Exhibit 10.21

CHROMCRAFT REVINGTON, INC.,

CR CHROMCRAFT, INC.,

CR HOME OCCASIONAL, INC, AND

CR HOME, INC.

as Borrowers

LOAN AND SECURITY AGREEMENT

Dated as of June 22, 2007

$35,000,000

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders

and

BANK OF AMERICA, N.A.,

as Agent

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TABLE OF CONTENTS

Page

                 
SECTION 1.
  DEFINITIONS; RULES OF CONSTRUCTION     1  
1.1.
  Definitions     1  
1.2.
  Accounting Terms     25  
1.3.
  Certain Matters of Construction     25  
SECTION 2.
  CREDIT FACILITIES     26  
2.1.
  Revolver Commitment     26  
2.1.1.
  Revolver Loans     26  
2.1.2.
  Revolver Notes     26  
2.1.3.
  Use of Proceeds     26  
2.1.4.
  Voluntary Reduction or Termination of Revolver Commitments     26  
2.1.5.
  Overadvances     26  
2.1.6.
  Protective Advances     27  
2.2.
  Intentionally Omitted     27  
2.3.
  Letter of Credit Facility     27  
2.3.1.
  Issuance of Letters of Credit     27  
2.3.2.
  Reimbursement; Participations     28  
2.3.3.
  Cash Collateral     30  
SECTION 3.
  INTEREST, FEES AND CHARGES     30  
3.1.
  Interest     30  
3.1.1.
  Rates and Payment of Interest     30  
3.1.2.
  Application of Adjusted LIBOR to Outstanding Loans     31  
3.1.3.
  Interest Periods     31  
3.1.4.
  Interest Rate Not Ascertainable     31  
3.2.
  Fees     31  
3.2.1.
  Unused Line Fee     31  
3.2.2.
  LC Facility Fees     32  
3.2.3.
  Closing Fee     32  
3.2.4.
  Agent Fees     32  
3.3.
  Computation of Interest, Fees, Yield Protection     32  
3.4.
  Reimbursement Obligations     32  

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TABLE OF CONTENTS
(continued)

Page

                 
3.5.
  Illegality     33  
3.6.
  Increased Costs     33  
3.7.
  Capital Adequacy     34  
3.8.
  Mitigation     34  
3.9.
  Funding Losses     34  
3.10.
  Maximum Interest     34  
SECTION 4.
  LOAN ADMINISTRATION     35  
4.1.
  Manner of Borrowing and Funding Revolver Loans     35  
4.1.1.
  Notice of Borrowing     35  
4.1.2.
  Fundings by Lenders     36  
4.1.3.
  Settlement     36  
4.1.4.
  Notices     36  
4.2.
  Defaulting Lender     37  
4.3.
  Number and Amount of LIBOR Loans; Determination of Rate     37  
4.4.
  Borrower Agent     37  
4.5.
  One Obligation     37  
4.6.
  Effect of Termination     38  
SECTION 5.
  PAYMENTS     38  
5.1.
  General Payment Provisions     38  
5.2.
  Repayment of Revolver Loans     38  
5.2.1.
  Payments on Revolver Termination Date and From Proceeds of Accounts and
Inventory     38  
5.2.2.
  Mandatory Prepayments     39  
5.3.
  Payment of Other Obligations     39  
5.4.
  Marshaling; Payments Set Aside     39  
5.5.
  Post-Default Allocation of Payments     39  
5.5.1.
  Allocation     39  
5.5.2.
  Erroneous Application     40  
5.6.
  Application of Payments     40  
5.7.
  Loan Account; Account Stated     40  
5.7.1.
  Loan Account     40  

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TABLE OF CONTENTS
(continued)

Page

                 
5.7.2.
  Entries Binding     40  
5.8.
  Taxes     41  
5.9.
  Withholding Tax Exemption     41  
5.10.
  Nature and Extent of Each Borrower’s Liability     41  
5.10.1.
  Joint and Several Liability     41  
5.10.2.
  Waivers     42  
5.10.3.
  Extent of Liability; Contribution     43  
5.10.4.
  Joint Enterprise     43  
5.10.5.
  Subordination     44  
SECTION 6.
  CONDITIONS PRECEDENT     44  
6.1.
  Conditions Precedent to Initial Loans     44  
6.2.
  Conditions Precedent to All Credit Extensions     45  
6.3.
  Limited Waiver of Conditions Precedent     46  
SECTION 7.
  COLLATERAL     46  
7.1.
  Grant of Security Interest     46  
7.2.
  Lien on Deposit Accounts; Cash Collateral     47  
7.2.1.
  Deposit Accounts     47  
7.2.2.
  Cash Collateral     47  
7.3.
  Other Collateral     48  
7.3.1.
  Commercial Tort Claims     48  
7.3.2.
  Certain After-Acquired Collateral     48  
7.4.
  No Assumption of Liability     48  
7.5.
  Further Assurances     48  
7.6.
  Foreign Subsidiary Stock     48  
SECTION 8.
  COLLATERAL ADMINISTRATION     48  
8.1.
  Borrowing Base Certificates     48  
8.2.
  Administration of Accounts     49  
8.2.1.
  Records and Schedules of Accounts     49  
8.2.2.
  Taxes     49  
8.2.3.
  Account Verification     49  

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TABLE OF CONTENTS
(continued)

Page

                 
8.2.4.
  Maintenance of Dominion Account     49  
8.2.5.
  Proceeds of Collateral     50  
8.3.
  Administration of Inventory     50  
8.3.1.
  Records and Reports of Inventory     50  
8.3.2.
  Returns of Inventory     50  
8.3.3.
  Acquisition, Sale and Maintenance     50  
8.4.
  Administration of Equipment     50  
8.4.1.
  Records and Schedules of Equipment     50  
8.4.2.
  Dispositions of Equipment     51  
8.4.3.
  Condition of Equipment     51  
8.5.
  Administration of Deposit Accounts     51  
8.6.
  General Provisions     51  
8.6.1.
  Location of Collateral     51  
8.6.2.
  Insurance of Collateral; Condemnation Proceeds     51  
8.6.3.
  Protection of Collateral     52  
8.6.4.
  Defense of Title to Collateral     53  
8.7.
  Power of Attorney     53  
SECTION 9.
  REPRESENTATIONS AND WARRANTIES     53  
9.1.
  General Representations and Warranties     53  
9.1.1.
  Organization and Qualification     54  
9.1.2.
  Power and Authority     54  
9.1.3.
  Enforceability     54  
9.1.4.
  Capital Structure     54  
9.1.5.
  Corporate Names; Locations     54  
9.1.6.
  Title to Properties; Priority of Liens     54  
9.1.7.
  Accounts     54  
9.1.8.
  Financial Statements     55  
9.1.9.
  Surety Obligations     56  
9.1.10.
  Taxes     56  
9.1.11.
  Brokers     56  

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TABLE OF CONTENTS
(continued)

Page

                 
9.1.12.
  Intellectual Property     56  
9.1.13.
  Governmental Approvals     56  
9.1.14.
  Compliance with Laws     56  
9.1.15.
  Compliance with Environmental Laws     57  
9.1.16.
  Burdensome Contracts     57  
9.1.17.
  Litigation     57  
9.1.18.
  No Defaults     57  
9.1.19.
  ERISA     57  
9.1.20.
  Trade Relations     58  
9.1.21.
  Labor Relations     58  
9.1.22.
  Payable Practices     58  
9.1.23.
  Not a Regulated Entity     58  
9.1.24.
  Margin Stock     58  
9.1.25.
  Plan Assets     58  
9.2.
  Complete Disclosure     58  
SECTION 10.
  COVENANTS AND CONTINUING AGREEMENTS     59  
10.1.
  Affirmative Covenants     59  
10.1.1.
  Inspections; Appraisals     59  
10.1.2.
  Financial and Other Information     59  
10.1.3.
  Notices     61  
10.1.4.
  Landlord and Storage Agreements     61  
10.1.5.
  Compliance with Laws     62  
10.1.6.
  Taxes     62  
10.1.7.
  Insurance     62  
10.1.8.
  Licenses     62  
10.1.9.
  Future Subsidiaries     62  
10.1.10.
  Cash Management Services     62  
10.2.
  Negative Covenants     62  
10.2.1.
  Permitted Debt     63  
10.2.2.
  Permitted Liens     63  

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TABLE OF CONTENTS
(continued)

Page

                 
10.2.3.
  Reserved     64  
10.2.4.
  Distributions; Upstream Payments     64  
10.2.5.
  Restricted Investments     64  
10.2.6.
  Disposition of Assets     64  
10.2.7.
  Loans     64  
10.2.8.
  Restrictions on Payment of Certain Debt     65  
10.2.9.
  Fundamental Changes     65  
10.2.10.
  Subsidiaries     65  
10.2.11.
  Organic Documents     65  
10.2.12.
  Tax Consolidation     65  
10.2.13.
  Accounting Changes     65  
10.2.14.
  Restrictive Agreements     65  
10.2.15.
  Hedging Agreements     65  
10.2.16.
  Conduct of Business     65  
10.2.17.
  Affiliate Transactions     65  
10.2.18.
  Plans     66  
10.2.19.
  Amendments to Subordinated Debt     66  
10.2.20.
  Trade Accounts Payable and Accrued Expenses     66  
10.3.
  Financial Covenants     66  
10.3.1.
  Fixed Charge Coverage Ratio     66  
SECTION 11.
  EVENTS OF DEFAULT; REMEDIES ON DEFAULT     66  
11.1.
  Events of Default     66  
11.2.
  Remedies upon Default     68  
11.3.
  License     69  
11.4.
  Setoff     69  
11.5.
  Remedies Cumulative; No Waiver     69  
11.5.1.
  Cumulative Rights     69  
11.5.2.
  Waivers     69  
SECTION 12.
  AGENT     70  
12.1.
  Appointment, Authority and Duties of Agent     70  

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TABLE OF CONTENTS
(continued)

Page

                 
12.1.1.
  Appointment and Authority     70  
12.1.2.
  Duties     70  
12.1.3.
  Agent Professionals     71  
12.1.4.
  Instructions of Required Lenders     71  
12.2.
  Agreements Regarding Collateral and Field Examination Reports     71  
12.2.1.
  Lien Releases; Care of Collateral     71  
12.2.2.
  Possession of Collateral     71  
12.2.3.
  Reports     72  
12.3.
  Reliance By Agent     72  
12.4.
  Action Upon Default     72  
12.5.
  Ratable Sharing     72  
12.6.
  Indemnification of Agent Indemnitees     73  
12.6.1.
  Indemnification     73  
12.6.2.
  Proceedings     73  
12.7.
  Limitation on Responsibilities of Agent     73  
12.8.
  Successor Agent and Co-Agents     74  
12.8.1.
  Resignation; Successor Agent     74  
12.8.2.
  Separate Collateral Agent     74  
12.9.
  Due Diligence and Non-Reliance     74  
12.10.
  Replacement of Certain Lenders     75  
12.11.
  Remittance of Payments and Collections     75  
12.11.1.
  Remittances Generally     75  
12.11.2.
  Failure to Pay     75  
12.11.3.
  Recovery of Payments     75  
12.12.
  Agent in its Individual Capacity     76  
12.13.
  Agent Titles     76  
12.14.
  No Third Party Beneficiaries     76  
SECTION 13.
  BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS     76  
13.1.
  Successors and Assigns     76  
13.2.
  Participations     76  

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TABLE OF CONTENTS
(continued)

Page

                 
13.2.1.
  Permitted Participants; Effect     76  
13.2.2.
  Voting Rights     77  
13.2.3.
  Benefit of Set-Off     77  
13.3.
  Assignments     77  
13.3.1.
  Permitted Assignments     77  
13.3.2.
  Effect; Effective Date     78  
13.4.
  Tax Treatment     78  
13.5.
  Representation of Lenders     78  
SECTION 14.
  MISCELLANEOUS     78  
14.1.
  Consents, Amendments and Waivers     78  
14.1.1.
  Amendment     78  
14.1.2.
  Limitations     79  
14.1.3.
  Payment for Consents     79  
14.2.
  Indemnity     79  
14.3.
  Notices and Communications     79  
14.3.1.
  Notice Address     79  
14.3.2.
  Electronic Communications; Voice Mail     80  
14.3.3.
  Non-Conforming Communications     80  
14.4.
  Performance of Borrowers’ Obligations     80  
14.5.
  Credit Inquiries     80  
14.6.
  Severability     80  
14.7.
  Cumulative Effect; Conflict of Terms     80  
14.8.
  Counterparts; Facsimile Signatures     81  
14.9.
  Entire Agreement     81  
14.10.
  Obligations of Lenders     81  
14.11.
  Confidentiality     81  
14.12.
  GOVERNING LAW     82  
14.13.
  CONSENT TO FORUM     82  
14.14.
  Waivers by Borrowers     82  
14.15.
  Patriot Act Notice     83  

 

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TABLE OF CONTENTS
(continued)

Page

LIST OF EXHIBITS AND SCHEDULES

         
Exhibit A
  —   Revolver Note
Exhibit B
  —   Assignment and Acceptance
Exhibit C
  —   Assignment Notice
Schedule 1.1
  —   Commitments of Lenders
Schedule 8.3.3
      Consignments
Schedule 8.5
  —   Deposit Accounts
Schedule 8.6.1
  —   Business Locations
Schedule 9.1.4
  —   Names and Capital Structure
Schedule 9.1.5
  —   Former Names and Companies
Schedule 9.1.12
  —   Patents, Trademarks, Copyrights and Licenses
Schedule 9.1.15
  —   Environmental Matters
Schedule 9.1.16
  —   Restrictive Agreements
Schedule 9.1.17
  —   Litigation
Schedule 9.1.19
  —   Pension Plans
Schedule 9.1.21
  —   Labor Contracts
Schedule 10.2.2
  —   Existing Liens
Schedule 10.2.17
  —   Existing Affiliate Transactions

 

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is dated as of June 22, 2007, among CHROMCRAFT
REVINGTON, INC., a Delaware corporation (“Chromcraft” or “Borrower
Representative”), CR CHROMCRAFT, INC., a Delaware corporation (“CR Chromcraft”),
CR HOME OCCASIONAL, INC, a Tennessee corporation (“CR Home Occasional”), and CR
HOME, INC, a South Carolina corporation (“CR Home” and together with Chromcraft,
CR Chromcraft and CR Home Occasional, individually, a “Borrower” and
collectively, “Borrowers”), the financial institutions party to this Agreement
from time to time as lenders (collectively, “Lenders”), and BANK OF AMERICA,
N.A., a national banking association, as agent for the Lenders (“Agent”).

R E C I T A L S:

Borrowers have requested that Lenders make available a credit facility, to be
used by Borrowers to finance their mutual and collective business enterprise.
Lenders are willing to provide such credit facility on the terms and conditions
set forth in this Agreement.

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:

SECTION 1.

DEFINITIONS; RULES OF CONSTRUCTION

1.1. Definitions. As used herein, the following terms have the meanings set
forth below:

Account — as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.

Account Debtor — a Person who is obligated under an Account, Chattel Paper or
General Intangible.

Accounts Formula Amount — 85% of the Value of Eligible Accounts (other than
Dated Eligible Accounts) plus the lesser of (i) $3,000,000 and (ii) 85% of the
Value of Dated Eligible Accounts.

Adjusted LIBOR — for any Interest Period, with respect to LIBOR Loans, the per
annum rate of interest (rounded upward, if necessary, to the nearest 1/8th of
1%) appearing on Telerate Page 3750, or if such page is unavailable, the Reuters
Screen LIBO Page (or any successor page of either, as applicable), as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if the Reuters
Screen LIBO Page is used and more than one rate is shown on such page, the
applicable rate shall be the arithmetic mean thereof. If for any reason none of
the foregoing rates is available, the Offshore Base Rate shall be the rate per
annum determined by Agent as the rate of interest at which Dollar deposits in
the approximate amount of the applicable LIBOR Loan would be offered to major

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banks in the offshore Dollar market at or about 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If the Board of Governors shall impose a
Reserve Percentage with respect to LIBOR deposits, then Adjusted LIBOR shall
equal the amount determined above, divided by 1 minus the Reserve Percentage.

Affiliate — with respect to any Person, another Person (a) who directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such first Person; (b) who beneficially owns 10% or
more of the voting securities or any class of Equity Interests of such first
Person; (c) at least 10% of whose voting securities or any class of Equity
Interests is beneficially owned, directly or indirectly, by such first Person;
or (d) who is an officer, director, partner or managing member of such first
Person. “Control” means the possession, directly or indirectly, of the power to
direct or cause direction of the management and policies of a Person, whether
through ownership of Equity Interests, by contract or otherwise.

Agent Indemnitees — Agent and its officers, directors, employees, Affiliates,
agents and attorneys.

Agent Professionals — attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.

Allocable Amount — as defined in Section 5.10.3.

Anti- Terrorism Laws — any laws relating to terrorism or money laundering,
including the Patriot Act.

Applicable Law — all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.

Applicable Margin — with respect to any Type of Loan, the margin set forth
below, as determined by the average Availability for the last Fiscal Quarter:

                                      Base Rate   LIBOR             Revolver  
Revolver Level   Average Availability   Loans   Loans
I
    > $15,000,000       0.00 %     1.50 %
 
                       
II
    > $10,000,000 < $15,000,000       0.25 %     1.75 %
III
    < $10,000,000       0.50 %     2.00 %

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Until December 31, 2007, margins shall be determined as if Level II were
applicable. Thereafter, the margins shall be subject to increase or decrease
upon receipt by Agent pursuant to Section 8.1 of the Borrowing Base Certificate
for the last month of the most recently ended Fiscal Quarter (commencing with
the Fiscal Quarter ending December 31, 2007), which change shall be effective on
the first Business Day of the calendar month following receipt. If, by the first
Business Day of a month, Borrowing Base Certificate due in the preceding month
have not been received, then the margins shall be determined as if Level III
were applicable, from such day until the first Business Day of the calendar
month following actual receipt.

Approved Fund — any Person (other than a natural person) that is engaged in
making, holding or investing in extensions of credit in its ordinary course of
business and is administered or managed by a Lender, an entity that administers
or manages a Lender, or an Affiliate of either.

Asset Disposition — a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including a disposition of Property in
connection with a sale-leaseback transaction or synthetic lease.

Assignment and Acceptance — an assignment agreement between a Lender and
Eligible Assignee, in the form of Exhibit B.

Availability — determined as of any date, the amount that Borrowers are entitled
to borrow as Revolver Loans, being the Borrowing Base minus the principal
balance of all Revolver Loans.

Availability Reserve — the sum (without duplication) of (a) the Inventory
Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank
Product Reserve; (e) the aggregate amount of liabilities secured by Liens upon
Collateral that are senior to Agent’s Liens (but imposition of any such reserve
shall not waive an Event of Default arising therefrom); (f) the Availability
Block; and (g) such additional reserves, in such amounts and with respect to
such matters, as Agent in its credit judgment may elect to impose from time to
time.

Bank of America — Bank of America, N.A., a national banking association, and its
successors and assigns.

Bank of America Indemnitees — Bank of America and its officers, directors,
employees, Affiliates, agents and attorneys.

Bank Product — any of the following products, services or facilities extended to
any Borrower or Subsidiary by Bank of America or any of its Affiliates: (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; and (d) leases and other banking
products or services as may be requested by any Borrower or Subsidiary, other
than Letters of Credit.

Bank Product Debt — Debt and other obligations of an Obligor relating to Bank
Products.

Bank Product Reserve — the aggregate amount of reserves established by Agent
from time to time in its discretion in respect of Bank Product Debt.

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Bankruptcy Code — Title 11 of the United States Code.

Base Rate — the rate of interest announced by Bank of America from time to time
as its prime rate. Such rate is a reference rate only and Bank of America may
make loans or other extensions of credit at, above or below it. Any change in
the prime rate announced by Bank of America shall take effect at the opening of
business on the effective date specified in the public announcement of the
change.

Base Rate Loan — any Loan that bears interest based on the Base Rate.

Base Rate Revolver Loan — a Revolver Loan that bears interest based on the Base
Rate.

Board of Governors — the Board of Governors of the Federal Reserve System.

Borrowed Money — with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) reimbursement obligations with respect to
letters of credit; and (d) guaranties of any Debt of the foregoing types owing
by another Person.

Borrower Agent — as defined in Section 4.4.

Borrowing — a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.

Borrowing Base — on any date of determination, an amount equal to the lesser of
(a) the aggregate amount of Revolver Commitments, minus the LC Reserve; or
(b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount,
minus the Availability Reserve.

Borrowing Base Certificate — a certificate, in form and substance satisfactory
to Agent, by which Borrowers certify calculation of the Borrowing Base.

Business Day — any day (a) excluding Saturday, Sunday and any other day on which
banks are permitted to be closed under the laws of the States of Illinois and
Wisconsin; and (b) when used with reference to a LIBOR Loan, also excluding any
day on which banks do not conduct dealings in Dollar deposits on the London
interbank market.

Capital Adequacy Regulation — any law, rule, regulation, guideline, request or
directive of any central bank or other Governmental Authority, whether or not
having the force of law, regarding capital adequacy of a bank or any Person
controlling a bank.

Capital Expenditures — all liabilities incurred, expenditures made or payments
due (whether or not made) by a Borrower or Subsidiary for the acquisition of any
fixed assets, or any improvements, replacements, substitutions or additions
thereto with a useful life of more than one year, including the principal
portion of Capital Leases.

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Capital Lease — any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

Cash Collateral — cash, and any interest or other income earned thereon, that is
delivered to Agent to Cash Collateralize any Obligations.

Cash Collateral Account — a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
discretion, which account shall be subject to Agent’s Liens for the benefit of
Secured Parties.

Cash Collateralize — the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate LC Obligations, and (b) with respect to any inchoate or
contingent Obligations (including Obligations arising under Bank Products),
Agent’s good faith estimate of the amount due or to become due, including all
fees and other amounts relating to such Obligations. “Cash Collateralization”
has a correlative meaning.

Cash Equivalents — (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the United States
government, maturing within 12 months of the date of acquisition;
(b) certificates of deposit, time deposits and bankers’ acceptances maturing
within 12 months of the date of acquisition, and overnight bank deposits, in
each case which are issued by a commercial bank organized under the laws of the
United States or any state or district thereof, rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a
Lender) not subject to offset rights; (c) repurchase obligations with a term of
not more than 30 days for underlying investments of the types described in
clauses (a) and (b) entered into with any bank meeting the qualifications
specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s, and maturing within nine months of the date of
acquisition; and (e) shares of any money market fund that has substantially all
of its assets invested continuously in the types of investments referred to
above, has net assets of at least $500,000,000 and has the highest rating
obtainable from either Moody’s or S&P.

Cash Management Services — any services provided from time to time by Bank of
America or any of its Affiliates to any Borrower or Subsidiary in connection
with operating, collections, payroll, trust, or other depository or disbursement
accounts, including automatic clearinghouse, controlled disbursement,
depository, electronic funds transfer, information reporting, lockbox, stop
payment, overdraft and/or wire transfer services.

CERCLA — the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).

Change of Control — an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than any such “person” or “group” existing as of the
Closing Date, becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, provided that a person shall be deemed to have
“beneficial ownership” of all securities that such person has the right to
acquire, whether such right is

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exercisable immediately or only after the passage of time), directly or
indirectly, of forty percent (40%) or more of the combined voting power of
Chromcraft’s outstanding Equity Interests ordinarily having the right to vote at
an election of directors; or

(b) the majority of the board of directors of Chromcraft fails to consist of
Continuing Directors; of

(c) Chromcraft consolidates with or merges into another corporation or conveys,
transfers or leases all or substantially all of its property to any Person, or
any corporation consolidates with or merges into Chromcraft, in either event
pursuant to a transaction in which the outstanding Equity Interests of
Chromcraft are reclassified or changed into or exchanged for cash, securities
(not constituting Equity Interests) or other property; or

(d) Chromcraft shall cease to own and control all of the economic and voting
rights associated with all of the outstanding Equity Interests of its existing
Subsidiaries so owned and controlled as of the Closing Date as of the Closing
Date.

Chattel Paper — as defined in the UCC.

Claims — all liabilities, obligations, losses, damages, penalties, judgments,
proceedings, costs and expenses of any kind (including remedial response costs,
reasonable attorneys’ fees and Extraordinary Expenses) at any time (including
after Full Payment of the Obligations, resignation or replacement of Agent, or
replacement of any Lender) incurred by or asserted against any Indemnitee in any
way relating to (a) any Loan Documents or transactions relating thereto, (b) any
action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) failure by any Obligor to perform or observe
any terms of any Loan Document, in each case including all costs and expenses
relating to any investigation, litigation, arbitration or other proceeding
(including an Insolvency Proceeding or appellate proceedings), whether or not
the applicable Indemnitee is a party thereto.

Closing Date — as defined in Section 6.1.

Collateral — all Property described in Section 7.1, all Property described in
any Security Documents as security for any Obligations, and all other Property
that now or hereafter secures (or is intended to secure) any Obligations.

Commercial Tort Claim — as defined in the UCC.

Commitment — for any Lender, the aggregate amount of such Lender’s Revolver
Commitment. “Commitments” means the aggregate amount of all Revolver
Commitments.

Commitment Termination Date — the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which Borrowers terminate the Revolver
Commitments pursuant to Section 2.1.4; or (c) the date on which the Revolver
Commitments are terminated pursuant to Section 11.2.

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Compliance Certificate — a certificate, in form and substance satisfactory to
Agent, by which Borrowers certify compliance with Section 10.3 and calculate the
applicable Level for the Applicable Margin.

Compliance Letter – as defined in an Imported Goods Agreement to be entered into
by Agent, Borrowers (or the applicable Borrower) and a Customs Brokers in
connection with the importation of any Inventory into the United States of
America.

Contingent Obligation — any obligation of a Person arising from a guaranty,
indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement, co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.

Continuing Director – means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (a) was a
member of such board of directors on the date of this Agreement, or (b) was
nominated for election or elected to such board of directors with the approval
of the Continuing Directors who were members of such board at the time of such
nomination or election.

CWA — the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

Dated Eligible Accounts — Eligible Accounts that remain unpaid more than 90 days
after the original invoice date.

Debt — as applied to any Person, without duplication, (a) all items that would
be included as liabilities on a balance sheet in accordance with GAAP, including
Capital Leases, but excluding trade payables incurred and being paid in the
Ordinary Course of Business; (b) all Contingent Obligations; (c) all
reimbursement obligations in connection with letters of credit issued for the
account of such Person; and (d) in the case of a Borrower, the Obligations. The
Debt of a Person shall include any recourse Debt of any partnership in which
such Person is a general partner or joint venturer.

Default — an event or condition that, with the lapse of time or giving of
notice, would constitute an Event of Default.

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Default Rate — for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% plus the interest rate otherwise applicable
thereto.

Deposit Account — as defined in the UCC.

Deposit Account Control Agreements — the Deposit Account control agreements to
be executed by each institution maintaining a Deposit Account for a Borrower, in
favor of Agent, for the benefit of Secured Parties, as security for the
Obligations.

Distribution — any declaration or payment of a distribution, interest or
dividend on any Equity Interest (other than payment-in-kind); any distribution,
advance or repayment of Debt to a holder of Equity Interests; or any purchase,
redemption, or other acquisition or retirement for value of any Equity Interest.

Document — as defined in the UCC.

Dollars — lawful money of the United States.

Dominion Account — a special account established by Borrowers at Bank of America
or another bank acceptable to Agent, over which Agent has exclusive control for
withdrawal purposes.

EBITDA — determined on a consolidated basis for Borrowers and Subsidiaries, net
income, calculated before interest expense, provision for income taxes, non-cash
ESOP expenses, depreciation and amortization expense, gains or losses arising
from the sale of capital assets, gains arising from the write-up of assets,
non-cash restructuring charges, other cash restructuring charges consented to by
Agent in its sole discretion, and any extraordinary gains (in each case, to the
extent included in determining net income).

Eligible Account — an Account owing to a Borrower that arises in the Ordinary
Course of Business from the sale of goods or rendition of services, is payable
in Dollars and is deemed by Agent, in its credit judgment, to be an Eligible
Account. Without limiting the foregoing, no Account shall be an Eligible Account
if (a) it is unpaid for more than 60 days after the original due date, or more
than 90 days (120 days for invoices with greater than 30 day terms) after the
original invoice date; (b) 50% or more of the Accounts owing by the Account
Debtor are not Eligible Accounts under the foregoing clause; (c) when aggregated
with other Accounts owing by the Account Debtor, it exceeds 25% of the aggregate
Eligible Accounts (or such higher percentage as Agent may establish for the
Account Debtor from time to time); (d) it does not conform with a covenant or
representation herein; (e) it is owing by a creditor or supplier, or is
otherwise subject to a potential offset, counterclaim, dispute, deduction,
discount, recoupment, reserve, defense, chargeback, credit or allowance (but
ineligibility shall be limited to the amount thereof); (f) an Insolvency
Proceeding has been commenced by or against the Account Debtor; or the Account
Debtor has failed, has suspended or ceased doing business, is liquidating,
dissolving or winding up its affairs, or is not Solvent; (g) the Account Debtor
is organized or has its principal offices or assets outside the United States or
any province of Canada in which the Personal Property Security Act has not been
adopted in substantially the same form as in Ontario; (h) it is owing by a
Government Authority, unless the Account Debtor is the United States, any state
of the United States or any department, agency or instrumentality thereof and

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the Account has been assigned to Agent in compliance with the Assignment of
Claims Act (or the applicable state equivalent thereof); (i) it is not subject
to a duly perfected, first priority Lien in favor of Agent, or is subject to any
other Lien; (j) the goods giving rise to it have not been delivered to and
accepted by the Account Debtor, the services giving rise to it have not been
accepted by the Account Debtor, or it otherwise does not represent a final sale;
(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment; (l) its payment has been extended, the Account Debtor has
made a partial payment, or it arises from a sale on a cash-on-delivery basis;
(m) it arises from a sale to an Affiliate, or from a sale on a bill-and- hold,
guaranteed sale, sale or return, sale on approval, consignment, or other
repurchase or return basis; (n) it represents a progress billing or retainage;
(o) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof; or (p) it arises from a retail sale to a
Person who is purchasing for personal, family or household purposes. In
calculating delinquent portions of Accounts under clause (c), credit balances
more than 90 (120 days, if applicable) days old will be excluded.

Eligible Assignee — a Person that is (a) a Lender, U.S.-based Affiliate of a
Lender or Approved Fund; (b) any other financial institution approved by Agent
and Borrower Agent (which approval by Borrower Agent shall not be unreasonably
withheld or delayed, and shall be deemed given if no objection is made within
two Business Days after notice of the proposed assignment), that is organized
under the laws of the United States or any state or district thereof, has total
assets in excess of $5 billion, extends asset-based lending facilities in its
ordinary course of business and whose becoming an assignee would not constitute
a prohibited transaction under Section 4975 of ERISA or any other Applicable
Law; and (c) during any Event of Default, any Person acceptable to Agent in its
discretion.

Eligible Inventory — Inventory owned by a Borrower that Agent, in its credit
judgment, deems to be Eligible Inventory. Without limiting the foregoing, no
Inventory shall be Eligible Inventory unless it (a) is finished goods or raw
materials, and not work-in-process, packaging or shipping materials, labels,
samples, display items, bags, replacement parts or manufacturing supplies;
(b) is not held on consignment, nor subject to any deposit or downpayment;
(c) is in new and saleable condition and is not damaged, defective, shopworn or
otherwise unfit for sale; (d) is not slow- moving, obsolete or unmerchantable,
and does not constitute returned or repossessed goods; (e) meets all standards
imposed by any Governmental Authority, and does not constitute hazardous
materials under any Environmental Law; (f) conforms with the covenants and
representations herein; (g) is subject to Agent’s duly perfected, first priority
Lien, and no other Lien; (h) except for Eligible In-Transit Inventory, is within
the continental United States or Canada, is not in-transit other than between
locations of Borrowers, and is not consigned to any Person; (i) is not subject
to any warehouse receipt or negotiable Document; (j) is not subject to any
License or other arrangement that restricts such Borrower’s or Agent’s right to
dispose of such Inventory, unless Agent has received an appropriate Lien Waiver;
(k) is not located on leased premises or in the possession of a warehouseman,
processor, repairman, mechanic, shipper, freight forwarder or other Person,
unless the lessor or such Person has delivered a Lien Waiver or an appropriate
Rent and Charges Reserve has been established; and (l) is reflected in the
details of a current perpetual inventory report or other reports acceptable to
Agent.

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Eligible In- Transit Inventory – Inventory of a Borrower that satisfies all of
the criteria for being Eligible Inventory and is in transit to a location of
such Borrower which is inside the United States and is the legal property of
such Borrower at the time of its delivery to the common carrier (or legal title
passes to such Borrower upon such delivery in a manner which results in its
becoming the consignee of such property) for delivery from a location outside
the United States, provided in each case that:

(a) for open account transactions, such Inventory has been paid for in full by a
Borrower or Agent has satisfied itself that a final sale of such Inventory to a
Borrower has occurred;

(b) for documentary letter of credit transactions, such Inventory has been paid
for in full by Bank and reimbursed by a Borrower under sight documentary Letters
of Credit issued by Bank and have been accepted by Bank creating bankers
acceptances;

(c) such Inventory is evidenced by a full set of clean, original, negotiable
ocean bills of lading consigned to the order of Agent with all such original
bills of lading required to be (i) sent by courier to Agent and received by
Agent, in the event the Compliance Letter is required to be used by Agent for
open account transactions, (ii) sent by courier to the United States based
Customs Broker, in the event the Compliance Letter is not required to be used by
the Agent for open account transactions or (iii) presented under each
documentary Letter of Credit;

(d) each such bill of lading with respect to such Inventory includes a clause
stating that one original bill of lading must be surrendered in order to obtain
goods at the port of disembarkation in the United States;

(e) an agreement with respect to such Inventory with each Customs Broker used by
a Borrower in form and substance acceptable to Agent is in full force and
effect;

(f) such Inventory is subject to a first priority perfected security interest in
favor of Agent;

(g) such Inventory is covered by insurance satisfactory to Agent; and

(h) the vendor of any such Inventory has no right to reclaim, repossess or
divert shipment of any such Inventory;

(i) such Inventory is subject to purchase orders and other sale documents
satisfactory to Agent;

(j) such Inventory is being shipped by a non-affiliated common carrier
acceptable to Agent; and

(k) the Agent has received a landlord’s agreement, bailee letter or warehouse
agreement which is acceptable to it in respect of the location at which such
Inventory is to be received which is not owned in fee by such Borrower.

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Enforcement Action — any action to enforce any Obligations or Loan Documents or
to realize upon any Collateral (whether by judicial action, self-help,
notification of Account Debtors, exercise of setoff or recoupment, or
otherwise).

Environmental Laws — all Applicable Laws (including all programs, permits and
guidance promulgated by regulatory agencies), relating to public health (but
excluding occupational safety and health, to the extent regulated by OSHA) or
the protection or pollution of the environment, including CERCLA, RCRA and CWA.

Environmental Notice — a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.

Environmental Release — a release as defined in CERCLA or under any other
Environmental Law.

Equipment — as defined in the UCC, including all machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other tangible
personal Property (other than Inventory), and all parts, accessories and special
tools therefor, and accessions thereto.

Equity Interest — the interest of any (a) shareholder in a corporation,
(b) partner in a partnership (whether general, limited, limited liability or
joint venture), (c) member in a limited liability company, or (d) other Person
having any other form of equity security or ownership interest.

ERISA — the Employee Retirement Income Security Act of 1974.

Event of Default — as defined in Section 11.

Exchange Act – the Securities and Exchange Act of 1934, as amended from time to
time.

Excluded Tax — Tax on the overall net income or gross receipts of a Lender
imposed by the jurisdiction in which such Lender’s principal executive office is
located.

Extraordinary Expenses — all costs, expenses or advances that Agent may incur
during a Default or Event of Default, or during the pendency of an Insolvency
Proceeding of an Obligor, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or
advertising for sale, sale, collection, or other preservation of or realization
upon any Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Obligor, any representative of
creditors of an Obligor or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent’s Liens with respect to any Collateral), Loan Documents or Obligations,
including any lender liability or other Claims; (c) the exercise, protection or
enforcement of any rights or remedies of Agent in, or the monitoring of, any
Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or
Liens with respect

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to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation
of any modification, waiver, workout, restructuring or forbearance with respect
to any Loan Documents or Obligations; or (g) Protective Advances. Such costs,
expenses and advances include transfer fees, taxes, storage fees, insurance
costs, permit fees, utility reservation and standby fees, reasonable legal fees,
appraisal fees, brokers’ fees and commissions, auctioneers’ fees and
commissions, accountants’ fees, environmental study fees, wages and salaries
paid to employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.

Fee Letter — the fee letter agreement between Agent and Borrowers.

Fiscal Quarter — each period of thirteen weeks ending on a Saturday, commencing
on the first day of a Fiscal Year, except that the last Fiscal Quarter of each
Fiscal Year shall end on December 31.

Fiscal Year — the fiscal year of Borrowers and Subsidiaries for accounting and
tax purposes, ending on December 31 of each year.

Fixed Charge Coverage Ratio — the ratio, determined on a consolidated basis for
Borrowers and Subsidiaries the most recent trailing twelve months, of (a) EBITDA
minus Capital Expenditures (except those financed with Borrowed Money other than
Revolver Loans) and cash taxes paid, to (b) Fixed Charges.

Fixed Charges — the sum of interest expense (other than payment-in- kind),
principal payments made on Borrowed Money, and Distributions (other than
Upstream Payments) made.

FLSA — the Fair Labor Standards Act of 1938.

Foreign Lender — any Lender that is organized under the laws of a jurisdiction
other than the laws of the United States, or any state or district thereof.

Foreign Plan — any employee benefit plan or arrangement maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States, or any employee benefit plan or arrangement mandated by a
government other than the United States for employees of any Obligor or
Subsidiary.

Foreign Subsidiary — a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Internal Revenue Code, such that a guaranty by such
Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to
secure the Obligations would result in material tax liability to Borrowers.

Full Payment — with respect to any Obligations, (a) the full and indefeasible
cash payment thereof, including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in the proceeding);
(b) if such Obligations are LC Obligations or inchoate or contingent in nature,
Cash Collateralization thereof (or delivery of a standby letter of credit
acceptable to Agent in its discretion, in the amount of required Cash
Collateral); and (c) a release of any Claims of Obligors against Agent, Lenders
and Issuing Bank arising on or before the payment date. No Loans shall be deemed
to have been paid in full until all Commitments related to such Loans have
expired or been terminated.

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GAAP — generally accepted accounting principles in the United States in effect
from time to time.

General Intangibles — as defined in the UCC, including choses in action, causes
of action, company or other business records, inventions, blueprints, designs,
patents, patent applications, trademarks, trademark applications, trade names,
trade secrets, service marks, goodwill, brand names, copyrights, registrations,
licenses, franchises, customer lists, permits, tax refund claims, computer
programs, operational manuals, internet addresses and domain names, insurance
refunds and premium rebates, all rights to indemnification, and all other
intangible Property of any kind.

Goods — as defined in the UCC.

Governmental Approvals — all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.

Governmental Authority — any federal, state, municipal, foreign or other
governmental department, agency, commission, board, bureau, court, tribunal,
instrumentality, political subdivision, or other entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions for or
pertaining to any government or court, in each case whether associated with the
United States, a state, district or territory thereof, or a foreign entity or
government.

Guarantor Payment — as defined in Section 5.11.3.

Guarantors — each Person who in the future guarantees payment or performance of
any Obligations.

Guaranty — each guaranty agreement executed by a Guarantor in favor of Agent.

Hedging Agreement — an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk.

Indemnitees — Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees
and Bank of America Indemnitees.

Insolvency Proceeding — any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.

Instrument — as defined in the UCC.

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Intellectual Property — all intellectual and similar Property of a Person,
including inventions, designs, patents, patent applications, copyrights,
trademarks, service marks, trade names, trade secrets, confidential or
proprietary information, customer lists, know-how, software and databases; all
embodiments or fixations thereof and all related documentation, registrations
and franchises; all books and records describing or used in connection with the
foregoing; and all licenses or other rights to use any of the foregoing.

Intellectual Property Claim — any claim or assertion (whether in writing, by
suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing,
sale or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

Interest Period — as defined in Section 3.1.3.

Interest Rate Contract — any interest rate swap, collar or cap agreement, or
other agreement or arrangement by any Borrower or Subsidiary with Bank of
America that is designed to protect against fluctuations in interest rates.

In-Transit Eligible Inventory – all Eligible Inventory consisting of Inventory
in-transit from a location outside the United States to a location in the United
States.

Inventory — as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a Borrower’s business
(but excluding Equipment).

Inventory Formula Amount — the sum of (x) the lesser of (a) 65% of the Value of
Eligible Inventory (other than Eligible Inventory consisting of Eligible
In-Transit Inventory) or (b) 85% of the NOLV Percentage of the Value of Eligible
Inventory (other than Eligible In-Transit Inventory) plus (y) the least of (a)
$5,000,000, or (b) 65% of the Value of Eligible In-Transit Inventory, or (c) 85%
of the NOLV Percentage of the Value of Eligible In-Transit Inventory.

Inventory Reserve — reserves established by Agent to reflect factors that may
negatively impact the Value of Inventory, including change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or
mix, markdowns and vendor chargebacks.

Investment — any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Equity Interests of a
Person; or any advance or capital contribution to or other investment in a
Person.

Investment Property — as defined in the UCC.

Issuing Bank — Bank of America or an Affiliate of Bank of America.

Issuing Bank Indemnitees — Issuing Bank and its officers, directors, employees,
Affiliates, agents and attorneys.

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LC Application — an application by Borrower Agent to Issuing Bank for issuance
of a Letter of Credit, in form and substance satisfactory to Issuing Bank.

LC Conditions — the following conditions necessary for issuance of a Letter of
Credit: (a) each of the conditions set forth in Section 6; (b) after giving
effect to such issuance, total LC Obligations do not exceed the Letter of Credit
Subline, no Overadvance exists and, if no Revolver Loans are outstanding, the LC
Obligations do not exceed the Borrowing Base (without giving effect to the LC
Reserve for purposes of this calculation); (c) the expiration date of such
Letter of Credit is (i) no more than 365 days from issuance, in the case of
standby Letters of Credit, (ii) no more than 120 days from issuance, in the case
of documentary Letters of Credit, and (iii) at least 20 Business Days prior to
the Revolver Termination Date; (d) the Letter of Credit and payments thereunder
are denominated in Dollars; and (e) the form of the proposed Letter of Credit is
satisfactory to Agent and Issuing Bank in their discretion.

LC Documents — all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by Borrowers or any other Person to Issuing Bank
or Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.

LC Obligations — the sum (without duplication) of (a) all amounts owing by
Borrowers for any drawings under Letters of Credit; (b) the aggregate undrawn
amount of all outstanding Letters of Credit; and (c) all fees and other amounts
owing with respect to Letters of Credit.

LC Request — a request for issuance of a Letter of Credit, to be provided by
Borrower Agent to Issuing Bank, in form satisfactory to Agent and Issuing Bank.

LC Reserve — the aggregate of all LC Obligations, other than (a) those that have
been Cash Collateralized, and (b) if no Default or Event of Default exists,
those constituting charges owing to the Issuing Bank.

Lender Indemnitees — Lenders and their officers, directors, employees,
Affiliates, agents and attorneys.

Lenders — as defined in the preamble to this Agreement, and any other Person who
hereafter becomes a “Lender” pursuant to an Assignment and Acceptance.

Letter of Credit — any standby or documentary letter of credit issued by Issuing
Bank for the account of a Borrower, or any indemnity, guarantee, exposure
transmittal memorandum or similar form of credit support issued by Agent or
Issuing Bank for the benefit of a Borrower.

Letter-of- Credit Right — as defined in the UCC.

Letter of Credit Subline — $7,500,000.

LIBOR Loan – any Loan that bears interest based on Adjusted LIBOR.

LIBOR Revolver Loan — a Revolver Loan that bears interest based on Adjusted
LIBOR.

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License — any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.

Licensor — any Person from whom an Obligor obtains the right to use any
Intellectual Property.

Lien — any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, hypothecations,
statutory trusts, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Property.

Lien Waiver — an agreement, in form and substance reasonably satisfactory to
Agent, by which (a) for any material Collateral located on leased premises, the
lessor waives or subordinates any Lien it may have on the Collateral, and agrees
to permit Agent to enter upon the premises and remove the Collateral or to use
the premises to store or dispose of the Collateral; (b) for any Collateral held
by a warehouseman, processor, shipper or freight forwarder, such Person waives
or subordinates any Lien it may have on the Collateral, agrees to hold any
Documents in its possession relating to the Collateral as agent for Agent, and
agrees to deliver the Collateral to Agent upon request; (c) for any Collateral
held by a repairman, mechanic or bailee, such Person acknowledges Agent’s Lien,
waives or subordinates any Lien it may have on the Collateral, and agrees to
deliver the Collateral to Agent upon request; and (d) for any Collateral subject
to a Licensor’s Intellectual Property rights, the Licensor grants to Agent the
right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to the
Collateral, including the right to dispose of it with the benefit of the
Intellectual Property, whether or not a default exists under any applicable
License.

Loan — a Revolver Loan.

Loan Account — the loan account established by each Lender on its books pursuant
to Section 5.8.

Loan Documents — this Agreement, Other Agreements and Security Documents.

Loan Year — each calendar year commencing on the Closing Date and on each
anniversary of the Closing Date.

Margin Stock — as defined in Regulation U of the Board of Governors.

Material Adverse Effect — the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, Properties, prospects or condition (financial or otherwise) of any
Obligor, on the value of any material Collateral, on the enforceability of any
Loan Documents, or on the validity or priority of Agent’s Liens on any
Collateral; (b) impairs the ability of any Obligor to perform any obligations
under the Loan Documents, including repayment of any Obligations; or
(c) otherwise impairs the ability of Agent or any Lender to enforce or collect
any Obligations or to realize upon any Collateral.

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Material Contract — any agreement or arrangement to which a Borrower or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract under any securities law applicable to such Obligor, including
the Securities Act of 1933, (b) for which breach, termination, nonperformance or
failure to renew could reasonably be expected to have a Material Adverse Effect,
or (c) that relates to Subordinated Debt, or Debt in an aggregate amount of
$250,000 or more.

Moody’s — Moody’s Investors Service, Inc., and its successors.

Multiemployer Plan — any employee benefit plan or arrangement described in
Section 4001(a)(3) of ERISA that is maintained or contributed to by any Obligor
or Subsidiary.

Net Proceeds — with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Borrower or
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to Agent’s Liens on Collateral sold; (c) transfer or
similar taxes; and (d) reserves for indemnities, until such reserves are no
longer needed.

NOLV Percentage — the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of Borrowers’ Inventory performed by an appraiser and
on terms satisfactory to Agent.

Notes — each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.

Notice of Borrowing — a Notice of Borrowing to be provided by Borrower Agent to
request the funding of a Borrowing of Revolver Loans, in form satisfactory to
Agent.

Notice of Conversion/Continuation — a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any Loans
as LIBOR Loans, in form satisfactory to Agent.

Obligations — all (a) principal of and premium, if any, on the Loans, (b) LC
Obligations and other obligations of Obligors with respect to Letters of Credit,
(c) interest, expenses, fees and other sums payable by Obligors under Loan
Documents, (d) obligations of Obligors under any indemnity for Claims,
(e) Extraordinary Expenses, (f) Bank Product Debt, and (g) other Debts,
obligations and liabilities of any kind owing by Obligors pursuant to the Loan
Documents, whether now existing or hereafter arising, whether evidenced by a
note or other writing, whether allowed in any Insolvency Proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several.

Obligor — each Borrower, Guarantor, or other Person that is liable for payment
of any Obligations or that has granted a Lien in favor of Agent on its assets to
secure any Obligations.

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Ordinary Course of Business — the ordinary course of business of any Borrower or
Subsidiary, consistent with past practices and undertaken in good faith.

Organic Documents — with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.

OSHA — the Occupational Safety and Hazard Act of 1970.

Other Agreement — each Note; LC Document; Fee Letter; Lien Waiver; Real Estate
Related Document; Borrowing Base Certificate, Compliance Certificate, financial
statement or report delivered hereunder; or other document, instrument or
agreement (other than this Agreement or a Security Document) now or hereafter
delivered by an Obligor or other Person to Agent or a Lender in connection with
any transactions relating hereto.

Overadvance — as defined in Section 2.1.5.

Overadvance Loan — a Base Rate Revolver Loan made when an Overadvance exists or
is caused by the funding thereof.

Participant — as defined in Section 13.2.

Patent Assignment — each patent collateral assignment agreement pursuant to
which an Obligor assigns to Agent, for the benefit of Secured Parties, such
Obligor’s interests in its patents, as security for the Obligations.

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

Payment Intangible — as defined in the UCC.

Payment Item — each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.

Permitted Acquisitions - an acquisition of the assets or capital stock or other
equity interest in a Person (including by means of a merger or consolidation of
such Person with or into a newly formed Subsidiary) if such acquisition
satisfies all of the following terms and conditions:

(i) such Person is a domestic corporation, limited liability company, or
partnership;

(ii) such acquisition and all transactions related thereto shall be consummated
in accordance with applicable law;

(iii) such Permitted Acquisition shall be structured as (i) an asset acquisition
by a Subsidiary of a Borrower; (ii) a merger of the acquired Person with and
into a Subsidiary of a

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Borrower with such Subsidiary as the surviving corporation in such merger, or
(iii) a merger of a Subsidiary of a Borrower with and into the acquired Person
with the acquired Person as the surviving corporation in such merger and as a
Subsidiary of a Borrower, or (iv) a purchase of one-hundred percent (100%) of
the capital stock of the acquired Person by a Borrower or a Subsidiary of a
Borrower;

(iv) if a Borrower forms a Subsidiary to effect such acquisition, such
Subsidiary either shall become a Borrower hereunder or, at Agent’s option, shall
guaranty all of the Obligations and execute a guaranty acceptable to the
Lenders, grant a security interest in all of its assts to Agent for the benefit
of the Lenders to secure the Obligations, and execute such documents as may be
required by the Agent to evidence such security interest; and in either case the
applicable Borrower shall pledge the stock of such Subsidiary to Agent for the
benefit of the Lenders to secure payment of the Obligations;

(v) no capital stock or other equity interest or assets acquired in connection
with such acquisition shall be subject to any material Lien other than Permitted
Liens;

(vi) no Borrower and no Subsidiary shall assume or incur, directly or
indirectly, any Indebtedness in connection with such acquisition other than as
permitted in accordance with subsection 10.2.1 of the Agreement;

(vii) no Default or Event of Default shall exist either before or after giving
effect to such acquisition or as a result thereof;

(viii) the acquired Person must be engaged in substantially the same type of
business as Borrowers and their Subsidiaries immediately prior to such Permitted
Acquisition;

(ix) unless waived by Agent, Agent shall receive, not less than ten
(10) Business Days’ prior to the consummation of such Permitted Acquisition, a
due diligence package, reasonably satisfactory to it, which package shall
include, without limitation, a general description of the acquired Person’s
business, a detailed schedule of pending material litigation with respect to
such acquired Person or its business, a description of the method of financing
of the Permitted Acquisition (including sources and uses), the locations of all
material personal and real property of the Person being acquired (including the
location of its chief executive office), a reasonably detailed description of
the proposed terms of such Permitted Acquisition (identifying the anticipated
closing date thereof), pro forma projections (“Projections”) in reasonable
detail, giving effect to the proposed Permitted Acquisition, for Borrowers for
the twelve months after the consummation of the proposed Permitted Acquisition
and, if reasonably requested by Agent, environmental reports and related
information regarding any property owned, leased or otherwise used by the
acquired Person.

(x) such Projections shall demonstrate to Agent’s reasonable satisfaction,
Borrower’s Fixed Charge Coverage Ratio for the twelve months after the
consummation of the proposed Permitted Acquisition shall equal or exceed 1.00 to
1.

(xi) such Permitted Acquisition shall be consensual and, if applicable, shall
have been approved by the board of directors or similar governing body of the
Person being acquired;

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(xii) all consents necessary for such Permitted Acquisition (including such
consents as the Agent deems reasonably necessary) have been acquired; and

(xiii) Availability on an average pro forma basis after giving effect to the
acquisition in question immediately following the closing of such acquisition
for the sixty (60) days immediately prior to the closing date of such
acquisition and on an actual basis, after giving effect to the closing of such
acquisition, equals or exceeds $10,000,000.

No Account or Inventory acquired in a Permitted Acquisition shall be included
within Eligible Accounts or Eligible Inventory until Agent has conducted an
audit of such Accounts or Inventory and the results of such audit are
satisfactory to Agent in its reasonable discretion.

Permitted Asset Disposition — as long as no Default or Event of Default exists
and all Net Proceeds are remitted to Agent, an Asset Disposition that is (a) a
sale of Inventory in the Ordinary Course of Business; (b) a disposition of
Equipment that, in the aggregate during any 12 month period, has a fair market
or book value (whichever is more) of $500,000 or less; (c) a disposition of
Inventory that is obsolete, unmerchantable or otherwise unsalable in the
Ordinary Course of Business; (d) termination of a lease of real or personal
Property that is not necessary for the Ordinary Course of Business, could not
reasonably be expected to have a Material Adverse Effect and does not result
from an Obligor’s default; or (e) approved in writing by Agent and Required
Lenders.

Permitted Contingent Obligations — Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder;
(c) existing on the Closing Date, and any extension or renewal thereof that does
not increase the amount of such Contingent Obligation when extended or renewed;
(d) incurred in the Ordinary Course of Business with respect to surety, appeal
or performance bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with
dispositions of Equipment permitted hereunder; or (f) arising under the Loan
Documents.

Permitted Lien — as defined in Section 10.2.2.

Permitted Purchase Money Debt — Purchase Money Debt of Borrowers and
Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long
as the aggregate amount does not exceed $1,000,000 at any time and its
incurrence does not violate Section 10.2.3.

Person — any individual, corporation, limited liability company, partnership,
joint venture, joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.

Plan — an employee pension benefit plan that is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and that is either (a) maintained by a Borrower or Subsidiary for
employees or (b) maintained pursuant to a collective bargaining agreement, or
other arrangement under which more than one employer makes contributions and to
which a Borrower or Subsidiary is making or accruing an obligation to make
contributions or has within the preceding five years made or accrued such
contributions.

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Pledge Agreement – each Stock Pledge Agreement pursuant to which an Obligor
grants Agent, for the benefit of Secured Parties, a Lien on such Obligor’s
interest in the Equity Interests of any Person.

Pro Rata — with respect to any Lender, a percentage (expressed as a decimal,
rounded to the ninth decimal place) determined (a) while Revolver Commitments
are outstanding, by dividing the amount of such Lender’s Revolver Commitment by
the aggregate amount of all Revolver Commitments; and (b) at any other time, by
dividing the amount of such Lender’s Loans and LC Obligations by the aggregate
amount of all outstanding Loans and LC Obligations.

Properly Contested — with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established in accordance with GAAP;
(d) non-payment could not have a Material Adverse Effect, nor result in
forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on
assets of the Obligor, unless bonded and stayed to the satisfaction of Agent;
and (f) if the obligation results from entry of a judgment or other order, such
judgment or order is stayed pending appeal or other judicial review.

Property — any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

Protective Advances — as defined in Section 2.1.6.

Purchase Money Debt — (a) Debt (other than the Obligations) for payment of any
of the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the
purpose of financing any of the purchase price thereof; and (c) any renewals,
extensions or refinancings (but not increases) thereof.

Purchase Money Lien — a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt and constituting a Capital Lease or a
purchase money security interest under the UCC.

RCRA — the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991- 6991i).

Real Estate — all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.

Refinancing Conditions — the following conditions for Refinancing Debt: (a) it
is in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or refinanced; (b) it has a final maturity no
sooner than, a weighted average life no less than, and an interest rate no
greater than, the Debt being extended, renewed or refinanced; (c) it is
subordinated to the Obligations at least to the same extent as the Debt being
extended, renewed or refinanced; (d) the representations, covenants and defaults
applicable to it are no less favorable to Borrowers than those applicable to the
Debt being extended, renewed or

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refinanced; (e) no additional Lien is granted to secure it; (f) no additional
Person is obligated on such Debt; and (g) upon giving effect to it, no Default
or Event of Default exists.

Refinancing Debt — Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).

Reimbursement Date — as defined in Section 2.3.2.

Rent and Charges Reserve — the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.

Report — as defined in Section 12.2.3.

Reportable Event — any event set forth in Section 4043(b) of ERISA.

Required Lenders — Lenders (subject to Section 4.2) having (a) Revolver
Commitments in excess of 50% of the aggregate Revolver Commitments; and (b) if
the Revolver Commitments have terminated, Loans in excess of 50% of all
outstanding Loans.

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

Restricted Investment — any Investment by a Borrower or Subsidiary, other than
(a) Investments in Subsidiaries to the extent existing on the Closing Date;
(b) Cash Equivalents that are subject to Agent’s Lien and control, pursuant to
documentation in form and substance satisfactory to Agent; and (c) loans and
advances permitted under Section 10.2.7.

Restrictive Agreement — an agreement (other than a Loan Document) that
conditions or restricts the right of any Borrower, Subsidiary or other Obligor
to incur or repay Borrowed Money, to grant Liens on any assets, to declare or
make Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.

Revolver Commitment — for any Lender, its obligation to make Revolver Loans and
to participate in LC Obligations up to the maximum principal amount shown on
Schedule 1.1, or as specified hereafter in the most recent Assignment and
Acceptance to which it is a party. “Revolver Commitments” means the aggregate
amount of such commitments of all Lenders.

Revolver Loan — a loan made pursuant to Section 2.1, and any Overadvance Loan or
Protective Advance.

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Revolver Note — a promissory note to be executed by Borrowers in favor of a
Lender in the form of Exhibit A, which shall be in the amount of such Lender’s
Revolver Commitment and shall evidence the Revolver Loans made by such Lender.

Revolver Termination Date — June 22, 2012.

Royalties — all royalties, fees, expense reimbursement and other amounts payable
by a Borrower under a License.

S&P — Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

Secured Parties — Agent, Issuing Bank, Lenders and providers of Bank Products.

Security Documents — the Guaranties, Patent Assignments, Trademark Security
Agreements, Pledge Agreements, Deposit Account Control Agreements, and all other
documents, instruments and agreements now or hereafter securing (or given with
the intent to secure) any Obligations.

Senior Officer — the chairman of the board, president, chief executive officer
or chief financial officer of a Borrower or, if the context requires, an
Obligor.

Settlement Report — a report delivered by Agent to Lenders summarizing the
Revolver Loans and participations in LC Obligations outstanding as of a given
settlement date, allocated to Lenders on a Pro Rata basis in accordance with
their Revolver Commitments.

Software — as defined in the UCC.

Solvent — as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise)
any obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Affiliates. “Fair salable value” means the amount that could be
obtained for assets within a reasonable time, either through collection or
through sale under ordinary selling conditions by a capable and diligent seller
to an interested buyer who is willing (but under no compulsion) to purchase.

Statutory Reserves — the percentage (expressed as a decimal) established by the
Board of Governors as the then stated maximum rate for all reserves (including
those imposed by Regulation D of the Board of Governors, all basic, emergency,
supplemental or other marginal reserve requirements, and any transitional
adjustments or other scheduled changes in reserve

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requirements) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D).

Subordinated Debt — Debt incurred by a Borrower that is expressly subordinate
and junior in right of payment to Full Payment of all Obligations, and is on
terms (including maturity, interest, fees, repayment, covenants and
subordination) satisfactory to Agent.

Subsidiary — any entity at least 50% of whose voting securities or Equity
Interests is owned by a Borrower or any combination of Borrowers (including
indirect ownership by a Borrower through other entities in which the Borrower
directly or indirectly owns 50% of the voting securities or Equity Interests).

Supporting Obligation — as defined in the UCC.

Taxes — any taxes, levies, imposts, duties, fees, assessments, deductions,
withholdings or other charges of whatever nature, including income, receipts,
excise, property, sales, use, transfer, license, payroll, withholding, social
security, franchise, intangibles, stamp or recording taxes imposed by any
Governmental Authority, and all interest, penalties and similar liabilities
relating thereto.

Trademark Security Agreement — each trademark security agreement pursuant to
which an Obligor grants to Agent, for the benefit of Secured Parties, a Lien on
such Obligor’s interests in trademarks, as security for the Obligations.

Transferee — any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.

Trigger Period – the period (a) commencing on the day that an Event of Default
occurs, or Availability is less than $10,000,000 at any time; and (b) continuing
until, during the preceding sixty (60) consecutive days, no Event of Default has
existed and Availability has been greater than $10,000,000 at all times.

Type — any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same
interest option and, in the case of LIBOR Loans, the same Interest Period.

UCC — the Uniform Commercial Code as in effect in the State of Illinois or, when
the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction.

Upstream Payment — a Distribution, or management or similar fee paid, by a
Subsidiary of a Borrower to such Borrower.

Value — (a) for Inventory, its value determined on the basis of the lower of
cost or market, calculated on a first-in, first out basis; and (b) for an
Account, its face amount, net of any returns, rebates, discounts (calculated on
the shortest terms), credits, allowances or Taxes (including sales, excise or
other taxes) that have been or could be claimed by the Account Debtor or any
other Person.

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1.2. Accounting Terms. Under the Loan Documents (except as otherwise specified
herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers’ certified
public accountants concur in such change, the change is disclosed to Agent, and
Section 10.3 is amended in a manner satisfactory to Required Lenders to take
into account the effects of the change.

1.3. Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,” and
“to” and “until” each mean “to but excluding.” The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each
Loan Document, the parties agree that the rule of ejusdem generis shall not be
applicable to limit any provision. Section titles appear as a matter of
convenience only and shall not affect the interpretation of any Loan Document.
All references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any document,
instrument or agreement include any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted by the Loan Documents); (c) any
section mean, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules mean, unless the context otherwise
requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day
mean time of day at Agent’s notice address under Section 14.3.1; or
(g) discretion of Agent, Issuing Bank or any Lender mean the sole and absolute
discretion of such Person. All calculations of Value, fundings of Loans,
issuances of Letters of Credit and payments of Obligations shall be in Dollars
and, unless the context otherwise requires, all determinations (including
calculations of Borrowing Base and financial covenants) made from time to time
under the Loan Documents shall be made in light of the circumstances existing at
such time. Borrowing Base calculations shall be consistent with historical
methods of valuation and calculation, and otherwise satisfactory to Agent (and
not necessarily calculated in accordance with GAAP). Borrowers shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent, Issuing Bank or any Lender under any Loan Documents. No provision of
any Loan Documents shall be construed against any party by reason of such party
having, or being deemed to have, drafted the provision. Whenever the phrase “to
the best of Borrowers’ knowledge” or words of similar import are used in any
Loan Documents, it means actual knowledge of a Senior Officer, or knowledge that
a Senior Officer would have obtained if he or she had engaged in good faith and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates. All references to any time of day shall be
deemed to mean Chicago time, unless otherwise specified.

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SECTION 2.

CREDIT FACILITIES

2.1. Revolver Commitment.

2.1.1. Revolver Loans. Each Lender agrees, severally on a Pro Rata basis up to
its Revolver Commitment, on the terms set forth herein, to make Revolver Loans
to Borrowers from time to time through the Commitment Termination Date. The
Revolver Loans may be repaid and reborrowed as provided herein. In no event
shall Lenders have any obligation to honor a request for a Revolver Loan if the
unpaid balance of Revolver Loans outstanding at such time (including the
requested Loan) would exceed the Borrowing Base.

2.1.2. Revolver Notes. The Revolver Loans made by each Lender and interest
accruing thereon shall be evidenced by the records of Agent and such Lender. At
the request of any Lender, Borrowers shall deliver a Revolver Note to such
Lender.

2.1.3. Use of Proceeds. The proceeds of Revolver Loans shall be used by
Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction
expenses associated with the closing of this credit facility; (c) to pay
Obligations in accordance with this Agreement; (d) to fund Permitted
Acquisitions; and (e) for working capital and other lawful corporate purposes of
Borrowers.

2.1.4. Voluntary Reduction or Termination of Revolver Commitments.

(a) The Revolver Commitments shall terminate on the Revolver Termination Date,
unless sooner terminated in accordance with this Agreement. Upon at least
90 days prior written notice to Agent at any time after the first Loan Year,
Borrowers may, at their option, terminate the Revolver Commitments and this
credit facility. Any notice of termination given by Borrowers shall be
irrevocable. On the termination date, Borrowers shall make Full Payment of all
Obligations.

(b) Borrowers may permanently reduce the Revolver Commitments, on a Pro Rata
basis for each Lender, from time to time upon written notice to Agent after the
First Loan Year, which notice shall specify the amount of the reduction, shall
be irrevocable once given, shall be given at least five Business Days prior to
the end of a month and shall be effective as of the first day of the next month.
Each reduction shall be in a minimum amount of $3,000,000, or an increment of
$1,000,000 in excess thereof.

2.1.5. Overadvances. If the aggregate Revolver Loans exceed the Borrowing Base
(“Overadvance”) or the aggregate Revolver Commitments at any time, the excess
amount shall be payable by Borrowers on demand by Agent, but all such Revolver
Loans shall nevertheless constitute Obligations secured by the Collateral and
entitled to all benefits of the Loan Documents. Unless its authority has been
revoked in writing by Required Lenders, Agent may require Lenders to honor
requests for Overadvance Loans and to forbear from requiring Borrowers to cure
an Overadvance, (a) when no other Event of Default is known to Agent, as long as
(i) the Overadvance does not continue for more than 30 consecutive days (and no
Overadvance may exist for at least five consecutive days thereafter before
further Overadvance

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Loans are required), and (ii) the Overadvance is not known by Agent to exceed
$3,500,000; and (b) regardless of whether an Event of Default exists, if Agent
discovers an Overadvance not previously known by it to exist, as long as from
the date of such discovery the Overadvance (i) is not increased to an aggregate
Overadvance Amount of more than $3,500,000, and (ii) does not continue for more
than 30 consecutive days. In no event shall Overadvance Loans be required that
would cause the outstanding Revolver Loans and LC Obligations to exceed the
aggregate Revolver Commitments. Any funding of an Overadvance Loan or sufferance
of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event
of Default caused thereby. In no event shall any Borrower or other Obligor be
deemed a beneficiary of this Section nor authorized to enforce any of its terms.

2.1.6. Protective Advances. Agent shall be authorized, in its discretion, at any
time that a Default or Event of Default exists or any conditions in Section 6
are not satisfied, and without regard to the aggregate Commitments, to make Base
Rate Revolver Loans (“Protective Advances”) (a) up to an aggregate amount of
$3,500,000 outstanding at any time, if Agent deems such Loans necessary or
desirable to preserve or protect any Collateral, or to enhance the
collectibility or repayment of Obligations; or (b) to pay any other amounts
chargeable to Obligors under any Loan Documents, including costs, fees and
expenses. All Protective Advances shall be Obligations, secured by the
Collateral, and shall be treated for all purposes as Extraordinary Expenses.
Each Lender shall participate in each Protective Advance on a Pro Rata basis.
Required Lenders may at any time revoke Agent’s authorization to make further
Protective Advances by written notice to Agent. Absent such revocation, Agent’s
determination that funding of a Protective Advance is appropriate shall be
conclusive.

2.2. Intentionally Omitted.

2.3. Letter of Credit Facility.

2.3.1. Issuance of Letters of Credit. Issuing Bank agrees to issue Letters of
Credit from time to time until 30 days prior to the Revolver Termination Date
(or until the Commitment Termination Date, if earlier), on the terms set forth
herein, including the following:

(a) Each Borrower acknowledges that Issuing Bank’s willingness to issue any
Letter of Credit is conditioned upon Issuing Bank’s receipt of a LC Application
with respect to the requested Letter of Credit, as well as such other
instruments and agreements as Issuing Bank may customarily require for issuance
of a letter of credit of similar type and amount. Issuing Bank shall have no
obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC
Request and LC Application at least three Business Days prior to the requested
date of issuance; and (ii) each LC Condition is satisfied. If Issuing Bank
receives written notice from a Lender at least one Business Day before issuance
of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank
shall have no obligation to issue the requested Letter of Credit (or any other)
until such notice is withdrawn in writing by that Lender or until Required
Lenders have waived such condition in accordance with this Agreement. Prior to
receipt of any such notice, Issuing Bank shall not be deemed to have knowledge
of any failure of LC Conditions.

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(b) Letters of Credit may be requested by a Borrower only (i) to support
obligations of such Borrower incurred in the Ordinary Course of Business; or
(ii) for other purposes as Agent and Lenders may approve from time to time in
writing. The renewal or extension of any Letter of Credit shall be treated as
the issuance of a new Letter of Credit, except that delivery of a new LC
Application shall be required at the discretion of Issuing Bank.

(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter
of Credit by the beneficiary. In connection with issuance of any Letter of
Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the
existence, character, quality, quantity, condition, packing, value or delivery
of any goods purported to be represented by any Documents; any differences or
variation in the character, quality, quantity, condition, packing, value or
delivery of any goods from that expressed in any Documents; the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Documents or of any
endorsements thereon; the time, place, manner or order in which shipment of
goods is made; partial or incomplete shipment of, or failure to ship, any goods
referred to in a Letter of Credit or Documents; any deviation from instructions,
delay, default or fraud by any shipper or other Person in connection with any
goods, shipment or delivery; any breach of contract between a shipper or vendor
and a Borrower; errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail,
telephone or otherwise; errors in interpretation of technical terms; the
misapplication by a beneficiary of any Letter of Credit or the proceeds thereof;
or any consequences arising from causes beyond the control of Issuing Bank,
Agent or any Lender, including any act or omission of a Governmental Authority.
The rights and remedies of Issuing Bank under the Loan Documents shall be
cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of
each beneficiary whose claims against Borrowers are discharged with proceeds of
any Letter of Credit.

(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
notice or other communication in whatever form believed by Issuing Bank, in good
faith, to be genuine and correct and to have been signed, sent or made by a
proper Person. Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such experts.
Issuing Bank may employ agents and attorneys-in-fact in connection with any
matter relating to Letters of Credit or LC Documents, and shall not be liable
for the negligence or misconduct of any such agents or attorneys-in-fact
selected with reasonable care.

2.3.2. Reimbursement; Participations.

(a) If Issuing Bank honors any request for payment under a Letter of Credit,
Borrowers shall pay to Issuing Bank, on the same day (“Reimbursement Date”), the
amount paid by Issuing Bank under such Letter of Credit, together with interest
at the

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interest rate for Base Rate Revolver Loans from the Reimbursement Date until
payment by Borrowers. The obligation of Borrowers to reimburse Issuing Bank for
any payment made under a Letter of Credit shall be absolute, unconditional,
irrevocable, and joint and several, and shall be paid without regard to any lack
of validity or enforceability of any Letter of Credit or the existence of any
claim, setoff, defense or other right that Borrowers may have at any time
against the beneficiary. Whether or not Borrower Agent submits a Notice of
Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate
Revolver Loans in an amount necessary to pay all amounts due Issuing Bank on any
Reimbursement Date and each Lender agrees to fund its Pro Rata share of such
Borrowing whether or not the Commitments have terminated, an Overadvance exists
or is created thereby, or the conditions in Section 6 are satisfied.

(b) Upon issuance of a Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased from Issuing Bank, without recourse or
warranty, an undivided Pro Rata interest and participation in all LC Obligations
relating to the Letter of Credit. If Issuing Bank makes any payment under a
Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender’s Pro Rata share of such payment. Upon
request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit
and LC Documents in its possession at such time.

(c) The obligation of each Lender to make payments to Agent for the account of
Issuing Bank in connection with Issuing Bank’s payment under a Letter of Credit
shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Obligor may have with respect to any
Obligations. Issuing Bank does not assume any responsibility for any failure or
delay in performance or any breach by any Borrower or other Person of any
obligations under any LC Documents. Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor. Issuing Bank shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectibility, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.

(d) No Issuing Bank Indemnitee shall be liable to any Lender or other Person for
any action taken or omitted to be taken in connection with any LC Documents
except as a result of its actual gross negligence or willful misconduct. Issuing
Bank shall not have any liability to any Lender if Issuing Bank refrains from
any action under any

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Letter of Credit or LC Documents until it receives written instructions from
Required Lenders.

2.3.3. Cash Collateral. If any LC Obligations, whether or not then due or
payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that Availability is less than zero, (c) after the
Commitment Termination Date, or (d) within 20 Business Days prior to the
Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or Agent’s
request, pay to Issuing Bank the amount of all outstanding LC Obligations and
Cash Collateralize all outstanding Letters of Credit. If Borrowers fail to Cash
Collateralize outstanding Letters of Credit as required herein, Lenders may (and
shall upon direction of Agent) advance, as Revolver Loans, the amount of the
Cash Collateral required (whether or not the Commitments have terminated, an
Overadvance exists, or the conditions in Section 6 are satisfied).

SECTION 3.

INTEREST, FEES AND CHARGES

3.1. Interest.

3.1.1. Rates and Payment of Interest.

(a) The Obligations shall bear interest (i) if a Base Rate Loan, at the Base
Rate in effect from time to time, plus the Applicable Margin; (ii) if a LIBOR
Loan, at Adjusted LIBOR for the applicable Interest Period, plus the Applicable
Margin; and (iii) if any other Obligation (including, to the extent permitted by
law, interest not paid when due), at the Base Rate in effect from time to time,
plus the Applicable Margin for Base Rate Revolver Loans. Interest shall accrue
from the date the Loan is advanced or the Obligation is incurred or payable,
until paid by Borrowers. If a Loan is repaid on the same day made, one day’s
interest shall accrue.

(b) During an Insolvency Proceeding with respect to any Borrower, or during any
other Event of Default if Agent or Required Lenders in their discretion so
elect, Obligations shall bear interest at the Default Rate. Each Borrower
acknowledges that the cost and expense to Agent and each Lender due to an Event
of Default are difficult to ascertain and that the Default Rate is a fair and
reasonable estimate to compensate Agent and Lenders for such added cost and
expense.

(c) Interest accrued on the Loans shall be due and payable in arrears, (i) on
the first day of each month and, for any LIBOR Loan, the last day of its
Interest Period; (ii) on any date of prepayment, with respect to the principal
amount of Loans being prepaid; and (iii) on the Commitment Termination Date.
Interest accrued on any other Obligations shall be due and payable as provided
in the Loan Documents and, if no payment date is specified, shall be due and
payable on demand. Notwithstanding the foregoing, interest accrued at the
Default Rate shall be due and payable on demand.

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3.1.2. Application of Adjusted LIBOR to Outstanding Loans.

(a) Borrowers may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Loans to,
or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR
Loan. During any Default or Event of Default, Agent may (and shall at the
direction of Required Lenders) declare that no Loan may be made, converted or
continued as a LIBOR Loan.

(b) Whenever Borrowers desire to convert or continue Loans as LIBOR Loans,
Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later
than 11:00 a.m. (Chicago time) at least three Business Days before the requested
conversion or continuation date. Promptly after receiving any such notice, Agent
shall notify each Lender thereof. Each Notice of Conversion/Continuation shall
be irrevocable, and shall specify the aggregate principal amount of Loans to be
converted or continued, the conversion or continuation date (which shall be a
Business Day), and the duration of the Interest Period (which shall be deemed to
be one month if not specified). If, upon the expiration of any Interest Period
in respect of any LIBOR Loans, Borrowers shall have failed to deliver a Notice
of Conversion/Continuation, they shall be deemed to have elected to convert such
Loans into Base Rate Loans.

3.1.3. Interest Periods. In connection with the making, conversion or
continuation of any LIBOR Loans, Borrowers shall select an interest period
(“Interest Period”) to apply, which interest period shall be one, two, or three
months; provided, however, that:

(a) the Interest Period shall commence on the date the Loan is made or continued
as, or converted into, a LIBOR Loan, and shall expire on the numerically
corresponding day in the calendar month at its end; and

(b) if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding day
falls after the last Business Day of such month, then the Interest Period shall
expire on the last Business Day of such month; and if any Interest Period would
expire on a day that is not a Business Day, the period shall expire on the next
Business Day.

3.1.4. Interest Rate Not Ascertainable. If Agent shall determine that on any
date for determining Adjusted LIBOR, due to any circumstance affecting the
London interbank market, adequate and fair means do not exist for ascertaining
such rate on the basis provided herein, then Agent shall immediately notify
Borrowers of such determination. Until Agent notifies Borrowers that such
circumstance no longer exists, the obligation of Lenders to make LIBOR Loans
shall be suspended, and no further Loans may be converted into or continued as
LIBOR Loans.

3.2. Fees.

3.2.1. Unused Line Fee. Borrowers shall pay to Agent, for the Pro Rata benefit
of Lenders, a fee equal to the “Unused Line Fee Percentage” (as defined below)
per annum times the amount by which the Revolver Commitments exceed the average
daily balance of Revolver

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Loans and stated amount of Letters of Credit during any month. Such fee shall be
payable in arrears, on the first day of each month and on the Commitment
Termination Date. From the Closing Date until December 31, 2007, the Unused Line
Fee Percentage shall equal 0.375%. Thereafter, the Unused Line Fee Percentage
shall equal 0.25%, for each calendar month during which the average amount of
the principal balance of Revolver Loans plus the LC Obligations equals or
exceeds $10,000,000 and 0.30% for any other Fiscal Quarter.

3.2.2. LC Facility Fees. Borrowers shall pay (a) to Agent, for the Pro Rata
benefit of Lenders, a fee equal to the Applicable Margin in effect for LIBOR
Revolver Loans times the average daily stated amount of Letters of Credit, which
fee shall be payable monthly in arrears, on the first day of each month; (b) to
Agent, for its own account, a per annum fronting fee equal to 1/8% per annum on
the stated amount of each Letter of Credit, which fee shall be payable monthly
in arrears, on the first day of each month; and (c) to Issuing Bank, for its own
account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred. During an Event of
Default, the fee payable under clause (a) shall be increased by 2% per annum.

3.2.3. Closing Fee. Borrowers shall pay to Agent, for the Pro Rata benefit of
the Lenders, the closing fee described in the fee letter, which shall be paid
concurrently with the funding of the initial Loans hereunder.

3.2.4. Agent Fees. In consideration of Agent’s syndication of the Commitments
and service as Agent hereunder, Borrowers shall pay to Agent, for its own
account, the fees described in the Fee Letter.

3.3. Computation of Interest, Fees, Yield Protection. All interest, as well as
fees and other charges calculated on a per annum basis, shall be computed for
the actual days elapsed, based on a year of 360 days. Each determination by
Agent of any interest, fees or interest rate hereunder shall be final,
conclusive and binding for all purposes, absent manifest error. All fees shall
be fully earned when due and shall not be subject to rebate or refund, nor
subject to proration except as specifically provided herein. All fees payable
under Section 3.2 are compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use, forbearance or detention
of money. A certificate as to amounts payable by Borrowers under Section 3.4,
3.6, 3.7, 3.9 or 5.9, submitted to Borrowers by Agent or the affected Lender, as
applicable, shall be final, conclusive and binding for all purposes, absent
manifest error.

3.4. Reimbursement Obligations. Borrowers shall reimburse Agent for all
Extraordinary Expenses. Borrowers shall also reimburse Agent for all reasonable
legal, accounting, appraisal, consulting, and other fees, costs and expenses
incurred by it in connection with (a) negotiation and preparation of any Loan
Documents, including any amendment or other modification thereof;
(b) administration of and actions relating to any Collateral, Loan Documents and
transactions contemplated thereby, including any actions taken to perfect or
maintain priority of Agent’s Liens on any Collateral, to maintain any insurance
required hereunder or to verify Collateral; and (c) subject to the limits of
Section 10.1.1(b), each inspection, audit or appraisal with respect to any
Obligor or Collateral, whether prepared by

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Agent’s personnel or a third party. All amounts reimbursable by Borrowers under
this Section shall constitute Obligations secured by the Collateral and shall be
payable on demand.

3.5. Illegality. Notwithstanding anything to the contrary herein, if (a) any
change in any law or interpretation thereof by any Governmental Authority makes
it unlawful for a Lender to make or maintain a LIBOR Loan or to maintain any
Commitment with respect to LIBOR Loans or (b) a Lender determines that the
making or continuance of a LIBOR Loan has become impracticable as a result of a
circumstance that adversely affects the London interbank market or the position
of such Lender in such market, then such Lender shall give notice thereof to
Agent and Borrowers and may (i) declare that LIBOR Loans will not thereafter be
made by such Lender, whereupon any request for a LIBOR Loan from such Lender
shall be deemed to be a request for a Base Rate Loan unless such Lender’s
declaration has been withdrawn (and it shall be withdrawn promptly upon
cessation of the circumstances described in clause (a) or (b) above); and/or
(ii) require that all outstanding LIBOR Loans made by such Lender be converted
to Base Rate Loans immediately, in which event all outstanding LIBOR Loans of
such Lender shall be immediately converted to Base Rate Loans.

3.6. Increased Costs. If, by reason of (a) the introduction of or any change
(including any change by way of imposition or increase of Statutory Reserves or
other reserve requirements) in any law or interpretation thereof, or (b) the
compliance with any guideline or request from any Governmental Authority or
other Person exercising control over banks or financial institutions generally
(whether or not having the force of law):

(i) a Lender shall be subject to any Tax with respect to any LIBOR Loan or
Letter of Credit or its obligation to make LIBOR Loans, issue Letters of Credit
or participate in LC Obligations, or a change shall result in the basis of
taxation of any payment to a Lender with respect to its LIBOR Loans or its
obligation to make LIBOR Loans, issue Letters of Credit or participate in LC
Obligations (except for Excluded Taxes); or

(ii) any reserve (including any imposed by the Board of Governors), special
deposits or similar requirement against assets of, deposits with or for the
account of, or credit extended by, a Lender shall be imposed or deemed
applicable, or any other condition affecting a Lender’s LIBOR Loans or
obligation to make LIBOR Loans, issue Letters of Credit or participate in LC
Obligations shall be imposed on such Lender or the London interbank market;

and as a result there shall be an increase in the cost to such Lender of
agreeing to make or making, funding or maintaining LIBOR Loans, Letters of
Credit or participations in LC Obligations (except to the extent already
included in determination of Adjusted LIBOR), or there shall be a reduction in
the amount receivable by such Lender, then the Lender shall promptly notify
Borrowers and Agent of such event, and Borrowers shall, within five days
following demand therefor, pay such Lender the amount of such increased costs or
reduced amounts.

If a Lender determines that, because of circumstances described above or any
other circumstances arising hereafter affecting such Lender, the London
interbank market or the Lender’s position in such market, Adjusted LIBOR or its
Applicable Margin, as applicable, will not adequately and fairly reflect the
cost to such Lender of funding LIBOR Loans, issuing Letters of Credit or
participating in LC Obligations, then (A) the Lender shall promptly notify

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Borrowers and Agent of such event; (B) such Lender’s obligation to make LIBOR
Loans, issue Letters of Credit or participate in LC Obligations shall be
immediately suspended, until each condition giving rise to such suspension no
longer exists; and (C) such Lender shall make a Base Rate Loan as part of any
requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for all
purposes, be considered part of such Borrowing.

3.7. Capital Adequacy. If a Lender determines that any introduction of or any
change in a Capital Adequacy Regulation, any change in the interpretation or
administration of a Capital Adequacy Regulation by a Governmental Authority
charged with interpretation or administration thereof, or any compliance by such
Lender or any Person controlling such Lender with a Capital Adequacy Regulation,
increases the amount of capital required or expected to be maintained by such
Lender or Person (taking into consideration its capital adequacy policies and
desired return on capital) as a consequence of such Lender’s Commitments, Loans,
participations in LC Obligations or other obligations under the Loan Documents,
then Borrowers shall, within five days following demand therefor, pay such
Lender an amount sufficient to compensate for such increase. A Lender’s demand
for payment shall set forth the nature of the occurrence giving rise to such
compensation and a calculation of the amount to be paid. In determining such
amount, the Lender may use any reasonable averaging and attribution method.

3.8. Mitigation. Each Lender agrees that, upon becoming aware that it is subject
to Section 3.5, 3.6, 3.7 or 5.9, it will take reasonable measures to reduce
Borrowers’ obligations under such Sections, including funding or maintaining its
Commitments or Loans through another office, as long as use of such measures
would not adversely affect the Lender’s Commitments, Loans, business or
interests, and would not be inconsistent with any internal policy or applicable
legal or regulatory restriction.

3.9. Funding Losses. If for any reason (other than default by a Lender) (a) any
Borrowing of, or conversion to or continuation of, a LIBOR Loan does not occur
on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required hereunder,
then Borrowers shall pay to Agent its customary administrative charge and to
each Lender all losses and expenses that it sustains as a consequence thereof,
including any loss or expense arising from liquidation or redeployment of funds
or from fees payable to terminate deposits of matching funds. Lenders shall not
be required to purchase Dollar deposits in the London interbank market or any
other offshore Dollar market to fund any LIBOR Loan, but the provisions hereof
shall be deemed to apply as if each Lender had purchased such deposits to fund
its LIBOR Loans.

3.10. Maximum Interest. In no event shall interest, charges or other amounts
that are contracted for, charged or received by Agent and Lenders pursuant to
any Loan Documents and that are deemed interest under Applicable Law
(“interest”) exceed the highest rate permissible under Applicable Law (“maximum
rate”). If, in any month, any interest rate, absent the foregoing limitation,
would have exceeded the maximum rate, then the interest rate for that month
shall be the maximum rate and, if in a future month, that interest rate would
otherwise be less than the maximum rate, then the rate shall remain at the
maximum rate until the amount of interest actually paid equals the amount of
interest which would have accrued if it had not been

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limited by the maximum rate. If, upon Full Payment of the Obligations, the total
amount of interest actually paid under the Loan Documents is less than the total
amount of interest that would, but for this Section, have accrued under the Loan
Documents, then Borrowers shall, to the extent permitted by Applicable Law, pay
to Agent, for the account of Lenders, (a) the lesser of (i) the amount of
interest that would have been charged if the maximum rate had been in effect at
all times, or (ii) the amount of interest that would have accrued had the
interest rate otherwise set forth in the Loan Documents been in effect, minus
(b) the amount of interest actually paid under the Loan Documents. If a court of
competent jurisdiction determines that Agent or any Lender has received interest
in excess of the maximum amount allowed under Applicable Law, such excess shall
be deemed received on account of, and shall automatically be applied to reduce,
Obligations other than interest (regardless of any erroneous application thereof
by Agent or any Lender), and upon Full Payment of the Obligations, any balance
shall be refunded to Borrowers. In determining whether any excess interest has
been charged or received by Agent or any Lender, all interest at any time
charged or received from Borrowers in connection with the Loan Documents shall,
to the extent permitted by Applicable Law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of the Obligations.

SECTION 4.

LOAN ADMINISTRATION

4.1. Manner of Borrowing and Funding Revolver Loans.

4.1.1. Notice of Borrowing.

(a) Whenever Borrowers desire funding of a Borrowing of Revolver Loans, Borrower
Agent shall give Agent a Notice of Borrowing. Such notice must be received by
Agent no later than 11:00 a.m. (Chicago time) (i) on the Business Day of the
requested funding date, in the case of Base Rate Loans, and (ii) at least three
Business Days prior to the requested funding date, in the case of LIBOR Loans.
Notices received after 11:00 a.m. (Chicago time) shall be deemed received on the
next Business Day. Each Notice of Borrowing shall be irrevocable and shall
specify (A) the principal amount of the Borrowing, (B) the requested funding
date (which must be a Business Day), (C) whether the Borrowing is to be made as
Base Rate Loans or LIBOR Loans, and (D) in the case of LIBOR Loans, the duration
of the applicable Interest Period (which shall be deemed to be one month if not
specified).

(b) Unless payment is otherwise timely made by Borrowers, the becoming due of
any Obligations (whether principal, interest, fees or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt)
shall be deemed to be a request for Base Rate Revolver Loans on the due date, in
the amount of such Obligations. The proceeds of such Revolver Loans shall be
disbursed as direct payment of the relevant Obligation.

(c) If Borrowers establish a controlled disbursement account with Agent or any
Affiliate of Agent, then the presentation for payment of any check or other item
of payment drawn on such account at a time when there are insufficient funds to

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cover it shall be deemed to be a request for Base Rate Revolver Loans on the
date of such presentation, in the amount of the check and items presented for
payment. The proceeds of such Revolver Loans may be disbursed directly to the
controlled disbursement account or other appropriate account.

4.1.2. Fundings by Lenders. Each Lender shall timely honor its Revolver
Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans
that is properly requested hereunder. Agent shall endeavor to notify Lenders of
each Notice of Borrowing (or deemed request for a Borrowing) by 12:00 noon on
the proposed funding date for Base Rate Loans or by 3:00 p.m. at least two
Business Days before any proposed funding of LIBOR Loans. Each Lender shall fund
to Agent such Lender’s Pro Rata share of the Borrowing to the account specified
by Agent in immediately available funds not later than 2:00 p.m. on the
requested funding date, unless Agent’s notice is received after the times
provided above, in which event Lender shall fund its Pro Rata share by
11:00 a.m. (Chicago time) on the next Business Day. Subject to its receipt of
such amounts from Lenders, Agent shall disburse the proceeds of the Revolver
Loans as directed by Borrower Agent. Unless Agent shall have received (in
sufficient time to act) written notice from a Lender that it does not intend to
fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has
deposited or promptly will deposit its share with Agent, and Agent may disburse
a corresponding amount to Borrowers. If a Lender’s share of any Borrowing is not
in fact received by Agent, then Borrowers agree to repay to Agent on demand the
amount of such share, together with interest thereon from the date disbursed
until repaid, at the rate applicable to such Borrowing.

4.1.3. Settlement. To facilitate administration of the Revolver Loans, Agent, in
its sole discretion, may from its own funds make a Revolver Loan on behalf of
any Lender. Lenders and Agent agree (which agreement is solely among them, and
not for the benefit of or enforceable by any Borrower) that settlement among
them with respect to Revolver Loans may take place periodically on a date
determined from time to time by Agent, which shall occur at least once every
five Business Days. On each settlement date, settlement shall be made with each
Lender in accordance with the Settlement Report delivered by Agent to Lenders.
Between settlement dates, Agent may in its discretion apply payments on Revolver
Loans to Revolver Loans it has advanced on behalf of other Lenders, regardless
of any designation by Borrower or any provision herein to the contrary. Each
Lender’s obligation to make settlements with Agent is absolute and
unconditional, without offset, counterclaim or other defense, and whether or not
the Commitments have terminated, an Overadvance exists, or the conditions in
Section 6 are satisfied. If, due to an Insolvency Proceeding with respect to a
Borrower or otherwise, any Revolver Loan that Agent has advanced on behalf of
another Lender may not be settled among Lenders hereunder, then each Lender
shall be deemed to have purchased from Agent a Pro Rata participation in each
such unpaid Revolver Loan and shall transfer the amount of such participation to
Agent, in immediately available funds, within one Business Day after Agent’s
request therefor.

4.1.4. Notices. Each Borrower authorizes Agent and Lenders to extend, convert or
continue Loans, effect selections of interest rates, and transfer funds to or on
behalf of Borrowers based on telephonic or e-mailed instructions. Borrowers
shall confirm each such request by prompt delivery to Agent of a Notice of
Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs
in any material respect from the action

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taken by Agent or Lenders, the records of Agent and Lenders shall govern.
Neither Agent nor any Lender shall have any liability for any loss suffered by a
Borrower as a result of Agent or any Lender acting upon its understanding of
telephonic or e-mailed instructions from a person believed in good faith by
Agent or any Lender to be a person authorized to give such instructions on a
Borrower’s behalf.

4.2. Defaulting Lender. If a Lender fails to make any payment to Agent that is
required hereunder, Agent may (but shall not be required to), in its discretion,
retain payments that would otherwise be made to such defaulting Lender
hereunder, apply the payments to such Lender’s defaulted obligations or
readvance the funds to Borrowers in accordance with this Agreement. The failure
of any Lender to fund a Loan or to make a payment in respect of a LC Obligation
shall not relieve any other Lender of its obligations hereunder, and no Lender
shall be responsible for default by another Lender. Lenders and Agent agree
(which agreement is solely among them, and not for the benefit of or enforceable
by any Borrower) that, solely for purposes of determining a defaulting Lender’s
right to vote on matters relating to the Loan Documents and to share in
payments, fees and Collateral proceeds thereunder, a defaulting Lender shall not
be deemed to be a “Lender” until all its defaulted obligations have been cured.

4.3. Number and Amount of LIBOR Loans; Determination of Rate. For ease of
administration, all LIBOR Revolver Loans having the same length and beginning
date of their Interest Periods shall be aggregated together, and such Loans
shall be allocated among Lenders on a Pro Rata basis. No more than seven
(7) aggregated LIBOR Loans may be outstanding at any time, and each aggregate
LIBOR Loan when made, continued or converted shall be in a minimum amount of
$1,000,000, or an increment of $500,000 in excess thereof. Upon determining
Adjusted LIBOR for any Interest Period requested by Borrowers, Agent shall
promptly notify Borrowers thereof by telephone or electronically and, if
requested by Borrowers, shall confirm any telephonic notice in writing.

4.4. Borrower Agent. Each Borrower hereby designates Chromcraft (“Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for Loans and Letters of Credit, designation of
interest rates, delivery or receipt of communications with Agent, Issuing Bank
or any Lender, preparation and delivery of Borrowing Base and financial reports,
receipt and payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender. Borrower Agent hereby accepts such appointment. Agent and Lenders
shall be entitled to rely upon, and shall be fully protected in relying upon,
any notice or communication (including any notice of borrowing) delivered by
Borrower Agent on behalf of any Borrower. Agent and Lenders may give any notice
or communication with a Borrower hereunder to Borrower Agent on behalf of such
Borrower. Agent shall have the right, in its discretion, to deal exclusively
with Borrower Agent for any or all purposes under the Loan Documents. Each
Borrower agrees that any notice, election, communication, representation,
agreement or undertaking made on its behalf by Borrower Agent shall be binding
upon and enforceable against it.

4.5. One Obligation. The Loans, LC Obligations and other Obligations shall
constitute one general obligation of Borrowers and (unless otherwise expressly
provided in any Loan Document) shall be secured by Agent’s Lien upon all
Collateral; provided, however, that

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Agent and each Lender shall be deemed to be a creditor of, and the holder of a
separate claim against, each Borrower to the extent of any Obligations jointly
or severally owed by such Borrower.

4.6. Effect of Termination. On the effective date of any termination of the
Commitments, all Obligations shall be immediately due and payable, and any
Lender may terminate its and its Affiliates’ Bank Products (including, with the
consent of Agent, any Cash Management Services). All undertakings of Borrowers
contained in the Loan Documents shall survive any termination, and Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the
Loan Documents until Full Payment of the Obligations. Notwithstanding Full
Payment of the Obligations, Agent shall not be required to terminate its Liens
in any Collateral unless, with respect to any damages Agent may incur as a
result of the dishonor or return of Payment Items applied to Obligations, Agent
receives (a) a written agreement, executed by Borrowers and any Person whose
advances are used in whole or in part to satisfy the Obligations, indemnifying
Agent and Lenders from any such damages; or (b) such Cash Collateral as Agent,
in its discretion, deems necessary to protect against any such damages. The
provisions of Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.5, 5.9, 12, 14.2 and this
Section, and the obligation of each Obligor and Lender with respect to each
indemnity given by it in any Loan Document, shall survive Full Payment of the
Obligations and any release relating to this credit facility.

SECTION 5.

PAYMENTS

5.1. General Payment Provisions. All payments of Obligations shall be made in
Dollars, without offset, counterclaim or defense of any kind, free of (and
without deduction for) any Taxes, and in immediately available funds, not later
than 12:00 noon (Chicago time) on the due date. Any payment after such time
shall be deemed made on the next Business Day. If any payment under the Loan
Documents shall be stated to be due on a day other than a Business Day, the due
date shall be extended to the next Business Day and such extension of time shall
be included in any computation of interest and fees. Any payment of a LIBOR Loan
prior to the end of its Interest Period shall be accompanied by all amounts due
under Section 3.9. Any prepayment of Loans shall be applied first to Base Rate
Loans and then to LIBOR Loans.

5.2. Repayment of Revolver Loans.

5.2.1. Payments on Revolver Termination Date and From Proceeds of Accounts and
Inventory. Revolver Loans shall be due and payable in full on the Revolver
Termination Date, unless payment is sooner required hereunder. Revolver Loans
may be prepaid from time to time, without penalty or premium. If any Asset
Disposition includes the disposition of Accounts or Inventory, then Net Proceeds
equal to the greater of (a) the net book value of such Accounts and Inventory,
or (b) the reduction in the Borrowing Base upon giving effect to such
disposition, shall be applied to the Revolver Loans. Notwithstanding anything
herein to the contrary, if an Overadvance exists, Borrowers shall, on the sooner
of Agent’s demand or the first Business Day after any Borrower has knowledge
thereof, repay the outstanding Revolver Loans in an amount sufficient to reduce
the principal balance of Revolver Loans to the Borrowing Base.

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5.2.2. Mandatory Prepayments.

(a) Concurrently with any Permitted Asset Disposition of Equipment, Borrowers
shall prepay Revolver Loans in an amount equal to the Net Proceeds of such
disposition;

(b) Concurrently with the receipt of any proceeds of insurance or condemnation
awards paid in respect of any Equipment, Borrowers shall prepay Revolver Loans
in an amount equal to such proceeds, subject to Section 8.6.2; and

(c) Concurrently with any issuance of any Debt or Equity Interests (other than
Debt which is permitted by this Agreement or proceeds from the exercise of
employee stock options or Upstream Payments) by a Borrower, Borrowers shall
prepay Revolver Loans in an amount equal to the net proceeds of such issuance.

Subject to the provisions of Section 6, Revolver Loans prepaid pursuant to this
Section 5.2.2 may be reborrowed.

5.3. Payment of Other Obligations. Obligations other than Loans, including LC
Obligations and Extraordinary Expenses, shall be paid by Borrowers as provided
in the Loan Documents or, if no payment date is specified, on demand.

5.4. Marshaling; Payments Set Aside. None of Agent or Lenders shall be under any
obligation to marshal any assets in favor of any Obligor or against any
Obligations. If any Obligor makes a payment to Agent or Lenders, or if Agent or
any Lender receives payment from the proceeds of Collateral, exercise of setoff
or otherwise, and such payment is subsequently invalidated or required to be
repaid to a trustee, receiver or any other Person, then the Obligations
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been received and any enforcement or setoff had not occurred.

5.5. Post-Default Allocation of Payments.

5.5.1. Allocation. Notwithstanding anything herein to the contrary, during an
Event of Default, monies to be applied to the Obligations, whether arising from
payments by Obligors, realization on Collateral, setoff or otherwise, shall be
allocated as follows:

(a) first, to all costs and expenses, including Extraordinary Expenses, owing to
Agent;

(b) second, to all amounts owing to Agent on Revolver Loans it has advanced on
behalf of other Lenders or Protective Advances;

(c) third, to all amounts owing to Issuing Bank on LC Obligations;

(d) fourth, to all Obligations constituting fees (excluding amounts relating to
Bank Products);

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(e) fifth, to all Obligations constituting interest (excluding amounts relating
to Bank Products);

(f) sixth, to provide Cash Collateral for outstanding Letters of Credit;

(g) seventh, to all other Obligations, other than Bank Product Debt; and

(h) last, to Bank Product Debt.

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. The allocations set forth in this Section are
solely to determine the rights and priorities of Agent and Lenders as among
themselves, and may be changed by agreement among them without the consent of
any Obligor. This Section is not for the benefit of or enforceable by any
Borrower.

5.5.2. Erroneous Application. Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been made shall be to recover the amount
from the Person that actually received it (and, if such amount was received by
any Lender, such Lender hereby agrees to return it).

5.6. Application of Payments. The ledger balance in the main Dominion Account as
of the end of a Business Day shall be applied to the Obligations at the
beginning of the next Business Day, during any Trigger Period. If, as a result
of such application, a credit balance exists, the balance shall not accrue
interest in favor of Borrowers and shall be made available to Borrowers as long
as no Default or Event of Default exists. Each Borrower irrevocably waives the
right to direct the application of any payments or Collateral proceeds, and
agrees that Agent shall have the continuing, exclusive right to apply and
reapply same against the Obligations, in such manner as Agent deems advisable,
notwithstanding any entry by Agent in its records.

5.7. Loan Account; Account Stated.

5.7.1. Loan Account. Agent shall maintain in accordance with its usual and
customary practices an account or accounts (“Loan Account”) evidencing the Debt
of Borrowers resulting from each Loan or issuance of a Letter of Credit from
time to time. Any failure of Agent to record anything in the Loan Account, or
any error in doing so, shall not limit or otherwise affect the obligation of
Borrowers to pay any amount owing hereunder. Agent may maintain a single Loan
Account in the name of Borrower Agent, and each Borrower confirms that such
arrangement shall have no effect on the joint and several character of its
liability for the Obligations.

5.7.2. Entries Binding. Entries made in the Loan Account shall constitute
presumptive evidence of the information contained therein. If any information
contained in the Loan Account is provided to or inspected by any Person, then
such information shall be conclusive and binding on such Person for all purposes
absent manifest error, except to the

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extent such Person notifies Agent in writing within 30 days after receipt or
inspection that specific information is subject to dispute.

5.8. Taxes. If any Taxes (except Excluded Taxes) shall be payable by any party
due to the execution, delivery, issuance or recording of any Loan Documents, or
the creation or repayment of any Obligations, Borrowers shall pay (and shall
promptly reimburse Agent and Lenders for their payment of) all such Taxes,
including any interest and penalties thereon, and will indemnify and hold
harmless Indemnitees against all liability in connection therewith. If Borrowers
shall be required by Applicable Law to withhold or deduct any Taxes (except
Excluded Taxes) with respect to any sum payable under any Loan Documents,
(a) the sum payable to Agent or such Lender shall be increased as may be
necessary so that, after making all required withholding or deductions, Agent or
such Lender (as the case may be) receives an amount equal to the sum it would
have received had no such withholding or deductions been made; (b) Borrowers
shall make such withholding or deductions; and (c) Borrowers shall pay the full
amount withheld or deducted to the relevant taxing or other authority in
accordance with Applicable Law.

5.9. Withholding Tax Exemption. At least five Business Days prior to the first
date for payment of interest or fees hereunder to a Foreign Lender, the Foreign
Lender shall deliver to Borrowers and Agent two duly completed copies of IRS
Form W-8BEN or W-8ECI (or any subsequent replacement or substitute form
therefor), certifying that such Lender can receive payment of Obligations
without deduction or withholding of any United States federal income taxes. Each
Foreign Lender shall deliver to Borrowers and Agent two additional copies of
such form before the preceding form expires or becomes obsolete or after the
occurrence of any event requiring a change in the form, as well as any
amendments, extensions or renewals thereof as may be reasonably requested by
Borrowers or Agent, in each case, certifying that the Foreign Lender can receive
payment of Obligations without deduction or withholding of any such taxes,
unless an event (including any change in treaty or law) has occurred that
renders such forms inapplicable or prevents the Foreign Lender from certifying
that it can receive payments without deduction or withholding of such taxes.
During any period that a Foreign Lender does not or is unable to establish that
it can receive payments without deduction or withholding of such taxes, other
than by reason of an event (including any change in treaty or law) that occurs
after it becomes a Lender, Agent may withhold taxes from payments to such
Foreign Lender at the applicable statutory and treaty rates, and Borrowers shall
not be required to pay any additional amounts under this Section as a result of
such withholding.

5.10. Nature and Extent of Each Borrower’s Liability.

5.10.1. Joint and Several Liability. Each Borrower agrees that it is jointly and
severally liable for, and absolutely and unconditionally guarantees to Agent and
Lenders the prompt payment and performance of, all Obligations and all
agreements under the Loan Documents. Each Borrower agrees that its guaranty
obligations hereunder constitute a continuing guaranty of payment and not of
collection, that such obligations shall not be discharged until Full Payment of
the Obligations, and that such obligations are absolute and unconditional,
irrespective of (a) the genuineness, validity, regularity, enforceability,
subordination or any future modification of, or change in, any Obligations or
Loan Document, or any other document, instrument or agreement to which any
Obligor is or may become a party or

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be bound; (b) the absence of any action to enforce this Agreement (including
this Section) or any other Loan Document, or any waiver, consent or indulgence
of any kind by Agent or any Lender with respect thereto; (c) the existence,
value or condition of, or failure to perfect a Lien or to preserve rights
against, any security or guaranty for the Obligations or any action, or the
absence of any action, by Agent or any Lender in respect thereof (including the
release of any security or guaranty); (d) the insolvency of any Obligor; (e) any
election by Agent or any Lender in an Insolvency Proceeding for the application
of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a
Lien by any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any
Lender against any Obligor for the repayment of any Obligations under
Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, except Full Payment of all Obligations.

5.10.2. Waivers.

(a) Each Borrower expressly waives all rights that it may have now or in the
future under any statute, at common law, in equity or otherwise, to compel Agent
or Lenders to marshal assets or to proceed against any Obligor, other Person or
security for the payment or performance of any Obligations before, or as a
condition to, proceeding against such Borrower. Each Borrower waives all
defenses available to a surety, guarantor or accommodation co-obligor other than
Full Payment of all Obligations. It is agreed among each Borrower, Agent and
Lenders that the provisions of this Section are of the essence of the
transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters of
Credit. Each Borrower acknowledges that its guaranty pursuant to this Section is
necessary to the conduct and promotion of its business, and can be expected to
benefit such business.

(b) Agent and Lenders may, in their discretion, pursue such rights and remedies
as they deem appropriate and as permitted by applicable law, including
realization upon Collateral or any Real Estate by judicial foreclosure or non
judicial sale or enforcement, without affecting any rights and remedies under
this Section 5.10. If, in the exercise of any rights or remedies, Agent or any
Lender shall forfeit any of its rights or remedies, including its right to enter
a deficiency judgment against any Borrower or any other Person, whether because
of any applicable laws pertaining to “election of remedies” or otherwise, each
Borrower consents to such action by Agent or such Lender and waives any claim
based upon such action, even if the action may result in loss of any rights of
subrogation that any Borrower might otherwise have had but for such action. Any
election of remedies that results in denial or impairment of the right of Agent
or any Lender to seek a deficiency judgment against any Borrower shall not
impair any other Borrower’s obligation to pay the full amount of the
Obligations. Each Borrower waives all rights and defenses arising out of an
election of remedies, such as nonjudicial foreclosure with respect to any
security for the Obligations, even though that election of remedies destroys
such Borrower’s rights of subrogation against any other Person. If Agent bids at
any foreclosure or trustee’s sale or at any private sale, Agent may bid all or a
portion of the Obligations and the amount of such bid need not be paid by Agent
but

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shall be credited against the Obligations. The amount of the successful bid at
any such sale, whether Agent or any other Person is the successful bidder, shall
be conclusively deemed to be the fair market value of the Collateral, and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 5.10, notwithstanding that any present or future law or court
decision may have the effect of reducing the amount of any deficiency claim to
which Agent or any Lender might otherwise be entitled but for such bidding at
any such sale.

5.10.3. Extent of Liability; Contribution.

(a) Notwithstanding anything herein to the contrary, each Borrower’s liability
under this Section 5.10 shall be limited to the greater of (i) all amounts for
which such Borrower is primarily liable, as described below, and (ii) such
Borrower’s Allocable Amount.

(b) If any Borrower makes a payment under this Section 5.10 of any Obligations
(other than amounts for which such Borrower is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payments in the same proportion that such Borrower’s
Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such
Borrower shall be entitled to receive contribution and indemnification payments
from, and to be reimbursed by, each other Borrower for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. The “Allocable Amount” for any
Borrower shall be the maximum amount that could then be recovered from such
Borrower under this Section 5.10 without rendering such payment voidable or
avoidable under Section 548 of the Bankruptcy Code or under any applicable state
fraudulent transfer or conveyance act, or similar statute or common law.

(c) Nothing contained in this Section 5.10 shall limit the liability of any
Borrower to pay Loans made directly or indirectly to that Borrower (including
Loans advanced to any other Borrower and then re-loaned or otherwise transferred
to, or for the benefit of, such Borrower), LC Obligations relating to Letters of
Credit issued to support such Borrower’s business, and all accrued interest,
fees, expenses and other related Obligations with respect thereto, for which
such Borrower shall be primarily liable for all purposes hereunder. Agent and
Lenders shall have the right, at any time in their discretion, to condition
Loans and Letters of Credit upon a separate calculation of borrowing
availability for each Borrower and to restrict the disbursement and use of such
Loans and Letters of Credit to such Borrower.

5.10.4. Joint Enterprise. Each Borrower has requested that Agent and Lenders
make this credit facility available to Borrowers on a combined basis, in order
to finance Borrowers’ business most efficiently and economically. Borrowers’
business is a mutual and collective enterprise, and Borrowers believe that
consolidation of their credit facility will

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enhance the borrowing power of each Borrower and ease the administration of
their relationship with Lenders, all to the mutual advantage of Borrowers.
Borrowers acknowledge and agree that Agent’s and Lenders’ willingness to extend
credit to Borrowers and to administer the Collateral on a combined basis, as set
forth herein, is done solely as an accommodation to Borrowers and at Borrowers’
request.

5.10.5. Subordination. Each Borrower hereby subordinates any claims, including
any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any
time against any other Obligor, howsoever arising, to the Full Payment of all
Obligations.

SECTION 6.

CONDITIONS PRECEDENT

6.1. Conditions Precedent to Initial Loans. In addition to the conditions set
forth in Section 6.2, Lenders shall not be required to fund any requested Loan,
issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder,
until the date (“Closing Date”) that each of the following conditions has been
satisfied:

(a) Notes shall have been executed by Borrowers and delivered to each Lender
that requests issuance of a Note. Each other Loan Document shall have been duly
executed and delivered to Agent by each of the signatories thereto, and each
Obligor shall be in compliance with all terms thereof.

(b) Agent shall have received acknowledgments of all filings or recordations
necessary to perfect its Liens in the Collateral, as well as UCC and Lien
searches and other evidence satisfactory to Agent that such Liens are the only
Liens upon the Collateral, except Permitted Liens.

(c) Agent shall have received duly executed agreements establishing each
Dominion Account and related lockbox, in form and substance, and with financial
institutions, satisfactory to Agent.

(d) By executing this Agreement each Borrower certifies that, after giving
effect to the initial Loans and transactions hereunder, (i) such Borrower is
Solvent; (ii) no Default or Event of Default exists; (iii) the representations
and warranties set forth in Section 9 are true and correct; and (iv) such
Borrower has complied with all agreements and conditions to be satisfied by it
under the Loan Documents.

(e) Agent shall have received a certificate of a duly authorized officer of each
Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents
are true and complete, and in full force and effect, without amendment except as
shown, (ii) that an attached copy of resolutions authorizing execution and
delivery of the Loan Documents is true and complete, and that such resolutions
are in full force and effect, were duly adopted, have not been amended, modified
or revoked, and constitute all resolutions adopted with respect to this credit
facility, and (iii) to the title, name and signature of each Person authorized
to sign the Loan Documents. Agent may

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conclusively rely on this certificate until it is otherwise notified by the
applicable Obligor in writing.

(f) Agent shall have received a written opinion of Krieg DeVault LLP, in form
and substance satisfactory to Agent.

(g) Agent shall have received copies of the charter documents of each Obligor,
certified as appropriate by the Secretary of State or another official of such
Obligor’s jurisdiction of organization. Agent shall have received good standing
certificates for each Obligor, issued by the Secretary of State or other
appropriate official of such Obligor’s jurisdiction of organization and each
jurisdiction where such Obligor’s conduct of business or ownership of Property
necessitates qualification.

(h) Agent shall have received copies of policies or certificates of insurance
for the insurance policies carried by Borrowers, all in compliance with the Loan
Documents.

(i) Agent shall have completed its business, financial and legal due diligence
of Obligors, including a roll-forward of its previous field examination, with
results satisfactory to Agent. No material adverse change in the financial
condition (other than May losses disclosed to Agent) of any Obligor or in the
quality, quantity or value of any Collateral shall have occurred since April 28,
2007.

(j) Borrowers shall have paid all fees and expenses to be paid to Agent and
Lenders on the Closing Date.

(k) Agent shall have received a Borrowing Base Certificate prepared as of
May 31, 2007. Upon giving effect to the initial funding of Loans and issuance of
Letters of Credit, and the payment by Borrowers of all fees and expenses
incurred in connection herewith as well as any payables stretched beyond their
customary payment practices, Availability shall be at least $10,000,000.

(l) Agent shall have received (i) interim financial statements for the monthly
period ending closest to the Closing Date, on an unconsolidated and, if
available, consolidating and consolidated basis, (ii) internally prepared
Projections on a quarterly basis for the reminder of Fiscal Year 2007, and on an
annual basis thereafter for such periods as Agent may require, and (iii) such
other financial information with respect to the Borrowers as Agent may require.

6.2. Conditions Precedent to All Credit Extensions. Agent, Issuing Bank and
Lenders shall not be required to fund any Loans, arrange for issuance of any
Letters of Credit or grant any other accommodation to or for the benefit of
Borrowers, unless the following conditions are satisfied:

(a) No Default or Event of Default shall exist at the time of, or result from,
such funding, issuance or grant;

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(b) The representations and warranties of each Obligor in the Loan Documents
shall be true and correct on the date of, and upon giving effect to, such
funding, issuance or grant (except for representations and warranties that
expressly relate to an earlier date);

(c) All conditions precedent in any other Loan Document shall be satisfied;

(d) No event shall have occurred or circumstance exist that has or could
reasonably be expected to have a Material Adverse Effect; and

(e) With respect to issuance of a Letter of Credit, the LC Conditions shall be
satisfied.

Each request (or deemed request) by Borrowers for funding of a Loan, issuance of
a Letter of Credit or grant of an accommodation shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or grant. As an
additional condition to any funding, issuance or grant, Agent shall have
received such other information, documents, instruments and agreements as it
deems appropriate in connection therewith.

6.3. Limited Waiver of Conditions Precedent. If Agent, Issuing Bank or Lenders
fund any Loans, arrange for issuance of any Letters of Credit or grant any other
accommodation when any conditions precedent are not satisfied (regardless of
whether the lack of satisfaction was known or unknown at the time), it shall not
operate as a waiver of (a) the right of Agent, Issuing Bank and Lenders to
insist upon satisfaction of all conditions precedent with respect to any
subsequent funding, issuance or grant; nor (b) any Default or Event of Default
due to such failure of conditions or otherwise.

SECTION 7.

COLLATERAL

7.1. Grant of Security Interest. To secure the prompt payment and performance of
all Obligations, each Borrower hereby grants to Agent, for the benefit of
Secured Parties, a continuing security interest in and Lien upon all Property of
such Borrower, including all of the following Property, whether now owned or
hereafter acquired, and wherever located:

(a) all Accounts;

(b) all Chattel Paper, including electronic chattel paper;

(c) all Commercial Tort Claims;

(d) all Deposit Accounts;

(e) all Documents;

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(f) all General Intangibles, including Payment Intangibles, Software and
Intellectual Property;

(g) all Goods, including Inventory, Equipment and fixtures;

(h) all Instruments;

(i) all Investment Property;

(j) all Letter-of-Credit Rights;

(k) all Supporting Obligations;

(l) all monies, whether or not in the possession or under the control of Agent,
a Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash
Collateral;

(m) all accessions to, substitutions for, and all replacements, products, and
cash and non-cash proceeds of the foregoing, including proceeds of and unearned
premiums with respect to insurance policies, and claims against any Person for
loss, damage or destruction of any Collateral; and

(n) all books and records (including customer lists, files, correspondence,
tapes, computer programs, print-outs and computer records) pertaining to the
foregoing.

7.2. Lien on Deposit Accounts; Cash Collateral.

7.2.1. Deposit Accounts. To further secure the prompt payment and performance of
all Obligations, each Borrower hereby grants to Agent, for the benefit of
Secured Parties, a continuing security interest in and Lien upon all of such
Borrower’s right, title and interest in and to each Deposit Account of such
Borrower and any deposits or other sums at any time credited to any such Deposit
Account, including any sums in any blocked or lockbox accounts or in any
accounts into which such sums are swept. Each Borrower authorizes and directs
each bank or other depository to deliver to Agent, on a daily basis, all
balances in each Deposit Account maintained by such Borrower with such
depository for application to the Obligations then outstanding. Each Borrower
irrevocably appoints Agent as such Borrower’s attorney-in-fact to collect such
balances to the extent any such delivery is not so made.

7.2.2. Cash Collateral. Any Cash Collateral may be invested, in Agent’s
discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement, understanding or course of dealing with any
Borrower, and shall have no responsibility for any investment or loss. Each
Borrower hereby grants to Agent, for the benefit of Secured Parties, a security
interest in all Cash Collateral held from time to time and all proceeds thereof,
as security for the Obligations, whether such Cash Collateral is held in the
Cash Collateral Account or elsewhere. Agent may apply Cash Collateral to the
payment of any Obligations, in such order as Agent may elect, as they become due
and payable. The Cash Collateral Account and all Cash Collateral shall be under
the sole dominion and control of

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Agent. No Borrower or other Person claiming through or on behalf of any Borrower
shall have any right to any Cash Collateral, until Full Payment of all
Obligations.

7.3. Other Collateral.

7.3.1. Commercial Tort Claims. Borrowers shall promptly notify Agent in writing
if any Borrower has a Commercial Tort Claim (other than, as long as no Default
or Event of Default exists, a Commercial Tort Claim for less than $100,000) and,
upon Agent’s request, shall promptly execute such documents and take such
actions as Agent deems appropriate to confer upon Agent (for the benefit of
Secured Parties) a duly perfected, first priority Lien upon such claim.

7.3.2. Certain After-Acquired Collateral. Borrowers shall promptly notify Agent
in writing if, after the Closing Date, any Borrower obtains any interest in any
Collateral consisting of Deposit Accounts, Chattel Paper, Documents,
Instruments, Intellectual Property, Investment Property or Letter-of-Credit
Rights and, upon Agent’s request, shall promptly execute such documents and take
such actions as Agent deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such Collateral, including obtaining any appropriate
possession, control agreement or Lien Waiver. If any Collateral is in the
possession of a third party, at Agent’s request, Borrowers shall obtain an
acknowledgment that such third party holds the Collateral for the benefit of
Agent.

7.4. No Assumption of Liability. The Lien on Collateral granted hereunder is
given as security only and shall not subject Agent or any Lender to, or in any
way modify, any obligation or liability of Borrowers relating to any Collateral.

7.5. Further Assurances. Promptly upon request, Borrowers shall deliver such
instruments, assignments, title certificates, or other documents or agreements,
and shall take such actions, as Agent deems appropriate under Applicable Law to
evidence or perfect its Lien on any Collateral, or otherwise to give effect to
the intent of this Agreement. Each Borrower authorizes Agent to file any
financing statement that indicates the Collateral as “all assets” or “all
personal property” of such Borrower, or words to similar effect, and ratifies
any action taken by Agent before the Closing Date to effect or perfect its Lien
on any Collateral.

7.6. Foreign Subsidiary Stock. Notwithstanding Section 7.1, the Collateral shall
include only 65% of the voting stock of any Foreign Subsidiary.

SECTION 8.

COLLATERAL ADMINISTRATION

8.1. Borrowing Base Certificates. By the 20th day of each month, Borrowers shall
deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing
Base Certificate prepared as of the close of business of the previous month, and
at such other times as Agent may request. All calculations of Availability in
any Borrowing Base Certificate shall originally be made by Borrowers and
certified by a Senior Officer, provided that Agent may from time to time review
and adjust any such calculation (a) to reflect its reasonable estimate of
declines in value of any Collateral, due to collections received in the Dominion
Account or

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otherwise; (b) to adjust advance rates to reflect changes in dilution, quality,
mix and other factors affecting Collateral; and (c) to the extent the
calculation is not made in accordance with this Agreement or does not accurately
reflect the Availability Reserve. On or before the 20th day of each calendar
month from and after the date hereof, Borrowers shall deliver to Agent, in the
form reasonably acceptable to Agent, (i) reconciliations of Borrowers’ Accounts
as shown on the month-end Borrowing Base Certificate for the immediately
preceding Fiscal Month to Borrowers’ accounts receivable agings, to Borrowers’
general ledger and to Borrowers’ most recent financial statements and (ii)
reconciliations of Borrowers’ Inventory as shown on Borrowers’ perpetual
inventory, to Borrowers’ general ledger and to Borrowers’ financial statements,
all with supporting materials as Agent shall reasonably request.

8.2. Administration of Accounts.

8.2.1. Records and Schedules of Accounts. Each Borrower shall keep accurate and
complete records of its Accounts, including all payments and collections
thereon, and shall submit to Agent, on such periodic basis as Agent may request,
a sales and collections report, in form satisfactory to Agent. Each Borrower
shall also provide to Agent, on or before the 20th day of each month, a detailed
aged trial balance of all Accounts as of the end of the preceding month,
specifying each Account’s Account Debtor name and address, amount, invoice date
and due date, showing any discount, allowance, credit, authorized return or
dispute, and including such proof of delivery, copies of invoices and invoice
registers, copies of related documents, repayment histories, status reports and
other information as Agent may reasonably request. If Accounts in an aggregate
face amount of $100,000 or more cease to be Eligible Accounts, Borrowers shall
notify Agent of such occurrence promptly (and in any event within three
(3) Business Days) after any Borrower has knowledge thereof.

8.2.2. Taxes. If an Account of any Borrower includes a charge for any Taxes,
Agent is authorized, in its discretion, to pay the amount thereof to the proper
taxing authority for the account of such Borrower and to charge Borrowers
therefor; provided, however, that neither Agent nor Lenders shall be liable for
any Taxes that may be due from Borrowers or with respect to any Collateral.

8.2.3. Account Verification. Whether or not a Default or Event of Default
exists, Agent shall have the right at any time, in the name of Agent, any
designee of Agent or any Borrower to verify the validity, amount or any other
matter relating to any Accounts of Borrowers by mail, telephone or otherwise.
Borrowers shall cooperate fully with Agent in an effort to facilitate and
promptly conclude any such verification process.

8.2.4. Maintenance of Dominion Account. Borrowers shall maintain Dominion
Accounts pursuant to lockbox or other arrangements acceptable to Agent.
Borrowers shall obtain an agreement (in form and substance satisfactory to
Agent) from each lockbox servicer and Dominion Account bank, establishing
Agent’s control over and Lien in the lockbox or Dominion Account, which may be
exercised by Agent during any Trigger Period, requiring immediate deposit of all
remittances received in the lockbox to a Dominion Account and waiving offset
rights of such servicer or bank, except for customary administrative charges. If
a Dominion Account is not maintained with Bank of America, Agent may, during any
Trigger Period require immediate transfer of all funds in such account to a
Dominion Account

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maintained with Bank of America. Neither Agent nor Lenders assume any
responsibility to Borrowers for any lockbox arrangement or Dominion Account,
including any claim of accord and satisfaction or release with respect to any
Payment Items accepted by any bank.

8.2.5. Proceeds of Collateral. Borrowers shall request in writing and otherwise
take all reasonable steps to ensure that all payments on Accounts or otherwise
relating to Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account). If any Borrower or Subsidiary receives cash or
Payment Items with respect to any Collateral, it shall hold same in trust for
Agent and promptly (not later than the next Business Day) deposit same into a
Dominion Account.

8.3. Administration of Inventory.

8.3.1. Records and Reports of Inventory. Each Borrower shall keep accurate and
complete records of its Inventory, including costs and daily withdrawals and
additions, and shall submit to Agent inventory reports in form satisfactory to
Agent, on such periodic basis as Agent may request. Each Borrower shall conduct
a physical inventory at least once per calendar year (and on a more frequent
basis if requested by Agent when an Event of Default exists) and periodic cycle
counts consistent with historical practices, and shall provide to Agent a report
based on each such inventory and count promptly upon completion thereof,
together with such supporting information as Agent may request. Agent may
participate in and observe each inventory or physical count.

8.3.2. Returns of Inventory. No Borrower shall return any Inventory to a
supplier, vendor or other Person, whether for cash, credit or otherwise, unless
(a) such return is in the Ordinary Course of Business; (b) no Default, Event of
Default or Overadvance exists or would result therefrom; (c) Agent is promptly
notified if the aggregate Value of all Inventory returned in any month exceeds
$100,000; and (d) any payment received by a Borrower for a return is promptly
remitted to Agent for application to the Obligations.

8.3.3. Acquisition, Sale and Maintenance. Except as set forth in Schedule 8.3.3,
no Borrower shall acquire or accept any Inventory on consignment or approval,
and shall take all steps to assure that all Inventory is produced in accordance
with Applicable Law, including the FLSA. No Borrower shall sell any Inventory on
consignment or approval or any other basis under which the customer may return
or require a Borrower to repurchase such Inventory. Borrowers shall use, store
and maintain all Inventory with reasonable care and caution, in accordance with
applicable standards of any insurance and in conformity with all Applicable Law,
and shall make current rent payments (within applicable grace periods provided
for in leases) at all locations where any Collateral is located.

8.4. Administration of Equipment.

8.4.1. Records and Schedules of Equipment. Each Borrower shall keep accurate and
complete records of its Equipment, including kind, quality, quantity, cost,
acquisitions and dispositions thereof, and shall submit to Agent, on such
periodic basis as Agent may reasonably request, a current schedule thereof, in
form reasonably satisfactory to Agent. Promptly upon

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request, Borrowers shall deliver to Agent evidence of their ownership or
interests in any Equipment.

8.4.2. Dispositions of Equipment. No Borrower shall sell, lease or otherwise
dispose of any Equipment, without the prior written consent of Agent (which
consent shall not be unreasonably withheld or delayed), other than (a) a
Permitted Asset Disposition; and (b) replacement of Equipment that is worn,
damaged or obsolete with Equipment of like function and value, if the
replacement Equipment is acquired substantially contemporaneously with such
disposition and is free of Liens (or if the disposed Equipment was subject to a
Lien securing Permitted Purchase Money Debt, other than a Lien securing
Permitted Purchase Money Debt).

8.4.3. Condition of Equipment. The Equipment is in good operating condition and
repair, and all necessary replacements and repairs have been made so that the
value and operating efficiency of the Equipment is preserved at all times,
reasonable wear and tear excepted. Each Borrower shall ensure that the Equipment
is mechanically and structurally sound, and capable of performing the functions
for which it was designed, in accordance with the manufacturer’s published and
recommended specifications. No Borrower shall permit any Equipment to become
affixed to real Property unless any landlord or mortgagee delivers a Lien Waiver
or similar instrument.

8.5. Administration of Deposit Accounts. Schedule 8.5 sets forth all Deposit
Accounts maintained by Borrowers, including all Dominion Accounts. Each Borrower
shall take all actions necessary to establish Agent’s control of each such
Deposit Account (other than an account exclusively used for payroll, payroll
taxes or employee benefits, or an account containing not more that $10,000 at
any time). Each Borrower shall be the sole account holder of each Deposit
Account and shall not allow any other Person (other than Agent) to have control
over a Deposit Account or any Property deposited therein. Each Borrower shall
promptly notify Agent of any opening or closing of a Deposit Account and, with
the consent of Agent, will amend Schedule 8.5 to reflect same. With respect to
any Deposit Account that is a disbursement account, investment account or other
account not utilized for the collection of Accounts, Agent agrees not to
exercise its rights to sweep funds in such Depository Account and apply such
funds to the Obligations unless an Event of Default has occurred and is
continuing and the Obligations have been declared immediately due and payable.

8.6. General Provisions.

8.6.1. Location of Collateral. All tangible items of Collateral, other than
Inventory in transit, shall at all times be kept by Borrowers at the business
locations set forth in Schedule 8.6.1, except that Borrowers may (a) make sales
or other dispositions of Collateral in accordance with Section 10.2.6; and
(b) move Collateral to another location in the United States, upon 30 Business
Days prior written notice to Agent.

8.6.2. Insurance of Collateral; Condemnation Proceeds.

(a) Each Borrower shall maintain insurance with respect to the Collateral (other
than from self insured in-transit Inventory), covering casualty, hazard, public
liability, theft, malicious mischief, and such other risks, in such amounts,
with

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such endorsements, and with such insurers (rated A7 or better by A.M. Best
Rating Guide) as are satisfactory to Agent. All proceeds under each policy shall
be payable to Agent. From time to time upon request, Borrowers shall deliver to
Agent the originals or certified copies of its insurance policies and updated
flood plain searches. Unless Agent shall agree otherwise, each policy shall
include satisfactory endorsements (i) showing Agent as sole loss payee or
additional insured, as appropriate; (ii) requiring 30 days prior written notice
to Agent in the event of cancellation of the policy for any reason whatsoever;
and (iii) specifying that the interest of Agent shall not be impaired or
invalidated by any act or neglect of any Borrower or the owner of the Property,
nor by the occupation of the premises for purposes more hazardous than are
permitted by the policy. If any Borrower fails to provide and pay for such
insurance, Agent may, at its option, but shall not be required to, procure the
insurance and charge Borrowers therefor. Each Borrower agrees to deliver to
Agent, promptly as rendered, copies of all reports made to insurance companies.
While no Event of Default exists, Borrowers may settle, adjust or compromise any
insurance claim, as long as the proceeds are delivered to Agent. If an Event of
Default exists, only Agent shall be authorized to settle, adjust and compromise
such claims.

(b) Any proceeds of insurance (other than proceeds from workers’ compensation or
D&O insurance) and any awards arising from condemnation of any Collateral shall
be paid to Agent. Any such proceeds or awards that relate to Inventory shall be
applied to payment of the Revolver Loans, and then to any other Obligations
outstanding. Subject to clause (c) below, any proceeds or awards that relate to
Equipment or Real Estate shall be applied first to Revolver Loans and then to
other Obligations.

(c) If requested by Borrowers in writing within 15 days after Agent’s receipt of
any insurance proceeds or condemnation awards relating to any loss or
destruction of Equipment or Real Estate, Borrowers may use such proceeds or
awards to repair or replace such Equipment or Real Estate (and until so used,
the proceeds shall be held by Agent as Cash Collateral) as long as (i) no
Default or Event of Default exists; (ii) such repair or replacement is promptly
undertaken and concluded, in accordance with plans satisfactory to Agent;
(iii) replacement buildings are constructed on the sites of the original
casualties and are of comparable size, quality and utility to the destroyed
buildings; (iv) the repaired or replaced Property is free of Liens, other than
Permitted Liens that are not Purchase Money Liens; (v) Borrowers comply with
disbursement procedures for such repair or replacement as Agent may reasonably
require; and (vi) the aggregate amount of such proceeds or awards from any
single casualty or condemnation does not exceed $500,000.

8.6.3. Protection of Collateral. All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes payable with respect to any Collateral (including any sale thereof), and
all other payments required to be made by Agent to any Person to realize upon
any Collateral, shall be borne and paid by Borrowers. Agent shall not be liable
or responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
Agent’s actual possession), for any diminution in the value thereof, or for any
act or default of any

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warehouseman, carrier, forwarding agency or other Person whatsoever, but the
same shall be at Borrowers’ sole risk.

8.6.4. Defense of Title to Collateral. Each Borrower shall at all times defend
its title to Collateral and Agent’s Liens therein against all Persons, claims
and demands whatsoever, except Permitted Liens.

8.7. Power of Attorney. Each Borrower hereby irrevocably constitutes and
appoints Agent (and all Persons designated by Agent) as such Borrower’s true and
lawful attorney (and agent-in-fact) for the purposes provided in this Section.
Agent, or Agent’s designee, may, without notice and in either its or a
Borrower’s name, but at the cost and expense of Borrowers:

(a) Endorse a Borrower’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and

(b) After the occurrence and during the continuation of an Event of Default,
(i) notify any Account Debtors of the assignment of their Accounts, demand and
enforce payment of Accounts, by legal proceedings or otherwise, and generally
exercise any rights and remedies with respect to Accounts; (ii) settle, adjust,
modify, compromise, discharge or release any Accounts or other Collateral, or
any legal proceedings brought to collect Accounts or Collateral; (iii) sell or
assign any Accounts and other Collateral upon such terms, for such amounts and
at such times as Agent deems advisable; (iv) take control, in any manner, of any
proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof
of claim or other document in a bankruptcy of an Account Debtor, or to any
notice, assignment or satisfaction of Lien or similar document; (vi) receive,
open and dispose of mail addressed to a Borrower, and notify postal authorities
to change the address for delivery thereof to such address as Agent may
designate; (vii) endorse any Chattel Paper, Document, Instrument, invoice,
freight bill, bill of lading, or similar document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use a Borrower’s stationery and
sign its name to verifications of Accounts and notices to Account Debtors;
(ix) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to any Collateral;
(x) make and adjust claims under policies of insurance; (xi) take any action as
may be necessary or appropriate to obtain payment under any letter of credit or
banker’s acceptance for which a Borrower is a beneficiary; and (xii) take all
other actions as Agent deems appropriate to fulfill any Borrower’s obligations
under the Loan Documents.

SECTION 9.

REPRESENTATIONS AND WARRANTIES

9.1. General Representations and Warranties. To induce Agent and Lenders to
enter into this Agreement and to make available the Commitments, Loans and
Letters of Credit, each Borrower represents and warrants that:

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9.1.1. Organization and Qualification. Borrowers and Subsidiary are duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their organization. Borrowers and Subsidiary are duly qualified,
authorized to do business and in good standing as a foreign corporation or
limited liability company in each jurisdiction where failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.

9.1.2. Power and Authority. Each Obligor is duly authorized to execute, deliver
and perform its Loan Documents. The execution, delivery and performance of the
Loan Documents have been duly authorized by all necessary action, and do not
(a) require any consent or approval of any holders of Equity Interests of any
Obligor, other than those already obtained; (b) contravene the Organic Documents
of any Obligor; (c) violate or cause a default under any Applicable Law or
Material Contract; or (d) result in or require the imposition of any Lien (other
than Permitted Liens) on any Property of any Obligor.

9.1.3. Enforceability. Each Loan Document is a legal, valid and binding
obligation of each Obligor party thereto, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally.

9.1.4. Capital Structure. Schedule 9.1.4 shows, for each Borrower and
Subsidiary, its name, its jurisdiction of organization, its authorized and
issued Equity Interests, the holders of its Equity Interests, and all agreements
binding on such holders with respect to their Equity Interests. Each Borrower
has good title to its Equity Interests in its Subsidiaries, subject only to
Agent’s Lien, and all such Equity Interests are duly issued, fully paid and
non-assessable. Except as set forth in Schedule 9.1.4, there are no outstanding
options to purchase, warrants, subscription rights, agreements to issue or sell,
convertible interests, phantom rights or powers of attorney relating to any
Equity Interests of any Borrower or Subsidiary.

9.1.5. Corporate Names; Locations. During the five years preceding the Closing
Date, except as shown on Schedule 9.1.5, no Borrower or Subsidiary has been
known as or used any corporate, fictitious or trade names, has been the
surviving corporation of a merger or combination, or has acquired any
substantial part of the assets of any Person. The chief executive offices and
other places of business of Borrowers and Subsidiaries are shown on
Schedule 8.6.1. During the five years preceding the Closing Date, no Borrower or
Subsidiary has had any other office or place of business.

9.1.6. Title to Properties; Priority of Liens. Each Borrower and Subsidiary has
good and marketable title to (or valid leasehold interests in) all of its Real
Estate, and good title to all of its personal Property, including all Property
reflected in any financial statements delivered to Agent or Lenders, in each
case free of Liens except Permitted Liens. Each Borrower and Subsidiary has paid
and discharged all lawful claims that, if unpaid, could become a Lien on its
Properties, other than Permitted Liens. All Liens of Agent in the Collateral are
duly perfected, first priority Liens, subject only to Permitted Liens that are
expressly allowed to have priority over Agent’s Liens.

9.1.7. Accounts. Agent may rely, in determining which Accounts are Eligible
Accounts, on all statements and representations made by Borrowers with respect
thereto.

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Borrowers warrant, with respect to each Account at the time it is shown as an
Eligible Account in a Borrowing Base Certificate, that:

(a) it is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;

(b) it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;

(c) it is for a sum certain, maturing as stated in the invoice covering such
sale or rendition of services, a copy of which has been furnished or is
available to Agent on request;

(d) it is not subject to any offset, Lien (other than Agent’s Lien), deduction,
defense, dispute, counterclaim or other adverse condition except as arising in
the Ordinary Course of Business and disclosed to Agent; and it is absolutely
owing by the Account Debtor, without contingency in any respect;

(e) no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC, the
restriction is ineffective);

(f) no extension, compromise, settlement, modification, credit, deduction or
return has been authorized with respect to the Account, except discounts or
allowances granted in the Ordinary Course of Business for prompt payment that
are reflected on the face of the invoice related thereto or applicable Borrowing
Base Certificate and in the reports submitted to Agent hereunder; and

(g) to the best of Borrowers’ knowledge, (i) there are no facts or circumstances
that are reasonably likely to impair the enforceability or collectibility of
such Account; (ii) the Account Debtor had the capacity to contract when the
Account arose, continues to meet the applicable Borrower’s customary credit
standards, is Solvent, is not contemplating or subject to an Insolvency
Proceeding, and has not failed, or suspended or ceased doing business; and
(iii) there are no proceedings or actions threatened or pending against any
Account Debtor that could reasonably be expected to have a material adverse
effect on the Account Debtor’s financial condition.

9.1.8. Financial Statements. The consolidated and consolidating balance sheets,
and related statements of income, cash flow and shareholder’s equity, of
Borrowers and Subsidiaries that have been and are hereafter delivered to Agent
and Lenders, are prepared in accordance with GAAP, and fairly present the
financial positions and results of operations of Borrowers and Subsidiaries at
the dates and for the periods indicated, except that monthly and quarterly
financial statements shall not include footnotes and may be subject to normal
year end audit adjustments and monthly statements may not be consolidated. All
projections delivered from time to time to Agent and Lenders have been prepared
in good faith, based on reasonable assumptions in light of the circumstances at
such time. Since December 31, 2006, there has been no change in the condition,
financial or otherwise, of any Borrower or Subsidiary that could

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reasonably be expected to have a Material Adverse Effect other than as set forth
in Chromcraft’s Form 10Q for the Fiscal Quarter ended on or about March 31, 2007
and in Chromcraft’s projections for its Fiscal Year ended December 31, 2007
provided to Agent. No financial statement delivered to Agent or Lenders at any
time contains any untrue statement of a material fact, nor fails to disclose any
material fact necessary to make such statement not materially misleading. Each
Borrower and Subsidiary is Solvent.

9.1.9. Surety Obligations. No Borrower or Subsidiary is obligated as surety or
indemnitor under any bond or other contract that assures payment or performance
of any obligation of any Person, except as permitted hereunder.

9.1.10. Taxes. Each Borrower and Subsidiary has filed all federal, state and
local tax returns and other reports that it is required by law to file, and has
paid, or made provision for the payment of, all Taxes upon it, its income and
its Properties that are due and payable, except to the extent being Properly
Contested. The provision for Taxes on the books of each Borrower and Subsidiary
is adequate for all years not closed by applicable statutes, and for its current
Fiscal Year.

9.1.11. Brokers. There are no brokerage commissions, finder’s fees or investment
banking fees payable in connection with any transactions contemplated by the
Loan Documents.

9.1.12. Intellectual Property. Each Borrower and Subsidiary owns or has the
lawful right to use all Intellectual Property necessary for the conduct of its
business, without conflict with any rights of others. There is no pending or, to
any Borrower’s knowledge, threatened Intellectual Property Claim with respect to
any Borrower, any Subsidiary or any of their Property (including any
Intellectual Property). Except as disclosed on Schedule 9.1.12, no Borrower or
Subsidiary pays or owes any Royalty or other compensation to any Person with
respect to any Intellectual Property. All Intellectual Property owned, used or
licensed by, or otherwise subject to any interests of, any Borrower or
Subsidiary is shown on Schedule 9.1.12.

9.1.13. Governmental Approvals. Each Borrower and Subsidiary has, is in
compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties. All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and Borrowers and Subsidiaries have complied
with all foreign and domestic laws with respect to the shipment and importation
of any goods or Collateral, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.

9.1.14. Compliance with Laws. Each Borrower and Subsidiary has duly complied,
and its Properties and business operations are in compliance, in all material
respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. There have been no
citations, notices or orders of material noncompliance issued to any Borrower or
Subsidiary under any Applicable Law. No Inventory has been produced in violation
of the FLSA.

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9.1.15. Compliance with Environmental Laws. Except as disclosed on
Schedule 9.1.15, no Borrower’s or Subsidiary’s past or present operations, Real
Estate or other Properties are subject to any federal, state or local
investigation to determine whether any remedial action is needed to address any
environmental pollution, hazardous material or environmental clean-up. No
Borrower or Subsidiary has received any Environmental Notice. No Borrower or
Subsidiary has any contingent liability with respect to any Environmental
Release, environmental pollution or hazardous material on any Real Estate now or
previously owned, leased or operated by it.

9.1.16. Burdensome Contracts. No Borrower or Subsidiary is a party or subject to
any contract, agreement or charter restriction that could reasonably be expected
to have a Material Adverse Effect. No Borrower or Subsidiary is party or subject
to any Restrictive Agreement, except as shown on Schedule 9.1.16, none of which
prohibit the execution or delivery of any Loan Documents by an Obligor nor the
performance by an Obligor of any obligations thereunder.

9.1.17. Litigation. Except as shown on Schedule 9.1.17, there are no proceedings
or investigations pending or, to any Borrower’s knowledge, threatened against
any Borrower or Subsidiary, or any of their businesses, operations, Properties,
prospects or conditions, that (a) relate to any Loan Documents or transactions
contemplated thereby; or (b) could reasonably be expected to have a Material
Adverse Effect if determined adversely to any Borrower or Subsidiary. No
Borrower or Subsidiary is in default with respect to any order, injunction or
judgment of any Governmental Authority.

9.1.18. No Defaults. No event or circumstance has occurred or exists that
constitutes a Default or Event of Default. No Borrower or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default, under any
Material Contract or in the payment of any Borrowed Money. There is no basis
upon which any party (other than a Borrower or Subsidiary) could terminate a
Material Contract prior to its scheduled termination date.

9.1.19. ERISA. Except as disclosed on Schedule 9.1.19, no Borrower or Subsidiary
has any Multiemployer Plan or Foreign Plan. Each Borrower and Subsidiary is in
full compliance with the requirements of all Applicable Law, including ERISA,
relating to each Multiemployer Plan and Foreign Plan. No fact or situation
exists that could reasonably be expected to result in a Material Adverse Effect
in connection with any Multiemployer Plan or Foreign Plan. No Borrower or
Subsidiary has any withdrawal liability in connection with a Multiemployer Plan
or Foreign Plan. All employer and employee contributions to Foreign Plans, to
the extent required by law or the terms of such plans, have been made or accrued
in accordance with normal accounting principles. The fair market value of the
assets of each funded Foreign Plan, the liability of each insurer for any
Foreign Plan funded through insurance and/or the book reserve established for
each Foreign Plan, together with any accrued contributions, are sufficient to
provide the accrued benefit obligations of all participants in such plans
according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles. Each Foreign Plan required to be registered has been
registered and is maintained in good standing with all applicable regulatory
authorities.

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9.1.20. Trade Relations. There exists no actual or threatened termination,
limitation or modification of any business relationship between any Borrower or
Subsidiary and any customer or supplier, or any group of customers or suppliers,
who individually or in the aggregate are material to the business of such
Borrower or Subsidiary. There exists no condition or circumstance that could
reasonably be expected to impair the ability of any Borrower or Subsidiary to
conduct its business at any time hereafter in substantially the same manner as
conducted on the Closing Date.

9.1.21. Labor Relations. Except as described on Schedule 9.1.21, no Borrower or
Subsidiary is party to or bound by any collective bargaining agreement,
management agreement or consulting agreement. There are no material grievances,
disputes or controversies with any union or other organization of any Borrower’s
or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or
threatened strikes, work stoppages or demands for collective bargaining.

9.1.22. Payable Practices. No Borrower or Subsidiary has made any material
change in its historical accounts payable practices from those in effect on the
Closing Date.

9.1.23. Not a Regulated Entity. No Obligor is (a) an “investment company” or a
“person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940;
(b) a “holding company,” a “subsidiary company” of a “holding company,” or an
“affiliate” of either, within the meaning of the Public Utility Holding Company
Act of 1935; or (c) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.

9.1.24. Margin Stock. No Borrower or Subsidiary is engaged, principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters
of Credit will be used by Borrowers to purchase or carry, or to reduce or
refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose governed by Regulations T, U or X of the Board of Governors.

9.1.25. Plan Assets. No Borrower is an entity deemed to hold “plan assets”
within the meaning of 29 C.F.R. §2510.3-101 of any “employee benefit plan” (as
defined in Section 3(3) of ERISA) that is subject to Title I of ERISA or any
“plan” (within the meaning of Section 4975 of the Internal Revenue Code), and
neither the execution of this Agreement nor the funding of any Loans gives rise
to a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.

9.2. Complete Disclosure. No Loan Document contains any untrue statement of a
material fact, nor fails to disclose any material fact necessary to make the
statements contained therein not materially misleading. There is no fact or
circumstance that any Obligor has failed to disclose to Agent in writing that
could reasonably be expected to have a Material Adverse Effect.

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SECTION 10.

COVENANTS AND CONTINUING AGREEMENTS

10.1. Affirmative Covenants. For so long as any Commitments or Obligations are
outstanding, each Borrower shall, and shall cause each Subsidiary to:

10.1.1. Inspections; Appraisals.

(a) Permit Agent from time to time, subject (except when a Default or Event of
Default exists) to reasonable notice and normal business hours, to visit and
inspect the Properties of any Borrower or Subsidiary, inspect, audit and make
extracts from any Borrower’s or Subsidiary’s books and records, and discuss with
its officers, employees, agents, advisors and independent accountants such
Borrower’s or Subsidiary’s business, financial condition, assets, prospects and
results of operations. Lenders may participate in any such visit or inspection,
at their own expense. Neither Agent nor any Lender shall have any duty to any
Borrower to make any inspection, nor to share any results of any inspection,
appraisal or report with any Borrower. To the extent any appraisal or other
information is shared by Agent or a Lender with any Borrower, such Borrower
acknowledges that it was prepared by Agent and Lenders for their purposes and
Borrowers shall not be entitled to rely upon it.

(b) Reimburse Agent for all charges, costs and expenses of Agent in connection
with (i) examinations of any Obligor’s books and records or any other financial
or Collateral matters as Agent deems appropriate, up to four times per Loan
Year; and (ii) appraisals of Inventory and Equipment up to one time per Loan
Year; provided, however, that if an examination or appraisal is initiated during
a Default or Event of Default, all charges, costs and expenses therefor shall be
reimbursed by Borrowers without regard to such limits. Subject to the foregoing,
Borrowers shall pay Agent’s then standard charges for each day that an employee
of Agent or its Affiliates is engaged in any examination activities, and shall
pay the standard charges of Agent’s internal appraisal group. This Section shall
not be construed to limit Agent’s right to conduct examinations or to obtain
appraisals at any time in its discretion, nor to use third parties for such
purposes.

10.1.2. Financial and Other Information. Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP reflecting all financial transactions; and furnish
to Agent and Lenders:

(a) as soon as available, and in any event within 90 days after the close of
each Fiscal Year, balance sheets as of the end of such Fiscal Year and the
related statements of income, cash flow and shareholders’ equity for such Fiscal
Year, on consolidated and consolidating basis for Borrowers and Subsidiaries,
which consolidated statements shall be audited and certified (without
qualification as to scope, “going concern” or similar items) by a firm of
independent certified public accountants of recognized standing selected by
Borrowers and reasonably acceptable to Agent, and shall

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set forth in comparative form corresponding figures for the preceding Fiscal
Year and other information acceptable to Agent;

(b) as soon as available, and in any event within 45 days after the end of each
Fiscal Quarter (but within 90 days after the last Fiscal Quarter in a Fiscal
Year), unaudited balance sheets as of the end of such Fiscal Quarter and the
related statements of income and cash flow for such Fiscal Quarter and for the
portion of the Fiscal Year then elapsed, on consolidated and consolidating basis
for Borrowers and Subsidiaries, setting forth in comparative form corresponding
figures for the preceding Fiscal Year and certified by the chief financial
officer of Borrower Agent as prepared in accordance with GAAP and fairly
presenting the financial position and results of operations for such month and
period, subject to normal year end adjustments and the absence of footnotes;

(c) as soon as available, and in any event within 30 days after the end of each
month (but within 60 days after the last month in a Fiscal Year), unaudited
balance sheets as of the end of such month and the related statements of income
and cash flow for such month and for the portion of the Fiscal Year then
elapsed, on an unconsolidated and if available, consolidated and consolidating
basis for Borrowers and Subsidiaries, setting forth in comparative form
corresponding figures for the preceding Fiscal Year and certified by the chief
financial officer of Borrower Agent as prepared in accordance with GAAP (except
that such monthly financial statements may not be consolidated) and fairly
presenting the financial position and results of operations for such month and
period, subject to normal quarterly and year end adjustments and the absence of
footnotes;

(d) concurrently with delivery of financial statements under clauses (a) and
(b) above, or more frequently if requested by Agent while a Default or Event of
Default exists, a Compliance Certificate executed by the chief financial officer
of Borrower Agent;

(e) concurrently with delivery of financial statements under clause (a) above,
copies of all management letters and other material reports submitted to
Borrowers by their accountants in connection with such financial statements;

(f) not later than the end of each Fiscal Year, projections of Borrowers’
consolidated balance sheets, results of operations, cash flow and Availability
for the next three Fiscal Years, year by year, and for the next Fiscal Year,
Fiscal Quarter by Fiscal Quarter (if practical month by month);

(g) at Agent’s request, a listing of each Borrower’s trade payables, specifying
the trade creditor and balance due, and a detailed trade payable aging, all in
form reasonably satisfactory to Agent;

(h) promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that any Borrower has made generally
available to its shareholders; copies of any regular, periodic and special
reports or registration statements or prospectuses that any Borrower files with
the Securities and

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Exchange Commission or any other Governmental Authority, or any securities
exchange; and copies of any press releases or other statements made available by
a Borrower to the public concerning changes to or developments in the business
of such Borrower that could reasonably be expected to have a Material Adverse
Effect;

(i) promptly after the sending or filing thereof, copies of any annual report to
be filed in connection with each Plan or Foreign Plan;

(j) such other reports and information (financial or otherwise) as Agent may
request from time to time in connection with any Collateral or any Borrower’s,
Subsidiary’s or other Obligor’s financial condition or business; and

(k) to the extent not included in Chromcraft’s consolidated and consolidating
financial statements, as soon as available, and in any event within 120 days
after the close of each Fiscal Year, financial statements for each Guarantor (if
any), in form and substance satisfactory to Agent.

Simultaneously with retaining accountants for their annual audit, Borrowers
shall send a letter to the accountants, with a copy to Agent and Lenders,
notifying the accountants that one of the primary purposes for retaining their
services and obtaining audited financial statements is for use by Agent and
Lenders. Agent is authorized to send such notice if Borrowers fail to do so for
any reason.

10.1.3. Notices. Notify Agent and Lenders in writing, promptly after a
Borrower’s obtaining knowledge thereof, of any of the following that affects an
Obligor: (a) the threat or commencement of any proceeding or investigation,
whether or not covered by insurance, if an adverse determination could have a
Material Adverse Effect; (b) any pending or threatened labor dispute, strike or
walkout, or the expiration of any material labor contract; (c) any default under
or termination of a Material Contract; (d) the existence of any Default or Event
of Default; (e) any judgment in an amount exceeding $250,000; (f) the assertion
of any Intellectual Property Claim, if an adverse resolution could have a
Material Adverse Effect; (g) any violation or asserted violation of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an
adverse resolution could have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased or occupied by an
Obligor; or receipt of any Environmental Notice; (i) the discharge of or any
withdrawal or resignation by Borrowers’ independent accountants; or (j) any
opening of a new office or place of business, at least 30 days prior to such
opening.

10.1.4. Landlord and Storage Agreements. Upon request, provide Agent with copies
of all existing agreements, and promptly after execution thereof provide Agent
with copies of all future agreements, between an Obligor and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral may be kept or that otherwise may possess or handle any
Collateral. With respect to any lease (other than leases for sales offices),
warehousing agreement or any processing agreement in any case entered into after
the Closing Date, Borrowers shall provide Agent with a Lien Waiver.

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10.1.5. Compliance with Laws. Comply with all Applicable Laws, including ERISA,
Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain could not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, if any Environmental Release
occurs at or on any Properties of any Borrower or Subsidiary, it shall act
promptly and diligently to investigate and report to Agent and all appropriate
Governmental Authorities the extent of, and to make appropriate remedial action
to eliminate, such Environmental Release, whether or not directed to do so by
any Governmental Authority.

10.1.6. Taxes. Pay and discharge all Taxes prior to the date on which they
become delinquent or penalties attach, unless such Taxes are being Properly
Contested.

10.1.7. Insurance. In addition to the insurance required hereunder with respect
to Collateral, maintain insurance with insurers (rated A7 or better by Best
Rating Guide) reasonably satisfactory to Agent, (a) with respect to the
Properties and business of Borrowers and Subsidiaries of such type (including
product liability, workers’ compensation, larceny, embezzlement, or other
criminal misappropriation insurance), in such amounts, and with such coverages
and deductibles as are customary for companies similarly situated, and
(b) business interruption insurance in an amount not less than $5,000,000 with
deductibles and subject to an Insurance Assignment satisfactory to Agent.

10.1.8. Licenses. Keep each License affecting any Collateral (including the
manufacture, distribution or disposition of Inventory) or any other material
Property of Borrowers and Subsidiaries in full force and effect; promptly notify
Agent of any proposed modification to any such License, or entry into any new
License, in each case at least 30 days prior to its effective date; pay all
Royalties when due; and notify Agent of any default or breach asserted by any
Person to have occurred under any License.

10.1.9. Future Subsidiaries. Promptly notify Agent upon any Person becoming a
Subsidiary and, if such Person is not a Foreign Subsidiary, cause it to guaranty
the Obligations or becomes a co-Borrower hereunder in a manner satisfactory to
Agent, and to execute and deliver such documents, instruments and agreements and
to take such other actions as Agent shall require to evidence and perfect a Lien
in favor of Agent (for the benefit of Secured Parties) on all assets of such
Person, including delivery of such legal opinions, in form and substance
satisfactory to Agent, as it shall deem appropriate.

10.1.10. Cash Management Services. Commencing with the date that is 60 days
after the Closing Date, Borrower shall maintain its lockbox deposit and
disbursement accounts and other Cash Management Services with Bank and shall
utilize Bank for its other cash management services.

10.2. Negative Covenants. For so long as any Commitments or Obligations are
outstanding, each Borrower shall not, and shall cause each Subsidiary not to:

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10.2.1. Permitted Debt. Create, incur, guarantee or suffer to exist any Debt,
except:

(a) the Obligations;

(b) Subordinated Debt (if any);

(c) Permitted Purchase Money Debt;

(d) Borrowed Money (other than the Obligations, Subordinated Debt and Permitted
Purchase Money Debt), but only to the extent outstanding on the Closing Date and
not satisfied with proceeds of the initial Loans;

(e) Bank Product Debt;

(f) Debt that is in existence when a Person becomes a Subsidiary or that is
secured by an asset when acquired by a Borrower or Subsidiary, as long as such
Debt was not incurred in contemplation of such Person becoming a Subsidiary or
such acquisition, and does not exceed $1,000,000 in the aggregate at any time;

(g) Permitted Contingent Obligations;

(h) Refinancing Debt as long as each Refinancing Condition is satisfied; and

(i) Debt that is not included in any of the preceding clauses of this Section,
is not secured by a Lien and does not exceed $1,000,000 in the aggregate at any
time.

10.2.2. Permitted Liens. Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):

(a) Liens in favor of Agent;

(b) Purchase Money Liens securing Permitted Purchase Money Debt;

(c) Liens for Taxes not yet due or being Properly Contested;

(d) statutory Liens (other than Liens for Taxes or imposed under ERISA) arising
in the Ordinary Course of Business, but only if (i) payment of the obligations
secured thereby is not yet due or is being Properly Contested, and (ii) such
Liens do not materially impair the value or use of the Property or materially
impair operation of the business of any Borrower or Subsidiary;

(e) Liens incurred or deposits made in the Ordinary Course of Business to secure
the performance of tenders, bids, leases, contracts (except those relating to
Borrowed Money), statutory obligations and other similar obligations, or

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arising as a result of progress payments under government contracts, as long as
such Liens are at all times junior to Agent’s Liens;

(f) Liens arising by virtue of a judgment or judicial order against any Borrower
or Subsidiary, or any Property of a Borrower or Subsidiary, as long as such
Liens are (i) in existence for less than 30 consecutive days or being Properly
Contested, and (ii) at all times junior to Agent’s Liens;

(g) easements, rights-of-way, restrictions, covenants or other agreements of
record, and other similar charges or encumbrances on Real Estate, that do not
secure any monetary obligation and do not interfere with the Ordinary Course of
Business;

(h) normal and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of
collection; and

(i) existing Liens shown on Schedule 10.2.2.

10.2.3. Reserved.

10.2.4. Distributions; Upstream Payments. Declare or make any Distributions,
except Upstream Payments; or create or suffer to exist any encumbrance or
restriction on the ability of a Subsidiary to make any Upstream Payment, except
for restrictions under the Loan Documents, under Applicable Law or in effect on
the Closing Date as shown on Schedule 9.1.16 unless after giving effect to any
such otherwise prohibited Distribution, no Default or Event of Default exists
and is continuing and Availability and average pro forma Availability for the
most recently ended sixty (60) day period computed on the basis that such
Distribution had occurred on the first day of such sixty (60) day period, equals
or exceeds $10,000,000.

10.2.5. Restricted Investments. Make any Restricted Investment other than
(x) Permitted Acquisitions and (y) investments in Foreign Subsidiaries so long
as after giving effect to any such investment in a Foreign Subsidiary, no Event
of Default exists and is continuing and Availability and average pro forma
Availability for the most recently ended sixty (60) day period computed on the
basis that such investment had occurred on the first day of such sixty (60) day
period equals or exceeds $10,000,000.

10.2.6. Disposition of Assets. Make any Asset Disposition, except a Permitted
Asset Disposition, a disposition of Equipment under Section 8.4.2, or a transfer
of Property by a Subsidiary or Obligor to a Borrower.

10.2.7. Loans. Make any loans or other advances of money to any Person, except
(a) advances to an officer or employee for salary, travel expenses, commissions
and similar items in the Ordinary Course of Business; (b) prepaid expenses and
extensions of trade credit made in the Ordinary Course of Business; (c) deposits
with financial institutions permitted hereunder; and (d) as long as no Default
or Event of Default exists, intercompany loans by a Borrower to another
Borrower.

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10.2.8. Restrictions on Payment of Certain Debt. Make any payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or
acquisition) with respect to any (a) Subordinated Debt, except regularly
scheduled payments of principal, interest and fees, but only to the extent
permitted under any subordination agreement relating to such Debt (and a Senior
Officer of Borrower Agent shall certify to Agent, not less than five Business
Days prior to the date of payment, that all conditions under such agreement have
been satisfied); or (b) Borrowed Money (other than the Obligations) prior to its
due date under the agreements evidencing such Debt as in effect on the Closing
Date (or as amended thereafter with the consent of Agent).

10.2.9. Fundamental Changes. Merge, combine or consolidate with any Person, or
liquidate, wind up its affairs or dissolve itself, in each case whether in a
single transaction or in a series of related transactions, except for mergers or
consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary
or into a Borrower; change its name or conduct business under any fictitious
name; change its tax, charter or other organizational identification number; or
change its form or state of organization.

10.2.10. Subsidiaries. Form or acquire any Subsidiary after the Closing Date,
except in accordance with Sections 10.1.9 and 10.2.5; or permit any existing
Subsidiary to issue any additional Equity Interests except director’s qualifying
shares.

10.2.11. Organic Documents. Amend, modify or otherwise change any of its Organic
Documents as in effect on the Closing Date.

10.2.12. Tax Consolidation. File or consent to the filing of any consolidated
income tax return with any Person other than Borrowers and Subsidiaries.

10.2.13. Accounting Changes. Make any material change in accounting treatment or
reporting practices, except as required by GAAP and in accordance with
Section 1.2; or change its Fiscal Year.

10.2.14. Restrictive Agreements. Become a party to any Restrictive Agreement,
except (a) a Restrictive Agreement as in effect on the Closing Date and shown on
Schedule 9.1.16; (b) a Restrictive Agreement relating to secured Debt permitted
hereunder, if such restrictions apply only to the collateral for such Debt; and
(c) customary provisions in leases and other contracts restricting assignment
thereof.

10.2.15. Hedging Agreements. Enter into any Hedging Agreement, except to hedge
risks arising in the Ordinary Course of Business and not for speculative
purposes.

10.2.16. Conduct of Business. Engage in any business, other than its business as
conducted on the Closing Date and any activities incidental thereto.

10.2.17. Affiliate Transactions. Enter into or be party to any transaction with
an Affiliate, except (a) transactions contemplated by the Loan Documents;
(b) payment of reasonable compensation to officers and employees for services
actually rendered, and loans and advances permitted by Section 10.2.7;
(c) payment of customary directors’ fees and indemnities; (d) transactions
solely among Borrowers; (e) transactions with Affiliates that were consummated

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prior to the Closing Date, as shown on Schedule 10.2.17; and (f) transactions
with Affiliates in the Ordinary Course of Business, upon fair and reasonable
terms fully disclosed to Agent and no less favorable than would be obtained in a
comparable arm’s-length transaction with a non-Affiliate.

10.2.18. Plans. Become party to any Multiemployer Plan or Foreign Plan, other
than any in existence on the Closing Date.

10.2.19. Amendments to Subordinated Debt. Amend, supplement or otherwise modify
any document, instrument or agreement relating to any Subordinated Debt, if such
modification (a) increases the principal balance of such Debt, or increases any
required payment of principal or interest; (b) accelerates the date on which any
installment of principal or any interest is due, or adds any additional
redemption, put or prepayment provisions; (c) shortens the final maturity date
or otherwise accelerates amortization; (d) increases the interest rate;
(e) increases or adds any fees or charges; (f) modifies any covenant in a manner
or adds any representation, covenant or default that is more onerous or
restrictive in any material respect for any Borrower or Subsidiary, or that is
otherwise materially adverse to any Borrower, any Subsidiary or Lenders; or
(g) results in the Obligations not being fully benefited by the subordination
provisions thereof.

10.2.20. Trade Accounts Payable and Accrued Expenses. Not extend the payment of
trade accounts payable on accrued expenses beyond industry norms.

10.3. Financial Covenants. For so long as any Commitments or Obligations are
outstanding and during any Financial Covenant Period, Borrowers shall:

10.3.1. Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of
at least 1.0 to 1.0.

As used herein, Financial Covenant Period means any period commencing on the
date Availability is less than $5,000,000 and continuing until, during the sixty
(60) consecutive days, Availability has been greater than $5,000,000 at all
times.

SECTION 11.

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

11.1. Events of Default. Each of the following shall be an “Event of Default”
hereunder, if the same shall occur for any reason whatsoever, whether voluntary
or involuntary, by operation of law or otherwise:

(a) Any Borrower fails to pay any Obligations when due (whether at stated
maturity, on demand, upon acceleration or otherwise);

(b) Any representation, warranty or other written statement of any Obligor made
in connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;

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(c) Any Borrower breaches or fail to perform any covenant contained in
Sections 7.2 (Lien on Deposit Accounts; Cash Collateral), 7.4 (Other
Collateral), 7.6 (Further Assurances), 8.1 (Borrowing Base Certificates),
8.2.4 (Maintenance of Dominion Account), 8.2.5 (Proceeds of Collateral),
8.6.2 (Insurance of Collateral; Condemnation Proceeds), 10.1.1 (Inspections;
Appraisals), 10.1.2 (Financial and Other Information), 10.2 (Negative Covenants)
or 10.3 (Financial Covenants);

(d) Any Obligor breaches or fails to perform any other covenant contained in any
Loan Documents, and such breach or failure is not cured within 15 days after a
Senior Officer of such Obligor has knowledge thereof or receives notice thereof
from Agent, whichever is sooner; provided, however, that such notice and
opportunity to cure shall not apply if the breach or failure to perform is not
capable of being cured within such period or is a willful breach by an Obligor;

(e) Any Guarantor repudiates, revokes or attempts to revoke its Guaranty; any
Obligor denies or contests the validity or enforceability of any Loan Documents
or Obligations, or the perfection or priority of any Lien granted to Agent; or
any Loan Document ceases to be in full force or effect for any reason (other
than a waiver or release by Agent and Lenders);

(f) Any breach or default of an Obligor occurs under any document, instrument or
agreement to which it is a party or by which it or any of its Properties is
bound, relating to any Debt (other than the Obligations) in excess of $250,000,
if the maturity of or any payment with respect to such Debt may be accelerated
or demanded due to such breach;

(g) Any judgment or order for the payment of money is entered against an Obligor
in an amount that exceeds, individually or cumulatively with all unsatisfied
judgments or orders against all Obligors, $250,000 (net of any insurance
coverage therefor acknowledged in writing by the insurer), unless a stay of
enforcement of such judgment or order is in effect, by reason of a pending
appeal or otherwise;

(h) Any loss, theft, damage or destruction occurs with respect to any Collateral
if the amount not covered by insurance exceeds $250,000 in excess of permitted
deductibles and co-insurance provisions;

(i) Any Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its business; any
Obligor suffers the loss, revocation or termination of any material license,
permit, lease or agreement necessary to its business; there is a cessation of
any material part of an Obligor’s business for a material period of time; any
material Collateral or Property of an Obligor is taken or impaired through
condemnation; any Obligor agrees to or commences any liquidation, dissolution or
winding up of its affairs; or any Obligor ceases to be Solvent;

(j) Any Insolvency Proceeding is commenced by any Obligor; an Insolvency
Proceeding is commenced against any Obligor and: such Obligor consents to

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the institution of the proceeding against it, the petition commencing the
proceeding is not timely controverted by such Obligor, such petition is not
dismissed within 30 days after its filing, or an order for relief is entered in
the proceeding; a trustee (including an interim trustee) is appointed to take
possession of any substantial Property of or to operate any of the business of
any Obligor; or any Obligor makes an offer of settlement, extension or
composition to its unsecured creditors generally;

(k) A Reportable Event occurs that constitutes grounds for termination by the
Pension Benefit Guaranty Corporation of any Multiemployer Plan or appointment of
a trustee for any Multiemployer Plan; any Multiemployer Plan is terminated or
any such trustee is requested or appointed; any Obligor is in “default” (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from any withdrawal therefrom; or any event similar
to the foregoing occurs or exists with respect to a Foreign Plan;

(l) Any Obligor or any of its Senior Officers is criminally indicted or
convicted for (i) a felony committed in the conduct of such Obligor’s business,
or (ii) any state or federal law (including the Controlled Substances Act, Money
Laundering Control Act of 1986 and Illegal Exportation of War Materials Act)
that could lead to forfeiture of any material Property or any Collateral; or

(m) A Change of Control occurs; or any event occurs or condition exists that has
a Material Adverse Effect.

11.2. Remedies upon Default. If an Event of Default described in Section 11.1(j)
occurs with respect to any Borrower, then to the extent permitted by Applicable
Law, all Obligations shall become automatically due and payable and all
Commitments shall terminate, without any action by Agent or notice of any kind.
In addition, or if any other Event of Default exists, Agent may in its
discretion (and shall upon written direction of Required Lenders) do any one or
more of the following from time to time:

(a) declare any Obligations immediately due and payable, whereupon they shall be
due and payable without diligence, presentment, demand, protest or notice of any
kind, all of which are hereby waived by Borrowers to the fullest extent
permitted by law;

(b) terminate, reduce or condition any Commitment, or make any adjustment to the
Borrowing Base;

(c) require Obligors to Cash Collateralize LC Obligations, Bank Product Debt and
other Obligations that are contingent or not yet due and payable, and, if
Obligors fail promptly to deposit such Cash Collateral, Agent may (and shall
upon the direction of Required Lenders) advance the required Cash Collateral as
Revolver Loans (whether or not an Overadvance exists or is created thereby, or
the conditions in Section 6 are satisfied); and

(d) exercise any other rights or remedies afforded under any agreement, by law,
at equity or otherwise, including the rights and remedies of a secured

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party under the UCC. Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require Borrowers to assemble Collateral, at
Borrowers’ expense, and make it available to Agent at a place designated by
Agent; (iii) enter any premises where Collateral is located and store Collateral
on such premises until sold (and if the premises are owned or leased by a
Borrower, Borrowers agree not to charge for such storage); and (iv) sell or
otherwise dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such notice
as may be required by Applicable Law, in lots or in bulk, at such locations, all
as Agent, in its discretion, deems advisable. Each Borrower agrees that 10 days
notice of any proposed sale or other disposition of Collateral by Agent shall be
reasonable. Agent shall have the right to conduct such sales on any Obligor’s
premises, without charge, and such sales may be adjourned from time to time in
accordance with Applicable Law. Agent shall have the right to sell, lease or
otherwise dispose of any Collateral for cash, credit or any combination thereof,
and Agent may purchase any Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of the purchase price, may set off the
amount of such price against the Obligations.

11.3. License. Agent is hereby granted an irrevocable, non- exclusive license or
other right to use, license or sub-license (without payment of royalty or other
compensation to any Person) any or all Intellectual Property of Borrowers,
computer hardware and software, trade secrets, brochures, customer lists,
promotional and advertising materials, labels, packaging materials and other
Property, in advertising for sale, marketing, selling, collecting, completing
manufacture of, or otherwise exercising any rights or remedies with respect to,
any Collateral. Each Borrower’s rights and interests under Intellectual Property
shall inure to Agent’s benefit.

11.4. Setoff. Agent, Lenders and their Affiliates are each authorized by
Borrowers at any time during an Event of Default, without notice to Borrowers or
any other Person, to set off and to appropriate and apply any deposits (general
or special), funds, claims, obligations, liabilities or other Debt at any time
held or owing by Agent, any Lender or any such Affiliate to or for the account
of any Obligor against any Obligations, whether or not demand for payment of
such Obligation has been made, any Obligations have been declared due and
payable, are then due, or are contingent or unmatured, or the Collateral or any
guaranty or other security for the Obligations is adequate.

11.5. Remedies Cumulative; No Waiver.

11.5.1. Cumulative Rights. All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of Borrowers contained in the
Loan Documents are cumulative and not in derogation or substitution of each
other. In particular, the rights and remedies of Agent and Lenders are
cumulative, may be exercised at any time and from time to time, concurrently or
in any order, and shall not be exclusive of any other rights or remedies that
Agent and Lenders may have, whether under any agreement, by law, at equity or
otherwise.

11.5.2. Waivers. The failure or delay of Agent or any Lender to require strict
performance by Borrowers with any terms of the Loan Documents, or to exercise
any rights or remedies with respect to Collateral or otherwise, shall not
operate as a waiver thereof nor as establishment of a course of dealing. All
rights and remedies shall continue in full force and

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effect until Full Payment of all Obligations. No modification of any terms of
any Loan Documents (including any waiver thereof) shall be effective, unless
such modification is specifically provided in a writing directed to Borrowers
and executed by Agent or the requisite Lenders, and such modification shall be
applicable only to the matter specified. No waiver of any Default or Event of
Default shall constitute a waiver of any other Default or Event of Default that
may exist at such time, unless expressly stated. If Agent or any Lender accepts
performance by any Obligor under any Loan Documents in a manner other than that
specified therein, or during any Default or Event of Default, or if Agent or any
Lender shall delay or exercise any right or remedy under any Loan Documents,
such acceptance, delay or exercise shall not operate to waive any Default or
Event of Default nor to preclude exercise of any other right or remedy. It is
expressly acknowledged by Borrowers that any failure to satisfy a financial
covenant on a measurement date shall not be cured or remedied by satisfaction of
such covenant on a subsequent date.

SECTION 12.

AGENT

12.1. Appointment, Authority and Duties of Agent.

12.1.1. Appointment and Authority. Each Lender appoints and designates Bank of
America as Agent hereunder. Agent may, and each Lender authorizes Agent to,
enter into all Loan Documents to which Agent is intended to be a party and
accept all Security Documents, for Agent’s benefit and the Pro Rata benefit of
Lenders. Each Lender agrees that any action taken by Agent or Required Lenders
in accordance with the provisions of the Loan Documents, and the exercise by
Agent or Required Lenders of any rights or remedies set forth therein, together
with all other powers reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive authority to (a) act as the disbursing
and collecting agent for Lenders with respect to all payments and collections
arising in connection with the Loan Documents; (b) execute and deliver as Agent
each Loan Document, including any intercreditor or subordination agreement, and
accept delivery of each Loan Document from any Obligor or other Person; (c) act
as collateral agent for Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other purposes stated
therein; (d) manage, supervise or otherwise deal with Collateral; and
(e) exercise all rights and remedies given to Agent with respect to any
Collateral under the Loan Documents, Applicable Law or otherwise. The duties of
Agent shall be ministerial and administrative in nature, and Agent shall not
have a fiduciary relationship with any Lender, Secured Party, Participant or
other Person, by reason of any Loan Document or any transaction relating
thereto. Agent alone shall be authorized to determine whether any Accounts or
Inventory constitute Eligible Accounts or Eligible Inventory, or whether to
impose or release any reserve, which determinations and judgments, if exercised
in good faith, shall exonerate Agent from liability to any Lender or other
Person for any error in judgment.

12.1.2. Duties. Agent shall not have any duties except those expressly set forth
in the Loan Documents, nor be required to initiate or conduct any Enforcement
Action except to the extent directed to do so by Required Lenders while an Event
of Default exists. The conferral

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upon Agent of any right shall not imply a duty on Agent’s part to exercise such
right, unless instructed to do so by Required Lenders in accordance with this
Agreement.

12.1.3. Agent Professionals. Agent may perform its duties through agents and
employees. Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional. Agent shall not
be responsible for the negligence or misconduct of any agents, employees or
Agent Professionals selected by it with reasonable care.

12.1.4. Instructions of Required Lenders. The rights and remedies conferred upon
Agent under the Loan Documents may be exercised without the necessity of joinder
of any other party, unless required by Applicable Law. Agent may request
instructions from Required Lenders with respect to any act (including the
failure to act) in connection with any Loan Documents, and may seek assurances
to its satisfaction from Lenders of their indemnification obligations under
Section 12.6 against all Claims that could be incurred by Agent in connection
with any act. Agent shall be entitled to refrain from any act until it has
received such instructions or assurances, and Agent shall not incur liability to
any Person by reason of so refraining. Instructions of Required Lenders shall be
binding upon all Lenders, and no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
in accordance with the instructions of Required Lenders. Notwithstanding the
foregoing, instructions by and consent of all Lenders shall be required in the
circumstances described in Section 14.1.1, and in no event shall Required
Lenders, without the prior written consent of each Lender, direct Agent to
accelerate and demand payment of Loans held by one Lender without accelerating
and demanding payment of all other Loans, nor to terminate the Commitments of
one Lender without terminating the Commitments of all Lenders. In no event shall
Agent be required to take any action that, in its opinion, is contrary to
Applicable Law or any Loan Documents or could subject any Agent Indemnitee to
personal liability.

12.2. Agreements Regarding Collateral and Field Examination Reports.

12.2.1. Lien Releases; Care of Collateral. Lenders authorize Agent to release
any Lien with respect to any Collateral (a) upon Full Payment of the
Obligations, (b) that is the subject of an Asset Disposition which Borrowers
certify in writing to Agent is a Permitted Asset Disposition or a Lien which
Borrowers certify is a Permitted Lien entitled to priority over Agent’s Liens
(and Agent may rely conclusively on any such certificate without further
inquiry), (c) that does not constitute a material part of the Collateral, or
(d) with the written consent of all Lenders. Agent shall have no obligation
whatsoever to any Lenders to assure that any Collateral exists or is owned by a
Borrower, or is cared for, protected, insured or encumbered, nor to assure that
Agent’s Liens have been properly created, perfected or enforced, or are entitled
to any particular priority, nor to exercise any duty of care with respect to any
Collateral.

12.2.2. Possession of Collateral. Agent and Lenders appoint each other Lender as
agent for the purpose of perfecting Liens (for the benefit of Secured Parties)
for the purpose of perfecting Liens in any Collateral held by such Lender, to
the extent such Liens perfected by possession. If any Lender obtains possession
of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s
request, deliver such Collateral to Agent or otherwise deal with it in
accordance with Agent’s instructions.

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12.2.3. Reports. Agent shall promptly, upon receipt thereof, forward to each
Lender copies of the results of any field audit or other examination or any
appraisal prepared by or on behalf of Agent with respect to any Obligor or
Collateral (“Report”). Each Lender agrees (a) that neither Bank of America nor
Agent makes any representation or warranty as to the accuracy or completeness of
any Report, and shall not be liable for any information contained in or omitted
from any Report; (b) that the Reports are not intended to be comprehensive
audits or examinations, and that Agent or any other Person performing any audit
or examination will inspect only specific information regarding Obligations or
the Collateral and will rely significantly upon Borrowers’ books and records as
well as upon representations of Borrowers’ officers and employees; and (c) to
keep all Reports confidential and strictly for such Lender’s internal use, and
not to distribute any Report (or the contents thereof) to any Person (except to
such Lender’s Participants, attorneys and accountants) or use any Report in any
manner other than administration of the Loans and other Obligations. Each Lender
agrees to indemnify and hold harmless Agent and any other Person preparing a
Report from any action such Lender may take as a result of or any conclusion it
may draw from any Report, as well as any Claims arising in connection with any
third parties that obtain all or any part of a Report through such Lender.

12.3. Reliance By Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any certification, notice or other communication
(including those by telephone, telex, telegram, telecopy or e- mail) believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person, and upon the advice and statements of Agent Professionals.

12.4. Action Upon Default. Agent shall not be deemed to have knowledge of any
Default or Event of Default unless it has received written notice from a Lender
or Borrower specifying the occurrence and nature thereof. If any Lender acquires
knowledge of a Default or Event of Default, it shall promptly notify Agent and
the other Lenders thereof in writing. Each Lender agrees that, except as
otherwise provided in any Loan Documents or with the written consent of Agent
and Required Lenders, it will not take any Enforcement Action, accelerate its
Obligations, or exercise any right that it might otherwise have under Applicable
Law to credit bid at foreclosure sales, UCC sales or other similar dispositions
of Collateral. Notwithstanding the foregoing, however, a Lender may take action
to preserve or enforce its rights against an Obligor where a deadline or
limitation period is applicable that would, absent such action, bar enforcement
of Obligations held by such Lender, including the filing of proofs of claim in
an Insolvency Proceeding.

12.5. Ratable Sharing. If any Lender shall obtain any payment or reduction of
any Obligation, whether through set-off or otherwise, in excess of its share of
such Obligation, determined on a Pro Rata basis or in accordance with
Section 5.5.1, as applicable, such Lender shall forthwith purchase from Agent,
Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.5.1, as
applicable. If any of such payment or reduction is thereafter recovered from the
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.

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12.6. Indemnification of Agent Indemnitees.

12.6.1. Indemnification. EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT
INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT WITHOUT LIMITING THE
INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN DOCUMENTS), ON A PRO RATA
BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY AGENT
INDEMNITEE. If Agent is sued by any receiver, trustee in bankruptcy,
debtor-in-possession or other Person for any alleged preference from an Obligor
or fraudulent transfer, then any monies paid by Agent in settlement or
satisfaction of such proceeding, together with all interest, costs and expenses
(including attorneys’ fees) incurred in the defense of same, shall be promptly
reimbursed to Agent by Lenders to the extent of each Lender’s Pro Rata share.

12.6.2. Proceedings. Without limiting the generality of the foregoing, if at any
time (whether prior to or after the Commitment Termination Date) any proceeding
is brought against any Agent Indemnitees by an Obligor, or any Person claiming
through an Obligor, to recover damages for any act taken or omitted by Agent in
connection with any Obligations, Collateral, Loan Documents or matters relating
thereto, or otherwise to obtain any other relief of any kind on account of any
transaction relating to any Loan Documents, each Lender agrees to indemnify and
hold harmless Agent Indemnitees with respect thereto and to pay to Agent
Indemnitees such Lender’s Pro Rata share of any amount that any Agent Indemnitee
is required to pay under any judgment or other order entered in such proceeding
or by reason of any settlement, including all interest, costs and expenses
(including attorneys’ fees) incurred in defending same. In Agent’s discretion,
Agent may reserve for any such proceeding, and may satisfy any judgment, order
or settlement, from proceeds of Collateral prior to making any distributions of
Collateral proceeds to Lenders.

12.7. Limitation on Responsibilities of Agent. Agent shall not be liable to
Lenders for any action taken or omitted to be taken under the Loan Documents,
except for losses directly and solely caused by Agent’s gross negligence or
willful misconduct. Agent does not assume any responsibility for any failure or
delay in performance or any breach by any Obligor or Lender of any obligations
under the Loan Documents. Agent does not make to Lenders any express or implied
warranty, representation or guarantee with respect to any Obligations,
Collateral, Loan Documents or Obligor. No Agent Indemnitee shall be responsible
to Lenders for any recitals, statements, information, representations or
warranties contained in any Loan Documents; the execution, validity,
genuineness, effectiveness or enforceability of any Loan Documents; the
genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor. No Agent Indemnitee shall have any obligation to any Lender to ascertain
or inquire into the existence of any Default or Event of Default, the observance
or performance by any Obligor of any terms of the Loan Documents, or the
satisfaction of any conditions precedent contained in any Loan Documents.

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12.8. Successor Agent and Co-Agents.

12.8.1. Resignation; Successor Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, Agent may resign at any time by giving
at least 30 days written notice thereof to Lenders and Borrowers. Upon receipt
of such notice, Required Lenders shall have the right to appoint a successor
Agent which shall be (a) a Lender or an Affiliate of a Lender; or (b) a
commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least
$200,000,000 and (provided no Default or Event of Default exists) is reasonably
acceptable to Borrowers. If no successor agent is appointed prior to the
effective date of the resignation of Agent, then Agent may appoint a successor
agent from among Lenders. Upon acceptance by a successor Agent of an appointment
to serve as Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the powers and duties of the retiring Agent without
further act, and the retiring Agent shall be discharged from its duties and
obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6 and 14.2. Notwithstanding any Agent’s
resignation, the provisions of this Section 12 shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while
Agent. Any successor by merger or acquisition of the stock or assets of Bank of
America shall continue to be Agent hereunder without further act on the part of
the parties hereto, unless such successor resigns as provided above.

12.8.2. Separate Collateral Agent. It is the intent of the parties that there
shall be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business in any jurisdiction. If Agent
believes that it may be limited in the exercise of any rights or remedies under
the Loan Documents due to any Applicable Law, Agent may appoint an additional
Person who is not so limited, as a separate collateral agent or co-collateral
agent. If Agent so appoints a collateral agent or co-collateral agent, each
right and remedy intended to be available to Agent under the Loan Documents
shall also be vested in such separate agent. Every covenant and obligation
necessary to the exercise thereof by such agent shall run to and be enforceable
by it as well as Agent. Lenders shall execute and deliver such documents as
Agent deems appropriate to vest any rights or remedies in such agent. If any
collateral agent or co-collateral agent shall die or dissolve, become incapable
of acting, resign or be removed, then all the rights and remedies of such agent,
to the extent permitted by Applicable Law, shall vest in and be exercised by
Agent until appointment of a new agent.

12.9. Due Diligence and Non-Reliance. Each Lender acknowledges and agrees that
it has, independently and without reliance upon Agent or any other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund Loans and participate in LC Obligations
hereunder. Each Lender has made such inquiries concerning the Loan Documents,
the Collateral and each Obligor as such Lender feels necessary. Each Lender
further acknowledges and agrees that the other Lenders and Agent have made no
representations or warranties concerning any Obligor, any Collateral or the
legality, validity, sufficiency or enforceability of any Loan Documents or
Obligations. Each Lender will, independently and without reliance upon the other
Lenders or Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and participating in LC Obligations,
and in taking or

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refraining from any action under any Loan Documents. Except for notices, reports
and other information expressly requested by a Lender, Agent shall have no duty
or responsibility to provide any Lender with any notices, reports or
certificates furnished to Agent by any Obligor or any credit or other
information concerning the affairs, financial condition, business or Properties
of any Obligor (or any of its Affiliates) which may come into possession of
Agent or any of Agent’s Affiliates.

12.10. Replacement of Certain Lenders. In the event that any Lender (a) fails to
fund its Pro Rata share of any Loan or LC Obligation hereunder, and such failure
is not cured within two Business Days, (b) defaults in performing any of its
obligations under the Loan Documents, or (c) fails to give its consent to any
amendment, waiver or action for which consent of all Lenders was required and
Required Lenders consented, then, in addition to any other rights and remedies
that any Person may have, Agent may, by notice to such Lender within 120 days
after such event, require such Lender to assign all of its rights and
obligations under the Loan Documents to Eligible Assignee(s) specified by Agent,
pursuant to appropriate Assignment and Acceptance(s) and within 20 days after
Agent’s notice. Agent is irrevocably appointed as attorney-in-fact to execute
any such Assignment and Acceptance if the Lender fails to execute same. Such
Lender shall be entitled to receive, in cash, concurrently with such assignment,
all amounts owed to it under the Loan Documents, including all principal,
interest and fees through the date of assignment (but excluding any prepayment
charge).

12.11. Remittance of Payments and Collections.

12.11.1. Remittances Generally. All payments by any Lender to Agent shall be
made by the time and on the day set forth in this Agreement, in immediately
available funds. If no time for payment is specified or if payment is due on
demand by Agent and request for payment is made by Agent by 11:00 a.m. (Chicago
time) on a Business Day, payment shall be made by Lender not later than
2:00 p.m. on such day, and if request is made after 11:00 a.m. (Chicago time),
then payment shall be made by 11:00 a.m. (Chicago time) on the next Business
Day. Payment by Agent to any Lender shall be made by wire transfer, in the type
of funds received by Agent. Any such payment shall be subject to Agent’s right
of offset for any amounts due from such Lender under the Loan Documents.

12.11.2. Failure to Pay. If any Lender fails to pay any amount when due by it to
Agent pursuant to the terms hereof, such amount shall bear interest from the due
date until paid at the rate determined by Agent as customary in the banking
industry for interbank compensation. In no event shall Borrowers be entitled to
receive credit for any interest paid by a Lender to Agent.

12.11.3. Recovery of Payments. If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
each Lender that received it. If Agent determines at any time that an amount
received under any Loan Document must be returned to an Obligor or paid to any
other Person pursuant to Applicable Law or otherwise, then, notwithstanding any
other term of any Loan Document, Agent shall not be required to distribute such
amount to any Lender. If any amounts received and applied by Agent to any
Obligations are later required to be returned by Agent pursuant to Applicable
Law,

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Lenders shall pay to Agent, on demand, such Lender’s Pro Rata share of the
amounts required to be returned.

12.12. Agent in its Individual Capacity. As a Lender, Bank of America shall have
the same rights and remedies under the other Loan Documents as any other Lender,
and the terms “Lenders,” “Required Lenders” or any similar term shall include
Bank of America in its capacity as a Lender. Each of Bank of America and its
Affiliates may accept deposits from, maintain deposits or credit balances for,
invest in, lend money to, provide Bank Products to, act as trustee under
indentures of, serve as financial or other advisor to, and generally engage in
any kind of business with, Obligors and their Affiliates, as if Bank of America
were any other bank, without any duty to account therefor (including any fees or
other consideration received in connection therewith) to the other Lenders. In
their individual capacity, Bank of America and its Affiliates may receive
information regarding Obligors, their Affiliates and their Account Debtors
(including information subject to confidentiality obligations), and each Lender
agrees that Bank of America and its Affiliates shall be under no obligation to
provide such information to Lenders, if acquired in such individual capacity and
not as Agent hereunder.

12.13. Agent Titles. Each Lender, other than Bank of America, that is designated
(on the cover page of this Agreement or otherwise) by Bank of America as an
“Agent” or “Arranger” of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event be deemed to have any fiduciary relationship
with any other Lender.

12.14. No Third Party Beneficiaries. This Section 12 is an agreement solely
among Lenders and Agent, and does not confer any rights or benefits upon
Borrowers or any other Person. As between Borrowers and Agent, any action that
Agent may take under any Loan Documents shall be conclusively presumed to have
been authorized and directed by Lenders as herein provided.

SECTION 13.

BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

13.1. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of Borrowers, Agent and Lenders and their respective successors and
assigns, except that (a) no Borrower shall have the right to assign its rights
or delegate its obligations under any Loan Documents, and (b) any assignment by
a Lender must be made in compliance with Section 13.3. Agent may treat the
Person which made any Loan as the owner thereof for all purposes until such
Person makes an assignment in accordance with Section 13.3. Any authorization or
consent of a Lender shall be conclusive and binding on any subsequent transferee
or assignee of such Lender.

13.2. Participations.

13.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary course
of its business and in accordance with Applicable Law, at any time sell to a
financial institution (“Participant”) a participating interest in the rights and
obligations of such Lender under any

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Loan Documents. Despite any sale by a Lender of participating interests to a
Participant, such Lender’s obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for performance of such obligations, such Lender shall remain the holder
of its Loans and Commitments for all purposes, all amounts payable by Borrowers
shall be determined as if such Lender had not sold such participating interests,
and Borrowers and Agent shall continue to deal solely and directly with such
Lender in connection with the Loan Documents. Each Lender shall be solely
responsible for notifying its Participants of any matters under the Loan
Documents, and Agent and the other Lenders shall not have any obligation or
liability to any such Participant. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.9 unless
Borrowers agree otherwise in writing.

13.2.2. Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Commitment in which such Participant has an interest, postpones
the Commitment Termination Date or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment, or releases
any Borrower, Guarantor or substantial portion of the Collateral.

13.2.3. Benefit of Set-Off. Borrowers agree that each Participant shall have a
right of set- off in respect of its participating interest to the same extent as
if such interest were owing directly to a Lender, and each Lender shall also
retain the right of set-off with respect to any participating interests sold by
it. By exercising any right of set-off, a Participant agrees to share with
Lenders all amounts received through its set-off, in accordance with
Section 12.5 as if such Participant were a Lender.

13.3. Assignments.

13.3.1. Permitted Assignments. A Lender may assign to any Eligible Assignee any
of its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $5,000,000 (unless
otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the
Commitments retained by the transferor Lender be at least $5,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording,
an Assignment and Acceptance. Nothing herein shall limit the right of a Lender
to pledge or assign any rights under the Loan Documents to (i) any Federal
Reserve Bank or the United States Treasury as collateral security pursuant to
Regulation A of the Board of Governors and any Operating Circular issued by such
Federal Reserve Bank, or (ii) counterparties to swap agreements relating to any
Loans; provided, however, that any payment by Borrowers to the assigning Lender
in respect of any Obligations assigned as described in this sentence shall
satisfy Borrowers’ obligations hereunder to the extent of such payment, and no
such assignment shall release the assigning Lender from its obligations
hereunder.

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13.3.2. Effect; Effective Date. Upon delivery to Agent of an assignment notice
in the form of Exhibit C and a processing fee of $5,000, such assignment shall
become effective as specified in the notice, if it complies with this
Section 13.3. From the effective date of such assignment, the Eligible Assignee
shall for all purposes be a Lender under the Loan Documents, and shall have all
rights and obligations of a Lender thereunder. Upon consummation of an
assignment, the transferor Lender, Agent and Borrowers shall make appropriate
arrangements for issuance of replacement and/or new Notes, as appropriate.

13.4. Tax Treatment. If any interest in a Loan Document is transferred to a
Transferee that is organized under the laws of any jurisdiction other than the
United States or any state or district thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, to
comply with the provisions of Section 5.10.

13.5. Representation of Lenders. Each Lender represents and warrants to each
Borrower, Agent and other Lenders that none of the consideration used by it to
fund its Loans or to participate in any other transactions under this Agreement
constitutes for any purpose of ERISA or Section 4975 of the Internal Revenue
Code assets of any “plan” as defined in Section 3(3) of ERISA or Section 4975 of
the Internal Revenue Code and the interests of such Lender in and under the Loan
Documents shall not constitute plan assets under ERISA.

SECTION 14.

MISCELLANEOUS

14.1. Consents, Amendments and Waivers.

14.1.1. Amendment. No modification of any Loan Document, including any extension
or amendment of a Loan Document or any waiver of a Default or Event of Default,
shall be effective without the prior written agreement of Agent, with the
consent of Required Lenders, and each Obligor party to such Loan Document;
provided, however, that

(a) without the prior written consent of Agent, no modification shall be
effective with respect to any provision in a Loan Document that relates to any
rights, duties or discretion of Agent;

(b) without the prior written consent of Issuing Bank, no modification shall be
effective with respect to any LC Obligations or Section 2.3;

(c) without the prior written consent of each affected Lender, no modification
shall be effective that would (i) increase the Commitment of such Lender; or
(ii) reduce the amount of, or waive or delay payment of, any principal, interest
or fees payable to such Lender; and

(d) without the prior written consent of all Lenders (except a defaulting Lender
as provided in Section 4.2), no modification shall be effective that would
(i) extend the Revolver Termination Date; (ii) alter Section 5.6, 7.1 (except to
add Collateral), or 14.1.1; (iii) amend the definitions of Borrowing Base (and
the defined terms used in such definition), Pro Rata or Required Lenders;
(iv) increase any advance

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rate, decrease the Availability Block, or increase total Commitments;
(vi) release all or substantially all of the Collateral, except as currently
contemplated by the Loan Documents; or (vii) release any Obligor from liability
for any Obligations, if such Obligor is Solvent at the time of the release.

14.1.2. Limitations. The agreement of Borrowers shall not be necessary to the
effectiveness of any modification of a Loan Document that deals solely with the
rights and duties of Lenders, Agent and/or Issuing Bank as among themselves.
Only the consent of the parties to the Fee Letter or any agreement relating to a
Bank Product shall be required for any modification of such agreement, and no
Affiliate of a Lender that is party to a Bank Product agreement shall have any
other right to consent to or participate in any manner in modification of any
other Loan Document. The making of any Loans during the existence of a Default
or Event of Default shall not be deemed to constitute a waiver of such Default
or Event of Default, nor to establish a course of dealing. Any waiver or consent
granted by Lenders hereunder shall be effective only if in writing, and then
only in the specific instance and for the specific purpose for which it is
given.

14.1.3. Payment for Consents. No Borrower will, directly or indirectly, pay any
remuneration or other thing of value, whether by way of additional interest, fee
or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.

14.2. Indemnity. EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES
AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE,
INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall
any party to a Loan Document have any obligation thereunder to indemnify or hold
harmless an Indemnitee with respect to a Claim that is determined in a final,
non-appealable judgment by a court of competent jurisdiction to result from the
gross negligence or willful misconduct of such Indemnitee.

14.3. Notices and Communications.

14.3.1. Notice Address. Subject to Section 4.1.4, all notices, requests and
other communications by or to a party hereto shall be in writing and shall be
given to any Borrower, at Borrower Agent’s address shown on the signature pages
hereof, and to any other Person at its address shown on the signature pages
hereof (or, in the case of a Person who becomes a Lender after the Closing Date,
at the address shown on its Assignment and Acceptance), or at such other address
as a party may hereafter specify by notice in accordance with this Section 14.3.
Each such notice, request or other communication shall be effective only (a) if
given by facsimile transmission, when transmitted to the applicable facsimile
number, if confirmation of receipt is received; (b) if given by mail, three
Business Days after deposit in the U.S. mail, with first-class postage pre-paid,
addressed to the applicable address; or (c) if given by personal delivery or
courier service (including, without limitation, Federal Express or UPS overnight
mail service), when duly delivered to the notice address with receipt
acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant to
Sections 2.1.4, 2.3, 3.1.2, 4.1.1 or 5.3.3 shall be

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effective until actually received by the individual to whose attention at Agent
such notice is required to be sent. Any written notice, request or other
communication that is not sent in conformity with the foregoing provisions shall
nevertheless be effective on the date actually received by the noticed party.
Any notice received by Borrower Agent shall be deemed received by all Borrowers.

14.3.2. Electronic Communications; Voice Mail. Electronic mail and internet
websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
Section 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under Section 4.1.4. Agent and Lenders make no
assurances as to the privacy and security of electronic communications.
Electronic and voice mail may not be used as effective notice under the Loan
Documents.

14.3.3. Non- Conforming Communications. Agent and Lenders may rely upon any
notices purportedly given by or on behalf of any Borrower even if such notices
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation. Each Borrower shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
telephonic communication purportedly given by or on behalf of a Borrower.

14.4. Performance of Borrowers’ Obligations. Agent may, in its discretion at any
time and from time to time, at Borrowers’ expense, pay any amount or do any act
required of a Borrower under any Loan Documents or otherwise lawfully requested
by Agent to (a) enforce any Loan Documents or collect any Obligations;
(b) protect, insure, maintain or realize upon any Collateral; or (c) defend or
maintain the validity or priority of Agent’s Liens in any Collateral, including
any payment of a judgment, insurance premium, warehouse charge, finishing or
processing charge, or landlord claim, or any discharge of a Lien. All payments,
costs and expenses (including Extraordinary Expenses) of Agent under this
Section shall be reimbursed to Agent by Borrowers, on demand, with interest from
the date incurred to the date of payment thereof at the Default Rate applicable
to Base Rate Revolver Loans. Any payment made or action taken by Agent under
this Section shall be without prejudice to any right to assert an Event of
Default or to exercise any other rights or remedies under the Loan Documents.

14.5. Credit Inquiries. Each Borrower hereby authorizes Agent and Lenders (but
they shall have no obligation) to respond to usual and customary credit
inquiries from third parties concerning any Borrower or Subsidiary.

14.6. Severability. Wherever possible, each provision of the Loan Documents
shall be interpreted in such manner as to be valid under Applicable Law. If any
provision is found to be invalid under Applicable Law, it shall be ineffective
only to the extent of such invalidity and the remaining provisions of the Loan
Documents shall remain in full force and effect.

14.7. Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents
are cumulative. The parties acknowledge that the Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters, and they agree that these are cumulative and that each must be
performed as provided. Except as otherwise specifically provided in another Loan
Document (by specific reference to the applicable

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provision of this Agreement), if any provision contained herein is in direct
conflict with any provision in another Loan Document, the provision herein shall
govern and control.

14.8. Counterparts; Facsimile Signatures. Any Loan Document may be executed in
counterparts, each of which taken together shall constitute one instrument. Loan
Documents may be executed and delivered by facsimile, and they shall have the
same force and effect as manually signed originals. Agent may require
confirmation by a manually-signed original, but failure to request or deliver
same shall not limit the effectiveness of any facsimile signature.

14.9. Entire Agreement. Time is of the essence of the Loan Documents. The Loan
Documents embody the entire understanding of the parties with respect to the
subject matter thereof and supersede all prior understandings regarding the same
subject matter.

14.10. Obligations of Lenders. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Commitments
of any other Lender. Amounts payable hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of the Loan Documents. It shall not be necessary for Agent or any other
Lender to be joined as an additional party in any proceeding for such purposes.
Nothing in this Agreement and no action of Agent or Lenders pursuant to the Loan
Documents shall be deemed to constitute Agent and Lenders to be a partnership,
association, joint venture or any other kind of entity, nor to constitute
control of any Borrower. Each Borrower acknowledges and agrees that in
connection with all aspects of any transaction contemplated by the Loan
Documents, Borrowers, Agent, Issuing Bank and Lenders have an arms- length
business relationship that creates no fiduciary duty on the part of Agent,
Issuing Bank or any Lender, and each Borrower, Agent, Issuing Bank and Lender
expressly disclaims any fiduciary relationship.

14.11. Confidentiality. During the term of this Agreement and for 18 months
thereafter, Agent and Lenders agree to take reasonable precautions to maintain
the confidentiality of any information that Borrowers deliver to Agent and
Lenders and identify as confidential at the time of delivery, except that Agent
and any Lender may disclose such information (a) to their respective officers,
directors, employees, Affiliates and agents, including legal counsel, auditors
and other professional advisors; (b) to any party to the Loan Documents from
time to time; (c) pursuant to the order of any court or administrative agency;
(d) upon the request of any Governmental Authority exercising regulatory
authority over Agent or such Lender; (e) which ceases to be confidential, other
than by an act or omission of Agent or any Lender, or which becomes available to
Agent or any Lender on a nonconfidential basis; (f) to the extent reasonably
required in connection with any litigation relating to any Loan Documents or
transactions contemplated thereby, or otherwise as required by Applicable Law;
(g) to the extent reasonably required for the exercise of any rights or remedies
under the Loan Documents; (h) to any actual or proposed party to a Bank Product
or to any Transferee, as long as such Person agrees to be bound by the
provisions of this Section; (i) to the National Association of Insurance
Commissioners or any similar organization, or to any nationally recognized
rating agency that requires access to information about a Lender’s portfolio in
connection with ratings issued with respect to such Lender; (j) to any investor
or potential investor in an Approved Fund that is a Lender or Transferee, but
solely for use by such investor to evaluate an investment in such Approved Fund,
or to any manager, servicer or other Person in connection with its
administration

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of any such Approved Fund; or (k) with the consent of Borrowers. Notwithstanding
the foregoing, Agent and Lenders may issue and disseminate to the public general
information describing this credit facility, including the names and addresses
of Borrowers and a general description of Borrowers’ businesses, and may use
Borrowers’ names in advertising and other promotional materials.

14.12. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS
OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO
FEDERAL LAWS RELATING TO NATIONAL BANKS).

14.13. CONSENT TO FORUM. EACH BORROWER HEREBY CONSENTS TO THE NON- EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER
COOK COUNTY, ILLINOIS, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY
LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT
SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR
SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. Nothing herein shall
limit the right of Agent or any Lender to bring proceedings against any Obligor
in any other court. Nothing in this Agreement shall be deemed to preclude
enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.

14.14. Waivers by Borrowers. To the fullest extent permitted by Applicable Law,
each Borrower waives (a) the right to trial by jury (which Agent and each Lender
hereby also waives) in any proceeding, claim or counterclaim of any kind
relating in any way to any Loan Documents, Obligations or Collateral;
(b) presentment, demand, protest, notice of presentment, default, non-payment,
maturity, release, compromise, settlement, extension or renewal of any
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which a Borrower may in any
way be liable, and hereby ratifies anything Agent may do in this regard;
(c) notice prior to taking possession or control of any Collateral; (d) any bond
or security that might be required by a court prior to allowing Agent to
exercise any rights or remedies; (e) the benefit of all valuation, appraisement
and exemption laws; (f) any claim against Agent or any Lender, on any theory of
liability, for special, indirect, consequential, exemplary or punitive damages
(as opposed to direct or actual damages) in any way relating to any Enforcement
Action, Obligations, Loan Documents or transactions relating thereto; and
(g) notice of acceptance hereof. Each Borrower acknowledges that the foregoing
waivers are a material inducement to Agent and Lenders entering into this
Agreement and that Agent and Lenders are relying upon the foregoing in their
dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with
its legal counsel and has knowingly and voluntarily waived its jury trial and
other rights following consultation with legal counsel. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

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14.15. Patriot Act Notice. Agent and Lenders hereby notify Borrowers that
pursuant to the requirements of the Patriot Act, Agent and Lenders are required
to obtain, verify and record information that identifies each Borrower,
including its legal name, address, tax ID number and other information that will
allow Agent and Lenders to identify it in accordance with the Patriot Act. Agent
and Lenders will also require information regarding each personal guarantor, if
any, and may require information regarding Borrowers’ management and owners,
such as legal name, address, social security number and date of birth.

[Remainder of page intentionally left blank; signatures begin on following page]

 

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(Signature Page to Loan and Security Agreement)

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.

BORROWERS:

CHROMCRAFT REVINGTON, INC., a Delaware corporation

By: /s/ Frank T. Kane                               
Frank T. Kane
Senior Vice President

Address for itself and all other Borrowers:

1330 Win Hentschel Blvd., Suite 280
West Lafayette, IN 47906
Attn: Sr. Vice President Finance           
Telecopy: (765) 807-2660

CR CHROMCRAFT, INC, a Delaware corporation

By: /s/ Frank T. Kane                            
Frank T. Kane
Vice President

CR HOME OCCASIONAL, INC., a Tennessee corporation

By: /s/ Frank T. Kane                               
Frank T. Kane
Vice President

CR HOME, INC., a South Carolina corporation

By: /s/ Frank T. Kane                                
Frank T. Kane
Vice President

 

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(Signature Page to Loan and Security Agreement)

AGENT AND LENDERS:

BANK OF AMERICA, N.A.,
as Agent and Lender

By: /s/ Philip Nomura                           
Title: Vice President                              
Address:

231 South LaSalle Street
7th Floor
Chicago, IL 60604
Attn: Loan Administration Manager
Telecopy: 312.755.3300

Schedule 10.2.17

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