitholder Parties in connection with this offering, sale of the
Offered Units or any other services the Underwriters may be deemed to be providing
hereunder, including, without limitation, with respect to the public offering price of the
Offered Units;

     (c) the relationship between the Trust and the Selling Unitholder Parties, on the one
hand, and the Underwriters, on the other, is entirely and solely commercial, based on
arms-length negotiations;

     (d) any duties and obligations that the Underwriters may have to the Trust or Selling
Unitholder Parties shall be limited to those duties and obligations specifically stated
herein; and

     (e) notwithstanding anything in this Underwriting Agreement to the contrary, you
acknowledge that the Underwriters’ may have financial interest in the success of the
offering that are not limited to the difference between the price to the public and the
purchase price paid to you by the Underwriters for the shares and the Underwriters have no
obligation to disclose, or account to you for, any of such additional financial interests.

The Trust and the Selling Unitholder Parties hereby waive and release, to the fullest extent
permitted by law, any claims that the Trust or the Selling Unitholder Parties may have against the
Underwriters with respect to any breach or alleged breach of fiduciary duty arising out of the
transactions contemplated by this Agreement.

          16. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:

 

28

     (a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission to (i) Lehman Brothers Inc., 745 Seventh Avenue, 19th Floor, New York, New
York 10019, Attention: Syndicate Department (Fax: 646-834-8133), with a copy, in the case of
any notice pursuant to Section 10(d), to the Director of Litigation, Office of the General
Counsel, Lehman Brothers Inc., 399 Park Avenue, 10th Floor, New York, New York 10022 (Fax:
212-520-0421), and (ii) Wachovia Capital Markets, LLC, 375 Park Avenue, New York, New York
10152, Attention: Equity Capital Markets (Fax: 212-214-5911);

     (b) if to the Trust, shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Trust set forth in the Registration Statement, Attention:
Ron E. Hooper (Fax: 214-209-2431); and

     (c) if to the Selling Unitholder Parties, shall be delivered or sent by mail, telex or
facsimile transmission to the Selling Unitholder Parties at the address set forth on
Schedule 2 hereto;

provided, however, that any notice to an Underwriter pursuant to Section 10(d) shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in
its acceptance telex to the Representatives, which address will be supplied to any other party
hereto by the Representatives upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Trust and the Selling Unitholder Parties
shall be entitled to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by the Representatives.

          17. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Trust, the Selling Unitholder Parties and their
respective successors and assigns. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (A) the representations, warranties, indemnities
and agreements of the Trust and the Selling Unitholder Parties contained in this Agreement shall
also be deemed to be for the benefit of the directors, officers and employees of the Underwriters
and each person or persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained in Section 10(c)
of this Agreement shall be deemed to be for the benefit of the trustee of the Trust, the officers,
directors and employees of the trustee of the Trust and the officers and directors of the Selling
Unitholder Parties who have signed the Registration Statement and any person controlling the Trust
and the Selling Unitholder Parties within the meaning of Section 15 of the Securities Act. Nothing
in this Agreement is intended or shall be construed to give any person, other than the persons
referred to in this Section 17, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.

          18. Survival. The respective indemnities, representations, warranties and agreements of the
Trust, the Selling Unitholder Parties and the Underwriters contained in this Agreement or made by
or on behalf on them, respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Offered Units and shall remain in full force and

 

29

effect, regardless of any investigation made by or on behalf of any of them or any person
controlling any of them.

          19. Definition of the Terms “Business Day” and “Subsidiary”. For purposes of this Agreement,
(a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on
which banking institutions in New York are generally authorized or obligated by law or executive
order to close and (b) “subsidiary” has the meaning set forth in Rule 405 of the Rules and
Regulations.

          20. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

          21. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original but
all such counterparts shall together constitute one and the same instrument.

          22. Liability of Unitholders. Any Liability of the Trust arising out of this Agreement shall
be satisfiable only out of the Trust estate and shall not, in any event, including the exhaustion
of the Trust estate, be satisfiable out of amounts at any time distributed to any unitholders of
the Trust or out of any other assets owned by any unitholder of the Trust.

          23. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.

 

30

          If the foregoing correctly sets forth the agreement among the Trust, the Selling Unitholder
Parties and the Underwriters, please indicate your acceptance in the space provided for that
purpose below.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	PERMIAN BASIN ROYALTY TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	BANK OF AMERICA, N.A.	 	 
	 

	 	 	 	Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ RON E. HOOPER
 

Name: Ron E. Hooper
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

 

31

	 	 	 	 	 	 	 
	 	 	CONOCOPHILLIPS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J.W. SHEETS
 

Name: J.W. Sheets
	 	 
	 

	 	 	 	Title: Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BURLINGTON RESOURCES OIL & GAS	 	 
	 	 	COMPANY LP	 	 
	 
	 	 	 	 	 	 
	 	 	By BROG GP INC.	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J.W. SHEETS
 

Name: J.W. Sheets
	 	 
	 

	 	 	 	Title: Vice President and Treasurer	 	 

 

32

Accepted:

Lehman Brothers Inc.

Wachovia Capital Markets, LLC

For themselves and as Representatives

of the several Underwriters named

in Schedule 1 hereto

	 	 	 	 	 
	Lehman Brothers Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ OSCAR K. BROWN
 

Authorized Representative
	 	 
	 
	 	 	 	 
	Wachovia Capital Markets, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ LEAR BYER
 

Authorized Representative
	 	 

 

SCHEDULE 1

	 	 	 	 	 
	 	 	Number of Firm
	Underwriters	 	Units
	Lehman Brothers Inc.
	 	 	2,258,783	 
	Wachovia Capital Markets, LLC
	 	 	2,258,783	 
	Citigroup Global Markets Inc.
	 	 	1,171,221	 
	A.G. Edwards & Sons, Inc.
	 	 	1,003,903	 
	RBC Capital Markets Corporation
	 	 	1,003,903	 
	Credit Suisse Securities (USA) LLC
	 	 	376,464	 
	Stifel, Nicolaus & Company, Incorporated
	 	 	292,805	 
	Total
	 	 	8,365,862	 
	 
	 	 	 	 

Annex A-1

 

SCHEDULE 2

	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	Number of
	Name and Address of Selling Unitholder Parties	 	Firm Units	 	Option Units
	ConocoPhillips
	 	 	 	 	 	 	 	 
	Burlington Resources Oil & Gas LP
	 	 	 	 	 	 	 	 
	600 N. Dairy Ashford
	 	 	 	 	 	 	 	 
	Houston, Texas 77079
	 	 	 	 	 	 	 	 
	Attn: Treasury Dept.
	 	 	 	 	 	 	 	 
	 
	 	 	8,365,862	 	 	 	1,254,879	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	8,365,862	 	 	 	1,254,879	 
	 
	 	 	 	 	 	 	 	 

Annex A-2

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