Exhibit 10.1

CHANNELL COMMERCIAL CORPORATION

as Domestic Borrower

CHANNELL COMMERCIAL CANADA INC.

as Canadian Borrower

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Dated:  July 30, 2007

$20,000,000

 

BANK OF AMERICA, N.A.

Individually and as Administrative Agent

BANK OF AMERICA, N.A., CANADA BRANCH

Individually and as Canadian Agent

THE LENDERS NAMED HEREIN

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TABLE OF CONTENTS

 

Page

 

 

 

SECTION 1. CREDIT FACILITY

 

2

 

 

 

1.1

 

Revolving Credit Facility.

 

2

1.2

 

Domestic Letters of Credit; Domestic LC Guaranties.

 

4

1.3

 

Domestic Term Loan and Domestic Cap Ex Facilities.

 

5

1.4

 

Optional Reductions of Domestic Revolving Credit Commitments

 

7

 

 

 

 

 

SECTION 2. INTEREST, FEES AND CHARGES

 

7

 

 

 

2.1

 

Interest.

 

7

2.2

 

Computation of Interest and Fees.

 

9

2.3

 

Fee Letter.

 

9

2.4

 

Domestic Letter of Credit and Domestic LC Guaranty Fees.

 

9

2.5

 

Unused Line Fee.

 

10

2.6

 

Fronting Fees and Participation Fees

 

10

2.7

 

Prepayment Fee.

 

10

2.8

 

Audit Fees.

 

11

2.9

 

Reimbursement of Expenses.

 

11

2.10

 

Bank Charges.

 

12

2.11

 

Collateral Protection Expenses; Appraisals.

 

12

2.12

 

Payment of Charges.

 

13

2.13

 

Taxes.

 

13

 

 

 

 

 

SECTION 3. LOAN ADMINISTRATION

 

17

 

 

 

 

 

3.1

 

Manner of Borrowing Loans

 

17

3.2

 

Payments.

 

23

3.3

 

Mandatory and Optional Prepayments.

 

27

3.4

 

Application of Payments and Collections.

 

31

3.5

 

All Loans to Constitute One Obligation

 

33

3.6

 

Loan Accounts.

 

33

3.7

 

Statements of Account.

 

33

3.8

 

Sharing of Payments, Etc.

 

33

3.9

 

Increased Costs.

 

35

3.10

 

Basis for Determining Interest Rate Inadequate or Unfair

 

36

3.11

 

Location of Payments.

 

36

 

 

 

 

 

SECTION 4. TERM AND TERMINATION

 

37

 

 

 

4.1

 

Term of Agreement.

 

37

4.2

 

Termination.

 

37

 

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SECTION 5. SECURITY INTERESTS

 

38

 

 

 

5.1

 

Security Interest in Collateral.

 

38

5.2

 

Other Collateral.

 

42

5.3

 

Lien Perfection; Further Assurances.

 

43

5.4

 

Lien on Realty.

 

43

 

 

 

 

 

SECTION 6. COLLATERAL ADMINISTRATION

 

44

 

 

 

6.1

 

General.

 

44

6.2

 

Administration of Accounts.

 

46

6.3

 

Records and Reports of Inventory.

 

48

6.4

 

Administration of Equipment.

 

49

 

 

 

 

 

SECTION 7. REPRESENTATIONS AND WARRANTIES

 

49

 

 

 

7.1

 

General Representations and Warranties.

 

49

7.2

 

Continuous Nature of Representations and Warranties.

 

59

7.3

 

Survival of Representations and Warranties.

 

60

 

 

 

 

 

SECTION 8. COVENANTS AND CONTINUING AGREEMENTS

 

60

 

 

 

8.1

 

Affirmative Covenants.

 

60

8.2

 

Negative Covenants.

 

66

 

 

 

 

 

SECTION 9. CONDITIONS PRECEDENT

 

72

 

 

 

9.1

 

Documentation.

 

72

9.2

 

No Default.

 

72

9.3

 

Other Conditions.

 

72

9.4

 

No Litigation.

 

72

9.5

 

Material Adverse Effect.

 

72

9.6

 

Fees.

 

72

9.7

 

Collateral.

 

72

9.8

 

Diligence.

 

73

9.9

 

Corporate Matters.

 

73

9.10

 

Environmental Matters.

 

73

9.11

 

Insurance.

 

73

9.12

 

Legal Opinions.

 

73

9.13

 

Reference Checks.

 

74

9.14

 

Financial Statements.

 

74

9.15

 

Updated Audit.

 

74

9.16

 

Costs and Expenses.

 

74

9.17

 

Representations and Warranties.

 

74

9.18

 

Availability.

 

74

 

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SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

 

74

 

 

 

10.1

 

Events of Default.

 

74

10.2

 

Acceleration of the Obligations.

 

78

10.3

 

Other Remedies.

 

79

10.4

 

Set Off and Sharing of Payments.

 

80

10.5

 

Remedies Cumulative; No Waiver.

 

82

 

 

 

 

 

SECTION 11. ADMINISTRATIVE AGENT AND CANADIAN AGENT

 

82

 

 

 

11.1

 

Authorization and Action.

 

82

11.2

 

Administrative Agent’s and Canadian Agent’s Reliance, Etc.

 

83

11.3

 

Bank of America, Bank of America Canada, and Affiliates.

 

84

11.4

 

Lender Credit Decision.

 

84

11.5

 

Indemnification.

 

85

11.6

 

Rights and Remedies to be Exercised by Administrative Agent and Canadian Agent
Only.

 

85

11.7

 

Agency Provisions Relating to Collateral.

 

86

11.8

 

Administrative Agent’s and Canadian Agent’s Right to Purchase Commitments.

 

87

11.9

 

Right of Sale, Assignment, Participations.

 

87

11.10

 

Amendment.

 

88

11.11

 

Resignation of Administrative Agent or Canadian Agent; Appointment of Successor.

 

89

 

 

 

 

 

SECTION 12. MISCELLANEOUS

 

90

 

 

 

12.1

 

Power of Attorney.

 

90

12.2

 

Indemnity.

 

91

12.3

 

Sale of Interest.

 

92

12.4

 

Severability.

 

92

12.5

 

Successors and Assigns.

 

92

12.6

 

Cumulative Effect; Conflict of Terms.

 

92

12.7

 

Execution in Counterparts.

 

92

12.8

 

Notices.

 

92

12.9

 

Consent.

 

94

12.10

 

Credit Inquiries.

 

94

12.11

 

Time of Essence.

 

94

12.12

 

Entire Agreement.

 

94

12.13

 

Interpretation.

 

94

12.14

 

Confidentiality.

 

94

12.15

 

Judgment.

 

95

12.16

 

GOVERNING LAW; CONSENT TO FORUM.

 

95

12.17

 

WAIVERS BY BORROWERS.

 

96

12.18

 

Further Assurances.

 

97

12.19

 

Interest Act (Canada).

 

97

12.20

 

Arbitration

 

98

12.21

 

Patriot Act Notice

 

99

 

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of July 30,
2007, by and among BANK OF AMERICA, N.A. (“Bank of America”), with an office at
55 South Lake Avenue, Suite 900, Pasadena, California  91101, individually as a
Lender and as administrative agent (“Administrative Agent”) for itself and any
other financial institution which is or becomes a party hereto (each such
financial institution, including Bank of America, Bank of America Canada (as
defined below) as Canadian Lender, and each Canadian Participating Lender (as
defined in Appendix A attached hereto)), is referred to hereinafter individually
as a “Lender” and collectively as the “Lenders”), BANK OF AMERICA, N.A., CANADA
BRANCH (“Bank of America Canada”), a Canadian corporation with an office at 200
Front Street West, Toronto, Ontario M5V 3L2 Canada, individually as the Canadian
Lender and as Canadian agent (“Canadian Agent”) for itself, the Canadian Lender
and any other financial entity which is or becomes a Canadian Participating
Lender (as defined in Appendix A attached hereto), the Lenders, CHANNELL
COMMERCIAL CORPORATION, a Delaware corporation, with its chief executive office
and principal place of business at 26040 Ynez Road, Temecula, California
92591-9022 (“Domestic Borrower”), and CHANNELL COMMERCIAL CANADA INC., an
Ontario corporation, with its chief executive office and principal place of
business at 6185 Tomken Road, Units 3-5, Mississauga, Ontario  L5T 1X3  Canada
(“Canadian Borrower”).  Domestic Borrower and Canadian Borrower are referred to
collectively in this Agreement as  “Borrowers”.

A.            Capitalized terms used in this Agreement have the meanings
assigned to them in Appendix A, General Definitions.  Accounting terms not
otherwise specifically defined herein shall be construed in accordance with GAAP
consistently applied.

B.            This Agreement amends and restates in its entirety that certain
Loan and Security Agreement dated as of September 25, 2002, among Borrowers, the
other borrowers named therein, the lenders named therein, Bank of America, N.A.
(as assignee of Banc of America Leasing and Capital, LLC, as
successor-in-interest to Fleet Capital Corporation), as administrative agent,
Bank of America, N.A., Canada Branch (as successor-in-interest to BABC Global
Finance Inc., as assignee of Fleet Capital Global Finance, Inc., as assignee of
Fleet Capital Canada Corporation), as Canadian agent, and Bank of America, N.A.
(as assignee to BABC Global Finance Inc., as successor-in-interest to Fleet
National Bank, London U.K. branch, trading as FleetBoston Financial), as UK
agent (as heretofore amended, restated, extended, supplemented or otherwise
modified, the “Prior Loan Agreement”). On the Closing Date, (i) all outstanding
Revolving Credit Loans (as defined in the Prior Loan Agreement) under the Prior
Loan Agreement shall be deemed outstanding Revolving Credit Loans hereunder, and
(ii) all letters of credit issued and outstanding under the Prior Loan Agreement
shall be deemed to be issued and outstanding hereunder.

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SECTION 1. CREDIT FACILITY

Subject to the terms and conditions of, and in reliance upon the representations
and warranties made in, this Agreement and the other Loan Documents, Lenders
agree to make a total credit facility of up to $20,000,000 available upon
Borrower Representative’s request therefor, as follows:

1.1           Revolving Credit Facility.

1.1.1        Domestic Revolving Credit Loans.  Each Lender having a Domestic
Revolving Credit Commitment (each, a “Domestic Lender”) agrees, severally and
not jointly, for so long as no Default or Event of Default exists, to make loans
denominated in U.S. Dollars (such loans relative to such Lender, its “Domestic
Revolving Credit Loans”) to Domestic Borrower from time to time during the
period from the date hereof to but not including the last day of the Term, as
requested by Borrower Representative in the manner set forth in Section 3.1.1(a)
hereof, provided, that no Domestic Revolving Credit Loan shall be made if, after
giving effect to the making of such Loan and the simultaneous application of the
proceeds thereof:

(a)           the principal amount of the Domestic Revolving Credit Exposure of
such Lender (which, for purposes of clarification, includes the Domestic LC
Amount and outstanding Domestic LC Obligations, as further set forth in the
definition of “Domestic Revolving Credit Exposure”) would exceed such Lender’s
Domestic Revolving Credit Commitment minus such Lender’s Domestic Revolving Loan
Percentage of Reserves, if any;

(b)           the aggregate amount of the Domestic Revolving Credit Exposure of
all the Domestic Lenders would exceed the Aggregate Borrowing Base then in
effect (minus Reserves, if any); or

(c)           the aggregate amount of the Domestic Revolving Credit Exposure of
all the Domestic Lenders would exceed the Revolving Credit Maximum Amount minus
the Canadian Revolving Credit Exposure.

Domestic Revolving Credit Loans may be borrowed as Domestic Base Rate Loans or
Domestic LIBOR Loans.  Amounts borrowed under this Section 1.1.1 may be repaid
in whole or in part and, up to but excluding the last day of the Term,
reborrowed, all in accordance with the terms and conditions hereof.  The
Domestic Revolving Credit Loans shall be further evidenced by, and repayable in
accordance with the terms of, the applicable Revolving Notes and shall be
secured by all of the Domestic Collateral.

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1.1.2        Canadian Revolving Credit Loans.

(a)           Subject to the terms and conditions hereof, the Canadian Lender
agrees, for so long as no Default or Event of Default exists, to make loans to
Canadian Borrower denominated in Canadian Dollars (each such loan or extension
of credit, a “Canadian Revolving Credit Loan”) from time to time during the
period from the date hereof to but not including the last day of the Term, as
requested by the Borrower Representative in the manner set forth in
Section 3.1.1(b) hereof; provided that no Canadian Revolving Credit Loan shall
be made if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof:

(i)            the aggregate amount of the Canadian Revolving Credit Exposure of
the Canadian Lender would exceed the Canadian Borrowing Base then in effect
minus Reserves applicable to Canadian Revolving Credit Loans, if any, or

(ii)           the aggregate amount of the Domestic Revolving Credit Exposure of
all the Lenders would exceed the Revolving Credit Maximum Amount minus the
Canadian Revolving Credit Exposure.

The Canadian Revolving Credit Loans shall be further evidenced by, and repayable
in accordance with the terms of, the applicable Revolving Note and shall be
secured by all of the Canadian Collateral.  Amounts borrowed under this
Section 1.1.2 may be repaid in whole or in part and, up to but excluding the
last day of the Term, reborrowed, all in accordance with the terms and
conditions hereof.  Upon the making of each such Canadian Revolving Credit Loan
and subject to Section 3.2.6, each Canadian Participating Lender shall be deemed
to have irrevocably and unconditionally purchased from the Canadian Lender,
without recourse or warranty, an undivided interest and participation in each
Canadian Revolving Credit Loan to the extent of such Canadian Participating
Lender’s Canadian Percentage thereof.

(b)           Administrative Agent will determine the Dollar Equivalent amount
with respect to any (i) Canadian Revolving Credit Loans as of the requested
borrowing date, and (ii) outstanding Canadian Revolving Credit Loans as of the
last Business Day of each month, or on such earlier date during such month as
Administrative Agent reasonably believes necessary, for all other purposes under
this Agreement where the determination of a Dollar Equivalent is required to be
made.

1.1.3        Use of Proceeds.  The Revolving Credit Loans shall be used by
Borrowers solely for (a) the satisfaction of certain existing Indebtedness of
Borrowers identified on Schedule 1.1.3 hereto, (b) for the general operating
capital needs of Borrowers in a manner consistent with the provisions of this
Agreement and all applicable laws, and (c) for other purposes permitted under
this Agreement.

1.1.4        Reserves.  Administrative Agent shall have the right to establish
reserves (collectively, “Reserves”) in such amounts, and with respect to such
matters, as Administrative Agent shall reasonably deem necessary or appropriate,
against the amount of Revolving Credit Loans which Borrowers may otherwise
request under this Section 1.1 with respect to (a) price adjustments, damages,
unearned discounts, returned products or other matters for which credit
memoranda are issued in the ordinary course of Borrowers’ and UK Guarantors’
businesses; (b) potential dilution related to Accounts of Borrowers and UK
Guarantors, (c) shrinkage, spoilage and obsolescence of Domestic Borrower’s
Inventory, (d) slow-moving Inventory of Domestic Borrower, (e) other sums
chargeable against Borrowers’ Loan Accounts as Revolving Credit Loans under any
section of this Agreement; (f) amounts owing by any Borrower or any UK Guarantor
to any Person to the extent secured by a Lien

3

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on, or trust over, any Property of a Borrower, including Prior Claims, landlord,
bailee and customs claims which are not subordinated to the satisfaction of
Administrative Agent, (g) with respect to UK Guarantors, claims of Preferential
Creditors of the UK Guarantors in their capacity as such, (h) with respect to
Canadian Borrower, claims of Preferential Creditors of the Canadian Borrower in
their capacity as such, (i) a permanent availability reserve, which Reserve
shall be in the amount of $300,000 on the Closing Date and shall be subject to
change after the Closing Date in the reasonable credit judgment of
Administrative Agent, (j) the Bank Product Reserve, and (k) such other specific
events, conditions or contingencies as to which Administrative Agent, in its
reasonable credit judgment, determines Reserves should be established from time
to time hereunder.  Notwithstanding the foregoing, Administrative Agent shall
not establish any Reserves in respect of any matters relating to any items of
Collateral that have been taken into account in determining Eligible Accounts
and Eligible Inventory.

1.2           Domestic Letters of Credit; Domestic LC Guaranties.

(a)           Administrative Agent agrees, for so long as no Default or Event of
Default exists and if requested by Borrower Representative on behalf of Domestic
Borrower, to (i) issue Domestic Letters of Credit of Administrative Agent or an
Affiliate of Administrative Agent for the account of Domestic Borrower on the
date requested by Borrower Representative or (ii) execute Domestic LC
Guaranties, by which Bank of America, or an Affiliate of Administrative Agent,
on the date requested by Borrower Representative, shall guaranty the payment or
performance by Domestic Borrower of its reimbursement obligations with respect
to Domestic Letters of Credit, provided that (i) the Domestic LC Amount shall
not exceed $2,000,000 at any time, (ii) the principal amount of the Domestic
Revolving Credit Exposure of such Lender (which, for purposes of clarification,
includes the Domestic LC Amount and outstanding Domestic LC Obligations, as
further set forth in the definition of “Domestic Revolving Credit Exposure”)
shall not exceed such Lender’s Domestic Revolving Credit Commitment minus such
Lender’s Domestic Revolving Loan Percentage of Reserves, if any, (iii) the
aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic
Lenders would exceed the Aggregate Borrowing Base then in effect (minus
Reserves, if any), and (iv) the aggregate amount of the Domestic Revolving
Credit Exposure of all the Domestic Lenders would exceed the Revolving Credit
Maximum Amount minus the Canadian Revolving Credit Exposure.  No Domestic Letter
of Credit which is a trade Domestic Letter of Credit or Domestic LC Guaranty of
a trade letter of credit may have an expiration date that is more than 180 days
after the date of issuance thereof; and no Domestic Letter of Credit which is a
standby Domestic Letter of Credit or Domestic LC Guaranty of a standby letter of
credit may have an expiration date that is more than one year from the date of
issuance thereof, which expiration date may be extended for additional periods
of up to one year, subject to the immediately following sentence.  No Domestic
Letter of Credit or Domestic LC Guaranty may have an expiration date that is
after 30 days prior to the last day of the Term.  Each Domestic Letter of Credit
shall be denominated in U.S. Dollars.  Notwithstanding anything to the contrary

4

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contained herein, Domestic Borrower, Administrative Agent and Domestic Lenders
hereby agree that all Domestic LC Obligations and all obligations of Domestic
Borrower relating thereto shall be satisfied by the prompt issuance of one or
more Domestic Revolving Credit Loans that are Domestic Base Rate Loans, which
Domestic Borrower hereby acknowledges are requested and Domestic Lenders hereby
agree to fund.  In the event that Domestic Revolving Credit Loans are not, for
any reason, promptly made to satisfy all then existing Domestic LC Obligations,
each Domestic Lender hereby agrees to pay to Administrative Agent, on demand, an
amount equal to such Domestic LC Obligations multiplied by such Domestic
Lender’s Domestic Revolving Loan Percentage, and until so paid, such amount
shall be secured by the Domestic Collateral and shall bear interest and be
payable at the same rate and in the same manner as Domestic Base Rate Loans. 
Immediately upon the issuance of a Domestic Letter of Credit or a Domestic LC
Guaranty under this Agreement, each Domestic Lender shall be deemed to have
irrevocably and unconditionally purchased and received from Administrative
Agent, without recourse or warranty, an undivided interest and participation
therein equal to such Domestic LC Amount or Domestic LC Obligations multiplied
by such Domestic Lender’s Domestic Revolving Loan Percentage.

1.3           Domestic Term Loan and Domestic Cap Ex Facilities.

1.3.1        Domestic Term Loan.  Each Domestic Lender, severally and not
jointly, agrees to make a term loan (collectively, the “Domestic Term Loan”) to
Domestic Borrower on the Closing Date, in the aggregate principal amount of such
Domestic Lender’s Domestic Term Loan Commitment.  The Domestic Term Loan shall
be repayable in accordance with the terms of the applicable Domestic Term Note
and shall be secured by all of the Domestic Collateral, and shall be initially
funded as a Domestic Base Rate Loan.  The proceeds of the Domestic Term Loan
shall be used solely for the purposes that the Domestic Revolving Credit Loans
are authorized to be used.

1.3.2        Domestic Cap Ex Loans.  Each Domestic Lender agrees, severally and
not jointly, for so long as no Default or Event of Default exists, to make loans
denominated in U.S. Dollars (such loans relative to such Lender, its “Domestic
Cap Ex Loans”), from time to time during the period from the date hereof to but
not including the last day of the Term, as requested by Borrower Representative
in the manner set forth in Section 3.1.1(d) hereof, provided, that no Domestic
Cap Ex Loan shall be made unless each of the following conditions has been
satisfied, in form and substance satisfactory to Administrative Agent in its
sole discretion:

(a)           after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the aggregate principal amount
of the outstanding Domestic Cap Ex Loans of such Lender would not exceed such
Lender’s Domestic Cap Ex Loan Commitment;

5

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(b)           Borrower Representative shall have provided evidence to
Administrative Agent, in form and substance satisfactory to Administrative Agent
in its reasonable discretion, that Domestic Borrower will use the proceeds of
each requested Domestic Cap Ex Loan for Equipment (i) to be used in Domestic
Borrower’s business operations, (ii) to be located at a location in compliance
with this Agreement, and (iii) subject to no Liens other than Permitted Liens;

(c)           Administrative Agent shall have received the invoice from the
seller of the Equipment evidencing the cost of the Equipment Domestic Borrower
proposes to purchase with the proceeds of each Domestic Cap Ex Loan, and such
invoice discloses that the original principal amount of such requested Equipment
Loan does not exceed (i) in the case of new Equipment, eighty percent (80%) of
the cost thereof or (ii) in the case of used Equipment, fifty percent (50%) of
the cost thereof, in each case, exclusive of transportation, installation,
taxes, perishable tooling and other soft costs (as determined by Administrative
Agent in its sole discretion) pertaining thereto;

(d)           Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent in its reasonable discretion, evidence of
insurance covering the Equipment Domestic Borrower proposes to purchase with the
proceeds of each Domestic Cap Ex Loan;

(e)           the requested Domestic Cap Ex Loan is in a minimum original
principal amount of $250,000;

(f)            the aggregate original principal amount of the requested Domestic
Cap Ex Loan together with the original principal amount of all other Domestic
Cap Ex Loans funded by Lenders during such fiscal year shall not exceed
$3,000,000;

(g)           Borrower Representative shall have delivered or caused to be
delivered to Administrative Agent and each Domestic Lender any and all
documents, agreements and instruments deemed reasonably necessary by
Administrative Agent or any Domestic Lender in connection with the making of
such Domestic Cap Ex Loan including, without limitation, certificates of title,
if any, for such Equipment and, subject to clause (h) below, a Domestic Cap Ex
Note duly executed by Borrower;

(h)           Borrower Representative shall have delivered or caused to be
delivered to each Domestic Lender a Domestic Cap Ex Note evidencing such
Domestic Lender’s Domestic Cap Ex Loans upon the earlier of (i) the date which
is 12 months following the initial Domestic Cap Ex Loan, (ii) the date which is
12 months following the most recent delivery of a Domestic Cap Ex Note, and
(iii) the date upon which the aggregate principal amount of all Domestic Cap Ex
Loans made since the most recent delivery of a Domestic Cap Ex Note exceeds
$1,000,000; and

(i)            the proceeds of the Domestic Cap Ex Loans shall be used solely
for the purpose of purchasing Equipment in accordance with the provisions of
this Section 1.3.2.

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Domestic Cap Ex Loans may be borrowed as Domestic Base Rate Loans or Domestic
LIBOR Loans.  Amounts borrowed under this Section 1.3.2 may not be reborrowed. 
The Domestic Cap Ex Loans shall be further evidenced by, and repayable in
accordance with the terms of, the applicable Domestic Cap Ex Notes and shall be
secured by all of the Domestic Collateral.

1.4           Optional Reductions of Domestic Revolving Credit Commitments. 
Domestic Borrower may, at its option from time to time upon not less than three
Business Days’ prior written notice to Administrative Agent, permanently reduce
ratably in part, the unused portion of the Domestic Revolving Credit
Commitments, provided, however, that (i) each such partial reduction shall be in
an amount of $1,000,000 or integral multiples of $250,000 in excess thereof and
(ii) the Domestic Revolving Credit Commitments shall not be reduced to an
aggregate amount of less than $10,000,000.  Except for charges under
subsection 3.2.5 applicable to prepayments of LIBOR Advances, such reductions
shall be without premium or penalty.

SECTION 2. INTEREST, FEES AND CHARGES

2.1           Interest.

2.1.1        Rates of Interest.

(a)           Interest shall accrue on the principal amount of the Domestic Base
Rate Loans outstanding at the end of each day at a fluctuating rate per annum
equal to the Applicable Margin then in effect plus the Domestic Base Rate.  Such
rate of interest shall increase or decrease by an amount equal to any increase
or decrease in the Domestic Base Rate, effective as of the opening of business
on the day that any such change in the Domestic Base Rate occurs.

(b)           Interest shall accrue on the principal amount of Canadian
Revolving Credit Loans outstanding at the end of each day at a fluctuating rate
per annum equal to the Applicable Margin then in effect plus the Canadian Base
Rate.  Such rate of interest shall increase or decrease by an amount equal to
any increase or decrease in the Canadian Base Rate, effective as of the opening
of business on the day that any such change in the Canadian Base Rate occurs.

(c)           Interest shall accrue on the principal amount of Domestic LIBOR
Loans outstanding at the end of each day at a fixed rate per annum equal to the
Applicable Margin then in effect plus the LIBOR for the applicable Interest
Period for such Domestic LIBOR Loan.

(d)           Interest shall be paid solely in the same currency as the
underlying Loan is made.

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2.1.2        Default Rate of Interest.  Upon and after the occurrence of an
Event of Default, and during the continuation thereof, the principal amount of
all Loans shall bear interest at a rate per annum equal to 2.0% plus the
interest rate otherwise applicable thereto (the “Default Rate”).

2.1.3        Maximum Interest.

(a)           In no event whatsoever shall the aggregate of all amounts deemed
interest hereunder or under the Notes and charged or collected pursuant to the
terms of this Agreement or pursuant to the Notes exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto (the “Maximum Rate”).  If any
provisions of this Agreement or the Notes are in contravention of any such law,
such provisions shall be deemed amended to conform thereto.  If at any time, the
amount of interest paid hereunder is limited by the Maximum Rate, and the amount
at which interest accrues hereunder is subsequently below the Maximum Rate, the
rate at which interest accrues hereunder shall remain at the Maximum Rate, until
such time as the aggregate interest paid hereunder equals the amount of interest
that would have been paid had the Maximum Rate not applied.

(b)           Without limiting the provisions of Section 2.1.3(a), if any
provision of this Agreement or any of the other Loan Documents would obligate
Canadian Borrower to make any payment of interest under the Canadian Obligations
or other amount in an amount or calculated at a rate which would be prohibited
by law or would result in a receipt by the applicable recipient of interest
under the Canadian Obligations at a criminal rate (as such terms are construed
under the Criminal Code (Canada)) then, notwithstanding such provision, such
amount or rates shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by such recipient of interest under
the Canadian Obligations at a criminal rate, such adjustment to be effected, to
the extent necessary, as follows:  (1) firstly, by reducing the amount or rates
of interest required to be paid to the recipient under this Section 2.1.3(b);
and (2) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid by the Canadian Borrower which would constitute
interest under the Canadian Obligations for purposes of Section 347 of the
Criminal Code (Canada).  Notwithstanding the foregoing, and after giving effect
to all adjustments contemplated thereby, if the recipient of payments by the
Canadian Borrower shall have received an amount in excess of the maximum
permitted by that section of the Criminal Code (Canada), then Canadian Borrower
shall be entitled, by notice in writing to Canadian Agent for the benefit of
such recipient, to obtain reimbursement from such recipient in an amount equal
to such excess, and pending such reimbursement, such amount shall be deemed to
be an amount payable by such recipient to Canadian Borrower.  Any amount or rate
of interest under the Canadian Obligations referred to in this Section 2.1.3
shall be determined in accordance with generally accepted actuarial practices
and principles as an effective annual rate of interest over the term that any
Loan to Canadian Borrower remains outstanding on the assumption that any
charges,

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fees or expenses that fall within the meaning of “interest” (as defined in the
Criminal Code (Canada)) shall, if they relate to a specific period of time, be
pro-rated over that period of time and otherwise be pro-rated over the period
from the Closing Date to the date all Obligations have been indefeasibly paid in
full and all commitments to make Canadian Revolving Credit Loans have been
terminated and, in the event of a dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Canadian Agent shall be conclusive
for the purposes of such determination.

2.2           Computation of Interest and Fees.

Interest, Domestic Letter of Credit and Domestic LC Guaranty fees and unused
line fees hereunder shall be calculated daily and shall be computed on the
actual number of days elapsed over a year of 360 days.  For the purpose of
computing interest hereunder, (a) all items of payment received by
Administrative Agent shall be applied by Administrative Agent on account of the
Domestic Obligations (subject to final payment of such items) one (1) Business
Day after receipt by Administrative Agent of such items in Administrative
Agent’s account located in Hartford, Connecticut and (b) all items of payment
received by Canadian Agent shall be applied by Canadian Agent on account of the
Canadian Obligations (subject to final payment of such items) one (1) Business
Day after receipt by Canadian Agent of such items in Canadian Agent’s account
located in Toronto, Ontario, Canada.  Unless otherwise set forth herein, all
fees shall be paid in the same currency as the underlying Loan is made or
Domestic Letter of Credit or Domestic LC Guaranty is issued for which such fee
is associated.

2.3           Fee Letter.

Borrowers shall pay to Administrative Agent certain fees and other amounts in
accordance with the terms of the fee letter between Borrowers and Administrative
Agent dated as of the date hereof (the “Fee Letter”).

2.4           Domestic Letter of Credit and Domestic LC Guaranty Fees.  

Each applicable Borrower shall pay to Administrative Agent (a) for
Administrative Agent’s own account, a fronting fee equal to 0.25% multiplied by
the available amount of each Domestic Letter of Credit (and, without
duplication, Domestic LC Guaranty) at the time of issuance of such Domestic
Letter of Credit (or, without duplication, Domestic LC Guaranty) and at the time
of any amendment to increase the amount of each such Domestic Letter of Credit
(or, without duplication, Domestic LC Guaranty)(on the amount of any such
increase), (b) for the ratable benefit of the applicable Lenders, a fee equal to
the Domestic LC Margin (provided that upon and after the occurrence of an Event
of Default, and during the continuation thereof, the Domestic LC Margin shall be
increased by 2.0% per annum) multiplied by the aggregate available amount of all
Domestic Letters of Credit and Domestic LC Guaranties, as applicable,
outstanding from time to time during the term of this Agreement (calculated for
each such Domestic Letter of Credit or Domestic LC Guaranty from the date of
issuance), which fees shall be payable monthly in arrears on the first day of
each month hereafter, and (c) for the benefit of Bank of America as applicable,
all normal and

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customary charges associated with the issuance, amendment, administration,
processing, transfer or negotiation of such Domestic Letters of Credit and
Domestic LC Guaranties, which fees and charges shall be deemed fully earned and
shall be due and payable upon issuance, amendment, transfer or negotiation of
each such Domestic Letter of Credit or Domestic LC Guaranty or such other times
as notified by Administrative Agent, as applicable, and shall not be subject to
rebate or proration upon the termination of this Agreement for any reason.

2.5           Unused Line Fee. 

Domestic Borrower shall pay to Administrative Agent, for the ratable benefit of
the Domestic Lenders, a fee (the “Unused Line Fee”) equal to the Applicable
Margin multiplied by the average daily amount by which the Revolving Credit
Maximum Amount exceeds the sum of the outstanding principal balance of the
Dollar Equivalent of the Revolving Credit Loans plus the Domestic LC Amount plus
the outstanding principal balance of the Domestic Cap Ex Loans.  The Unused Line
Fee shall be payable in Dollars monthly in arrears on the first day of each
month hereafter.

2.6           Fronting Fees and Participation Fees.  The provisions of this
Section 2.6 shall only be effective upon the initial assignment of any of the
Loans hereunder by Bank of America or Canadian Lender to another lender in
accordance with the provisions of this Agreement.  When and as interest is
collected on Canadian Revolving Credit Loans, and until the Canadian Revolving
Credit Loans are refunded in accordance with Section 3.2.6, Canadian Borrower
shall distribute to the Canadian Lender a fee (the “Canadian Fronting Fee”)
equal to 1/8 of one percent (0.125%) per annum of the outstanding principal
balance of the Canadian Revolving Credit Loans, and Canadian Agent shall
distribute to the Canadian Participating Lenders, ratably, a per annum fee (the
“Canadian Participation Fee”) equal to the product of such Canadian
Participating Lender’s Canadian Percentage times the Applicable Margin then in
effect for Canadian Revolving Credit Loans with respect to the aggregate
principal amount of Canadian Revolving Credit Loans outstanding from time to
time during the term of this Agreement plus any Default Rate then in effect. 
The Canadian Participation Fee shall be distributed by the Canadian Agent
promptly upon receipt of the relevant Applicable Margin by the Canadian Agent
pursuant to Section 2.1.1(b).  If Canadian Borrower pays less than all of the
interest then due and owing by it for any period, that portion of the interest
corresponding to the Canadian Participation Fee shall be deemed to be the last
portion of interest paid or to be paid.  For purposes of Section 2.13, any
interest distributed by Canadian Lender to a Canadian Participating Lender shall
be deemed to have been paid by Canadian Borrower.

2.7           Prepayment Fee.

Subject to the next sentence, Domestic Borrower shall pay to Administrative
Agent, for the ratable benefit of the Lenders, a fee in the event that Borrowers
elect to repay the Loans in full and terminate all credit facilities provided
pursuant to this Agreement.  Such fee shall be payable upon repayment of the
Loans and shall be in an amount equal to one percent (1%) of the Total Credit
Facility as of such date.

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2.8           Audit Fees.

Borrowers shall pay to Administrative Agent and Canadian Agent, as the case may
be, an audit fee of $850 per day per auditor which is an employee of
Administrative Agent or Canadian Agent (which daily audit fee shall be subject
to change from time to time without prior notice), and, with respect to audits
conducted by auditors which are not employees of Administrative Agent or
Canadian Agent, such audit fees as shall be charged by such auditors, together
with all reasonable out-of-pocket expenses incurred by Administrative Agent or
Canadian Agent, as the case may be, in connection with audits of the books and
records and Properties of Borrowers and their Subsidiaries and such other
matters as Administrative Agent or Canadian Agent, as the case may be, shall
deem appropriate in its sole judgment, whether such audits are conducted by
employees of Administrative Agent or Canadian Agent, as the case may be, or by
third parties hired by Administrative Agent or Canadian Agent, as the case may
be; provided that Canadian Borrower shall not be responsible for such fees and
expenses incurred with respect to Domestic Borrower.  Such fees and
out-of-pocket expenses shall be payable within 10 days following the date of
issuance by Administrative Agent or Canadian Agent, as the case may be, of a
request for payment thereof to Borrower Representative.

2.9           Reimbursement of Expenses.

If, at any time or times regardless of whether or not an Event of Default then
exists, (a) Administrative Agent and/or Canadian Agent incurs legal or
accounting expenses or any other costs or out-of-pocket expenses (including,
without limitation, costs or expenses of any third party consultants, and costs
or expenses relating to due diligence, transportation, computer, duplication,
appraisal, audit, insurance, searches, filing and recording of documents) in
connection with (i) the negotiation and preparation of this Agreement or any of
the other Loan Documents and the closing of the transactions contemplated
hereby, Administrative Agent’s and Canadian Agent’s due diligence in connection
therewith, any amendment of or modification of this Agreement or any of the
other Loan Documents, or any sale or attempted sale of any interest herein to
any assignee (including, without limitation, printing and distribution of
materials to prospective Lenders and all costs associated with bank meetings,
but excluding any closing fees paid to Lenders in connection therewith) or
(ii) the administration of this Agreement or any of the other Loan Documents and
the transactions contemplated hereby and thereby; or (b) Administrative Agent,
Canadian Agent, or any Lender incurs legal or accounting expenses or any other
costs or out-of-pocket expenses (including, without limitation, costs or
expenses of any third-party consultants) in connection with (i) any litigation,
contest, dispute, suit, proceeding or action (whether instituted by
Administrative Agent, Canadian Agent, any Lender, any Borrower or any other
Person) relating to the Collateral, this Agreement or any of the other Loan
Documents or any affairs of Borrower, any of its Subsidiaries, or any Guarantor;
(ii) any attempt to enforce any rights of Administrative Agent, Canadian Agent,
or any Lender against any Borrower or any other Person which may be obligated to
Administrative Agent, Canadian Agent, or any Lender by virtue of this Agreement
or any of the other Loan Documents, including, without limitation, the Account
Debtors; or (iii) any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the Collateral;
then all

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such reasonable legal and accounting expenses, other costs and out of pocket
expenses of Administrative Agent, Canadian Agent, or any Lender, as applicable,
shall be charged to Borrowers; provided, that Borrowers shall not be responsible
for such costs and out-of-pocket expenses to the extent incurred because of the
gross negligence or willful misconduct of Administrative Agent, Canadian Agent,
or any Lender; and provided, further, that Canadian Borrower shall not be
responsible for such fees and expenses incurred with respect to Domestic
Borrower.  Borrowers shall also reimburse Administrative Agent and Canadian
Agent for expenses incurred by Administrative Agent and Canadian Agent in their
administration of the Collateral to the extent and in the manner provided in
Section 2.11 hereof.

2.10         Bank Charges.

Borrowers shall pay to Administrative Agent and Canadian Agent any and all fees,
costs or expenses which Administrative Agent or Canadian Agent pays to a bank or
other similar institution arising out of or in connection with (a) the
forwarding to Borrowers or any other Person on behalf of any Borrower, by
Administrative Agent or Canadian Agent, of proceeds of Loans made to any
Borrower pursuant to this Agreement and (b) the depositing for collection by
Administrative Agent or Canadian Agent of any check or item of payment received
or delivered to Administrative Agent or Canadian Agent on account of the
Obligations; provided that Canadian Borrower shall not be responsible for such
fees, costs or expenses incurred with respect to Domestic Borrower.

2.11         Collateral Protection Expenses; Appraisals.

All out-of-pocket expenses incurred in protecting, storing, warehousing,
insuring, handling, maintaining and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, provincial or
local authority on any of the Collateral or in respect of the sale thereof shall
be borne and paid by Borrowers; provided that Canadian Borrower shall not be
liable for any such expenses incurred with respect to Domestic Borrower.  If
Borrowers fail to promptly pay any portion thereof when due, Administrative
Agent or Canadian Agent, as the case may be, may, at its option, but shall not
be required to, pay the same and charge Borrowers therefor.  Additionally, from
time to time, if Administrative Agent or Canadian Agent or any Lender determines
that obtaining appraisals is necessary in order for it to comply with applicable
laws or regulations, or is otherwise necessary in the reasonable credit judgment
of Administrative Agent or Canadian Agent, as the case may be, and at any time
if a Default or an Event of Default shall have occurred and be continuing,
Administrative Agent or Canadian Agent, as the case may be, may, at Borrowers’
expense, obtain appraisals from appraisers (who may be personnel of
Administrative Agent or Canadian Agent, as the case may be), stating the then
current fair market value or liquidation value of all or any portion of the real
(or immovable) Property or personal (or movable) Property of Borrowers or any of
their Subsidiaries.  Administrative Agent also shall have the right to obtain
such appraisals periodically, at Borrowers’ expense, with respect to the real
estate or equipment of Borrowers to confirm the continuing adequacy of the value
of such Collateral as the basis for the Domestic Term Loan and Domestic Cap Ex
Loans.  In the event that personnel of Administrative Agent or Canadian Agent
conduct any such appraisal, Administrative Agent’s or Canadian Agent’s, as
applicable, then-prevailing internal cost of such appraisal shall be payable by
Borrowers (which cost per appraisal shall be subject to change from time to time
with respect to future appraisals without prior notice).

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2.12         Payment of Charges.

All amounts chargeable to Domestic Borrower under this Agreement shall be
Obligations secured by all of the Domestic Collateral, all amounts chargeable to
Canadian Borrower under this Agreement shall be Obligations secured by all of
the Canadian Collateral, and in each case shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to that portion of the outstanding principal amount of the
Domestic Term Loan bearing interest with reference to the Domestic Base Rate
from time to time, with respect to amounts chargeable to Domestic Borrower, and
at the rate applicable to Canadian Revolving Credit Loans, with respect to
amounts chargeable to Canadian Borrower.

2.13         Taxes.

2.13.1      Subject to Section 2.13.5, all payments made by Domestic Borrower to
any Lender under this Agreement or any other Loan Document shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future taxes, levies, assessments, imposts, duties, fees, deductions
or withholdings or similar charges, and all liabilities with respect thereto,
now or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority, excluding, in the case of Administrative Agent and each
Lender, any tax based upon or measured by net income (or taxes that are
expressly in substitution for, or relieve the indemnitee from, any tax based on
or measured by net income) imposed on Administrative Agent or such Lender
(including, without limitation, any transferee or assignee (including a
participation holder) (any such entity, a “Transferee”)), as the case may be, as
a result of a present or former connection between the jurisdiction of the
governmental authority imposing such tax and Administrative Agent or such Lender
(excluding a connection arising solely from Administrative Agent or such Lender
or Transferee having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document) (all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called “Domestic Non-Excluded
Taxes”).

2.13.2      Subject to Section 2.13.5, if Domestic Borrower shall be required by
law to deduct or withhold any Domestic Non-Excluded Taxes or Further Taxes from
or in respect of any sum payable hereunder to any Lender or Administrative
Agent, then:

(a)           the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section), such
Lender or Administrative Agent, as the case may be, receives and retains an
amount equal to the sum it would have received and retained had no such
deductions or withholdings been made;

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(b)           Domestic Borrower shall make such deductions and withholdings;

(c)           Domestic Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and

(d)           Domestic Borrower shall also pay to each Lender or Administrative
Agent for the account of such Lender, at the time interest is paid, Further
Taxes in the amount that the respective Lender reasonably specifies is necessary
to preserve the after-tax yield such Lender would have received if such Domestic
Non-Excluded Taxes or Further Taxes had not been imposed.

2.13.3      Subject to Section 2.13.5, Domestic Borrower agrees to indemnify and
hold harmless each Lender and Administrative Agent for the full amount of
Domestic Non-Excluded Taxes and Further Taxes in the amount that the respective
Lender or Administrative Agent reasonably specifies as necessary to preserve the
after-tax yield such Lender or Administrative Agent would have received if such
Domestic Non-Excluded Taxes or Further Taxes had not been imposed, and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Domestic Non-Excluded
Taxes or Further Taxes were correctly or legally asserted.  Payment under this
indemnification shall be made within 30 days after the date the applicable
Lender or Administrative Agent makes written demand therefor specifying the
amount and basis for such determination.

2.13.4      Within 30 days after the date of any payment by Domestic Borrower of
Domestic Non-Excluded Taxes or Further Taxes, Domestic Borrower shall furnish to
each Lender or Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
such Lender or Administrative Agent.

2.13.5      (a)  Each Lender or Transferee that is not a “United States Person”
within the meaning of Section 7701(a)(30) of the Code, agrees that it will
deliver to the Borrower Representative and Administrative Agent on or before the
date it becomes a Lender or Transferee two duly completed and signed copies of
Form W-8BEN, Form W-8ECI or Form W-8IMY or successor applicable form (relating
to such Person and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Person by the Domestic
Borrower pursuant to this Agreement or the other Loan Documents) certifying that
such Person is entitled to receive all payments under this Agreement and the
other Loan Documents without deduction or withholding of any United States
federal income taxes (or, in the case of a Transferee, that any such deduction
or withholding is no greater than it would have been for the Lender (or the
Transferee) that transferred or assigned its interest to such Transferee).  A
Form W-8BEN completed and delivered by (i) certain foreign trusts, or
(ii) persons claiming an exemption or reduced rate of withholding at source
under an

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income tax treaty will not be considered duly completed unless the Form W-8BEN
contains such person’s U.S. taxpayer identification number.  Each such Lender or
Transferee also agrees (x) to deliver to the Borrower Representative and
Administrative Agent two further completed and signed copies of one of such
forms (or successor applicable forms) on or before the date that any such
statement or form expires or becomes obsolete or after the occurrence of any
event (including, without limitation, a change in such Lender’s or Transferee’s
lending office) requiring a change in the most recent statement or form
previously delivered by it to the Borrower Representative and Administrative
Agent, and (y) to obtain such extensions of the time for filing and to renew
such statements or forms and certifications thereof as may reasonably be
requested by the Borrower Representative or Administrative Agent, unless in any
such case an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such statements or forms inapplicable or
which would prevent such Lender or Transferee from duly completing and
delivering any such statement or form with respect to it and such Lender or
Transferee so advises the Borrower Representative and Administrative Agent.  If
such Person fails to deliver the above forms or other documentation, then
Administrative Agent may withhold from any interest payment to such Person an
amount equivalent to the applicable withholding tax imposed by Sections 1441 and
1442 of the Code, without reduction, provided that the Domestic Borrower shall
not be required to increase any such amounts payable to any Lender pursuant to
Section 2.13.1, unless the obligation to pay such increased amounts would not
have arisen but for a change in law.  Each Lender or Transferee that is a
“United States person”, as defined under Section 7701(a)(30) of the Code, and
that is not a corporation agrees that it will deliver to the Borrower
Representative and Administrative Agent a Form W-9 stating that it is entitled
to an exemption from United States backup withholding tax.

(b)           Domestic Borrower shall not be required to pay any additional
amounts to any Lender or Transferee pursuant to this Section 2.13 if the
obligation to pay such additional amounts arose solely from a failure by such
Lender or Transferee to comply with the provisions of Section 2.13.5(a) above.

2.13.6      If any Lender or Transferee claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN or
W-8IMY (or any successor form) or claims an exemption from withholding tax by
providing an IRS Form W-8ECI (or any successor form) and such Lender or
Transferee sells, assigns or (other than pursuant to Section 2.13.8 below)
otherwise transfers all or part of the Obligations of Domestic Borrower to a
transferee Lender or Transferee, such Lender or Transferee agrees to notify
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of Domestic Borrower to such Lender or
Transferee.  To the extent of such percentage amount, Administrative Agent will
treat such Lender or Transferee’s IRS Form W-8BEN or W-8IMY (or any successor
form) as no longer valid.

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2.13.7      If any Lender or Transferee claims an exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS Form
W-8BEN or W-8IMY (or any successor form) or claims an exemption from withholding
tax by providing Form W-8ECI (or successor form) and such Lender or Transferee
grants a participation in the Obligations of Domestic Borrower to a transferee
Lender or Transferee, such Lender or Transferee agrees to notify Administrative
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of Domestic Borrower, and such Lender or Transferee agrees to
undertake responsibility to provide to Administrative Agent such forms and
documentation (including IRS Form W-8IMY and forms and documentation provided by
each participant to the extent required by the IRS) to enable the Domestic
Borrower to comply with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.

2.13.8      (a)  If the IRS or any other governmental authority of the United
States or other jurisdiction asserts a claim that Administrative Agent or
Domestic Borrower did not properly withhold tax or any other amount from amounts
paid to or for the account of any Lender or Transferee (because the appropriate
form was not delivered or was not properly executed, or because such Lender or
Transferee failed to notify Administrative Agent or Domestic Borrower of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender or Transferee
shall indemnify Administrative Agent or Domestic Borrower fully for all amounts
paid, directly or indirectly, by Administrative Agent or Domestic Borrower as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Administrative Agent or
Domestic Borrower under this Section 2.13, together with all costs and expenses
(including reasonable fees and expenses of legal counsel).  The obligation of
the Lenders or Transferees under this Section 2.13.8 shall survive the payment
of all Obligations and the resignation or replacement of Administrative Agent.

(b)           If  Administrative Agent or any Lender (or Transferee), as
applicable, receives a refund of a tax for which a payment has been made by
Domestic Borrower pursuant to this Section 2.13, which refund in the good faith
judgment of Administrative Agent or such Lender (or Transferee), as the case may
be, is attributable to such payment made by Domestic Borrower, then
Administrative Agent or such Lender (or Transferee), as the case may be, shall
reimburse Domestic Borrower for such amount as Administrative Agent or such
Lender (or Transferee), as the case may be, determines will leave it, after such
reimbursement, in the same position it would have been in if the payment of such
tax and any payment by Domestic Borrower under this Section 2.13 had not been
made.  Administrative Agent and each Lender (or Transferee), as the case may be,
shall exercise good faith in determining whether to make a claim for any
refund.  Subject to this Section 2.13.8(b), upon the request of Domestic
Borrower, Administrative Agent or such Lender (or Transferee), as applicable,
shall use reasonable efforts to cooperate with Domestic Borrower with a view to
obtaining a refund of any Domestic Non-Excluded Taxes with respect to which
Domestic Borrower has paid any amounts pursuant to this Section 2.13 and which
Domestic Borrower reasonably believes were not correctly or legally asserted.

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2.13.9      Any and all payments or reimbursements made by the Canadian Borrower
hereunder and under the other Loan Documents to Canadian Agent, Canadian Lender
or any Canadian Participating Lender shall be made in  Canadian Dollars, as
applicable, free and clear of and without deduction for any and all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto; excluding, however, the following: franchise taxes and taxes
imposed on the net income of  Canadian Agent or Canadian Lender by the
jurisdiction under the laws of which  Canadian Agent or Canadian Lender is
organized or doing business or any political subdivision thereof and franchise
taxes and taxes imposed on its net income by the jurisdiction of Canadian
Agent’s or Canadian Lender’s applicable lending office or any political
subdivision thereof (all such taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto, excluding such franchise
taxes and taxes imposed on net income, herein “Canadian Non-Excluded Taxes”). 
If Canadian Borrower (or Canadian Agent) shall be required by law or the
administration thereof to deduct any such Canadian Non-Excluded Taxes from or in
respect of any sum payable hereunder to Canadian Agent, Canadian Lender or any
Canadian Participating Lender, then the sum payable hereunder shall be increased
as may be necessary so that, after all required deductions are made, Canadian
Agent, Canadian Lender and any such Canadian Participating Lender receives an
amount equal to the sum it would have received had no such deductions been
made.  Whenever any Canadian Non-Excluded Taxes are deducted by Canadian
Borrower, as soon as practicable thereafter, the Borrower Representative shall
send to Canadian Agent for its own account or for the account of the Canadian
Lender or Canadian Participating Lenders, as the case may be, a certified copy
of an original official receipt received by Canadian Borrower showing payment
thereof or other evidence of such payment reasonably satisfactory to the
Canadian Agent.  If Canadian Borrower fails to pay any Canadian Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to Canadian
Agent the required receipts or other required documentary evidence, Canadian
Borrower shall indemnify Canadian Agent, Canadian Lender and Canadian
Participating Lenders for any incremental taxes, interest or penalties that may
become payable by Canadian Agent, Canadian Lender or Canadian Participating
Lenders as a result of any such failure.  Without in any way limiting the
foregoing, Canadian Borrower shall indemnify and hold harmless Canadian Agent,
Canadian Lender and Canadian Participating Lenders for any Canadian Non-Excluded
Taxes (including related interest and penalties, if any) that may be incurred by
Canadian Agent, Canadian Lender and/or Canadian Participating Lender in respect
of arrangements pertaining to the refunding, pursuant to Section 3.2.6, of the
Canadian Revolving Credit Loans and the Canadian Participation Fees provided for
pursuant to Section 2.6.

2.13.10    The agreements in this Section 2.13 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

SECTION 3. LOAN ADMINISTRATION

3.1           Manner of Borrowing Loans.  Borrowings under the credit facility
established pursuant to Section 1 hereof shall be as follows:

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3.1.1        Loan Requests.

(a)           Domestic Revolving Credit Loan Requests.  A request for a Domestic
Revolving Credit Loan shall be made, or shall be deemed to be made, in the
following manner:  (i) Borrower Representative may give Administrative Agent
notice of its intention to borrow, in which notice Borrower Representative shall
specify the amount of the proposed borrowing and the proposed borrowing date, no
later than 10:00 a.m. Los Angeles time on the proposed borrowing date (or in
accordance with Section 3.1.7 in the case of a request for a Domestic LIBOR
Loan), provided, however, that no such request may be made at a time when there
exists a Default or an Event of Default; and (ii) the becoming due of any amount
required to be paid under this Agreement, or the Notes, by Domestic Borrower,
whether as interest or for any other Domestic Obligation, shall be deemed
irrevocably to be a request for a Domestic Revolving Credit Loan bearing
interest in relation to the Domestic Base Rate on the due date in the amount
required to pay such interest or other Domestic Obligation.

(b)           Canadian Revolving Credit Loan Requests.  A request for a Canadian
Revolving Credit Loan shall be made, or shall be deemed to be made, in the
following manner: (i) Borrower Representative may give Administrative Agent and
Canadian Agent notice of its intention to borrow, in a form specified by
Administrative Agent and the Canadian Agent, which notice must be received by
each of Administrative Agent and the Canadian Agent prior to 10:00 a.m. (Los
Angeles time) one (1) Business Day prior to the requested borrowing date
(provided, however, that no such request may be made at a time when there exists
a Default or an Event of Default) specifying: (A) the amount of the proposed
borrowing (which shall be no less than cdn$100,000) and (B) the requested
borrowing date, which shall be a Business Day; and (ii) the becoming due of any
amount required to be paid under this Agreement, or the Notes, by Canadian
Borrower, whether as interest or for any other Canadian Obligation, shall be
deemed irrevocably to be a request for a Canadian Revolving Credit Loan on the
due date in the amount required to pay such interest or other Canadian
Obligation.

(c)           Domestic Cap Ex Loan Requests.  A request for a Domestic Cap Ex
Loan shall be made, or shall be deemed to be made,  in the following manner: 
Borrower Representative may give Administrative Agent notice of its intention to
borrow, in which notice Borrower Representative shall specify the amount of the
proposed borrowing and the proposed borrowing date, no later than 10:00 a.m. Los
Angeles time on the proposed borrowing date (or in accordance with Section 3.1.7
in the case of a request for a Domestic LIBOR Loan), provided, however, that no
such request may be made at a time when there exists a Default or an Event of
Default.  In addition, Borrower shall also comply with the requirements of
Section 1.3.2 with respect to such Domestic Cap Ex Loan.

3.1.2        Disbursement.  Each Borrower hereby irrevocably authorizes
Administrative Agent and Canadian Agent, as the case may be, to disburse the
proceeds of each Revolving Credit Loan and each Domestic Cap Ex Loan requested,
or deemed to be requested, pursuant to Section 3.1.1 as follows:  (a) the
proceeds of each Revolving Credit

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Loan requested under Sections 3.1.1(a)(i) or 3.1.1(b)(i) shall be disbursed by
Administrative Agent or Canadian Agent, as the case may be, in Dollars or
Canadian Dollars, as the case may be, in immediately available funds, in the
case of the initial borrowing, in accordance with the terms of the written
disbursement letter from Borrower Representative, and in the case of each
subsequent borrowing, by wire transfer to such bank account as may be agreed
upon by Borrower Representative and Administrative Agent from time to time;
(b) the proceeds of each Revolving Credit Loan deemed requested under
Section 3.1.1(a)(ii) or 3.1.1(b)(ii)  shall be disbursed, as the case may be, by
Administrative Agent by way of direct payment of the relevant interest or other
Domestic Obligation or by Canadian Agent by way of direct payment of the
relevant interest or other Canadian Obligation; and (c) the proceeds of each
Domestic Cap Ex Loan requested under Section 3.1.1(c) shall be disbursed by
Administrative Agent in Dollars in immediately available funds, as directed by
Borrower Representative in writing with respect to such Domestic Cap Ex Loan.

3.1.3        Payment by Lenders.  Administrative Agent shall give to each
Domestic Lender prompt written notice (which notice shall specify the requested
date and amount of the applicable Domestic Revolving Credit Loan or Domestic Cap
Ex Loan, whether such Domestic Revolving Credit Loan or Domestic Cap Ex Loan
shall be a Domestic LIBOR Loan, and the amount of each Domestic Lender’s advance
thereunder (in accordance with its applicable Domestic Revolving Loan Percentage
or Domestic Cap Ex Loan Percentage, as applicable)) by facsimile, telex or cable
of the receipt by Administrative Agent from Borrower Representative of any
request for a Domestic Revolving Credit Loan or a Domestic Cap Ex Loan, and
Administrative Agent shall give to each Canadian Participating Lender prompt
written notice by facsimile, telex or cable of the receipt by Administrative
Agent from Canadian Lender of any Notice of Canadian Revolving Loan Refunding
(as defined in Section 3.2.6 below).  Each Domestic Lender shall, and each
Canadian Participating Lender shall, not later than 12:00 noon (Los Angeles
time) or 12:00 noon (Toronto time), respectively, on the applicable requested
date of funding, wire to a bank designated by Administrative Agent the amount of
that Domestic Lender’s Domestic Revolving Loan Percentage of the requested
Domestic Revolving Credit Loan, Domestic Lender’s Domestic Cap Ex Loan
Percentage of the requested Domestic Cap Ex Loan, or that Canadian Participating
Lender’s Canadian Percentage of the outstanding principal amount of Canadian
Revolving Credit Loans.  The failure of any Domestic Lender or Canadian
Participating Lender to make the Domestic Revolving Credit Loans, Domestic Cap
Ex Loans, or Canadian Revolving Credit Loans refunding, as the case may be, to
be made by it shall not release any other Domestic Lender or Canadian
Participating Lender, as the case may be, of its obligations hereunder to make
its Domestic Revolving Credit Loan, Domestic Cap Ex Loans, or Canadian Revolving
Credit Loan refunding, as the case may be.  Neither Administrative Agent, or
Canadian Agent, nor any other Domestic Lender or Canadian Participating Lender
shall be responsible for the failure of any other Domestic Lender or Canadian
Participating Lender, as the case may be, to make the Domestic Revolving Credit
Loan, the Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as
the case may be, to be made by such other Domestic Lender or Canadian
Participating Lender, as the case may be.  The foregoing notwithstanding,
Administrative Agent or Canadian Agent, as applicable, in its sole discretion,
may from its own funds make a Domestic Revolving Credit

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Loan on behalf of any Domestic Lender, or a Domestic Cap Ex Loan, or a Canadian
Revolving Credit Loan refunding on behalf of any Canadian Participating Lender. 
In such event, the Domestic Lender or Canadian Participating Lender on behalf of
whom Administrative Agent or Canadian Agent made the Domestic Revolving Credit
Loan, Domestic Cap Ex Loan or Canadian Revolving Credit Loan refunding, as the
case may be, shall reimburse Administrative Agent or Canadian Agent, as
applicable, for the amount of such Domestic Revolving Credit Loan, Domestic Cap
Ex Loan, or Canadian Revolving Credit Loan refunding, as the case may be, made
on its behalf, on a weekly (or more frequent, as determined by Administrative
Agent or Canadian Agent, as applicable, in its sole discretion) basis.  The
entire amount of interest attributable to such Domestic Revolving Credit Loan,
Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the case
may be, for the period from the date on which such Domestic Revolving Credit
Loan, Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the
case may be, was made by Administrative Agent or Canadian Agent on such Domestic
Lender’s or Canadian Participating Lender’s, as the case may be, behalf until
Administrative Agent or Canadian Agent, as applicable, is reimbursed by such
Domestic Lender or Canadian Participating Lender, as the case may be, shall be
paid to Administrative Agent or Canadian Agent, as applicable, for its own
account.

3.1.4        Authorization.

(a)           Domestic Borrower hereby irrevocably authorizes Administrative
Agent to advance on behalf of Domestic Borrower, and to charge to Domestic
Borrower’s Domestic Loan Account hereunder as a Domestic Revolving Credit Loan
(which shall be a Domestic Base Rate Loan), a sum sufficient to pay all interest
accrued on the Domestic Obligations during the immediately preceding month and
to pay all fees, costs and expenses and other Domestic Obligations at any time
owed by Domestic Borrower to Administrative Agent or any Lender hereunder.

(b)           Canadian Borrower hereby irrevocably authorizes Canadian Agent to
advance on behalf of Canadian Borrower, and to charge to Canadian Borrower’s
Canadian Loan Account hereunder as a Canadian Revolving Credit Loan, a sum
sufficient to pay interest accrued on the Canadian Obligations during the
immediately preceding month and to pay all fees, costs and expenses and other
Canadian Obligations at any time owed by Canadian Borrower to Canadian Agent,
Canadian Lender, or Canadian Participating Lenders hereunder.

3.1.5        Domestic Letter of Credit and Domestic LC Guaranty Requests.  A
request for a Domestic Letter of Credit or Domestic LC Guaranty shall be made in
the following manner:  Borrower Representative may give Administrative Agent a
written notice of its request for the issuance of a Domestic Letter of Credit or
Domestic LC Guaranty, not later than 10:00 a.m. Los Angeles time, three (3)
Business Days before the proposed issuance date thereof, in which notice
Borrower Representative shall specify the proposed beneficiary, issuance date,
expiration date and format and wording for the Domestic Letter of Credit or
Domestic LC Guaranty being requested (which shall be satisfactory to
Administrative Agent, or any other Person asked to issue such Domestic Letter of
Credit or Domestic LC Guaranty); provided, that no such request may be made at a
time when there exists a Default or Event of Default.  Such request shall be
accompanied by an executed application and reimbursement agreement in form and
substance satisfactory to Administrative Agent and the Person being asked to
issue the Domestic Letter of Credit or Domestic LC Guaranty, as well as any
required resolutions.

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3.1.6        Method of Making Requests.  As an accommodation to Borrowers,
unless a Default or an Event of Default is then in existence, (a) Administrative
Agent shall permit telephonic requests for Domestic Revolving Credit Loans or
Domestic Cap Ex Loans to Administrative Agent; provided that in the case of
requests for Domestic Cap Ex Loans, Borrower has previously delivered to
Administrative Agent the written materials required by Section 1.3.2,
(b) Administrative Agent may, in its discretion, permit electronic transmittal
of requests for Domestic Letters of Credit and Domestic LC Guaranties to
Administrative Agent, and (c) Administrative Agent may, in Administrative
Agent’s discretion, permit electronic transmittal of instructions,
authorizations, agreements or reports to Administrative Agent.  All other
instructions, authorizations, agreements or reports must be in written hard copy
form (including by facsimile).  Unless Borrower Representative specifically
directs Administrative Agent in writing not to accept or act upon telephonic or
electronic communications from Borrower Representative, Administrative Agent
shall not have any liability to Borrowers for any loss or damage suffered by
Borrowers as a result of Administrative Agent’s honoring of any requests,
execution of any instructions, authorizations or agreements or reliance on any
reports communicated to it telephonically or electronically and purporting to
have been sent to Administrative Agent by an authorized officer of Borrower
Representative, and Administrative Agent shall not have any duty to verify the
origin of any such communication or the authority of the Person sending it. 
Each telephonic request for a Revolving Credit Loan, Domestic Cap Ex Loan,
Domestic Letter of Credit or Domestic LC Guaranty accepted by Administrative
Agent, hereunder shall be promptly followed by a written confirmation of such
request from Borrower Representative to Administrative Agent.

3.1.7        Domestic LIBOR Loans.  Notwithstanding the provisions of
Section 3.1.1(a), in the event Borrower Representative desires to obtain a
Domestic LIBOR Loan, Borrower Representative shall give Administrative Agent
prior, written, irrevocable notice no later than 10:00 a.m. Los Angeles time on
the second (2nd) Business Day prior to the requested borrowing date specifying
(i) Borrower Representative’s election to obtain a Domestic LIBOR Loan, (ii) the
date of the proposed borrowing (which shall be a Business Day), (iii) the length
of the Interest Period, and (iv) the amount to be borrowed, which amount shall
be in a minimum principal amount of $1,000,000 and may increase in integral
multiples of $500,000.  In no event shall Domestic Borrower be permitted to have
outstanding at any one time in the aggregate more than five (5) different
Domestic LIBOR Loans.

3.1.8        Conversion of Domestic Base Rate Loans.  Provided that no Default
or Event of Default has occurred which is then continuing, Borrower
Representative may, on any Business Day, convert any Domestic Base Rate Loan
into a Domestic LIBOR Loan.  If Borrower Representative desires to convert a
Domestic Base Rate Loan, Borrower Representative shall give Administrative Agent
not less than two (2) Business Days’ prior

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written notice (prior to 10:00 a.m. Los Angeles time on such Business Day),
specifying the date of such conversion, the amount to be converted, and the
length of the Interest Period.  Each conversion into or conversion of a Domestic
LIBOR Loan shall be in a minimum principal amount of $1,000,000 and may increase
in integral multiples of $500,000 in excess thereof.  After giving effect to any
conversion of Domestic Base Rate Loans to Domestic LIBOR Loans, the number of
Domestic LIBOR Loans outstanding shall not exceed five (5).

3.1.9        Continuation of Domestic LIBOR Loans.  Borrower Representative
shall have the right on two (2) Business Days’ prior irrevocable written notice
given to Administrative Agent by Borrower Representative (prior to 10:00 a.m.
Los Angeles time on such Business Day), subject to the provisions hereof, to
continue any Domestic LIBOR Loan into a subsequent Interest Period of the same
or a different permitted duration, in each case subject to the satisfaction of
the following conditions:

(a)           in the case of a continuation of less than all Domestic LIBOR
Loans, the Domestic LIBOR Loans continued shall each be in a minimum principal
amount of $1,000,000 and may increase in integral multiples of $500,000; and

(b)           no Domestic LIBOR Loan (or portion thereof) may be continued as a
Domestic LIBOR Loan if a Default or Event of Default has occurred which is then
continuing or if, after giving effect to such continuation, Domestic Borrower
shall have outstanding in the aggregate more than five (5) separate Domestic
LIBOR Loans.

If Borrower Representative shall fail to give timely notice of its election to
continue any Domestic LIBOR Loan or portion thereof as provided above, or if
such continuation shall not be permitted, such Domestic LIBOR Loan or portion
thereof, unless such Domestic LIBOR Loan shall be repaid, shall automatically be
converted into a Domestic Base Rate Loan at the end of the Interest Period then
in effect with respect to such Domestic LIBOR Loan.

3.1.10      Inability to Make Domestic LIBOR Loans.  Notwithstanding any other
provision hereof, if any applicable law, treaty, regulation or directive, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for any Lender (for purposes of this Section 3.1.10, the term “Lender”
shall include the office or branch where a Lender or any corporation or bank
then controlling such Lender makes or maintains any Domestic LIBOR Loan) to make
or maintain its Domestic LIBOR Loans or if with respect to any Interest Period,
Administrative Agent is unable to determine the LIBOR relating thereto, or
adverse or unusual conditions in, or changes in applicable law relating to, the
London interbank market make it, in the reasonable judgment of Administrative
Agent impracticable to fund therein any of the Domestic LIBOR Loans or make the
projected LIBOR unreflective of the actual costs of funds therefor to any
Lender, the obligation of Administrative Agent and Lenders to make or continue
Domestic LIBOR Loans or convert Domestic Base Rate Loans to Domestic LIBOR
Loans, as the case may be, hereunder shall forthwith be suspended during the
pendency of such circumstances and Borrowers shall, if any affected Domestic
LIBOR Loans are then outstanding, promptly upon request from Administrative
Agent convert such affected Domestic LIBOR Loans into Domestic Base Rate Loans.

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3.1.11      Borrower Representative.  Each Borrower hereby designates Domestic
Borrower as its representative and agent on its behalf for the purposes of
requests for Loans, giving instructions with respect to the disbursement of the
proceeds of the Loans, selecting interest rate options, requesting Domestic
Letters of Credit, giving and receiving all other notices and consents hereunder
or under any of the other Loan Documents and taking all other actions (including
in respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents.  Domestic Borrower hereby accepts such appointment as
Borrower Representative.  Administrative Agent, Canadian Agent, and each Lender
may regard any notice or other communication pursuant to any Loan Document from
Borrower Representative as a notice or communication from all Borrowers, any
group of Borrowers or any Borrower, as the case may be, and may give any notice
or communication required or permitted to be given to any Borrower or Borrowers
hereunder to Borrower Representative on behalf of such Borrower or Borrowers. 
Each Borrower agrees that each notice, election, representation and warranty,
covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.

3.2           Payments.

Except where evidenced by notes or other instruments issued or made by Borrowers
to any Lender and accepted by such Lender specifically containing payment
instructions that are in conflict with this Section 3.2 (in which case the
conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:

3.2.1        Principal.

(a)           Domestic Revolving Credit Loans.  Principal payable on account of
Domestic Revolving Credit Loans shall be payable by Domestic Borrower to
Administrative Agent for the ratable benefit of Domestic Lenders, in addition to
the circumstances described in Section 3.3.3, immediately upon the earliest of
(i) the receipt by Administrative Agent or Domestic Borrower of any proceeds of
any of the Domestic Collateral (except as otherwise provided herein), including
without limitation pursuant to Sections 3.3.1, 3.3.2(a) and 6.2.4, to the extent
of such proceeds, subject to Domestic Borrower’s rights to reborrow such amounts
in compliance with Section 1.1.1 hereof; (ii) the occurrence of an Event of
Default in consequence of which Administrative Agent or Majority Lenders elect
to accelerate the maturity and payment of the Obligations, or (iii) termination
of this Agreement pursuant to Section 4 hereof.  Each payment (including
principal prepayments) by Domestic Borrower on account of principal of the
Domestic Revolving Credit Loans shall be applied first to Domestic Base Rate
Loans, then to Domestic LIBOR Loans.

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(b)           Domestic Term Loan.  The principal amount of the Domestic Term
Loan shall be payable in equal monthly installments of $41,666.67 commencing
with September 1, 2007 and on the first day of each succeeding calendar month
during the Term, and Domestic Borrower shall in any event repay the then
outstanding principal balance of the Domestic Term Loan on the last day of the
Term.  Any prepayments of the Domestic Term Loan shall be applied to these
installments in the inverse order of their maturity.  Principal payable on
account of Domestic Terms Loans shall also be payable by Domestic Borrower to
Administrative Agent for the ratable benefit of Domestic Lenders, in addition to
the circumstances described in Section 3.3.3, immediately upon the earliest of
(i) the receipt by Administrative Agent or Domestic Borrower of any proceeds of
any of the Domestic Collateral (except as otherwise provided herein), including
without limitation pursuant to Sections 3.3.1 and 6.2.4, to the extent of such
proceeds; (ii) the occurrence of an Event of Default in consequence of which
Administrative Agent or Majority Lenders elect to accelerate the maturity and
payment of the Obligations, or (iii) termination of this Agreement pursuant to
Section 4 hereof.  Each payment (including principal prepayments) by Domestic
Borrower on account of principal of the Domestic Term Loan shall be applied
first to Domestic Base Rate Loans, then to Domestic LIBOR Loans.

(c)           Domestic Cap Ex Loans.  The principal amount of the Domestic Cap
Ex Loans shall be payable in monthly installments in the amounts set forth in
each Domestic Cap Ex Note, which amounts shall be equal to the original
principal of such Domestic Cap Ex Note divided by 60.  Such principal payments
shall be payable commencing with the first full calendar month following the
delivery of the initial Domestic Cap Ex Note and on the first day of each
succeeding calendar month during the Term, and Domestic Borrower shall in any
event repay the then outstanding principal balance of the Domestic Cap Ex Loans
on the last day of the Term.  Any prepayments of the Domestic Cap Ex Loans shall
be applied to these installments in the inverse order of their maturity. 
Principal payable on account of Domestic Cap Ex Loans shall also be payable by
Domestic Borrower to Administrative Agent for the ratable benefit of Domestic
Lenders, in addition to the circumstances described in Section 3.3.3,
immediately upon the earliest of (i) the receipt by Administrative Agent or
Domestic Borrower of any proceeds of any of the Domestic Collateral (except as
otherwise provided herein), including without limitation pursuant to
Sections 3.3.1 and 6.2.4, to the extent of such proceeds; (ii) the occurrence of
an Event of Default in consequence of which Administrative Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations, or
(iii) termination of this Agreement pursuant to Section 4 hereof.  Each payment
(including principal prepayments) by Domestic Borrower on account of principal
of the Domestic Cap Ex Loans shall be applied first to Domestic Base Rate Loans,
then to Domestic LIBOR Loans.

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(d)           Canadian Revolving Credit Loans.  Principal on account of Canadian
Revolving Credit Loans shall be payable by Canadian Borrower to Canadian Agent
for the ratable benefit of the Canadian Lender and the Canadian Participating
Lenders, in addition to the circumstances described in Section 3.3.3,
immediately upon the earliest of (i) the receipt by Canadian Borrower of any
proceeds of any of the Collateral (except as otherwise provided herein),
including without limitation pursuant to Sections 3.3.1, 3.3.2(b) and 6.2.4, to
the extent of such proceeds, subject to Canadian Borrower’s right to reborrow
such amounts in compliance with Section 1.1.2 hereof, (ii) the occurrence of an
Event of Default in consequence of which Administrative Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations, or
(iii) termination of this Agreement pursuant to Section 4 hereof.

3.2.2        Interest.  Interest accrued on all Loans shall be due and payable
on each applicable Interest Payment Date and on the earliest of (a) the
occurrence of an Event of Default in consequence of which Administrative Agent
or Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (b) termination of this Agreement pursuant to Section 4 hereof.

3.2.3        Costs, Fees and Charges.  Costs, fees and charges payable pursuant
to this Agreement shall be payable by Borrowers to Administrative Agent and
Canadian Agent, as and when provided in Section 2 or Section 3 hereof or to any
other Person designated by Administrative Agent or Canadian Agent in writing.

3.2.4        Other Obligations.  The balance of the Domestic Obligations
requiring the payment of money, if any, shall be payable by Domestic Borrower to
Administrative Agent for distribution to Domestic Lenders or any other Lender,
as appropriate, the balance of the Canadian Obligations requiring the payment of
money, if any, shall be payable by Canadian Borrower to Canadian Agent for
distribution to Canadian Agent, Canadian Lender, and the Canadian Participating
Lenders, as appropriate, in each case as and when provided in this Agreement,
the Other Agreements or the Security Documents, or on demand, whichever is
later.

3.2.5        Prepayment of or Failure to Borrow Domestic LIBOR Loans.  Except as
otherwise provided in this Section 3.2.5, repayment of a Domestic LIBOR Loan
shall occur only on the last day of the Interest Period for such Domestic LIBOR
Loan.  Borrowers may prepay a Domestic LIBOR Loan only upon at least two (2)
Business Days prior written notice (which notice shall be irrevocable), and
subject to the provisions of this Section 3.2.5.  Domestic Borrower shall pay to
Administrative Agent, upon request of Administrative Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of Administrative
Agent) to compensate Domestic Lenders for any loss, cost, or expense incurred as
a result of:  (a) any payment of a Domestic LIBOR Loan on a date other than the
last day of the Interest Period for such Loan; (b) any failure by Domestic
Borrower to borrow a Domestic LIBOR Loan on the date specified by Borrower
Representative’s applicable written notice; or (c) any failure by Domestic
Borrower to pay a Domestic LIBOR Loan on the date for payment specified in
Borrower Representative’s written notice. Without limiting the foregoing, in
connection with any prepayment of a Domestic LIBOR Loan, Borrowers shall pay, as
applicable, to Administrative Agent, for the ratable benefit of

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Domestic Lenders, a “yield maintenance fee” in an amount computed as follows: 
the greater of (i) $150.00 (which amount shall be subject to change from time to
time without prior notice), and (ii) the amount obtained when the current rate
for United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to the Interest
Period chosen pursuant to the Domestic LIBOR Loan as to which the prepayment is
made, is subtracted from the LIBOR in effect at the time of prepayment.  If the
result in clause (ii) above is zero or a negative number, the yield maintenance
fee shall be $150.00.  If the result in clause (ii) above is a positive number,
then the resulting percentage shall be multiplied by the amount of the principal
balance being prepaid.  The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the Interest Period chosen
pursuant to the Domestic LIBOR Loan as to which the prepayment is made.  Such
amount shall be reduced to present value calculated by using the above
referenced United States Treasury securities rate  and the number of days
remaining in the term chosen pursuant to the Domestic LIBOR Loan as to which
prepayment is made.  The resulting amount shall be, if greater than $150.00, as
applicable, the yield maintenance fee due to Administrative Agent, for the
ratable benefit of Domestic Lenders, upon the prepayment of a Domestic LIBOR
Loan.  If by reason of an Event of Default, Administrative Agent or Majority
Lenders elect to declare the Obligations to be immediately due and payable, then
any yield maintenance fee with respect to a Domestic LIBOR Loan, as the case may
be, shall become due and payable in the same manner as though Borrowers had
exercised such right of prepayment.

3.2.6        Canadian Revolving Credit Loans Refunding.

(a)           If any Default or Event of Default shall occur and be continuing,
the Canadian Lender may, in its sole and absolute discretion, direct that the
Canadian Revolving Credit Loans owing to it be refunded by delivering a notice
(with such detail as Administrative Agent shall request, a “Notice of Canadian
Revolving Loan Refunding”) to Administrative Agent.  Upon receipt of any such
notice, Administrative Agent shall (i) promptly give notice of the contents
thereof to the Canadian Participating Lenders and, unless an Event of Default
described in Sections 10.1.8 or 10.1.9 shall have occurred, to the Borrower
Representative and (ii) calculate the aggregate principal amount of Canadian
Revolving Credit Loans (the “Canadian Dollar Refunding Amount”).  Each such
Notice of Canadian Revolving Loan Refunding shall be deemed to constitute
delivery of a notice to Administrative Agent requesting each Canadian
Participating Lender to immediately transfer to the Canadian Lender, in
immediately available funds, the amount of such Canadian Participating Lender’s
participation with reference to the Canadian Dollar Refunding Amount, as the
case may be.

(b)           Whenever, at any time after a Canadian Participating Lender has
funded a participating interest in a Canadian Revolving Credit Loan, the
Canadian Lender receives any payment on account thereof, the Canadian Lender
will distribute to Administrative Agent for delivery to such Canadian
Participating Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Canadian Participating

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Lender’s participating interest was outstanding and funded); provided, however,
that in the event that such payment received by the Canadian Lender is required
to be returned, such Canadian Participating Lender will return to Administrative
Agent for delivery to the Canadian Lender any portion thereof previously
distributed by Administrative Agent or the Canadian Lender to it.

(c)           Each Canadian Participating Lender’s obligation to fund the
participating interests referred to in this Section 3.2.6 shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Canadian Participating Lender or any Borrower may have against the
Canadian Lender, any Canadian Participating Lender, any Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement or
any other Loan Document by any Borrower, any Guarantor, any Subsidiary of any
Borrower or any other Lender, or (v) any other circumstances, happening or event
whatsoever, whether or not similar to any of the foregoing.

3.2.7        Satisfaction of Corresponding Obligations.  Any payment of
principal or interest under this Agreement in respect of a Domestic Term Loan,
Domestic Cap Ex Loan or a Revolving Credit Loan will be taken to be a payment
under the relevant Domestic Term Note, Domestic Cap Ex Note or Revolving Note,
as applicable (and all payments of principal or interest made under a Domestic
Term Note, Domestic Cap Ex Note, or a Revolving Note will also be taken to
discharge the equivalent liability under this Agreement).

3.3           Mandatory and Optional Prepayments.

3.3.1        Proceeds of Sale, Loss, Destruction or Condemnation of Collateral.

(a)           Except as provided in Sections 6.4.2 and 8.2.10, if any Borrower
or any of its Subsidiaries sells any of the Equipment or real (or immovable)
Property, or if any of the Collateral owned by such Borrower or such Subsidiary
is lost or destroyed or taken by condemnation, (i) Domestic Borrower shall pay,
in the case of Domestic Borrower and all other Subsidiaries other than Canadian
Borrower, unless otherwise agreed by Majority Lenders, to Administrative Agent
for the benefit of Administrative Agent and the Lenders for application towards
the Obligations, and (ii) Canadian Borrower shall pay in the case of Canadian
Borrower, to Canadian Agent for the benefit of Canadian Agent, Canadian Lender,
and the Canadian Participating Lenders for application towards the Canadian
Obligations, as and when received by such Borrower or such Subsidiary and as a
mandatory prepayment of the Loans, as herein provided, a sum equal to the
proceeds (including insurance payments but net of costs and taxes incurred in
connection with such sale or event) received by such Borrower or such Subsidiary
from such sale, loss, destruction or

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condemnation, provided that (i) with respect to the sale, loss, destruction or
taking of the assets of the Channell Australia Entities, the proceeds of such
sale, loss, destruction or taking shall be, to the extent permitted under the
Channell Bushman Credit Facility, applied to the outstanding obligations under
any intercompany loans owed to Borrowers by the Channell Australia Entities, but
only to the extent any such intercompany loans exist at such time, and (ii)
Canadian Borrower shall only be required to pay from the proceeds of any of
sale, loss, destruction or taken of the assets of the Canadian Borrower an
amount equal to the then outstanding Canadian Obligations, and Domestic Borrower
shall make a payment in respect of the Domestic Obligations in an amount equal
to the remaining amount of such proceeds.

(b)           To the extent that the Domestic Collateral sold, lost, destroyed
or condemned consists of Equipment other than Equipment that was purchased with
the proceeds of Domestic Cap Ex Loans, real Property, or other Property other
than Accounts or Inventory, the applicable prepayment under this Section 3.3.1
shall be applied (i) FIRST to the installments of principal due under the
Domestic Term Notes evidencing the Domestic Term Loan ratably, to be applied to
future installment payments in inverse order of maturity until paid in full,
(ii) SECOND to the installments of principal due under the Domestic Cap Ex Notes
evidencing the Domestic Cap Ex Loans  ratably, to be applied to future
installment payments in inverse order of maturity until paid in full, (iii)
THIRD to repay ratably outstanding principal of Domestic Revolving Credit Loans
(but shall not permanently reduce the Domestic Revolving Credit Commitments),
(iv) FOURTH to pay any other Domestic Obligations owing by Domestic Borrower,
and (v) FIFTH, at Administrative Agent’s option, to be held by Administrative
Agent as security for repayment of any remaining Domestic Obligations (or to be
released to Domestic Borrower, if there are no remaining Obligations and the
Commitment Termination has occurred).

(c)           To the extent that the Domestic Collateral sold, lost, destroyed
or condemned consists of Equipment purchased with the proceeds of Domestic Cap
Ex Loans, the applicable prepayment under this Section 3.3.1 shall be applied
(i) FIRST to the installments of principal due under the Domestic Cap Ex Notes
evidencing the Domestic Cap Ex Loans  ratably, to be applied to future
installment payments in inverse order of maturity until paid in full, (ii)
SECOND to the installments of principal due under the Domestic Term Notes
evidencing the Domestic Term Loan ratably, to be applied to future installment
payments in inverse order of maturity until paid in full, (iii) THIRD to repay
ratably outstanding principal of Domestic Revolving Credit Loans (but shall not
permanently reduce the Domestic Revolving Credit Commitments), (iv) FOURTH to
pay any other Domestic Obligations owing by Domestic Borrower, and (v) FIFTH at
Administrative Agent’s option, to be held by Administrative Agent as security
for repayment of any remaining Domestic Obligations (or to be released to
Domestic Borrower, if there are no remaining Obligations and the Commitment
Termination has occurred).

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(d)           any prepayment under this Section 3.3.1 with respect to Canadian
Collateral shall be applied (i) FIRST to repay ratably outstanding principal of
Canadian Revolving Credit Loans (but shall not permanently reduce the Canadian
Revolving Credit Sub-Limit), (ii) SECOND to pay any other Canadian Obligations
owing by Canadian Borrower, and (iii) THIRD, at Canadian Agent’s option, to be
held by Canadian Agent as security for repayment of any remaining Canadian
Obligations (or to be released to Canadian Borrower, if there are no remaining
Canadian Obligations and the Commitment Termination has occurred).

(e)           Notwithstanding the foregoing, if the proceeds of insurance (net
of costs and taxes incurred) with respect to any loss or destruction of
Equipment, Inventory or real (or immovable) Property (i) are less than $250,000,
unless an Event of Default is then in existence, Administrative Agent shall
remit such proceeds to the applicable Borrower for use in replacing or repairing
the damaged Collateral or (ii) are equal to or greater than $250,000 and the
applicable Borrower has requested that Administrative Agent agree to permit such
Borrower or the applicable Subsidiary to repair or replace the damaged
Collateral, such amounts shall be provisionally applied to reduce the
outstanding principal balance of the applicable Revolving Credit Loans until the
earlier of Administrative Agent’s decision with respect thereto or the
expiration of 120 days from such request.  If Administrative Agent agrees, in
its reasonable judgment, to permit such repair or replacement under such
clause (ii), such amount shall, unless an Event of Default is in existence, be
remitted to the applicable Borrower for use in replacing or repairing the
damaged Collateral; if Administrative Agent declines to permit such repair or
replacement or does not respond to the applicable Borrower within such 120 day
period, such amount shall be applied to the Loans in the manner specified in
clauses (b) through (d) of this Section 3.3.1 until payment thereof in full.

3.3.2        Prepayment Upon Exceeding Commitments and Borrowing Base.

(a)           Domestic Revolving Credit Loans.  Domestic Borrower shall prepay
the outstanding principal amount of the Domestic Revolving Credit Loans on any
date on which (i) the aggregate amount of the Domestic Revolving Credit Exposure
of all the Domestic Lenders exceeds the Aggregate Borrowing Base then in effect
(minus Reserves, if any) or (ii) the aggregate amount of the Domestic Revolving
Credit Exposure of all the Domestic Lenders and the Canadian Revolving Credit
Exposure of the Canadian Lender exceeds the Revolving Credit Maximum Amount
(minus the Dollar Equivalent of the aggregate principal amount of the
outstanding Canadian Revolving Credit Loans minus Reserves, if any), in the
amount of such excess.

(b)           Canadian Revolving Credit Loans.  Canadian Borrower shall prepay
the outstanding principal amount of Canadian Revolving Credit Loans on any date
on which the aggregate amount of the Canadian Revolving Credit Exposure of the
Canadian Lender would exceed (including, without limitation, solely as a result
of fluctuation in exchange rates) the Canadian Borrowing Base then in effect
(minus

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Reserves applicable to Canadian Revolving Credit Loans, if any), in the amount
of such excess and in the applicable currency; provided, however, that if such
excess is solely as a result of fluctuation in exchange rates, such repayment
shall not be required to be made until two Business Days after notice from the
Canadian Agent, and Canadian Borrower shall not be obligated to pay such amount
unless such excess is greater than the Dollar Equivalent of an amount equal to
1% of the Canadian Revolving Credit Sub-Limit then in effect.  Any such
prepayment shall be applied to repay ratably outstanding principal of Canadian
Revolving Credit Loans (but shall not permanently reduce the Canadian Revolving
Credit Sub-Limit).

3.3.3        Proceeds from Issuance of Additional Indebtedness or Equity.  If
any Borrower or any Subsidiary issues any additional Indebtedness for Money
Borrowed or issues any additional equity in a manner permitted under this
Agreement, other than (provided no Default or Event of Default has occurred and
is continuing) (A) for the purpose of financing an asset or stock acquisition or
merger approved by the Majority Lenders, (B) Permitted Intercompany Loans, and
(C) stock options in Domestic Borrower granted to executives and other employees
of Domestic Borrower, then (i) Domestic Borrower shall pay, in the case of
Domestic Borrower or any Subsidiary other than the Canadian Borrower, to
Administrative Agent for the benefit of Administrative Agent, Canadian Agent,
and the Lenders, and (ii) Canadian Borrower shall pay, in the case of Canadian
Borrower, to Canadian Agent for the benefit of Canadian Agent, Canadian Lender,
and the Canadian Participating Lenders, when and as received by such Borrower or
Subsidiary and as a mandatory prepayment of the Domestic Obligations or the
Canadian Obligations, respectively, a sum equal to 100% of the net proceeds to
such Borrower or Subsidiary of the issuance of such Indebtedness or equity,
provided that (i), for so long as the Channell Bushman Credit Facility has not
been terminated, the Domestic Borrower shall only be required to make such
prepayments in connection with such issuance by any of the Channell Australia
Entities to the extent such prepayment is not required by, and does not violate,
the documents governing the Channell Bushman Credit Facility, and (ii) Canadian
Borrower shall only be required to pay from the net proceeds of the issuance of
such Indebtedness or equity by Canadian Borrower an amount equal to the then
outstanding Canadian Obligations, and Domestic Borrower shall make a payment in
respect of the Domestic Obligations in an amount equal to the remaining amount
of such proceeds, if any.  Any prepayment under this Section 3.3.3 with respect
to the issuance of such Indebtedness for Money Borrowed or equity by Domestic
Borrower or any of its Subsidiaries (other than Canadian Borrower) shall be
applied (i) FIRST to the installments of principal due under the Domestic Term
Notes evidencing the Domestic Term Loan ratably, to be applied to future
installment payments in inverse order of maturity until paid in full, (ii)
SECOND to the installments of principal due under the Domestic Cap Ex Notes
evidencing the Domestic Cap Ex Loan ratably, to be applied to future installment
payments in inverse order of maturity until paid in full, and (iii) THIRD to
repay ratably the outstanding principal of Domestic Revolving Credit Loans (but
shall not permanently reduce the Domestic Revolving Credit Commitments), and any
prepayment under this Section 3.3.3 with respect to the issuance of such
Indebtedness for Money Borrowed or equity by Canadian Borrower shall be applied
to repay ratably outstanding principal of Canadian Revolving Credit Loans (but
shall not permanently reduce the Canadian Revolving Credit Sub-Limit).

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3.3.4        Domestic LIBOR Loans.  If the application of any payment made in
accordance with the provisions of this Section 3.3 at a time when no Event of
Default has occurred and is continuing would result in termination of a Domestic
LIBOR Loan prior to the last day of the Interest Period for such Domestic LIBOR
Loan, the amount of such prepayment shall not be applied to such Domestic LIBOR
Loan, but will, at Borrower Representative’s option, be held by Administrative
Agent in a non-interest bearing account or deposited by the applicable Borrower
in an interest-bearing account at a Lender or another bank satisfactory to
Administrative Agent, in its discretion, which account is in the name of
Administrative Agent, and from which account only Administrative Agent can make
any withdrawal, in each case to be applied as such amount would otherwise have
been applied under this Section 3.3 at the earlier to occur of (a) the last day
of the relevant Interest Period or (b) the occurrence of a Default or an Event
of Default.

3.3.5        Optional Prepayments.  Domestic Borrower may, at its option from
time to time upon not less than 3 Business Days’ prior written notice to
Administrative Agent, prepay installments of the Domestic Term Notes or the
Domestic Cap Ex Notes, provided that the amount of any such prepayment is at
least $500,000 and in integral multiples of $100,000 above $500,000, and that
such prepayments are made ratably with respect to all such Domestic Term Notes
or Domestic Cap Ex Notes, as applicable.  Except for charges under Section 3.2.5
applicable to prepayments of Domestic LIBOR Loans, subject to Section 2.7, such
prepayments shall be without premium or penalty.

3.4           Application of Payments and Collections.

3.4.1        Collections.  All items of payment received by Administrative Agent
by 12:00 noon, Los Angeles time, or by Canadian Agent by 12:00 noon, Toronto
time, on any Business Day shall be deemed received on that Business Day for
purposes other than computation of interest.  All items of payment received
after 12:00 noon, Los Angeles time, or 12:00 noon, Toronto time, on any Business
Day shall be deemed received on the following Business Day for purposes other
than computation of interest.  Domestic Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Administrative Agent from or on behalf of Domestic
Borrower or any of its Subsidiaries (other than Canadian Borrower), and Domestic
Borrower does hereby irrevocably agree that Administrative Agent shall have the
continuing exclusive right to apply and reapply any and all such payments and
collections received at any time or times hereafter by Administrative Agent or
its agent against the Domestic Obligations, in such manner as Administrative
Agent may deem advisable, notwithstanding any entry by Administrative Agent or
any Lender upon any of its books and records.  Canadian Borrower irrevocably
waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by Canadian Agent from or on
behalf of Canadian Borrower, and Canadian Borrower does hereby irrevocably agree
that Canadian Agent shall have the continuing exclusive right to apply and
reapply any and all such payments and collections received at any time or times
hereafter by Canadian Agent or its agent against the Canadian Obligations, in
such manner as Canadian Agent may deem advisable, notwithstanding any entry by
Canadian Agent or Canadian Lender or any Canadian Participating Lender upon any
of its books and records.  If as the result of collections of

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Accounts as authorized by Section 6.2.4 hereof or otherwise, a credit balance
exists in the Domestic Loan Account, such credit balance shall not accrue
interest in favor of Domestic Borrower, but shall be disbursed to Domestic
Borrower or otherwise at  Borrower Representative’s direction in the manner set
forth in Section 3.1.2, upon  Borrower Representative’s request at any time, so
long as no Default or Event of Default then exists.  If as the result of
collections of Accounts authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the Canadian Loan Account, such credit balance shall
not accrue interest in favor of Canadian Borrower, but shall be disbursed to
Canadian Borrower or otherwise at Borrower Representative’s direction in the
manner set forth in Section 3.1.2, upon Borrower Representative’s request at any
time, so long as no Default or Event of Default then exists.  Administrative
Agent may at its option, offset such credit balance with respect to the Domestic
Loan Account against any of the Domestic Obligations upon and during the
continuance of an Event of Default.  Canadian Agent may at its option, offset
such credit balance with respect to the Canadian Loan Account against any of the
Canadian Obligations upon and during the continuance of an Event of Default.

3.4.2        Apportionment; Application and Reversal of Payments.  Principal and
interest payments (i) by Domestic Borrower shall be apportioned ratably among
all Domestic Lenders (according to the unpaid principal balance of the Loans to
which such payments related held by each Domestic Lender), and (ii) by Canadian
Borrower shall be distributed to Canadian Lender subject to Section 2.6 or,
following a refunding in accordance with Section 3.2.6, apportioned among
Canadian Lender and all Canadian Participating Lenders (according to the unpaid
principal balance of the Loans to which such payments related held by Canadian
Lender and each Canadian Participating Lender).  All payments by Domestic
Borrower shall be remitted to Administrative Agent and by Canadian Borrower
shall be remitted to Canadian Agent, and all such payments not relating to
principal or interest of specific Loans, or not constituting payment of specific
fees, and all proceeds of Collateral, except as otherwise provided in this
Agreement received by Administrative Agent or Canadian Agent, as applicable,
shall be applied, ratably, subject to the provisions of this Agreement, first,
to pay any fees, indemnities, or expense reimbursements then due to
Administrative Agent, Canadian Agent, or Lenders  from the applicable Borrower;
second, to pay interest due from the applicable Borrower in respect of all Loans
made to such Borrower, third, to pay or prepay principal of the Domestic Term
Loan made to such Borrower; fourth, to pay or prepay principal of the Domestic
Cap Ex Loans made to such Borrower; fifth, to pay or prepay principal of the
Revolving Credit Loans made to such Borrower and unpaid reimbursement
obligations in respect of Domestic Letters of Credit owed by such Borrower;
sixth, with respect to payments by Domestic Borrower, to pay an amount to
Administrative Agent equal to the available amount of all outstanding Domestic
Letters of Credit to be held as cash Collateral for reimbursement and fee
obligations in respect of such Domestic Letters of Credit; seventh, to the
payment of any Derivative Obligations due to Administrative Agent, Canadian
Agent, any Lender or any other Bank Product Provider by such Borrower, and
eighth, to the payment of any other Obligations due to Administrative Agent,
Canadian Agent, or any Lender by such Borrower.  Except as expressly set forth
to the contrary, payments received (i) from Domestic Borrower shall be applied
only to the Domestic Obligations, and (ii) from Canadian Borrower shall be
applied only to the Canadian

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Obligations.  Subject to the provisions of this Section 3.4.2, after the
occurrence and during the continuance of an Event of Default, Administrative
Agent and Canadian Agent shall have the continuing exclusive right to apply and
reapply any and all such payments and collections received at any time or times
hereafter by Administrative Agent or Canadian Agent or their agents against the
Obligations, in such manner as Administrative Agent or Canadian Agent may deem
advisable, notwithstanding any entry by Administrative Agent, Canadian Agent, or
any Lender upon any of its books and records.

3.5           All Loans to Constitute One Obligation.

The Domestic Revolving Credit Loans, the Domestic Term Loan, the Domestic Cap Ex
Loans shall constitute one general Obligation of Domestic Borrower, and shall be
secured by Administrative Agent’s (for the benefit of itself, and each Lender)
Lien upon all of the Domestic Collateral.  The Canadian Revolving Credit Loans
shall constitute one general Obligation of Canadian Borrower, and shall be
secured by Canadian Agent’s (on behalf of itself, Canadian Lender, and the
Canadian Participating Lenders) Lien upon all of the Canadian Collateral.

3.6           Loan Accounts.

Administrative Agent shall enter all Domestic Revolving Credit Loans and the
Domestic Term Loan as debits to a loan account (the “Domestic Loan Account”),
and Canadian Agent shall enter all Canadian Revolving Credit Loans as debits to
a loan account (the “Canadian Loan Account”, and together with the Domestic Loan
Account, each a “Loan Account”), and shall also record in the relevant Loan
Account all payments made by the relevant Borrowers on any Obligations and all
proceeds of the relevant Collateral which are finally paid to Administrative
Agent or Canadian Agent, as the case may be, and may record therein, in
accordance with customary accounting practice, other debits and credits,
including interest and all charges and expenses properly chargeable to Borrowers
pursuant to this Agreement or any other Loan Document.

3.7           Statements of Account.

Administrative Agent will account to Borrower Representative monthly with a
statement of Loans, charges and payments made pursuant to this Agreement during
the immediately preceding month, and such account rendered by Administrative
Agent shall be deemed final, binding and conclusive upon Borrowers absent
demonstrable error unless Administrative Agent is notified by Borrower
Representative in writing to the contrary within 30 days of the date each
accounting is received by Borrower Representative.  Such notice shall only be
deemed an objection to those items specifically objected to therein.

3.8           Sharing of Payments, Etc.

3.8.1        If any Domestic Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Domestic Revolving Credit Loan or any portion of the Domestic
Term Loan made by

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it in excess of its ratable share of payments on account of such Loans made by
all Domestic Lenders, such Domestic Lender shall forthwith purchase from each
other Domestic Lender such participation in such Loans as shall be necessary to
cause such purchasing Domestic Lender to share the excess payment ratably with
each other Domestic Lender; provided, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Domestic Lender, such
purchase from each Domestic Lender shall be rescinded and such Domestic Lenders
shall repay to the purchasing Domestic Lender the purchase price to the extent
of such recovery, together with an amount equal to such Domestic Lender’s
ratable share (according to the proportion of (i) the amount of such Domestic
Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Domestic Lender) of any interest or other amount paid or payable by
the purchasing Domestic Lender in respect of the total amount so recovered. 
Each Borrower agrees that any Domestic Lender so purchasing a participation from
another Domestic Lender pursuant to this Section 3.8.1 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Domestic
Lender were the direct creditor of Borrowers in the amount of such
participation.  Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.8.1 shall be made
through Administrative Agent.

3.8.2        If Canadian Lender or any Canadian Participating Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of any Canadian Revolving Credit
Loan  made or refunded by it in excess of its ratable share of payments on
account of such Loans made or refunded by Canadian Agent and Canadian
Participating Lenders in the aggregate, such Lender shall forthwith purchase
from Canadian Lender and each other Canadian Participating Lender such
participation in such Loans as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with Canadian Lender and each other
Canadian Participating Lender; provided, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from Canadian Lender and each Canadian Participating Lender shall be
rescinded and Canadian Lender and such Canadian Participating Lenders shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such  Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.  Each Borrower agrees that Canadian Lender and
any Canadian Participating Lender so purchasing a participation from Canadian
Lender or a Canadian Participating Lender pursuant to this Section 3.8.2 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrowers in the amount of such
participation.  Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.8.2 shall be made
through Canadian Agent.

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3.9           Increased Costs.

If any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) adopted or
implemented after the date of this Agreement and having general applicability to
all banks or finance companies within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall:

(a)           (i) subject such Lender to any tax with respect to this Agreement
(other than (A) any tax based on or measured by net income or otherwise in the
nature of a net income tax, including, without limitation, any franchise tax or
any similar tax based on capital, net worth or comparable basis for measurement
and (B) subject to the provisions of Section 2.13, any tax collected by a
withholding on payments and which neither is computed by reference to the net
income of the payee nor is in the nature of an advance collection of a tax based
on or measured by the net income of the payee) or (ii) change the basis of
taxation of payments to such Lender of principal, fees, interest or any other
amount payable hereunder or under any Loan Documents (other than in respect of
(A) any tax based on or measured by net income or otherwise in the nature of a
net income tax, including, without limitation, any franchise tax or any similar
tax based on capital, net worth or comparable basis for measurement and
(B) subject to the provisions of Section 2.13, any tax collected by a
withholding on payments and which neither is computed by reference to the net
income of the payee nor is in the nature of an advance collection of a tax based
on or measured by the net income of the payee);

(b)           impose, modify or hold applicable any reserve (except any reserve
taken into account in the determination of the applicable LIBOR), special
deposit, assessment or similar requirement against assets held by, or deposits
in or for the account of, advances or loans by, or other credit extended by, any
office of such Lender, including (without limitation) pursuant to Regulation D
of the Board of Governors of the Federal Reserve System; or

(c)           impose on such Lender or the London interbank market any other
condition with respect to any Loan Document and the result of any of the
foregoing is to increase the cost to such Lender of making, renewing or
maintaining its Loans hereunder by an amount that such Lender deems to be
material or the result of any of the foregoing is to reduce the rate of return
on such Lender’s capital as a consequence of its obligations hereunder, or the
result of any of the foregoing is to reduce the amount of any payment (whether
of principal, interest or otherwise) in respect of any of such Loans by an
amount that such Lender deems to be material, then, in any such case, the
applicable Borrower(s) shall pay such Lender, upon demand and certification not
later than sixty (60) days following Borrower Representative’s receipt of notice
of the imposition of such increased costs, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case
may be, to the extent such Lender has not otherwise been compensated, with
respect to a particular Loan, for such increased cost as a result of

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an increase in the Domestic Base Rate, Canadian Base Rate or LIBOR.  An officer
of such Lender shall determine the amount of such additional cost or reduced
amount using reasonable averaging and attribution methods and shall certify the
amount of such additional cost or reduced amount to Borrower Representative,
which certification shall include a written explanation of such additional cost
or reduction to Borrower Representative.  Such certification shall be conclusive
absent manifest error.  If a Lender claims any additional cost or reduced amount
pursuant to this Section 3.9, then such Lender shall use reasonable efforts
(consistent with legal and regulatory restrictions) to designate a different
lending office or to file any certificate or document reasonably requested by
Borrower Representative if the making of such designation or filing would avoid
the need for, or reduce the amount of, any such additional cost or reduced
amount and would not, in the sole discretion of such Lender, be otherwise
disadvantageous to such Lender.

3.10         Basis for Determining Interest Rate Inadequate or Unfair

In the event that Administrative Agent or any Lender shall have determined that:

(a)           reasonable means do not exist for ascertaining the LIBOR for any
Interest Period; or

(b)           Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank market with respect to a
proposed Domestic LIBOR Loan, or a proposed conversion of a Domestic Base Rate
Loan into a Domestic LIBOR Loan; then

Administrative Agent or such Lender, as applicable, shall give Borrower
Representative prompt written, telephonic or electronic notice of the
determination of such event.  If such notice is given, (i) any such requested
Domestic LIBOR Loan shall be made as a Domestic Base Rate Loan, unless Borrower
Representative shall notify Administrative Agent, with respect to Domestic LIBOR
Loans, no later than 10:00 a.m. (Los Angeles time) two (2) Banking Days prior to
the date of such proposed borrowing that the request for such borrowing shall be
canceled, and (ii) any Domestic Base Rate Loan which was to have been converted
to an affected type of Domestic LIBOR Loan shall be continued as or converted
into a Domestic Base Rate Loan.

3.11         Location of Payments.

Notwithstanding anything else herein to the contrary, all payments made by
Borrowers or Borrower Representative on behalf of Borrowers under this
Agreement, whether principal or interest payments, fees, expenses or other
charges hereunder, shall be made to the applicable Administrative Agent at its
address for notices set forth in Section 12.8 of this Agreement.

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SECTION 4. TERM AND TERMINATION

4.1           Term of Agreement.

Subject to the right of Lenders to cease making Loans to Borrowers during the
continuance of any Default or Event of Default, this Agreement shall be in
effect from the Closing Date through and including June 30, 2010 (the “Term”),
unless terminated as provided in Section 4.2 hereof.

4.2           Termination.

4.2.1        Termination by Lenders.  Administrative Agent may, and at the
direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default.

4.2.2        Termination by Borrower Representative.  Upon at least 60 days
prior written notice to Administrative Agent and Lenders, Borrower
Representative may, at its option, terminate this Agreement; provided, however,
no such termination shall be effective until Borrowers have paid or
collateralized to Administrative Agent’s reasonable satisfaction all of the
Obligations in immediately available funds, all Domestic Letters of Credit and
Domestic LC Guaranties have expired, terminated or have been cash collateralized
to Administrative Agent’s reasonable satisfaction and Borrowers have complied
with Sections 2.7, 3.2.5 and 4.2.3(b) (if applicable).  Any notice of
termination given by Borrower Representative shall be irrevocable unless all
Lenders otherwise agree in writing, and no Lender shall have any obligation to
make any Loans or issue or procure any Domestic Letters of Credit or Domestic LC
Guaranties on or after the termination date stated in such notice.  Borrower
Representative may elect to terminate this Agreement in its entirety only.  No
section of this Agreement or type of Loan available hereunder may be terminated
singly.

4.2.3        Effect of Termination.

(a)           All of the Obligations shall be immediately due and payable upon
the termination date stated in any notice of termination of this Agreement.  All
undertakings, agreements, covenants, warranties and representations of Borrowers
and their Subsidiaries contained in the Loan Documents shall survive any such
termination and Administrative Agent and Canadian Agent shall retain their Liens
in the Collateral and Administrative Agent, Canadian Agent, and each Lender
shall retain all of its rights and remedies under the Loan Documents
notwithstanding such termination until all Obligations have been discharged or
paid, in full, in immediately available funds, including, without limitation,
all applicable Obligations under Sections 2.7, 3.2.5 and 4.2.3(b) resulting from
such termination.  Notwithstanding the foregoing or the payment in full of the
Obligations, none of Administrative Agent and Canadian Agent shall be required
to terminate its Liens in the Collateral unless, with respect to any loss or
damage Administrative Agent or Canadian Agent may incur as a result of
dishonored checks or other items of payment received by Administrative Agent or
Canadian Agent from Borrowers or any of their Subsidiaries

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or any Account Debtor and applied to the Obligations, Administrative Agent
shall, at its option, (i) have received a written agreement satisfactory to
Administrative Agent, executed by Borrowers and/or their Subsidiaries and by any
Person whose loans or other advances to Borrowers and/or their Subsidiaries are
used in whole or in part to satisfy the Obligations, indemnifying Administrative
Agent, Canadian Agent, and each Lender from any such loss or damage or (ii) have
retained cash Collateral for such period of time as Administrative Agent, in its
reasonable discretion, may deem necessary to protect Administrative Agent,
Canadian Agent, and each Lender from any such loss or damage.

(b)           In the event that Borrower Representative provides less than 60
days prior written notice of termination of this Agreement as required by
Section 4.2.2, in addition to any other amounts which are required to be paid to
Administrative Agent, Canadian Agent, or any Lender under the Loan Documents,
(i) Domestic Borrower agrees to pay to Administrative Agent (for the ratable
benefit of the Domestic Lenders), an amount equal to the product of (A)(I) the
product of (X) the aggregate payoff amount of the Domestic Obligations times (Y)
the interest rates applicable to such Domestic Obligations, divided by (II) 360
times (B) the difference between 60 and the number of days prior written notice
of termination of this Agreement given by Borrower Representative to
Administrative Agent and Lenders (the “Notice Days”) and (ii) Canadian Borrower
agrees to pay to Canadian Agent (for the benefit of Canadian Lender and,
subsequent to any Canadian Revolving Credit Loan refunding pursuant to Section
3.2.6, for the ratable benefit of Canadian Lender and Canadian Participating
Lenders) an amount equal to the product of (A)(I) the product of (X) the
aggregate payoff amount of the Canadian Obligations times (Y) the interest rates
applicable to such Canadian Obligations, divided by (II) 360 times (B) the
Notice Days.

(c)           Upon termination of this Agreement and repayment in full of the
Obligations, each Administrative Agent shall promptly execute and deliver to
Borrowers such documents as reasonably requested by Borrower Representative to
evidence the release of Agents’ Liens in the Collateral.

SECTION 5. SECURITY INTERESTS

5.1           Security Interest in Collateral.

5.1.1        To secure the prompt payment and performance of the Domestic
Obligations (including, without limitation, the obligations of Domestic Borrower
under the Domestic Borrower Guaranty), Domestic Borrower hereby grants to
Administrative Agent for the benefit of itself, Canadian Agent, each Lender and
each Bank Product Provider, a continuing Lien upon all of Domestic Borrower’s
assets, including all of the following Property and interests in Property of
Domestic Borrower, whether now owned or existing or hereafter created, acquired
or arising and wheresoever located:

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(a)           Accounts;

(b)           Certificated Securities;

(c)           Chattel Paper;

(d)           Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications, and any substitutions,
replacements, additions or model conversions of any of the foregoing;

(e)           Contract Rights;

(f)            Deposit Accounts;

(g)           Documents;

(h)           Equipment;

(i)            Financial Assets;

(j)            Fixtures;

(k)           General Intangibles, including Payment Intangibles and Software;

(l)            Goods (including all of its Equipment, Fixtures and Inventory),
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;

(m)          Instruments;

(n)           Intellectual Property;

(o)           Inventory;

(p)           Investment Property;

(q)           money (of every jurisdiction whatsoever);

(r)            Letter-of-Credit Rights;

(s)           Payment Intangibles;

(t)            Security Entitlements;

(u)           Software;

(v)           Supporting Obligations;

(w)          Uncertificated Securities; and

(x)            to the extent not included in the foregoing, all other personal
property of any kind or description;

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together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that (i) to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of a security interest therein, Administrative Agent will
not enforce its security interest in Domestic Borrower’s rights under such lease
or license (other than in respect of the Proceeds thereof) for so long as such
prohibition continues, it being understood that upon request of Administrative
Agent, Domestic Borrower will in good faith use reasonable efforts (other than
the payment of money) to obtain consent for the creation of a security interest
in favor of Administrative Agent (and to Administrative Agent’s enforcement of
such security interest) in Domestic Borrower’s rights under such lease or
license, (ii) with respect to other contracts or agreements, Contract Rights of
Domestic Borrower will be excluded from Domestic Collateral  to the extent
assignment is expressly prohibited by the underlying contract or agreement
(which prohibition is enforceable under applicable law), it being understood
that upon request of Administrative Agent, Domestic Borrower will in good faith
use reasonable efforts (other than the payment of money) to obtain consent for
the creation of a security interest in favor of Administrative Agent (and to
Administrative Agent’s enforcement of such security interest) in Domestic
Borrower’s rights under such contract or agreement, (iii) that the Domestic
Collateral described above (A) shall not include any of Domestic Borrower’s
equity interests in Channel de Mexico S.A. de C.V., CC Holdings, Inc., or
Channell Bushman, and (B) shall, with respect to each of Channell Commercial
Canada, Inc. and Channell Commercial Hong Kong Limited, be limited to 65% of the
issued and outstanding Securities of each such entity.

5.1.2        To secure the prompt payment and performance of the Canadian
Obligations, Canadian Borrower hereby grants to Canadian Agent for the benefit
of itself, Canadian Lender, and each Canadian Participating Lender, a continuing
security interest upon all of Canadian Borrower’s assets, including all of the
following Property and interests in Property of Canadian Borrower, whether now
owned or existing or hereafter created, acquired or arising and wheresoever
located:

(a)             Accounts;

(b)             Certificated Securities;

(c)             Chattel Paper;

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(d)             Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications, and any substitutions,
replacements, additions or model conversions of any of the foregoing;

(e)             Contract Rights;

(f)              Deposit Accounts;

(g)             Documents;

(h)             Equipment;

(i)              Financial Assets;

(j)              Fixtures;

(k)             General Intangibles, including Payment Intangibles and Software;

(l)              Goods (including all of its Equipment, Fixtures and Inventory),
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;

(m)            Instruments;

(n)             Intellectual Property;

(o)             Inventory;

(p)             Investment Property;

(q)             money (of every jurisdiction whatsoever);

(r)              Letter-of-Credit Rights;

(s)             Payment Intangibles;

(t)              Security Entitlements;

(u)             Software;

(v)             Supporting Obligations;

(w)            Uncertificated Securities; and

(x)              to the extent not included in the foregoing, all other personal
property of any kind or description;

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together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, however, that notwithstanding the foregoing this Section
5.1.2 shall not constitute a grant of a security interest in any property to the
extent that such grant of a security interest is prohibited by any applicable
law, requires a consent not obtained of any governmental authority pursuant to
such applicable law or is prohibited by, or constitutes a breach or default
under or results in the termination of or requires any consent not obtained
under any contract, license, agreement, instrument or other document evidencing
or giving rise to such property or, in the case of any Investment Property, any
applicable shareholder or similar agreement, except to the extent that such
applicable law or the term in such contract, license, agreement, instrument or
other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law, it being understood that upon request of
Canadian Agent, Canadian Borrower will in good faith use reasonable efforts
(other than the payment of money) to obtain any such required consent. In
addition to the foregoing grant of a security interest, Canadian Borrower shall
execute and deliver such debentures, hypothecs, pledges and other security
agreements as Canadian Agent may reasonably request to provide Canadian Agent
with a first-priority perfected Lien on all assets of Canadian Borrower.  In the
event of a conflict between this Section 5.1.2 and the Security Documents
executed by Canadian Borrower, the latter shall govern.

5.2           Other Collateral.

5.2.1        Commercial Tort Claims.  Domestic Borrower shall promptly notify
Administrative Agent in writing upon incurring or otherwise obtaining a
Commercial Tort Claim after the Closing Date against any third party and, upon
request of Administrative Agent, promptly enter into an amendment to this
Agreement and do such other acts or things deemed appropriate by Administrative
Agent to give Administrative Agent a security interest in any such Commercial
Tort Claim.

5.2.2        Other Collateral.  Each Borrower shall promptly notify
Administrative Agent or Canadian Agent, as the case may be, in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof consisting
of Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic
Chattel Paper and, upon the request of Administrative Agent or Canadian Agent,
as the case may be, promptly execute such other documents, and do such other
acts or things deemed appropriate by Administrative Agent or Canadian Agent, as
the case may be, to deliver to Administrative Agent or Canadian Agent, as the
case may be, control with respect to such Collateral; promptly notify
Administrative Agent or Canadian Agent, as the case may be, in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof consisting
of Documents (and Documents of Title, as defined in the PPSA) or Instruments
and, upon the request of Administrative Agent or Canadian Agent, as the case may
be, will promptly execute such other documents, and do such other acts or things
deemed appropriate by Administrative Agent or Canadian Agent, as the case may
be, to deliver to Administrative Agent or Canadian Agent, as the case may be,
possession of such Documents (and Documents of Title, as defined in the PPSA)
which are

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negotiable and Instruments, and, with respect to nonnegotiable Documents (and
Documents of Title, as defined in the PPSA), to have such nonnegotiable
Documents (and Documents of Title, as defined in the PPSA) issued in the name of
Administrative Agent or Canadian Agent, as the case may be; and with respect to
Collateral in the possession of a third party, other than Certificated
Securities and Goods covered by a Document, obtain an acknowledgement from the
third party that it is holding the Collateral for the benefit of Administrative
Agent or Canadian Agent, as the case may be.

5.3           Lien Perfection; Further Assurances.

Each Borrower hereby authorizes Administrative Agent to file such UCC-1 and PPSA
financing statements as are required by the UCC or the PPSA, and any other
applicable statutory scheme, and each Borrower shall execute such other
instruments, assignments or documents as are necessary to perfect Administrative
Agent’s Lien upon any of the Domestic Collateral and Canadian Agent’s Lien upon
any of the Canadian Collateral, and each Borrower shall take such other action
as may be required to perfect or to continue the perfection of Administrative
Agent’s Lien upon the Domestic Collateral and Canadian Agent’s Lien upon the
Canadian Collateral.  Without limiting the generality of the preceding sentence,
each Borrower hereby irrevocably authorizes Administrative Agent and Canadian
Agent, as applicable, to file any such financing statements, including, without
limitation, financing statements that indicate the portion of the Collateral
owned by such Borrower (a) as all assets of such Borrower or words of similar
effect, or (b) as being of an equal or lesser scope, or with greater or lesser
detail, than as set forth in Section 5.1.  Each Borrower also hereby ratifies
its authorization for Administrative Agent and Canadian Agent, as the case may
be, to have filed in any jurisdiction any like financing statements or
amendments thereto if filed prior to the date hereof.  The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement for the purposes of the UCC and may be filed in any
appropriate office in lieu thereof.  At Administrative Agent’s or Canadian
Agent’s request, each Borrower shall also promptly execute or cause to be
executed and shall deliver to Administrative Agent or Canadian Agent, as the
case may be, any and all documents, instruments and agreements deemed necessary
by Administrative Agent or Canadian Agent, as the case may be, to give effect to
or carry out the terms or intent of the Loan Documents.

5.4           Lien on Realty.

The due and punctual payment and performance of the Domestic Obligations shall
also be secured by the Lien created by Mortgages upon all real (or immovable)
Property of Domestic Borrower now or hereafter owned.  The due and punctual
payment and performance of the Canadian Obligations shall also be secured by the
Lien created by Mortgages upon all real (or immovable) Property of Canadian
Borrower now or hereafter owned.  Each Mortgage shall be executed by the
applicable Borrower in favor of Administrative Agent or Canadian Agent,

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as the case may be.  Each Mortgage shall be duly recorded, at the applicable
Borrower’s expense, in each office where such recording is required to
constitute a fully perfected first Lien on the real (or immovable) Property
covered thereby.  Each applicable Borrower shall deliver to Administrative Agent
or Canadian Agent, as the case may be, at such Borrower’s expense, mortgagee
title insurance policies (or a Canadian equivalent acceptable to the applicable
Administrative Agent) issued by a title insurance company satisfactory to
Administrative Agent or Canadian Agent, as the case may be, which policies shall
be in form and substance satisfactory to Administrative Agent or Canadian Agent,
as the case may be, and shall insure a valid first Lien in favor of
Administrative Agent (for the benefit of itself, Canadian Agent, and the
Lenders), or in favor of Canadian Agent (for the benefit of itself, Canadian
Lender, and the Canadian Participating Lenders), as the case may be, on the
Property covered by each Mortgage, subject only to those exceptions reasonably
acceptable to Administrative Agent or Canadian Agent, as the case may be, and
its counsel.  Each applicable Borrower shall deliver to Administrative Agent or
Canadian Agent, as the case may be, such other documents, including, without
limitation, as-built survey prints of the real (or immovable) Property (to the
extent such as-built survey prints are already in existence or, at the
applicable Borrower’s sole option, prepared), as Administrative Agent or
Canadian Agent, as the case may be, and its counsel may reasonably request
relating to the real (or immovable) Property subject to the Mortgages.

SECTION 6. COLLATERAL ADMINISTRATION

6.1           General.

6.1.1        Location of Collateral.  All tangible Collateral, other than
Inventory in transit and motor vehicles, will at all times be kept by the
applicable Borrowers and their Subsidiaries at one or more of the business
locations identified in Schedule 6.1.1 hereto as a business location for such
Borrower or Subsidiary.

6.1.2        Insurance of Collateral.  Each Borrower shall maintain and pay for
insurance upon all Collateral owned by such Borrower wherever located and with
respect to the business of such Borrower and each of its Subsidiaries, covering
casualty, hazard, public liability, workers’ compensation and such other risks
in such amounts and with such insurance companies as are reasonably satisfactory
to Administrative Agent.  Each Borrower shall deliver certified copies of such
policies to Administrative Agent and Canadian Agent as promptly as practicable,
with satisfactory lender’s loss payable endorsements, naming Administrative
Agent, with respect to Domestic Collateral, and Canadian Agent, with respect to
Canadian Collateral, as a loss payee, assignee or additional insured, as
appropriate, as its interest may appear, and showing only such other loss
payees, assignees and additional insureds as are satisfactory to Administrative
Agent and Canadian Agent, as the case may be.  Each policy of insurance or
endorsement shall contain a clause  requiring the insurer to give not less than
10 days’ prior written notice to Administrative Agent or Canadian Agent, as the
case may be, in the event of cancellation of the policy for nonpayment of
premium and not less than 30 days’ prior written notice to Administrative Agent
or Canadian Agent, as the case may be, in the event of cancellation of the
policy for any other reason whatsoever and shall provide in substance that the
interest of Administrative Agent or Canadian Agent, as the case may be, shall
not be impaired or invalidated by any act or neglect of the applicable Borrower,
any of its Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy. Borrower
Representative agrees to deliver to Administrative Agent and Canadian Agent, as
the case may be, promptly as

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rendered, true copies of all reports made in any reporting forms to insurance
companies.  If any proceeds of business interruption insurance are received by
any Borrowers or any of their Subsidiaries, then (i) Domestic Borrower shall
remit to Administrative Agent (A) the proceeds of such insurance received by
Domestic Borrower and (B) an amount equal to the proceeds received by any such
Subsidiary (other than the Channell Australia Entities and the Canadian
Borrower), in each case, for application to the outstanding balance of the
Revolving Credit Loans, (ii) Canadian Borrower shall remit to Canadian Agent the
proceeds of such insurance received by Canadian Borrower for application to the
then outstanding Canadian Obligations; and (iii) to the extent that the payment
thereof does not violate the documents governing the Channell Bushman Credit
Facility, the Channell Australia Entities shall apply the proceeds of any
business interruption insurance received by them to the repayment of outstanding
obligations under any intercompany loans owed by such entity to Borrowers
(provided that, for the avoidance of doubt, such repayment shall only be
required to the extent any such intercompany loans exist at the time of receipt
of such insurance proceeds); provided that the maximum amount Canadian Borrower
shall be required to make under this Section 6.1.2 shall be equal to the then
outstanding Canadian Obligations, and Domestic Borrower shall make a payment in
respect of the Domestic Obligations in an amount equal to the remaining amount,
if any, of the proceeds from such business interruption insurance received by
Canadian Borrower.

Unless Borrower Representative provides Administrative Agent and Canadian Agent,
as the case may be, with evidence of the insurance coverage required by this
Agreement, Administrative Agent or Canadian Agent, as the case may be, may
purchase insurance at the applicable Borrowers’ expense to protect
Administrative Agent’s and Canadian Agent’s, as the case may be, interests in
the Properties of Borrowers and their Subsidiaries.  This insurance may, but
need not, protect the interests of Borrowers and their Subsidiaries.  The
coverage that Administrative Agent or Canadian Agent, as the case may be,
purchases may not pay any claim that Borrowers or any Subsidiary makes or any
claim that is made against Borrowers or any such Subsidiary in connection with
said Property.  Borrower Representative may later cancel any insurance purchased
by Administrative Agent or Canadian Agent, but only after (a) providing
Administrative Agent or Canadian Agent, as the case may be, with evidence that
Borrowers and their Subsidiaries have obtained insurance as required by this
Agreement, and (b) Administrative Agent or Canadian Agent, as the case may be,
shall have approved such insurance.  If Administrative Agent or Canadian Agent
purchases insurance in accordance with this Section 6.1.2, Borrowers will be
responsible for the costs of that insurance, including interest and any other
charges Administrative Agent or Canadian Agent, as the case may be, may impose
in connection with the placement of insurance, until the effective date of the
cancellation or expiration of the insurance.  The costs of the insurance may be
added to the Obligations.  The costs of the insurance may be more than the cost
of insurance that Borrowers and their Subsidiaries may be able to obtain on
their own.

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6.1.3         Protection of Collateral.  Neither Administrative Agent, Canadian
Agent, nor Lenders shall  be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in
Administrative Agent’s, Canadian Agent’s, or any Lender’s actual possession) or
for any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency, or other person whomsoever, but the
same shall be at the applicable Borrower’s or Subsidiary’s sole risk.

6.2            Administration of Accounts.

6.2.1        Records, Schedules and Assignments of Accounts.  Each Borrower
shall keep (and shall cause each of its Subsidiaries to keep) accurate and
complete records of its Accounts and all payments and collections thereon and
Borrowers shall submit to Administrative Agent and Canadian Agent on such
periodic basis as Administrative Agent or Canadian Agent shall request a sales
and collections report for the preceding period, in form consistent with the
reports currently prepared by Borrowers and their Subsidiaries with respect to
such information.  Concurrently with the delivery of each Borrowing Base
Certificate required by Section 8.1.4, or more frequently as reasonably
requested by Administrative Agent or Canadian Agent, from and after the date
hereof, Borrower Representative shall deliver to Administrative Agent and
Canadian Agent a detailed aged trial balance of all Accounts of Borrowers and
their Subsidiaries (other than the Channell Australia Entities), and upon
Administrative Agent’s or Canadian Agent’s request therefor, copies of proof of
delivery and the original copy of all documents, including, without limitation,
repayment histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status of then
existing Accounts as Administrative Agent or Canadian Agent shall reasonably
request.

6.2.2        If an Account of a Borrower (or any of its Subsidiaries (other than
the Channell Australia Entities)) includes a charge for any tax payable to any
governmental taxing authority, Administrative Agent and/or Canadian Agent, as
the case may be, is authorized, in its sole discretion, to pay the amount
thereof to the proper taxing authority for the account of the applicable
Borrower or Subsidiary and to charge the applicable Borrowers therefor, except
for taxes that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which the applicable Borrower or Subsidiary
maintains reasonable reserves on its books therefor and (ii) would not
reasonably be expected to result in any Lien on any material Property of
Borrowers other than a Permitted Lien.  In no event shall Administrative Agent,
Canadian Agent, or any Lender be liable for any taxes to any governmental taxing
authority that may be due by any Borrower or any Subsidiary of a Borrower.

6.2.3        Account Verification.  Any of Administrative Agent’s or Canadian
Agent’s officers, employees or agents shall have the right, at any time or times
hereafter, in the name of Administrative Agent or Canadian Agent, any designee
of Administrative Agent, Canadian Agent, or any Borrower or any of its
Subsidiaries, to verify the validity, amount or any other matter relating to any
Accounts owned by any such Person by mail, telephone, telegraph or otherwise;
provided, that unless a Default or an Event of Default is then in existence,
prior to conducting each set of verifications, Administrative Agent and Canadian
Agent shall generally consult with the applicable Borrower or Subsidiary about
the verification process.  Each Borrower shall (and shall cause each of its
Subsidiaries to) cooperate fully with Administrative Agent and Canadian Agent in
an effort to facilitate and promptly conclude any such verification process.

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6.2.4        Maintenance of Dominion Accounts.

(a)           Domestic Borrower shall maintain, and, if requested by
Administrative Agent, shall cause each Subsidiary of such Borrower (other than
other Canadian Borrower and Restricted Subsidiaries) to maintain, at Domestic
Borrower’s expense, a Dominion Account or Accounts pursuant to lockbox and
blocked account arrangements acceptable to Administrative Agent, with such banks
as may be selected by Domestic  Borrower and be acceptable to Administrative
Agent for direct deposit of payments and other remittances.  Domestic Borrower
shall issue, and shall cause each of its Subsidiaries required to maintain such
account arrangements hereunder to issue, to any such banks an irrevocable letter
of instruction directing such banks to deposit all payments or other remittances
received in the lockbox and blocked accounts to Domestic Borrower’s Dominion
Account for application on account of the Domestic Obligations (with all such
payments and remittances to be applied, prior to the occurrence of an Event of
Default, first to outstanding Domestic Revolving Credit Loans with any remaining
amounts remitted to Domestic Borrower).

(b)           Canadian Borrower shall maintain, at Canadian Borrower’s expense,
the RBC Account (which is a Dominion Account for purposes of this Agreement)
pursuant to blocked account arrangements acceptable to Administrative Agent (or
other Dominion Account or Accounts pursuant to blocked account arrangements
acceptable to Administrative Agent, with such banks as may be selected by
Canadian Borrower and be acceptable to Administrative Agent) for direct deposit
of payments and other remittances.  Amounts deposited in Canadian Borrower’s
Dominion Account shall be applied on account of the Canadian Obligations in the
event of the occurrence of an Event of Default.

(c)           UK Guarantors shall maintain, at UK Guarantors’ expense, (i) a
Dominion Account or Accounts pursuant to collection account letters acceptable
to Administrative Agent with Bank of America for direct deposit of payments and
other remittances and (ii) their primary disbursement accounts and other cash
management accounts with Bank of America and shall close all of their other
deposit and cash management accounts in the United Kingdom, unless otherwise
consented to by Administrative Agent.  Amounts deposited in the UK Guarantors’
Dominion Account shall be applied on account of the Domestic Obligations (with
all such payments and remittances to be applied, prior to the occurrence of an
Event of Default, first to outstanding Domestic Revolving Credit Loans with any
remaining amounts remitted to UK Guarantors).

(d)           All funds deposited in any Dominion Account shall, to the extent
of the applicable Obligations, immediately become the property of, in the case
of Domestic Borrower and its Subsidiaries (other than Canadian Borrower and

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Restricted Subsidiaries), Administrative Agent, for the benefit of itself,
Canadian Agent, and the Lenders, and, in the case of Canadian Borrower, Canadian
Agent, for the benefit of Canadian Lender and the Canadian Participating
Lenders, and the applicable Borrowers shall obtain (and shall cause their
applicable Subsidiaries to obtain) the agreement by such banks in favor of
Administrative Agent and Canadian Agent, as applicable, to waive any recoupment,
compensation rights, offset rights and any security interest or hypothec in, or
against, the funds so deposited.  Neither Administrative Agent, nor Canadian
Agent assumes any responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.

6.2.5        Collection of Accounts, Proceeds of Collateral.  To expedite
collection, each Borrower shall endeavor in the first instance, and shall cause
its Subsidiaries (other than Restricted Subsidiaries) to endeavor in the first
instance, to collect its Accounts for Administrative Agent or Canadian Agent, as
applicable.  All remittances received by each applicable Borrower or Subsidiary
on account of Accounts, together with the proceeds of any other Collateral,
shall be held as Administrative Agent’s or Canadian Agent’s, as the case may be,
property, for its benefit and the benefit of the applicable Lenders, and other
Agents, by such Borrower or Subsidiary as trustee of an express trust for
Administrative Agent’s or Canadian Agent’s, as the case may be, benefit and such
Borrower shall, and shall cause its applicable Subsidiaries to, immediately
deposit same in kind in the lockboxes or a Dominion Account.  Administrative
Agent and Canadian Agent each retains the right at all times after the
occurrence and during the continuance of a Default or an Event of Default to
notify Account Debtors that Borrowers’ and their applicable Subsidiaries’
Accounts have been assigned to Administrative Agent or Canadian Agent, as the
case may be, and to collect such Borrowers’ and their applicable Subsidiaries’
Accounts directly in its own name and to charge the collection costs and
expenses, including legal fees, to Borrowers.

6.3                Records and Reports of Inventory.

Each Borrower shall keep records of its Inventory which records shall be
complete and accurate in all material respects.  Domestic Borrower will furnish
to Administrative Agent Inventory reports concurrently with the delivery of each
Borrowing Base Certificate described in Section 8.1.4 or more frequently as
requested by Administrative Agent, which reports will be in such other format
and detail as Administrative Agent shall request and shall include a current
list of all locations of Domestic Borrower’s Inventory.  Domestic Borrower shall
conduct a physical inventory no less frequently than annually and shall provide
to Administrative Agent a report based on each such physical inventory promptly
thereafter, together with such supporting information as Administrative Agent
shall reasonably request.  Upon Administrative Agent’s request, Canadian
Borrower and UK Guarantors shall furnish to Administrative Agent perpetual
listings of Inventory of such Person.

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6.4           Administration of Equipment.

6.4.1        Records and Schedules of Equipment.  Each Borrower shall (and shall
cause each of its Subsidiaries to) keep records of its Equipment which shall be
complete and accurate in all material respects itemizing and describing the
kind, type, quantity and book value of its Equipment and all dispositions made
in accordance with Section 6.4.2 hereof, and Borrowers shall promptly after the
reasonable request therefor by Administrative Agent or Canadian Agent, and shall
cause each of their Subsidiaries to, furnish Agents with a current schedule
containing the foregoing information on at least an annual basis and more often
if reasonably requested by Agents, which schedule shall contain a certification
that, except as otherwise indicated  in such schedule, all such Equipment is
working in a satisfactory manner.  Promptly after the reasonable request
therefor by Administrative Agent or Canadian Agent, each applicable Borrower
shall (and shall cause each of its Subsidiaries to) deliver to Administrative
Agent or Canadian Agent, as applicable, any and all evidence of ownership, if
any, of any of its Equipment.

6.4.2        Dispositions of Equipment.  No Borrower shall, nor shall it permit
any of its Subsidiaries to, sell, lease or otherwise dispose of or transfer any
of its respective Equipment or other fixed assets or any part thereof without
the prior written consent of Administrative Agent, in the case of Domestic
Borrower, and Canadian Agent, in the case of Canadian Borrower; provided,
however, that the foregoing restriction shall not apply, for so long as no
Default or Event of Default exists and is continuing, to (a) dispositions of
Equipment and other fixed assets which, in the aggregate during any consecutive
twelve-month period, have a book value of $250,000 or less, provided that all
proceeds thereof are remitted to Administrative Agent or Canadian Agent, as
applicable, for application to the Loans as provided in Section 3.3.1,
(b) replacements of Equipment or other fixed assets that are substantially worn,
damaged or obsolete with Equipment or other fixed assets which are useful in the
business of the applicable Borrower or one of its Subsidiaries, provided that
the replacement Equipment or other fixed assets shall be acquired within 180
days before or after any disposition of the Equipment or other fixed assets that
are to be replaced and the replacement Equipment or other fixed assets shall be
free and clear of Liens other than Permitted Liens that are Purchase Money
Liens, and (c) the sale, lease or other disposition of or transfer of Equipment
or other fixed assets of the Channell Australia Entities, so long as the
proceeds of such sale, lease, disposition, or transfer shall be, to the extent
permitted under the Channell Bushman Credit Facility, applied to the outstanding
obligations under any intercompany loans owed to Borrowers, but only to the
extent any such intercompany loans exist at such time.  For the avoidance of
doubt, if there are no outstanding intercompany loans owed to Borrowers by the
Channell Australia Entities, then the sale, lease or other disposition of or
transfer of Equipment or other fixed assets of the Channell Australia Entities
shall be permitted under this Section 6.4.2.

SECTION 7. REPRESENTATIONS  AND  WARRANTIES

7.1          General Representations and Warranties.

To induce Administrative Agent, Canadian Agent, and each Lender to enter into
this Agreement and to make advances hereunder, each Borrower warrants,
represents and covenants to Administrative Agent, Canadian Agent, and each
Lender that:

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7.1.1        Organization and Qualification.  Domestic Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  Canadian Borrower is a corporation duly organized and
validly existing under the laws of Ontario.  CCEL is a private limited liability
company  duly incorporated and validly existing under the laws of England and
Wales. CLU is a private limited liability company duly incorporated and validly
existing under the laws of England and Wales.  Each of Borrowers’ Subsidiaries
not referenced in the preceding sentences is a corporation, limited partnership
or limited liability company duly organized, validly existing and, with respect
to those Subsidiaries organized in the United States, in good standing under the
laws of the jurisdiction of its incorporation or organization.  Each Borrower
and each of its Subsidiaries is duly qualified and is authorized to do business
and, with respect to Domestic Borrower and those Subsidiaries organized in the
United States, is in good standing as a foreign limited liability company,
limited partnership or corporation, as applicable, in each state or jurisdiction
listed on Schedule 7.1.1 hereto and in all other states and jurisdictions in
which the failure of such Borrower or any of its Subsidiaries to be so qualified
would reasonably be expected to have a Material Adverse Effect.

7.1.2        Power and Authority.  Each Borrower and each of its Subsidiaries is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party.  The
execution, delivery and performance of this Agreement by each Borrower, and the
execution, delivery and performance of each of the other Loan Documents by each
Borrower and each of its Subsidiaries party thereto, have been duly authorized
by all necessary corporate or other relevant action and do not and will not
(a) require any consent or approval of the shareholders or other equity holders
of any Borrower or any of the shareholders, partners or members, as the case may
be, of any Subsidiary of any Borrower (other than UK Guarantors); (b) contravene
any Borrower’s or any of its Subsidiaries’ charter, articles or certificate of
incorporation, partnership agreement, certificate of formation, by-laws, limited
liability agreement, operating agreement, unanimous shareholders agreement or
other organizational documents (as the case may be); (c) violate, or cause any
Borrower or any of its Subsidiaries to be in default under, any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award in effect having applicability to such Borrower or any of its
Subsidiaries, the violation of which would reasonably be expected to have a
Material Adverse Effect; (d) result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of its Subsidiaries is a party or by
which it or its Properties may be bound or affected, the breach of or default
under which would reasonably be expected to have a Material Adverse Effect; or
(e) result in, or require, the creation or imposition of any Lien (other than
Permitted Liens) upon or with respect to any of the Properties now owned or
hereafter acquired by any Borrower or any of its Subsidiaries.

7.1.3        Legally Enforceable Agreement.  This Agreement is, and each of the
other Loan Documents when delivered under this Agreement will be, a legal, valid
and binding obligation of each Borrower party thereto and each of its
Subsidiaries party thereto, enforceable against it in accordance with its
respective terms, except as enforcement may be limited by applicable bankruptcy
or insolvency laws, and by general principles of equity.

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7.1.4        Capital Structure.  Schedule 7.1.4 hereto states, as of the date
hereof, (a) the correct name of each of the Subsidiaries of each Borrower, its
jurisdiction of incorporation or organization and the percentage of its Voting
Stock owned by Borrowers, (b) the name of each Borrower’s and each of its
Subsidiaries’ corporate or joint venture relationships and the nature of the
relationship, (c) the number, class and holder of all outstanding Securities of
Borrowers (other than Domestic Borrower) and the holder of Securities of each
Subsidiary of each Borrower and (d) the number of issued and authorized, but
unissued, Securities of each Borrower (with respect to Domestic Borrower, as of
the date set forth in such schedule).  Attached as Schedule 7.1.4A hereto is the
corporate organization chart of the Domestic Borrower and its Subsidiaries as of
the Closing Date.  Each Borrower has good title to all of the Securities it
purports to own of each of such Subsidiaries, free and clear in each case of any
Lien other than Permitted Liens.  All such Securities have been duly issued and
are fully paid and non-assessable.  Except as set forth on Schedule 7.1.4, as of
the date hereof, there are no outstanding options to purchase, or any rights or
warrants to subscribe for, or any commitments or agreements to issue or sell any
Securities or obligations convertible into, or any powers of attorney relating
to, any Securities of any Borrower or any of its Subsidiaries.  Except as set
forth on Schedule 7.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of any Borrower’s or any of its
Subsidiaries’ partners, members or shareholders, as the case may be, relating to
the ownership of its Securities.

7.1.5        Names.  No Borrower nor any of its Subsidiaries has been known as
or has used any legal, fictitious or trade names except those listed on
Schedule 7.1.5 hereto.  Except as set forth on Schedule 7.1.5, no Borrower nor
any of its Subsidiaries has been the surviving entity of a merger or
consolidation, or the entity resulting from an amalgamation, or has acquired all
or substantially all of the assets of any Person.  Each Borrower’s and each of
its Subsidiaries’ respective jurisdictions of incorporation or organization,
Type of Organization and Organizational I.D. Number, and any United Kingdom and
Canadian equivalent thereof, are set forth on Schedules 7.1.4 and 7.1.5.  The
respective exact legal names of each Borrower and each of its Subsidiaries are
set forth on Schedule 7.1.5.

7.1.6        Business Locations.  Each Borrower’s and each of its Subsidiaries’
chief executive office and other places of business as of the date hereof are as
listed on Schedule 6.1.1 hereto as updated from time to time by Borrower
Representative.  During the preceding one-year period, no Borrower nor any of
its Subsidiaries has had an office or place of business other than as listed on
Schedule 6.1.1.  All tangible Collateral is and will at all times be kept by
each Borrower and its Subsidiaries in accordance with Section 6.1.1.  Except as
shown on Schedule 6.1.1, as  of the date hereof, no Inventory is stored with a
bailee, distributor, warehouseman or similar party, nor is any Inventory
consigned to any Person.

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7.1.7        Title to Properties; Priority of Liens.  Each Borrower and each of
its Subsidiaries has good and indefeasible title to and fee simple ownership of,
or valid and subsisting leasehold interests in, all of its real (or immovable)
Property, and good title to all of the Collateral owned by such Borrower or
Subsidiary and all of its other Property, in each case, free and clear of all
Liens except Permitted Liens.  Each Borrower and each of its Subsidiaries has
paid or discharged all lawful claims which, if unpaid, might become a Lien
against any Borrower’s or such Subsidiary’s Properties that is not a Permitted
Lien.  The Liens granted to Administrative Agent and Canadian Agent under
Section 5 hereof are first priority Liens, subject only to Permitted Liens.

7.1.8        Accounts.  Administrative Agent and Canadian Agent may rely, in
determining which Accounts are Eligible Accounts, on all statements and
representations made by Borrowers and their Subsidiaries with respect to any
Account or Accounts.  With respect to each Account of a Borrower and each
Account of each Subsidiary of a Borrower, whether or not such Account of such
Borrower or such Subsidiary is an Eligible Account, unless otherwise disclosed
to Administrative Agent or Canadian Agent in writing:

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

(b)           It arises out of a completed, bona fide sale and delivery of goods
or rendition of services by such Borrower or such Subsidiary, in the ordinary
course of its business and in accordance with the terms and conditions of all
purchase orders, contracts or other documents relating thereto to be complied
with by any Borrower or any of its Subsidiaries and forming a part of the
contract between such Borrower or such Subsidiary and the Account Debtor and the
Account Debtor is not an Affiliate of such Borrower or such Subsidiary, except
to the extent such Accounts with Affiliates exist in the ordinary course of
business and consistent with past practices;

(c)           It is for a liquidated amount maturing as stated in the duplicate
invoice covering such sale or rendition of services, a copy of which has been
furnished or is available to Administrative Agent or Canadian Agent, as
applicable;

(d)           There are no facts, events or occurrences known to Borrowers which
in any way impair the validity or enforceability of any Accounts or tend to
reduce the amount payable thereunder from the face amount of the invoice and
statements delivered or made available to Administrative Agent or Canadian
Agent, as applicable, with respect thereto;

(e)           To the best of such Borrower’s knowledge (with “knowledge” in this
clause (e) referring to the actual knowledge of those officers of such Borrower
which are directly involved in the administration of the credit facilities
provided pursuant to this Agreement), the Account Debtor thereunder (i) had the
capacity to contract at the time any contract or other document giving rise to
the Account was executed and (ii) is not involved in any bankruptcy or
insolvency proceeding; and

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(f)            To the best of such Borrower’s knowledge (with “knowledge” in
this clause (f) referring to the actual knowledge of those officers of such
Borrower which are directly involved in the administration of the credit
facilities provided pursuant to this Agreement), there are no proceedings or
actions which are pending against the Account Debtor thereunder which are
reasonably likely to result in any material adverse change in such Account
Debtor’s financial condition or the collectability of such Account.

7.1.9        Equipment.  The Equipment of each Borrower and its Subsidiaries is
in good operating condition and repair as of the date hereof, and all necessary
replacements of and repairs thereto shall be made so that the operating
efficiency thereof shall be maintained and preserved, reasonable wear and tear
excepted, except where the failure to so maintain the same would not reasonably
be expected to have a Material Adverse Effect.  No Borrower will permit (nor
will it allow any of its Subsidiaries (other than Restricted Subsidiaries) to
permit) any Equipment owned by such Borrower or Subsidiary to become affixed to
any real (or immovable) Property leased to such Borrower or such Subsidiary so
that an interest arises therein under the real estate laws of the applicable
jurisdiction unless the landlord of such real (or immovable) Property has
executed a landlord waiver or leasehold mortgage in favor of and in form
reasonably acceptable to Administrative Agent or Canadian Agent, as applicable,
and no Borrower will permit (nor will it allow any of its Subsidiaries (other
than Restricted Subsidiaries) to permit) any of the Equipment of such Borrower
or such Subsidiary to become an accession to any personal (or movable) Property
other than Equipment that is subject to first priority (except for Permitted
Liens) Liens in favor of Administrative Agent or Canadian Agent, as applicable.

7.1.10      Financial Statements; Fiscal Year.  The Consolidated balance sheets
of Domestic Borrower and its Subsidiaries (including the accounts of all
Subsidiaries of Domestic Borrower and their respective Subsidiaries for the
respective periods during which a Subsidiary relationship existed) as of April
30, 2007, and the related statements of income for the periods ended on such
date, except for the absence of footnote disclosures and normal year-end
adjustments, have been prepared in accordance with GAAP, and present fairly in
all material respects the financial positions of Domestic Borrower and such
Persons, taken as a whole, at such dates and the results of Domestic Borrower’s
and such Persons’ operations, taken as a whole, for such periods.  As of the
date hereof, since December 31, 2006, there has been no material adverse change
in the financial position of Domestic Borrower and such other Persons, taken as
a whole, as reflected in the Consolidated balance sheet as of such date.  As of
the date hereof, the fiscal year of each Borrower and each of its Subsidiaries
ends on December 31 of each year.

7.1.11      Full Disclosure.  The financial statements referred to in
Section 7.1.10 hereof do not, nor does this Agreement or any other written
statement of any Borrower or any of its Subsidiaries to Administrative Agent,
Canadian Agent, or any Lender contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. To the best of Borrowers’ knowledge, there is no fact
pertaining directly to the business of Borrowers and their Subsidiaries or their
customers which any Borrower or any of its Subsidiaries has failed to disclose
to Administrative Agent, Canadian Agent, or any Lender in writing which would
reasonably be expected to have a Material Adverse Effect.

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7.1.12      Solvent Financial Condition.  Except as set forth on Schedule
7.1.12, each Borrower and each of its Subsidiaries, is now and, after giving
effect to the initial Loans to be made and the initial Domestic Letters of
Credit and Domestic LC Guaranties to be issued hereunder and all related
transactions, will be, as of the Closing Date, Solvent.

7.1.13      Surety Obligations.  Except as set forth on Schedule 7.1.13, as of
the date hereof, no Borrower nor any of its Subsidiaries is obligated as surety
or indemnitor under any surety or similar bond or other contract issued or
entered into to assure payment, performance or completion of performance of any
undertaking or obligation of any Person.

7.1.14      Taxes.  Domestic Borrower’s federal tax identification number is
95-2453261.  Canadian Borrower’s original corporation number is Ontario
Corporation Number 1244636.  The federal tax identification number of each
Domestic Subsidiary of each Borrower is shown on Schedule 7.1.14 hereto.  Except
as set forth on Schedule 7.1.14 hereto, each Borrower and each of its
Subsidiaries has filed all federal, national, state, provincial and local tax
returns (including, without limitation, any returns required under its
jurisdiction of organization or incorporation) and other reports relating to
taxes it is required by law to file, except where the failure to so file would
not reasonably be expected to have a Material Adverse Effect, and has paid, or
made provision for the payment of, all material taxes, assessments, fees, levies
and other governmental charges known by it to be due upon it, its income and
Properties as and when such taxes, assessments, fees, levies and charges are due
and payable, unless and to the extent any thereof are being actively contested
in good faith and by appropriate proceedings and each Borrower and each of its
Subsidiaries maintains reasonable reserves on its books therefor.  Except as set
forth on Schedule 7.1.14 hereto, no tax Lien has been filed with respect to any
such tax, fee or other charge.  To the knowledge of each Borrower, no claim is
being asserted with respect to any such tax, fee or other charge, except (a) as
set forth on Schedule 7.1.14 hereto, and (b) where any such claim would not
reasonably be expected to result in a Material Adverse Effect.  The provision
for taxes on the books of each Borrower and its Subsidiaries is adequate for all
years not closed by applicable statutes, and for the current fiscal year.  No
Borrower, nor any of its Subsidiaries, has entered into any “listed
transactions” within the meaning of Treasury Regulation 1.6011-4T(b)(2).

7.1.15      Brokers.  Except as shown on Schedule 7.1.15 hereto, there are no
claims for brokerage commissions, finder’s fees or investment banking fees in
connection with the transactions contemplated by this Agreement arising from any
actions taken by any Borrower or any of its Subsidiaries.

7.1.16      Patents, Trademarks, Copyrights and Licenses.  Each Borrower and
each of its Subsidiaries owns, possesses or licenses or has the right to use all
the patents, trademarks, service marks, trade names, copyrights, licenses and
other Intellectual Property necessary for the present conduct of its business
without any known conflict with the rights of others, except for such conflicts
as would not reasonably be expected to have a Material Adverse Effect.  All such
patents, registered trademarks, trademark applications, registered service
marks, registered tradenames, registered copyrights, copyright applications, and

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licenses of Intellectual Property are listed on Schedule 7.1.16 hereto.  No
claim has been asserted against any Borrower or any of its Subsidiaries which is
currently pending that its use of its Intellectual Property or the conduct of
its business does or may infringe upon the Intellectual Property rights of any
third party, except for such claims as would not reasonably be expected to have
a Material Adverse Effect.  To the knowledge of Borrowers and except as set
forth on Schedule 7.1.16 hereto, as of the date hereof, no Person is engaging in
any activity that infringes in any material respect upon Borrowers’ or any of
their Subsidiaries’ material Intellectual Property.  Except as set forth on
Schedule 7.1.16, each Borrower’s and each of its Subsidiaries’ material license
agreements and similar arrangements relating to its Inventory (a) permits, and
does not restrict, the assignment by such Borrower or any of its Subsidiaries to
Administrative Agent or Canadian Agent, as the case may be, or any other Person
designated by Administrative Agent or Canadian Agent, as the case may be, of all
of such Borrower’s or such Subsidiary’s, as applicable, rights, title and
interest pertaining to such license agreement or such similar arrangement and
(b) would permit the continued use by such Borrower or such Subsidiary, or
Administrative Agent or Canadian Agent, as the case may be, or its assignee, of
such license agreement or such similar arrangement and the right to sell
Inventory subject to such license agreement for a period of no less than 6
months after a default or breach of such agreement or arrangement.  The
consummation and performance of the transactions and actions contemplated by
this Agreement and the other Loan Documents, including without limitation, the
exercise by Administrative Agent or Canadian Agent, as the case may be, of any
of its rights or remedies under Section 10, will not result in the termination
or impairment of any of any Borrower’s or any of its Subsidiaries’ ownership or
rights relating to its Intellectual Property, except for such Intellectual
Property rights the loss or impairment of which would not reasonably be expected
to have a Material Adverse Effect.  Except as listed on Schedule 7.1.16 and
except as would not reasonably be expected to have a Material Adverse Effect,
(A) no Borrower nor any of its Subsidiaries is in breach of, or default under,
any term of any license or sublicense with respect to any of its Intellectual
Property and (B) to the knowledge of Borrowers, no other party to such license
or sublicense is in breach thereof or default thereunder, and such license is
valid and enforceable.

7.1.17      Governmental Consents.  Each Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it, except where the failure to possess or so maintain
such rights would not reasonably be expected to have a Material Adverse Effect. 
No action, consent or approval of, registration or filing with or any other
action by any governmental authority is or will be required in connection with
the borrowings hereunder, the creation of the security interests contemplated
hereby and the other transactions contemplated to occur under the Loan
Documents, except for (a) the filing of UCC and PPSA financing statements and
filings with the United States Patent and Trademark Office, the United States
Copyright Office and foreign equivalent, as applicable, and such other
comparable documents as may be necessary to perfect the security interest of the
Lenders hereunder in any jurisdiction, (b) such filings as are required by
Section 395 of the Companies Act of England and Wales (as amended) or any
applicable act of Parliament or rule or regulations of England and Wales
relating to creation of security interests over land, and (c) such others as
have been made or obtained and are in full force and effect.

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7.1.18      Compliance with Laws.  Except as set forth on Schedule 7.1.18, each
Borrower and each of its Subsidiaries has duly complied in all material respects
with (except for such noncompliance with respect to which no action may be taken
by the applicable governmental authorities against any Borrower or any of its
Subsidiaries), and its Properties, business operations and leaseholds are in
compliance in all material respects with, the provisions of all United States of
America, Canadian and United Kingdom federal, state, provincial and local laws,
rules and regulations applicable to such Borrower or such Subsidiary, as
applicable, its Properties or the conduct of its business, except for such
non-compliance as would not reasonably be expected to have a Material Adverse
Effect, and there have been no citations, notices or orders of noncompliance
issued to any Borrower or any of its Subsidiaries under any such law, rule or
regulation, except where (i) such noncompliance would not reasonably be expected
to have a Material Adverse Effect or (ii) no action may be taken by the
applicable governmental authorities against any Borrower or any of its
Subsidiaries with respect to such noncompliance.  Each Borrower and each of its
Subsidiaries has established and maintains an adequate monitoring system to
insure that it remains in compliance in all material respects with all federal,
state, provincial and local rules, laws and regulations applicable to it.  No
Inventory has been produced in violation of the Fair Labor Standards Act (29
U.S.C. §201 et seq.), as amended.

7.1.19      Restrictions.  Except pursuant to the documents governing the
Channell Bushman Credit Facility, no Borrower nor any of its Subsidiaries is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness.

7.1.20      Litigation.  Except as set forth on Schedule 7.1.20 hereto, there
are no actions, suits, proceedings or investigations pending, or to the
knowledge of Borrowers, threatened, against or involving any Borrower or any of
its Subsidiaries, or the business, operations, Properties, prospects, profits or
condition of any Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.  No
Borrower nor any of its Subsidiaries is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court, governmental authority
or arbitration board or tribunal, which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

7.1.21      No Defaults.  No event has occurred and no condition exists which
would, upon or after the execution and delivery of this Agreement or Borrowers’
performance hereunder, constitute a Default or an Event of Default.  No Borrower
nor any of its Subsidiaries is in default in (and no event has occurred and no
condition exists which constitutes, or which with the passage of time or the
giving of notice or both would constitute, a default in) the payment of any
Indebtedness to any Person for Money Borrowed in excess of $250,000.

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7.1.22      Leases.  Schedule 7.1.22 hereto is a complete listing of all
capitalized and operating personal (or movable) Property leases of Borrowers and
their Subsidiaries and all real (or immovable) Property leases of Borrowers and
their Subsidiaries.  Each Borrower and each of its Subsidiaries is in full
compliance with all of the terms of each of its respective capitalized and
operating leases, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.

7.1.23      Pension Plans.

(a)           Except as disclosed on Schedule 7.1.23 hereto, no Borrower nor any
of its Subsidiaries has any Plan, Canadian Pension Plan or pension scheme.  Each
Borrower and each of its Subsidiaries is in compliance with the requirements of
ERISA and the regulations promulgated thereunder with respect to each Plan,
except where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.  No fact or situation that would reasonably be expected
to have a Material Adverse Effect exists in connection with any Plan.  Neither
Domestic Borrower nor any of its Subsidiaries has any material withdrawal
liability in connection with a Multiemployer Plan.

(b)           The Canadian Pension Plans are duly registered under and have been
administered in compliance with the Income Tax Act (Canada) and all other
applicable laws which require registration (except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect) and
no event has occurred which is reasonably likely to cause the loss of such
registered status.  All material obligations of Canadian Borrower or any of its
Subsidiaries (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with the Canadian Pension
Plans and the funding agreements therefor have been performed in a timely
fashion.  There have been no improper withdrawals or applications of the assets
of the Canadian Pension Plans or the Canadian Benefit Plans.  There are no
outstanding disputes, actions, suits or claims concerning the assets of the
Canadian Pension Plans or the Canadian Benefit Plans.  Each of the Canadian
Pension Plans is fully funded on a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable governmental authorities and which are consistent with generally
accepted actuarial principles).  Canadian Borrower and its Subsidiaries have
withheld all employee withholdings and have made all employer contributions to
be withheld and made by it pursuant to Canadian and any provincial applicable
law on account of Canadian Pension Plans, Canadian Benefit Plans, Canadian
employment insurance and employee income taxes.  No condition exists or
transaction has occurred in connection with any Canadian Pension Plan or
Canadian Benefit Plan which could result in the incurrence by Canadian Borrower
or its Subsidiaries of any liability, fine or penalty, except any liability,
fine or penalty the imposition of which would not reasonably be expected to have
a Material Adverse Effect.

(c)           All pension schemes of UK Guarantors and any other Subsidiaries of
Domestic Borrower that are organized under the laws of England and Wales are
operated and fully funded to the extent required by law based on reasonable
actuarial assumptions applicable in the United Kingdom.

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7.1.24      Trade Relations.  There exists no actual or, to any Borrower’s
knowledge, threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any Borrower or any
of its Subsidiaries and any customer or any group of customers whose purchases
individually or in the aggregate are material to the business of any Borrower
and its Subsidiaries, or with any material supplier, except in each case, where
the same would not reasonably be expected to have a Material Adverse Effect, and
there exists no present condition or state of facts or circumstances which would
prevent any Borrower or any of its Subsidiaries from conducting such business
after the consummation of the transaction contemplated by this Agreement in
substantially the same manner in which it has heretofore been conducted.

7.1.25      Labor Relations.  Except as described on Schedule 7.1.25 hereto, as
of the date hereof, no Borrower nor any of its Subsidiaries is a party to any
collective bargaining agreement.  There are no material grievances, disputes or
controversies with any union or any other organization of any Borrower’s or any
of its Subsidiaries’ employees, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or organization,
except those that would not reasonably be expected to have a Material Adverse
Effect.

7.1.26      Environmental Matters.

(a)           The properties now or formerly owned or operated by each Borrower
and its Subsidiaries (as referred to in this Section 7.1.26, the “Owned
Properties”) do not contain any Hazardous Materials in amounts or concentrations
which (i) constitute, or constituted a violation of, or (ii) could give rise to
liability under, Environmental Laws resulting from any Release of Hazardous
Materials during such  Borrower’s or its Subsidiaries’ ownership or operation of
the Owned Properties or, to the knowledge of such Borrower, at any other time,
which violations and liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

(b)           The Owned Properties currently owned or occupied by such Borrower
or any of its Subsidiaries and all operations of such Borrower and its
Subsidiaries are in compliance, and, to the extent that such Borrower or any of
its Subsidiaries owned or operated any Owned Properties in the past three years,
in the last three years have been in compliance, with all Environmental Laws and
all Environmental Permits and all necessary Environmental Permits have been
obtained and are in effect, except to the extent that such non-compliance or
failure to obtain any necessary permits, in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.

(c)           During the time of such Borrower’s or its Subsidiaries’ ownership
or operation of the Owned Properties and, to the knowledge of such Borrower, at
any other time, there have been no Releases at, from, under or proximate to the
Owned Properties or otherwise in connection with the operations of such Borrower
or its Subsidiaries, which Releases, in the aggregate, could reasonably

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be expected to result in a Material Adverse Effect, and none of the Owned
Properties currently owned or operated by such Borrower and its Subsidiaries are
listed on the Federal National Priorities List (under CERCLA and as defined
pursuant to Environmental Law), or any similar listing in any other relevant
jurisdiction.

(d)           No Borrower nor any of its Subsidiaries has received any
Environmental Claim in connection with any of the Owned Properties or the
operations of such Borrower or any of its Subsidiaries or with regard to any
Person whose liabilities for environmental matters such Borrower or any of its
Subsidiaries  has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which Environmental Claim, in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, nor do such
Borrower or any of its Subsidiaries have reason to believe that notice of any
such Environmental Claim will be received or is being threatened.

Hazardous Materials have not been transported from any of the Owned Properties
by any Borrower or any of its Subsidiaries or, to the knowledge of Borrowers,
any other party, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Owned Properties by any Borrower or any
of its Subsidiaries in a manner that could reasonably be expected to give rise
to liability under any  Environmental Law that would constitute a Material
Adverse Effect, nor have any Borrower or any of its Subsidiaries retained or
assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

7.2           Continuous Nature of Representations and Warranties.

Each representation and warranty contained in this Agreement and the other Loan
Documents shall be continuous in nature and shall remain accurate, complete and
not misleading at all times during the term of this Agreement, except for
changes in the nature of a Borrower’s or one of a Borrower’s Subsidiary’s
business or operations that would render the information in any schedule
attached hereto or to any other Loan Document either inaccurate, incomplete or
misleading, so long as Majority Lenders have consented to such changes or such
changes are expressly permitted by this Agreement (provided that the consent of
Majority Lenders shall not be required (so long as Borrowers have notified
Administrative Agent of such changes) with respect to the following, to the
extent otherwise expressly permitted by this Agreement: (a) the entry into any
capitalized or operating personal (or movable) Property leases by any Borrowers
or any of their Subsidiaries, or any real (or immovable) Property leases by any
Borrower or any of their Subsidiaries not identified on Schedule 7.1.22 as of
the Closing Date, (b) the establishment by any Borrower or any of their
Subsidiaries of any Plan, Canadian Pension Plan or pension scheme not identified
on Schedule 7.1.23 as of the Closing Date, (c) the filing of any tax Lien
permitted by Section 8.2.5(b), or (d) the issuance of additional equity by
Domestic Borrower).

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7.3           Survival of Representations and Warranties.

All representations and warranties of Borrowers contained in this Agreement or
any of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Administrative Agent, Canadian Agent, and each Lender and
the parties thereto and the closing of the transactions described therein or
related thereto.

SECTION 8. COVENANTS  AND  CONTINUING  AGREEMENTS

8.1           Affirmative Covenants.

During the term of this Agreement, and thereafter for so long as there are any
Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall (and it shall cause each
of its Subsidiaries to):

8.1.1        Visits and Inspections; Lender Meeting.  Permit representatives of
Administrative Agent and Canadian Agent, and during the continuation of any
Default or Event of Default any Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to visit and
inspect the Properties of such Borrower and such Subsidiaries, inspect, audit
and make extracts from their books and records, and discuss with their officers,
their employees, their consultants and their independent accountants, such
Borrower’s and such Subsidiaries’ business, assets, liabilities, financial
condition, business prospects and results of operations.  Administrative Agent
or Canadian Agent, as applicable, if no Default or Event of Default then exists,
shall give each Borrower or Subsidiary reasonable prior notice of any such
inspection or audit.  Without limiting the foregoing, each Borrower will
participate and will cause its Subsidiaries and key management personnel to
participate in a meeting with Administrative Agent, Canadian Agent, and Lenders
periodically during each year, which meetings shall be held at such times and
such places as may be reasonably requested by Administrative Agent and Canadian
Agent.

8.1.2        Notices.  Promptly notify Administrative Agent in writing of the
occurrence of (a) any Default or Event of Default and (b) any event or the
existence of any fact which renders any representation or warranty in this
Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect as of the date made or remade.  In addition,
each Borrower agrees to provide Administrative Agent with (i) 10 Business Days’
prior written notice of (A) any change in the legal name of such Borrower or any
of its Subsidiaries, (B) the adoption by such Borrower or any of its
Subsidiaries of any new fictitious name or tradename and (C) any change in the
principal place of business of such Borrower or any of its Subsidiaries, and
(ii) prompt written notice of any change in the information disclosed in any
exhibit or schedule hereto, in each case after giving effect to the materiality
limits and Material Adverse Effect qualifications contained therein.

8.1.3        Financial Statements.  Keep, and cause each of its Subsidiaries to
keep, adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with customary
accounting practices reflecting all its financial transactions; and cause to be
prepared and furnished to Administrative Agent,

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Canadian Agent, and each Lender, the following, all to be prepared in accordance
with GAAP applied on a consistent basis, unless Borrowers’ certified public
accountants concur in any change therein and such change is disclosed to
Administrative Agent and is consistent with GAAP:

(a)           not later than 90 days after the close of each fiscal year of
Domestic Borrower, unqualified (except for a qualification for a change in
accounting principles with which the accountant concurs) audited financial
statements of Domestic Borrower and its Subsidiaries as of the end of such year
(including without limitation, a balance sheet, statement of income and
statement of cash flow), on a Consolidated basis, certified by a firm of
independent certified public accountants of recognized standing selected by
Borrowers but reasonably acceptable to Administrative Agent and, within a
reasonable time thereafter a copy of any management letter issued in connection
therewith;

(b)           not later than 30 days after the end of each month hereafter,
including the last month of Domestic Borrower’s fiscal year, unaudited financial
statements of Domestic Borrower and its Subsidiaries as of the end of such month
and of the portion of the fiscal year then elapsed (including without
limitation, a balance sheet, statement of income and statement of cash flow), on
a Consolidated and consolidating basis, certified by the principal financial
officer of Domestic Borrower as prepared in accordance with GAAP and fairly
presenting in all material respects the financial position and results of
operations of Domestic Borrower and its Subsidiaries for such month and period
subject only to changes from audit and year-end adjustments and except that such
statements need not contain notes;

(c)           together with each delivery of financial statements pursuant to
clauses (a) and (b) of this Section 8.1.3, a management report (i) setting forth
in comparative form the corresponding figures for the corresponding periods of
the previous fiscal year and the corresponding figures from the most recent
Projections for the current fiscal year delivered pursuant to Section 8.1.7 and
(ii) upon Administrative Agent’s request, identifying the reasons for any
significant variations from such Projections.  The information above shall be
presented in reasonable detail and shall be certified by the chief financial
officer of Domestic Borrower to the effect that such information fairly presents
in all material respects the results of operations and financial condition of
Domestic Borrower and its Subsidiaries as at the dates and for the periods
indicated;

(d)           upon Administrative Agent’s request, promptly after the sending or
filing thereof, as the case may be, copies of any proxy statements or financial
statements which any Borrower has made available to its Securities holders and
copies of any regular, periodic and special reports or registration statements
which any Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or any national securities exchange;

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(e)           upon request of Administrative Agent, copies of any annual report
to be filed with the United States Department of Labor in connection with each
Plan;

(f)            concurrently with the delivery of the financial statements
described in paragraph (a) and (b) of this Section 8.1.3 and as more frequently
as Administrative Agent or Canadian Agent may request, a statutory payables
certificate with respect to Canadian Borrower and UK Guarantors in the form of
Exhibit 8.1.3(g) hereto; and

(g)           such other data and information (financial and otherwise) as
Administrative Agent, Canadian Agent, or any Lender, from time to time, may
reasonably request, bearing upon or related to the Collateral or Borrowers’ or
any of their Subsidiaries’ financial condition or results of operations.

Concurrently with the delivery of the financial statements described in
paragraph (a) of this Section 8.1.3, Borrowers shall forward to Administrative
Agent a copy of the accountants’ letter to Domestic Borrower’s management that
is prepared in connection with such financial statements and at Administrative
Agent’s request shall furnish to Administrative Agent a certificate of the
aforesaid certified public accountants certifying to Administrative Agent that,
based upon their examination of the financial statements of Domestic Borrower
and its Subsidiaries, they are not aware of any Default or Event of Default, or,
if they are aware of such Default or Event of Default, specifying the nature
thereof.  Concurrently with the delivery of the financial statements described
in paragraphs (a) and (b) of this Section 8.1.3, or more frequently if
reasonably requested by Administrative Agent or Canadian Agent, Borrowers shall
cause to be prepared and furnished to Administrative Agent and Canadian Agent a
Compliance Certificate in the form of Exhibit 8.1.3 hereto executed by the Chief
Financial Officer of Domestic Borrower.

8.1.4        Borrowing Base Certificates.  On or before the 15th day of each
month from and after the date hereof, Borrowers shall deliver to Administrative
Agent a Borrowing Base Certificate as of the last day of the immediately
preceding month, with such supporting materials as Administrative Agent shall
reasonably request, which Borrowing Base Certificate shall provide eligibility
information with respect to Accounts of the Account Creditors and Inventory of
Domestic Borrower on a consolidated and consolidating basis. If Administrative
Agent deems it advisable in its sole discretion, Borrowers shall execute and
deliver to Administrative Agent Borrowing Base Certificates more frequently than
as provided above.

8.1.5        [Reserved].

8.1.6        Landlord, Processor and Storage Agreements.  Provide Administrative
Agent and Canadian Agent with copies of all agreements between each Borrower or
any of its Subsidiaries and any landlord, processor, distributor, warehouseman
or consignee which owns any premises at which any Collateral may, from time to
time, be kept.

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8.1.7        Projections.  No later than thirty (30) days prior to the end of
each fiscal year of Domestic Borrower, deliver to Administrative Agent
Consolidated and consolidating Projections of Domestic Borrower and its
Subsidiaries for the forthcoming fiscal year of Domestic Borrower, month by
month.

8.1.8        Subsidiaries.  Cause each Domestic Subsidiary of Domestic Borrower
(other than Restricted Subsidiaries) and upon Administrative Agent’s request
each Foreign Subsidiary of Domestic Borrower (other than Restricted Subsidiaries
and Canadian Borrower), in each case whether now or hereafter in existence, to
execute and deliver to Administrative Agent a Guaranty Agreement and a Guaranty
Security Agreement pursuant to which such Subsidiary guaranties the payment of
all Obligations and grants to Administrative Agent (for the benefit of itself,
Canadian Agent, and Lenders) a first priority Lien (subject only to Permitted
Liens) on all of its Properties of the types described in Section 5. 
Additionally, each Borrower and each Subsidiary of a Borrower (other than
Restricted Subsidiaries) shall execute and deliver to Administrative Agent a
pledge agreement pursuant to which such Borrower or such Subsidiary grants to
Administrative Agent (for the benefit of itself, Canadian Agent, and Lenders) a
first priority Lien (subject only to Permitted Liens) with respect to (a) all of
the issued and outstanding Securities of each Subsidiary of Domestic Borrower
which is not a Restricted Subsidiary (other than Canadian Borrower (with respect
to which 65% of the issued and outstanding Securities shall be pledged to
Administrative Agent on the Closing Date), and (b) 65% of the issued and
outstanding Securities, in the aggregate, of each Restricted Subsidiary (other
than Channell Bushman and the Channell Australia Entities) described in
clause (b) of the definition of “Restricted Subsidiary” if such Subsidiary
possesses 2.5% or greater of Consolidated assets of Domestic Borrower,
determined in accordance with GAAP, or owns any material Intellectual Property. 
In addition, Borrowers shall cause each Restricted Subsidiary of Domestic
Borrower which ceases to be a Restricted Subsidiary to comply with this Section
8.1.8, and Borrowers shall, and shall cause each Subsidiary of Borrower (other
than Restricted Subsidiaries) which owns equity of such Restricted Subsidiary
to, comply with this Section 8.1.8 with respect to each Restricted Subsidiary of
Domestic Borrower which ceases to be a Restricted Subsidiary.

8.1.9        Deposit and Brokerage Accounts.  For each deposit account or
brokerage account that any Borrower or any of its Subsidiaries (other than
Restricted Subsidiaries) at any time opens or maintains, such Borrower shall (or
shall cause such Subsidiary to), at Administrative Agent’s or Canadian Agent’s,
as the case may be, request and option, pursuant to an agreement in form and
substance satisfactory to Administrative Agent or Canadian Agent, as the case
may be, cause the depository bank or securities intermediary, as applicable, to
agree to comply at any time with instructions from Administrative Agent or
Canadian Agent, as the case may be, to such depository bank or securities
intermediary, as applicable, directing the disposition of funds from time to
time credited to such deposit or brokerage account, without further consent of
such Borrower or such Subsidiary.

8.1.10      ERISA.  Each Borrower will, and will cause each of its Subsidiaries
to, (a) comply with the applicable provisions of ERISA and the Code (or their
Canadian or United Kingdom equivalent) and of the regulations and published
interpretations thereunder, except where the failure to comply therewith could
not reasonably be expected to

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have a Material Adverse Effect, and (b) furnish to Administrative Agent
(i) promptly, and in any event within 30 days after any responsible officer of
such Borrower either knows or has a reasonable basis to know that any Reportable
Event has occurred, that alone or together with any other Reportable Event could
reasonably be expected to result in material liability, of such Borrower, any
Subsidiary or any ERISA Affiliate to the PBGC, a statement of a responsible
officer of such Borrower (in his or her capacity as such) setting forth details
as to such Reportable Event and the action proposed to be taken with respect
thereto, together with a copy of the notice, if any, of such Reportable Event
given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice
such Borrower, any Subsidiary or any ERISA Affiliate receives from the PBGC
relating to the intention of the PBGC to terminate any Plan or Plans or to
appoint a trustee to administer any Plan or Plans, (iii) within 30 days after
the due date for filing with the PBGC pursuant to Section 412(n) of the Code a
notice of failure to make a required installment or other payment with respect
to a Plan, a statement of a responsible officer of such Borrower setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of such notice given to the PBGC and (iv) promptly
and in any event within 30 days after receipt thereof by such Borrower, any
Subsidiary or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by such Borrower, any Subsidiary or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in Reorganization, in each case within the meaning of Title IV of ERISA;
provided, however, that no such notice or statement will be required under this
Section 8.1.10 unless the event, when aggregated with all other events described
in this Section 8.1.10 occurring at the same time, could be reasonably expected
to result in liability to such Borrower, any Subsidiary or any ERISA Affiliate
in an amount that would exceed $250,000 in the aggregate for such Borrower, its
Subsidiaries and all ERISA Affiliates.

8.1.11      Compliance with Environmental Laws.  Except as any of the following,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, each Borrower will, and will cause each of its
Subsidiaries to, comply, and use its reasonable best efforts to cause all
lessees and other Persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any remedial action
required by any governmental authority in accordance with Environmental Laws;
provided, however, that no Borrower nor any of its Subsidiaries shall be
required to undertake any remedial action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.

8.1.12      Patents, Trademarks and Copyrights.  Each Borrower will, and will
cause each of its Subsidiaries (other than Restricted Subsidiaries) to (a) as it
deems appropriate in its business judgment, use commercially reasonable efforts
to register with the United States Patent and Trademark Office, the United
States Copyright Office or foreign equivalent, as the case may be, all of its or
their right, title and interest in each material patent, trademark and copyright
used in its or their business which is so registrable under applicable

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law, (b) report each such filing and registration to Administrative Agent, with
respect to Domestic Collateral, and Canadian Agent, with respect to Canadian
Collateral, within fifteen (15) Business Days after the last day of the fiscal
quarter in which such filing occurs and (c) promptly upon request by
Administrative Agent, with respect to Domestic Collateral, and Canadian Agent,
with respect to Canadian Collateral, execute and deliver any and all agreements,
instruments, documents, and papers (each of which shall be in form and substance
reasonably satisfactory to Administrative Agent or Canadian Agent, as
applicable) as may be necessary or as Administrative Agent or Canadian Agent, as
applicable, may reasonably request to grant (to the extent possible) to
Administrative Agent, for the benefit of itself, Canadian Agent, and the
Lenders, and to Canadian Agent, for the benefit of itself, Canadian Lender and
the Canadian Participating Lenders, a perfected, first priority security
interest therein and in any goodwill and general intangibles relating thereto or
represented thereby.

8.1.13      Canadian Pension and Benefit Plans.

(a)           For each existing Canadian Pension Plan of Canadian Borrower or
any of its Subsidiaries, Canadian Borrower or such Subsidiary, as applicable,
shall ensure that such plan retains its registered status under and is
administered in a timely manner in all material respects in accordance with the
applicable pension plan text, funding agreement, the Income Tax Act (Canada) and
all other applicable laws.

(b)           For each Canadian Pension Plan hereafter adopted by Canadian
Borrower or any of its Subsidiaries which is required to be registered under the
Income Tax Act (Canada) or any other applicable laws, the Canadian Borrower or
such Subsidiary, as applicable, shall use its best efforts to seek and receive
confirmation in writing from the applicable governmental authorities to the
effect that such plan is unconditionally registered under the Income Tax Act
(Canada) and such other applicable laws.

(c)           For each existing and hereafter adopted Canadian Pension Plan and
Canadian Benefit Plan of Canadian Borrower or any of its Subsidiaries, Canadian
Borrower or such Subsidiary, as applicable, shall in a timely fashion perform in
all material respects all obligations (including fiduciary, funding, investment
and administration obligations) required to be performed in connection with such
plan and the funding media therefor.

(d)           Canadian Borrower and each Subsidiary of Canadian Borrower shall
deliver to Administrative Agent and Canadian Agent, if requested by
Administrative Agent or Canadian Agent, promptly after the filing thereof by
Canadian Borrower or such Subsidiary, as applicable, with any applicable
governmental authority, (i) copies of each annual and other return, report or
valuation with respect to each Canadian Pension Plan of Canadian Borrower or
such Subsidiary, as applicable; (ii) promptly after receipt thereof, a copy of
any direction, order, notice, ruling or opinion that Canadian Borrower or such
Subsidiary, as

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applicable, may receive from any applicable governmental authority with respect
to any Canadian Pension Plan of Canadian Borrower or such Subsidiary, as
applicable; and (iii) notification within 30 days of any increases having a cost
to Canadian Borrower or such Subsidiary, as applicable, in excess of $250,000
per annum, in the benefits of any existing Canadian Pension Plan or Canadian
Benefit Plan, or the establishment of any new Canadian Pension Plan or Canadian
Benefit Plan, or the commencement of contributions to any such plan to which
Canadian Borrower or such Subsidiary, as applicable, was not previously
contributing.

8.2          Negative Covenants.

During the Term, and thereafter for so long as there are any Obligations
outstanding, each Borrower covenants that, unless otherwise consented to by
Majority Lenders, in writing, it shall not (and it shall not permit its
Subsidiaries to):

8.2.1        Mergers; Consolidations; Acquisitions; Structural Changes.  Merge,
amalgamate or consolidate with any Person; or acquire all or substantially all
of the Properties of any Person; or change its state or other jurisdiction of
incorporation or organization or Type of Organization; or change its legal name,
except for:

(a)           mergers of any Subsidiary of a Borrower into a Borrower or another
Subsidiary (other than Canadian Borrower or a Restricted Subsidiary) of a
Borrower;

(b)           acquisitions of assets consisting of fixed assets or real (or
immovable) Property that constitute Capital Expenditures permitted under
Section 8.2.8; and

(c)           mergers of any Channell Australia Entity into another Channell
Australia Entity.

8.2.2        Loans and Advances.  Make any loans or other advances of money to
any Person, other than (a) for salary, travel advances, advances against
commissions and other similar advances to employees and extensions of trade
credit in the ordinary course of business, (b) deposits with financial
institutions permitted under this Agreement, (c) prepaid expenses, and (d)
Permitted Intercompany Loans.

8.2.3        Total Indebtedness.  Create, incur, assume, or suffer to exist, any
Indebtedness, except:

(a)           Obligations owing to Administrative Agent, Canadian Agent, or any
Lender under this Agreement or the other Loan Documents;

(b)           Indebtedness existing on the date of this Agreement and listed on
Schedule 8.2.3(b) and any refinancing thereof which does not increase the amount
thereof;

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(c)           Contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;

(d)           Guaranties of any Indebtedness permitted hereunder;

(e)           To the extent not mentioned above, trade payables, accruals and
accounts payable in the ordinary course of business (in each case to the extent
not overdue) not for Money Borrowed;

(f)            Subordinated Debt in such amounts as may be approved in writing
by Administrative Agent and the Majority Lenders;

(g)           Purchase Money Indebtedness secured by a Purchase Money Lien and
Capitalized Lease Obligations (and any refinancing thereof), provided that the
aggregate unpaid principal amount for Borrowers and their Subsidiaries of the
foregoing (excluding any interest component thereof) does not exceed $2,000,000;

(h)           Permitted Intercompany Loans;

(i)            Guaranties in the ordinary course of business by any Borrower of
any obligation owed by any Subsidiary to an unrelated third party, and
guaranties by Subsidiaries of Domestic Borrower of any obligation owed by a
Borrower to an unrelated third party, provided that the guarantied obligations
are otherwise permitted by this Agreement and do not exceed at any time the sum
of the amount set forth on Schedule 8.2.3(i) hereto as of the Closing Date plus
$75,000;

(j)            Indebtedness not included in paragraphs (a) through (j) above
which, when added to outstanding Indebtedness permitted under paragraph (g)
above, does not exceed at any time, in the aggregate, the sum of $1,000,000; and

(k)           Indebtedness under the Channell Bushman Credit Facility which does
not exceed an aggregate principal amount of AUD15,000,000.

8.2.4        Affiliate Transactions.  Enter into, or be a party to, any
transaction with any Affiliate of a Borrower, including without limitation any
management, consulting or similar fees, except, without duplication, (a) in the
ordinary course of and pursuant to the reasonable requirements of such
Borrower’s or such Subsidiary’s business and upon fair and reasonable terms
which are fully disclosed to Administrative Agent and are no less favorable to
such Borrower or such Subsidiary than would be obtained in a comparable
arms-length transaction with a Person not an Affiliate of such Borrower or such
Subsidiary, (b) those transactions identified on Schedule 8.2.4 hereto, (c)
Permitted Intercompany Loans, and (d) the employment of an Affiliate who is a
natural person by any Borrower or any Subsidiary as an officer, director or
employee of such Borrower or Subsidiary, and (e) as otherwise permitted under
this Agreement.

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8.2.5        Limitation on Liens.  Create or suffer to exist any Lien upon any
of its Property, income or profits, whether now owned or hereafter acquired,
except:

(a)           Liens at any time granted in favor of Administrative Agent or
Canadian Agent pursuant to the Loan Documents;

(b)           Liens for taxes, assessments or governmental charges (excluding
any Lien imposed pursuant to any of the provisions of ERISA) not yet due, or
being contested in the manner described in Section 7.1.14 hereto, but only if
such Lien would not reasonably be expected to have a Material Adverse Effect;

(c)           Liens arising in the ordinary course of the business of such
Borrower or any of its Subsidiaries by operation of law or regulation, but only
if payment in respect of any such Lien is not at the time required and such
Liens do not, in the aggregate, materially detract from the value of the
Property of such Borrower or any of its Subsidiaries or materially impair the
use thereof in the operation of the business of such Borrower or any of its
Subsidiaries;

(d)           Purchase Money Liens securing Permitted Purchase Money
Indebtedness and any renewals or extensions thereof so long as the obligations
secured or benefited thereby are not increased and such Liens comply with the
limitations set forth in the definition of “Purchase Money Lien”;

(e)           Such other Liens as appear on Schedule 8.2.5 hereto and any
renewals or extensions thereof so long as the obligations secured or benefited
thereby are not increased and such Liens are not extended beyond their scope
from that existing on the Closing Date;

(f)            Liens incurred or deposits made in the ordinary course of
business in connection with (i) worker’s compensation, social security,
unemployment insurance and other like laws or (ii) sales contracts, leases,
statutory obligations, work in progress advances and other similar obligations
not incurred in connection with the borrowing of money or the payment of the
deferred purchase price of property;

(g)           Reservations, covenants, zoning and other land use regulations,
title exceptions or encumbrances granted in the ordinary course of business,
affecting real (or immovable) Property owned or leased by such Borrower or one
of its Subsidiaries; provided that such exceptions do not in the aggregate
materially interfere with the use of such Property in the ordinary course of
such Borrower’s or such Subsidiary’s business;

(h)           Judgment Liens that do not give rise to an Event of Default under
Section 10.1.15;

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(i)            Liens securing Capitalized Lease Obligations permitted by Section
8.2.3(g) on and limited to the capital assets acquired, constructed or financed
with the proceeds of such Capitalized Lease Obligations;

(j)            Liens securing the Channell Bushman Credit Facility; and

(k)           Such other Liens as Majority Lenders may hereafter approve in
writing.

Notwithstanding any provision contained herein or in any of the Loan Documents
to the contrary, Borrower shall not, nor shall it permit any of its
Subsidiaries, to create or suffer to exist any Liens on the equity interests in
Channell Bushman.

8.2.6        Payments and Amendments of Certain Debt.

(a)           Make any payment of any part or all of any Subordinated Debt or
take any other action or omit to take any other action in respect of any
Subordinated Debt, except in accordance with the subordination agreement
relative thereto or the subordination provisions thereof; or

(b)           Amend or modify any agreement, instrument or document evidencing
or relating to any Subordinated Debt.

8.2.7        Distributions.  Declare or make any Distributions, except for:

(a)           Distributions by any Subsidiary of Borrowers to a Borrower; and

(b)           Distributions paid solely in Securities of such Borrower or any of
its Subsidiaries;

(c)           Distributions by Domestic Borrower consisting of the repurchase of
the common stock of Domestic Borrower in the open market in an amount not to
exceed $200,000 in the aggregate during each fiscal year of Domestic Borrower,
subject in the case of each such Distribution to the following: (i) Aggregate
Availability as at such date shall not be less than $2,000,000, after giving
effect to such repurchase, (ii) no Default or Event of Default shall then exist
or would result therefrom, and (iii) Borrowers and their Subsidiaries shall not
be in violation of Section 8.2.19 as of such date; and

(d)           Distributions by any Channell Australia Entity to another Channell
Australia Entity.

8.2.8        Capital Expenditures.  Make Capital Expenditures (including,
without limitation, by way of capitalized leases (but counting in any fiscal
year the full amount of the obligations under each capitalized lease entered
into during such fiscal year and counting no amount in respect of capitalized
leases entered into during any other fiscal year)) which, in the aggregate, (a)
as to Borrowers and the UK Guarantors, exceed $3,500,000 for any fiscal year of
Domestic Borrower and (b) as to Borrowers and all of their Subsidiaries, exceed
$6,000,000 for any fiscal year of Domestic Borrower.

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8.2.9        Operating Leases.  Incur any obligation to pay rent under an
operating lease in any fiscal year of Domestic Borrower if to do so would result
in the aggregate obligation of Borrowers and their Subsidiaries to make cash
payments under all operating leases in that fiscal year to exceed the sum of the
amount set forth in Schedule 8.2.9 as of the Closing Date plus $500,000.

8.2.10      Disposition of Assets.  Sell, lease or otherwise dispose of any of
its Properties, including any disposition of Property as part of a sale and
leaseback transaction, to or in favor of any Person, except for:

(a)           unless a Default or Event of Default has occurred and Agents or
Lenders are exercising any default remedies pertaining to mashalling, sale,
liquidation or other control of such Inventory, sales of Inventory in the
ordinary course of business;

(b)           transfers of Property to such Borrower by a Subsidiary of such
Borrower or by any Subsidiary to a Borrower where the Liens created by the
Security Documents over such Property are not adversely affected in any material
respect;

(c)           dispositions of Property that is substantially worn, damaged,
uneconomic or obsolete (subject to Section 6.4.2 hereof);

(d)           dispositions of investments described in clauses (d), (e), (f) and
(g) of the definition of the term “Restricted Investments”; and

(e)           other dispositions expressly authorized by this Agreement,
including without limitation dispositions of Equipment and other fixed assets
permitted by Section 6.4.2 hereof; and

(f)            the subletting by either UK Guarantor of its leasehold interest
in the applicable Subject UK Leaseholds.

8.2.11      Securities of Subsidiaries.  Permit any Subsidiaries of Domestic
Borrower to issue any additional Securities except to a Borrower and except for
(i) director’s qualifying Securities and to any other Subsidiary of Domestic
Borrower provided such Subsidiary pledges such Securities to the Agents in
accordance with this Agreement and the other Loan Documents and (ii) Securities
issued by any Channell Australia Entity to any other Channell Australia Entity.

8.2.12      Bill-and-Hold Sales, Etc.  Make a sale to any customer on a
bill-and-hold or consignment basis.

8.2.13      Restricted Investment.  Make or have any Restricted Investment.

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8.2.14      Subsidiaries and Joint Ventures.  Create, acquire or otherwise
suffer to exist any Subsidiary or joint venture arrangement not in existence as
of the date hereof except for the Subsidiary described on Schedule 8.2.13.

8.2.15      Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Domestic Borrower and
its Subsidiaries.

8.2.16      Organizational Documents.  Agree to, or suffer to occur, any
amendment, supplement or addition to its or any of its Subsidiaries’ charter,
articles or certificate of incorporation, certificate of formation, limited
partnership agreement, bylaws, limited liability agreement, operating agreement
or other organizational documents (as the case may be), that would reasonably be
expected to have a Material Adverse Effect.

8.2.17      Fiscal Year End.  Change its fiscal year end.

8.2.18      Aggregate Availability.  Permit Aggregate Availability to be less
than $1,500,000 at any time.

8.2.19      UK Losses.  Permit UK Loss, (i) as of the last day of each calendar
month for the calendar month then ended, to exceed negative $500,000 and (ii) as
of the last day of each calendar month for the twelve month period then ended,
to exceed negative $900,000; provided that, notwithstanding anything to the
contrary contained in this Agreement, a violation of this covenant shall not
constitute a Default or an Event of Default under this Agreement nor otherwise
impose upon Borrowers or their Subsidiaries any additional Obligations nor any
acceleration of the payment of any outstanding Obligations, but rather in the
event of a violation of this Section 8.2.19, the sole and exclusive right and
remedy shall consist of the right of Administrative Agent, in its sole
discretion, to deem the UK Borrowing Base equal to $0 (unless and until such
breach shall be cured by Borrowers and their Subsidiaries delivering appropriate
information to Administrative Agent indicating, and Administrative Agent’s
determination, that Borrowers and their Subsidiaries have complied with this
Section 8.2.19 for three consecutive months subsequent to such breach (it being
acknowledged that only a breach of clause (b) of this Section 8.2.19 is capable
of such cure)).

8.2.20      Post-Closing Deliveries.  Within 30 days of the Closing Date, fail
to cause UK Guarantors to deliver fully executed collection account agreements
and/or amendments to the existing collection account agreements in respect of
(i) UK Guarantors’ accounts with Bank of America, N.A., London U.K. Branch and
(ii) such other accounts of UK Guarantors, as may be requested by Administrative
Agent, in its sole discretion, in each case in form and substance reasonably
acceptable to Administrative Agent.

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SECTION 9. CONDITIONS PRECEDENT

Notwithstanding any other provision of this Agreement or any of the other Loan
Documents, and without affecting in any manner the rights of Administrative
Agent, Canadian Agent, or any Lender under the other sections of this Agreement,
no Lender shall be required to make any Loan, nor shall Administrative Agent be
required to or issue or procure any Domestic Letter of Credit or Domestic LC
Guaranty unless and until each of the following conditions has been and
continues to be satisfied:

9.1           Documentation.

Administrative Agent shall have received, in form and substance reasonably
satisfactory to Administrative Agent, Canadian Agent, and their counsel, a duly
executed copy of this Agreement and the other Loan Documents, together with such
additional documents, instruments and certificates as Administrative Agent and
Canadian Agent and their counsel shall require in connection therewith from time
to time, all in form and substance reasonably satisfactory to Administrative
Agent, Canadian Agent, and their counsel, including, without limitation, the
pledge by Domestic Borrower to Administrative Agent of 65% of the outstanding
equity of Canadian Borrower and 100% of the outstanding equity of Egerton, CLU
and CCEL.

9.2           No Default.

No Default or Event of Default shall exist.

9.3           Other Conditions.

Each of the conditions precedent set forth in the other Loan Documents shall
have been satisfied.

9.4           No Litigation.

No action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of this Agreement or the
consummation of the transactions contemplated hereby.

9.5           Material Adverse Effect.

Since December 31, 2006, there has not been any material adverse change in
Borrowers’ business, assets, condition (financial or otherwise), operations,
income or prospects and no event or condition exists which would be reasonably
likely to result in any Material Adverse Effect.

9.6           Fees.

The fees payable on the Closing Date pursuant to the Fee Letter shall have been
paid.

9.7           Collateral.

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Administrative Agent shall be reasonably satisfied that, upon the filing of
appropriate financing statements showing Administrative Agent (for the benefit
of itself, Canadian Agent, and each Lender) as secured party with the
appropriate governmental authorities, Administrative Agent (for the benefit of
itself, Canadian Agent, and each Lender) will hold a first priority perfected
Lien in the collateral described therein subject only to Permitted Liens. 
Canadian Agent shall be reasonably satisfied that, upon the filing of
appropriate financing statements showing Canadian Agent (for the benefit of
itself, Canadian Lender and Canadian Participating Lenders) as secured party
with the appropriate governmental authorities,  Canadian Agent (for the benefit
of itself, Canadian Lender, and Canadian Participating Lenders) will hold a
first priority perfected Lien in the collateral described therein subject only
to Permitted Liens.

9.8           Diligence.

Administrative Agent and Canadian Agent shall have completed and received all
audits, inspections, legal due diligence and research (including, without
limitation, with respect to state sales tax issues), appraisals and examinations
as deemed necessary in Administrative Agent’s and Canadian Agent’s reasonable
opinion with respect to the Collateral (including inventory, fixed assets and
real (or immovable) Property), the books and records of Borrowers and their
Subsidiaries, the financial and business condition and operations of Borrowers
and their Subsidiaries, environmental assessment studies and remediation plans,
and the transactions contemplated hereby.

9.9           Corporate Matters.

Administrative Agent shall be satisfied with the corporate and legal structure
and capitalization of Borrowers and each of their Subsidiaries, including the
charter and bylaws of Borrowers and each such Subsidiary and each agreement or
instrument relating thereto.

9.10         Environmental Matters.

Administrative Agent shall be satisfied as to the existing and potential
liability of Borrowers and their Subsidiaries with respect to any environmental
matters, and as to the compliance by Borrowers and their Subsidiaries with all
Environmental Laws.

9.11         Insurance.

Administrative Agent and Canadian Agent shall be satisfied that Borrowers have
obtained the insurance policies and the loss payable and additional insured
endorsements relating thereto required by Section 6.1.2.

9.12         Legal Opinions.

Administrative Agent and Canadian Agent shall have received satisfactory written
opinions of counsel for Borrowers and their Subsidiaries as to the transactions
contemplated hereby (including, without limitation, the tax aspects thereof and
compliance with all applicable securities laws), the status of Borrowers and
their Subsidiaries, and the legal, binding and enforceable effect of the Loan
Documents.

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9.13         Reference Checks.

Administrative Agent shall have completed satisfactory reference checks of the
customers and vendors of Borrowers and their Subsidiaries.

9.14         Financial Statements.

Administrative Agent shall have been satisfied with its review of Borrowers’
financial statements for the fiscal year ending December 31, 2006, and all
interim financial statements of Borrowers delivered to Administrative Agent
(including, without limitation, as of April 30, 2007) prior to the Closing Date.

9.15         Updated Audit.

Administrative Agent and Canadian Agent shall have completed a satisfactory
pre-closing updated audit of the books and records of Borrowers and their
Subsidiaries.

9.16         Costs and Expenses.

The reasonable costs and expenses of Administrative Agent and Canadian Agent in
connection with the preparation of the Loan Documents payable pursuant to
Section 2.9 and invoiced to Borrowers prior to the Closing Date, shall have been
paid.

9.17         Representations and Warranties.

The representations and warranties of Borrowers contained in Section 7 shall be
true and correct in all material respects.

9.18         Availability.

Administrative Agent shall have determined that immediately after Lenders have
made the initial Loans and after Administrative Agent have procured the initial
Domestic Letters of Credit and Domestic LC Guaranties contemplated hereby, and
Borrowers have paid (or, if accrued, treated as paid) all closing costs incurred
in connection with the transactions contemplated hereby and have reserved an
amount sufficient to pay all trade payables greater than 60 days past due,
Aggregate Availability shall not be less than $1,500,000.

SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

10.1         Events of Default.

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

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10.1.1      Payment of Obligations.  Borrowers shall fail to pay any of the
Obligations hereunder or under any Note on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise), or, in the case of
any payment required because of an Overadvance (as defined below), within three
Business Days of the due date thereof (whether due at stated maturity, on
demand, upon acceleration or otherwise).  As used in this Section 10.1.1, the
term “Overadvance” means the occurrence of any of the following: (a) the
Domestic Revolving Credit Exposure of all the Domestic Lenders exceeds (i) the
Aggregate Borrowing Base then in effect (minus Reserves, if any) or (ii) the
Revolving Credit Maximum Amount (minus the Dollar Equivalent of the aggregate
principal amount of the outstanding Canadian Revolving Credit Loans, if any) or
(b) the aggregate amount of the Canadian Revolving Credit Exposure of the
Canadian Lender exceeds (including, without limitation, as a result of
fluctuation in exchange rates) the Canadian Borrowing Base then in effect (minus
Reserves applicable to Canadian Revolving Credit Loans, if any).

10.1.2      Misrepresentations.  Any representation, warranty or other statement
made or furnished to Administrative Agent, Canadian Agent, or any Lender by or
on behalf of any Borrower, any Subsidiary of any Borrower or any Guarantor in
this Agreement, any of the other Loan Documents or any instrument, certificate
or financial statement furnished in compliance with or in reference thereto
proves to have been false or misleading in any material respect when made,
furnished or remade pursuant to Section 7.2 hereof, unless (a) any breach
described in this Section 10.1.2 was not intentional on the part of Borrowers
and their Subsidiaries, (b) such breach is capable of being cured as reasonably
determined by Administrative Agent, and (c) such breach is in fact so cured to
Administrative Agent’s satisfaction within fifteen days after the sooner to
occur of Borrower Representative’s receipt of notice of such breach from
Administrative Agent or the date on which such breach first becomes known to any
officer of any Borrower.

10.1.3      Breach of Specific Covenants.  Any Borrower shall breach any
covenant contained in Sections 6.1.2, 8.1.1 (other than, if no Event of Default
shall have occurred and be continuing, the last sentence thereof), 8.1.2, 8.1.4
or 8.2 (provided that if at such time there are no outstanding Loans, a breach
of the covenants contained in Sections 8.2.3(g) and 8.2.8 shall not constitute a
Default or an Event of Default hereunder but Lenders may cease funding
hereunder) hereof on the date that Borrowers are required to perform, keep or
observe such covenant or shall fail to perform, keep or observe any covenant
contained in Section 8.1.3 or in the last sentence of Section 8.1.1 hereof
within 5 days following the date on which Borrowers are required to perform,
keep or observe such covenant.

10.1.4      Breach of Other Covenants.  Any Borrower shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and
the breach of such other covenant is not cured to Administrative Agent’s
satisfaction within 30 days after the sooner to occur of Borrower
Representative’s receipt of notice of such breach from Administrative Agent or
the date on which such failure or neglect first becomes known to any officer of
any Borrower.

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10.1.5      Default Under Security Documents or Other Agreements.  Any event of
default shall occur under, or any Borrower, any of its Subsidiaries or any 
Guarantor shall default in the performance or observance of any term, covenant,
condition or agreement contained in, any of the Security Documents or the Other
Agreements and such default shall continue beyond any applicable grace or cure
period.

10.1.6      Other Defaults.  There shall occur any default or event of default
on the part of any Borrower, any Subsidiary of any Borrower or any Guarantor
under any agreement, document or instrument to which such Borrower, such
Subsidiary of any Borrower or such Guarantor is a party or by which such
Borrower, such Subsidiary of any Borrower or such Guarantor or any of its
Property is bound, evidencing or relating to any Indebtedness for Money Borrowed
(other than the Obligations) with an outstanding principal balance in excess of
$250,000, if the payment or maturity of such Indebtedness is accelerated in
consequence of such event of default or demand for payment of such Indebtedness
is made or could be made in accordance with the terms thereof.

10.1.7      Uninsured Losses.  There shall occur any material loss, theft,
damage or destruction of any portion of the Collateral and the portion of such
Collateral that is not fully covered by insurance exceeds $200,000, in the
aggregate (subject to such deductibles and self-insurance retentions as
Administrative Agent or Canadian Agent, as the case may be, shall have
permitted).

10.1.8      Insolvency and Related Proceedings.  Any Borrower, any Subsidiary of
any Borrower which is a Loan Party or any Guarantor (that is not a Subsidiary of
Domestic Borrower) shall cease to be Solvent or shall suffer the appointment of
a receiver, administrator, administrative receiver, trustee, interim receiver,
sheriff, monitor, sequestrator, custodian or similar fiduciary, or shall pass or
convene any meeting for the purpose of considering any resolution for winding up
or administration, or shall make an assignment, composition or arrangement for
the benefit of creditors, or any petition for an order for relief (or similar
proceedings, including, without limitation, an application for a stay order or
filing of a proposal or notice of intention to make a proposal) shall be filed
by or against any Borrower, any Subsidiary of any Borrower (which is a Loan
Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) under
the United States federal bankruptcy laws, the Insolvency Laws of Canada,
England’s Insolvency Act of 1986 or any other insolvency laws in the United
Kingdom (if against any Borrower, any Subsidiary of any Borrower (which is a
Loan Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) the
continuation of such proceeding for more than 30 days or, with respect to any
proceeding in the United Kingdom, 14 days), or any Borrower, any Subsidiary of
any Borrower (which is a Loan Party) or any Guarantor (that is not a Subsidiary
of Domestic Borrower) shall make any offer of settlement, extension or
composition to their respective unsecured creditors generally.  With respect to
UK Guarantors or any other Subsidiary of Domestic Borrower (which is a Loan
Party) organized under the laws of the United Kingdom, a petition has been
presented or a meeting convened or application made for the purpose of
appointing an administrator or receiver or other similar officer of, or for the
making of an administration order in respect of, UK Guarantors or any such
Subsidiary and (other than in the case of a petition to appoint an administrator
or receiver to which a grace period shall not apply), such petition or
application is not stayed or discharged within 14 days or in any event before it
is heard.  Notwithstanding the foregoing provisions of this Section 10.1.8, no
Event of Default shall have occurred as a result of UK Guarantors ceasing to be
Solvent, so long as UK Guarantors are in compliance with Section 8.2.19.

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10.1.9      Business Disruption; Condemnation.  There shall occur a cessation of
a substantial part of the business of any Borrower or any Subsidiary of any
Borrower for a period which materially adversely affects Borrowers’ and their
Subsidiaries’, taken as a whole, capacity to continue their business on a
profitable basis; or any Borrower or any Subsidiary of any Borrower shall suffer
the loss or revocation of any material license or permit now held or hereafter
acquired by such Borrower or such Subsidiary which is necessary to the continued
or lawful operation of its business and any such loss or revocation would
reasonably be expected to have a Material Adverse Effect; or any Borrower or any
Subsidiary of any Borrower shall be enjoined, restrained or in any way prevented
by court, governmental or administrative order from conducting all or any
material part of its business affairs and any such action would reasonably be
expected to have a Material Adverse Effect; or any material lease or agreement
pursuant to which any Borrower or any Subsidiary of any Borrower leases, uses or
occupies any Property shall be canceled or terminated prior to the expiration of
its stated term, except any such lease or agreement the cancellation or
termination of which would not reasonably be expected to have a Material Adverse
Effect; or any material portion of the Collateral shall be taken through
condemnation or the value of such Property shall be impaired through
condemnation.

10.1.10        Change of Ownership.  Any Borrower shall cease to own and
control, beneficially and of record (directly or indirectly), 100% (except for
directors’ qualifying Securities) of the issued and outstanding Securities and
Voting Stock of each of its Subsidiaries which are Loan Parties.

10.1.11        Reportable Event.  A Reportable Event shall occur which, in
Administrative Agent’s determination, constitutes grounds for the termination by
the PBGC of any Plan or for the appointment by the appropriate United States
district court of a trustee for any Plan, or if any Plan shall be terminated or
any such trustee shall be requested or appointed, or if any Borrower, any
Subsidiary of any Borrower or any Guarantor is in “default” (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from such Borrower’s, such Subsidiary’s or such Guarantor’s complete
or partial withdrawal from such Plan and any such event specified in this
Section 10.1.11 would reasonably be expected to have a Material Adverse Effect.

10.1.12        Challenge to Agreement.  Any Borrower, any Subsidiary of any
Borrower or any Guarantor, or any Designated Affiliate of any of them, shall
challenge or contest in any action, suit or proceeding the validity or
enforceability of this Agreement or any of the other Loan Documents, the
legality or enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Administrative Agent or Canadian Agent.  Any
holder of Subordinated Debt asserts in writing that such Subordinated Debt is
not subordinated to the Obligations in accordance with its terms and Borrowers
do not promptly deny in writing such assertion and contest any attempt by such
holder to take action based on such assertion.

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10.1.13        Repudiation of or Default Under Guaranty Agreement.  Any
Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by
such Guarantor, or shall repudiate such Guarantor’s liability thereunder or
shall be in default under the terms thereof (including any grace or cure
period).

10.1.14        Criminal Forfeiture.  Any Borrower, any Subsidiary of any
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any material Property of any Borrower,
any Subsidiary of any Borrower or any Guarantor.

10.1.15        Judgments.  Any money judgments, writ of attachment or similar
processes (collectively, “Judgments”) are issued or rendered against any
Borrower, any Subsidiary of any Borrower or any Guarantor, or any of their
respective Property (i) in the case of money judgments, in an amount of $150,000
or more for any single judgment, attachment or process or $300,000 or more for
all such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance with respect to which the insurer has
admitted liability, and (ii) in the case of non-monetary Judgments, such
Judgment or Judgments (in the aggregate) would reasonably be expected to have a
Material Adverse Effect, in each case which Judgment is not stayed, appealed,
released or discharged within 30 days.

10.1.16        Canadian Pension Plans.  Any of the following events or
conditions has occurred which could reasonably be expected to have a Material
Adverse Effect: (a) the withdrawal of Canadian Borrower or any of its
Subsidiaries from a Canadian Pension Plan; (b) the obligation to provide
affected parties with written notice of the intention to terminate or wind-up a
Canadian Pension Plan in whole or in part, whether voluntarily or by order of
any applicable pension regulatory authority; (c) the institution by any
applicable pension regulatory authority of any action to terminate, in whole or
in part, any Canadian Pension Plan; (d) any event or condition which would
require the appointment of a trustee or similar Person to administer a Canadian
Pension Plan; or (e) any event that would give rise to any liability or offense
under Canadian pension laws or that could jeopardize the registration of any
Canadian Pension Plan.

10.2         Acceleration of the Obligations.

Upon or at any time after the occurrence and during the continuance of an Event
of Default, (a) the Domestic Revolving Credit Commitments and the Canadian
Revolving Credit Sub-Limit shall, at the option of Administrative Agent or
Majority Lenders be terminated and/or (b) Administrative Agent or Majority
Lenders may declare all or any portion of the Obligations at once due and
payable without presentment, demand, protest or further notice by Administrative
Agent, Canadian Agent, or any Lender, and Domestic Borrower shall forthwith pay
to Administrative Agent, and Canadian Borrower shall forthwith pay to Canadian
Agent, the full amount of such Obligations, provided, that upon the occurrence
of an Event of Default specified in Section 10.1.8 hereof, the Domestic
Revolving

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Credit Commitments (together with the Canadian Revolving Credit Sub-Limit) and
the Domestic Cap Ex Commitments shall automatically be terminated and all of the
Obligations shall become automatically due and payable without declaration,
notice or demand by Administrative Agent, Canadian Agent, or any Lender.

10.3         Other Remedies.

Upon the occurrence and during the continuance of an Event of Default,
Administrative Agent and Canadian Agent shall have and may exercise from time to
time the following rights and remedies:

10.3.1      All of the rights and remedies of a secured party under the UCC or
the PPSA or under other applicable law, such additional rights as may be
afforded under the Loan Documents, and all other legal and equitable rights to
which Administrative Agent, Canadian Agent, or Lenders may be entitled, all of
which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.

10.3.2      The right to take immediate possession of the Collateral, and to
(a) require Borrowers and each of their Subsidiaries to assemble the Collateral,
at Borrowers’ expense, and make it available to Administrative Agent and/or
Canadian Agent at a place designated by Administrative Agent and/or Canadian
Agent which is reasonably convenient to both parties, and (b) enter any premises
where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
any Borrower or any Subsidiary of any Borrower, such Borrower agrees not to
charge, or permit any of its Subsidiaries to charge, Administrative Agent or
Canadian Agent for storage thereof).

10.3.3      The right to sell or otherwise dispose of all or any Collateral in
its then condition, or after any further manufacturing or processing thereof, at
public or private sale or sales, with such notice as may be required by law, in
lots or in bulk, for cash or on credit, all as Administrative Agent or Canadian
Agent, as applicable, in its sole discretion, may deem advisable. 
Administrative Agent and/or Canadian Agent, as applicable, may, at
Administrative Agent’s and/or Canadian Agent’s, as applicable, option, disclaim
any and all warranties regarding the Collateral in connection with any such
sale.  Each Borrower agrees that 10 days’ written notice to Borrower
Representative of any public or private sale or other disposition of Collateral
shall be reasonable notice thereof, and such sale shall be at such locations as
Administrative Agent and/or Canadian Agent may designate in said notice. 
Administrative Agent and/or Canadian Agent, as applicable, shall have the right
to conduct such sales on Borrowers’ or any of their Subsidiaries’ premises,
without charge therefor, and such sales may be adjourned from time to time in
accordance with applicable law.  Administrative Agent and/or Canadian Agent
shall have the right to sell, lease or otherwise dispose of the Collateral, or
any part thereof, for cash, credit or any combination thereof, and
Administrative Agent, on behalf of itself, Canadian Agent, and Lenders, and
Canadian Agent, on behalf of itself, Canadian Lender, and Canadian Participating
Lenders, may purchase all or any part of the Collateral at public or, if
permitted by law, private sale and, in lieu of actual

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payment of such purchase price, may set off the amount of such price against the
Obligations.  The proceeds realized from the sale of any Collateral may be
applied, after allowing one (1) Business Day for collection, first to the costs,
expenses and legal fees incurred by Administrative Agent and/or Canadian Agent,
as applicable, in collecting the Obligations, in enforcing the rights of
Administrative Agent, Canadian Agent, and Lenders under the Loan Documents and
in collecting, retaking, completing, protecting, removing, storing, advertising
for sale, selling and delivering any Collateral, second to the interest due upon
any of the Obligations; and third, to the principal of the Obligations.  If any
deficiency shall arise with respect to the Domestic Obligations, Domestic
Borrower and each Guarantor of the Domestic Obligations shall remain jointly and
severally liable to Agents and Lenders therefor.  If any deficiency shall arise
with respect to the Canadian Obligations each Guarantor of the Canadian
Obligations shall remain jointly and severally liable, and Canadian Borrower
shall remain liable, to Canadian Agent, Canadian Lender, and Canadian
Participating Lenders therefor.

10.3.4      Administrative Agent, with respect to the Domestic Collateral,  and
Canadian Agent, with respect to the Canadian Collateral, is hereby granted a
license or other right to use, without charge, Borrowers’ and each of their
Subsidiary’s labels, patents, copyrights, licenses, rights of use of any name,
trade secrets, tradenames, trademarks and advertising matter, or any Property of
a similar nature, as it pertains to the applicable Collateral, in completing,
advertising for sale and selling any applicable Collateral and Borrowers’ and
each of their Subsidiary’s rights under all licenses and all franchise
agreements shall inure to Administrative Agent’s and Canadian Agent’s, as
applicable, benefit.

10.3.5      Administrative Agent may, at its option, require Domestic Borrower
to deposit with Administrative Agent funds equal to one hundred and five percent
(105%) of the Domestic LC Amount and, if Domestic Borrower fails to promptly
make such deposit, Administrative Agent may advance such amount as a Domestic
Revolving Credit Loan (provided that such Domestic Revolving Credit Loan and the
Domestic LC Amount shall only be counted once in determining Domestic
Availability).  Each such Domestic Revolving Credit Loan shall be secured by all
of the Domestic Collateral and shall bear interest and be payable at the same
rate and in the same manner as the Domestic Base Rate Loans.  Any such deposit
or advance shall be held by Administrative Agent as a reserve to fund future
payments on such Domestic LC Guaranties and future drawings against such
Domestic Letters of Credit and fees payable in connection with such Domestic
Letters of Credit.  At such time as all Domestic LC Guaranties have been paid or
terminated and all Domestic Letters of Credit have been drawn upon or expired,
any amounts remaining in such reserve shall be applied against any outstanding
Domestic Obligations, or, if all Domestic Obligations have been indefeasibly
paid in full, returned to Domestic Borrower.

10.4         Set Off and Sharing of Payments.

10.4.1      In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, during the continuance of
any Event of Default, each Domestic Lender is hereby authorized by Domestic
Borrower at any time or from time to time, with prior written consent of
Administrative Agent and with

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reasonably prompt subsequent notice to Borrower Representative (any prior or
contemporaneous notice to Borrowers being hereby expressly waived) to set off
and to appropriate and to apply any and all (a) balances held by such Domestic
Lender at any of its offices for the account of Domestic Borrower or any of its
Subsidiaries (other than Canadian Borrower)(regardless of whether such balances
are then due to such Borrower or its Subsidiaries), and (b) other property at
any time held or owing by such Domestic Lender to or for the credit or for the
account of Domestic Borrower or any of its Subsidiaries (other than Canadian
Borrower), against and on account of any of the Domestic Obligations.  Any
Domestic Lender exercising a right to set off shall, to the extent the amount of
any such set off exceeds its pro rata share of the amount set off, purchase for
cash (and the other Domestic Lenders shall sell) interests in each such other
Domestic Lender’s pro rata share of the Domestic Obligations as would be
necessary to cause such Domestic Lender to share such excess with each other
Domestic Lender in accordance with their respective pro rata shares.  Domestic
Borrower agrees, to the fullest extent permitted by law, that any Domestic
Lender may exercise its right to set off with respect to amounts in excess of
its pro rata share of the Domestic Obligations and upon doing so shall deliver
such excess to Administrative Agent for the benefit of all Domestic Lenders, in
accordance with the Domestic Revolving Loan Percentages and the outstanding
principal amount of the Domestic Term Loan, as applicable, to be applied to the
Domestic Obligations in the manner set forth in subsections (b)-(d) of
Section 3.3.1 with respect to the application of proceeds of Domestic
Collateral.

10.4.2      In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, during the continuance of
any Event of Default, Canadian Lender and each Canadian Participating Lender is
hereby authorized by Canadian Borrower at any time or from time to time, with
prior written consent of Canadian Agent and with reasonably prompt subsequent
notice to Borrower Representative (any prior or contemporaneous notice to
Borrowers being hereby expressly waived) to set off and to appropriate and to
apply any and all (a) balances held by Canadian Lender or such Canadian
Participating Lender at any of its offices for the account of Canadian Borrower
(regardless of whether such balances are then due to Canadian Borrower), and
(b) other property at any time held or owing by Canadian Lender or such Canadian
Participating Lender to or for the credit or for the account of Canadian
Borrower, against and on account of any of the Canadian Obligations.  Canadian
Lender, or any Canadian Participating Lender, exercising a right to set off
shall, to the extent the amount of any such set off exceeds its Canadian
Percentage of the amount set off, purchase for cash (and Canadian Lender and the
Canadian Participating Lenders shall sell) interests in each such Lender’s
Canadian Percentage of the Canadian Obligations as would be necessary to cause
Canadian Lender or such Canadian Participating Lender, as applicable, to share
such excess with Canadian Lender and each Canadian Participating Lender in
accordance with their respective Canadian Percentages of the Canadian
Obligations.  Canadian Borrower agrees, to the fullest extent permitted by law,
that Canadian Lender and any Canadian Participating Lender may exercise its
right to set off with respect to amounts in excess of its Canadian Percentage of
the Canadian Obligations and upon doing so shall deliver such excess to Canadian
Agent for the benefit of Canadian Lender and all Canadian Participating Lenders,
in accordance with the Canadian Percentages, to be applied to the Canadian
Obligations in the manner set forth in subsections (b)-(d) of Section 3.3.1 with
respect to the application of proceeds of Canadian Collateral.

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10.5         Remedies Cumulative; No Waiver.

All covenants, conditions, provisions, warranties, guaranties, indemnities, and
other undertakings of Borrowers contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule or in any Guaranty Agreement given to
Administrative Agent, Canadian Agent, or any Lender or contained in any other
agreement between any Lender and any Borrower or between Administrative Agent,
Canadian Agent, and any Borrower heretofore, concurrently, or hereafter entered
into, shall be deemed cumulative to and not in derogation or substitution of any
of the terms, covenants, conditions, or agreements of Borrowers herein
contained.  The failure or delay of Administrative Agent, Canadian Agent, or any
Lender to require strict performance by Borrowers of any provision of this
Agreement or to exercise or enforce any rights, Liens, powers, or remedies
hereunder or under any of the aforesaid agreements or other documents or
security or Collateral shall not operate as a waiver of such performance, Liens,
rights, powers and remedies, but all such requirements, Liens, rights, powers,
and remedies shall continue in full force and effect until all Loans and other
Obligations owing or to become owing from Borrowers to Administrative Agent,
Canadian Agent, and each Lender have been fully satisfied.  None of the
undertakings, agreements, warranties, covenants and representations of Borrowers
and their Subsidiaries contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrowers or any of their
Subsidiaries under this Agreement or any other Loan Document shall be deemed to
have been suspended or waived by Lenders or Administrative Agent, unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of Administrative
Agent or Canadian Agent, as applicable, and directed to Borrowers.

SECTION 11. ADMINISTRATIVE AGENT
AND CANADIAN AGENT

11.1         Authorization and Action.

11.1.1      Each Lender hereby appoints and authorizes Administrative Agent and
Canadian Agent to take such action on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to
Administrative Agent and Canadian Agent, as applicable, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto.  Each
Lender hereby acknowledges that neither Administrative Agent nor Canadian Agent
has by reason of this Agreement assumed a fiduciary relationship in respect of
any Lender.  In performing its functions and duties under this Agreement,
Administrative Agent and Canadian Agent shall act solely as agent of Lenders and
shall not assume, or be deemed to have assumed, any obligation toward, or
relationship of agency or trust with or for, any Borrower or any of its
Subsidiaries.  As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including without limitation enforcement and
collection of the Notes), Administrative Agent

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and Canadian Agent may, but shall not be required to, exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, whenever such instruction shall be
requested by Administrative Agent or Canadian Agent or required hereunder, or a
greater or lesser number of Lenders if so required hereunder, and such
instructions shall be binding upon all Lenders; provided, that Administrative
Agent and Canadian Agent shall be fully justified in failing or refusing to take
any action which exposes Administrative Agent and/or Canadian Agent to any
liability or which is contrary to this Agreement, the other Loan Documents or
applicable law, unless Administrative Agent and/or Canadian Agent is indemnified
to its satisfaction by the other Lenders against any and all liability and
expense which it may incur by reason of taking or continuing to take any such
action.  If Administrative Agent and/or Canadian Agent seeks the consent or
approval of the Majority Lenders (or a greater or lesser number of Lenders as
required in this Agreement), with respect to any action hereunder,
Administrative Agent and/or Canadian Agent shall send notice thereof to each
Lender and shall notify each Lender at any time that the Majority Lenders (or
such greater or lesser number of Lenders) have instructed Administrative Agent
and/or Canadian Agent to act or refrain from acting pursuant hereto.

11.1.2      Each Lender hereby authorizes Administrative Agent to delegate to
Canadian Agent any and all of its obligations under this Agreement and the other
Loan Documents with respect to all actions required to be taken in Canada of any
kind whatsoever.  Canadian Agent, when acting pursuant to the authority granted
hereunder, shall have all the protections, indemnities, rights and powers
granted to Administrative Agent under this Agreement and any other Loan
Document.

11.2         Administrative Agent’s and Canadian Agent’s Reliance, Etc.

Neither Administrative Agent nor Canadian Agent, any Affiliate of Administrative
Agent or Canadian Agent, nor any of their respective directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement or the other Loan Documents,
except for its or their own gross negligence or willful misconduct.  Without
limitation of the generality of the foregoing, Administrative Agent and Canadian
Agent:  (a) may treat each Lender party hereto as the holder of Obligations
until Administrative Agent receives written notice of the assignment or transfer
of such Lender’s portion of the Obligations signed by such Lender and in form
reasonably satisfactory to Administrative Agent; (b) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts,
(c) makes no warranties or representations to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (d) shall not have any duty beyond Administrative Agent’s or Canadian
Agent’s customary practices in respect of loans in which Administrative Agent or
Canadian Agent is the only lender, to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Borrower or any of
their Subsidiaries, to inspect the property (including the books and

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records) of any Borrower or any of their Subsidiaries, to monitor the financial
condition of any Borrower or any of their Subsidiaries or to ascertain the
existence or possible existence or continuation of any Default or Event of
Default; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (f) shall not be liable to any Lender for
any action taken, or inaction, by Administrative Agent or Canadian Agent upon
the instructions of Majority Lenders pursuant to Section 11.1 hereof or
refraining to take any action pending such instructions; (g) shall not be liable
for any apportionment or distributions of payments made by it in good faith
pursuant to Section 3 hereof; (h) shall incur no liability under or in respect
of this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate, message or other instrument or writing (which may be by
telephone, facsimile, telegram, cable or telex) believed in good faith by it to
be genuine and signed or sent by the proper party or parties; and (i) may assume
that no Event of Default has occurred and is continuing, unless Administrative
Agent or Canadian Agent, as applicable, has actual knowledge of the Event of
Default, has received notice from Borrowers or Borrowers’ independent certified
public accountants stating the nature of the Event of Default, or has received
notice from a Lender stating the nature of the Event of Default and that such
Lender considers the Event of Default to have occurred and to be continuing.  In
the event any apportionment or distribution described in clause (g) above is
determined to have been made in error, the sole recourse of any Person to whom
payment was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.

11.3         Bank of America, Bank of America Canada, and Affiliates.

With respect to its commitment hereunder to make Loans, Bank of America, and
Bank of America Canada shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise the
same as though it were not Administrative Agent and Canadian Agent,
respectively; and the terms “Lender,” “Lenders” or “Majority Lenders” shall,
unless otherwise expressly indicated, include Bank of America and Bank of
America Canada in its individual capacity as a Lender. Bank of America and Bank
of America Canada and its Affiliates may lend money to, and generally engage in
any kind of business with, Borrowers, Borrowers’ Subsidiaries, and any Person
who may do business with or own Securities of Borrowers all as if Bank of
America and Bank of America Canada were not Administrative Agent and Canadian
Agent, respectively, and without any duty to account therefor to any other
Lender.

11.4         Lender Credit Decision.

Each Lender acknowledges that it has, independently and without reliance upon
Administrative Agent or Canadian Agent or any other Lender and based on the
financial statements referred to herein and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement.  Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Agent or Canadian Agent or any other
Lender and based on such documents

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and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement. 
Neither Administrative Agent nor Canadian Agent shall have any duty or
responsibility, either initially or on an ongoing basis, to provide any Lender
with any credit or other similar information regarding Borrowers or any of their
Subsidiaries.

11.5         Indemnification.

Lenders agree to indemnify Administrative Agent and Canadian Agent (to the
extent not reimbursed by Borrowers), in accordance with their respective
Aggregate Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against Administrative Agent and/or Canadian Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by Administrative Agent and/or Canadian Agent under this
Agreement; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Administrative Agent’s or
Canadian Agent’s gross negligence or willful misconduct.  Without limitation of
the foregoing, each Lender agrees to reimburse Administrative Agent and Canadian
Agent promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including legal fees) and allocated costs of audits and
appraisals incurred by Administrative Agent and/or Canadian Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiation, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Administrative
Agent and/or Canadian Agent is not reimbursed for such expenses by Borrowers. 
The obligations of Lenders under this Section 11.5 shall survive the payment in
full of all Obligations and the termination of this Agreement.  If after payment
and distribution of any amount by Administrative Agent and/or Canadian Agent to
Lenders, any Lender or any other Person, including any Borrower, any Subsidiary
of any Borrower, any creditor of any Borrower or any of its Subsidiaries, a
liquidator, administrator or trustee in bankruptcy, recovers from Administrative
Agent and/or Canadian Agent any amount found to have been wrongfully paid to
Administrative Agent and/or Canadian Agent or disbursed by Administrative Agent
and/or Canadian Agent to Lenders, then Lenders, in accordance with their
respective Aggregate Percentages, shall reimburse Administrative Agent and/or
Canadian Agent for all such amounts.

11.6         Rights and Remedies to be Exercised by Administrative Agent and
Canadian Agent Only.

Each Lender agrees that, except as set forth in Section 10.4, no Lender shall
have any right individually (a) to realize upon the security created by this
Agreement or any other Loan Document, (b) to enforce any provision of this
Agreement or any other Loan Document, or (c) to make demand under this Agreement
or any other Loan Document.

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11.7         Agency Provisions Relating to Collateral.

Each Lender authorizes and ratifies Administrative Agent’s and Canadian Agent’s
entry into this Agreement and the Security Documents for the benefit of
Lenders.  Each Lender agrees that any action taken by Administrative Agent
and/or Canadian Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by
Administrative Agent and/or Canadian Agent of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all Lenders.  Administrative Agent and/or
Canadian Agent, as the case may be, are hereby authorized on behalf of all
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any action with
respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected Administrative Agent’s Liens upon the Domestic
Collateral, for its and Canadian Agent’s and the Lenders’ benefit, and Canadian
Agent’s Liens upon the Canadian Collateral, for its, Canadian Lender’s, and
Canadian Participating Lenders’ benefit.  Lenders hereby irrevocably authorize
Administrative Agent and Canadian Agent, as the case may be, at its option and
in its discretion, to release any Lien granted to or held by Administrative
Agent or Canadian Agent upon any Collateral (a) upon termination of this
Agreement and payment and satisfaction of all Obligations; or (b) constituting
property being sold or disposed of if the Borrower Representative certifies to
Administrative Agent and Canadian Agent, as the case may be, that the sale or
disposition is made in compliance with Section 8.2.10 hereof (and Administrative
Agent and Canadian Agent may rely conclusively on any such certificate, without
further inquiry); or (c) constituting property in which the applicable Borrower
or Subsidiary of a Borrower owned no interest at the time the Lien was granted
or at any time thereafter; or (d) in connection with any foreclosure sale or
other disposition of Collateral after the occurrence and during the continuation
of an Event of Default or (e) if approved, authorized or ratified in writing by
Administrative Agent at the direction of all Lenders in the case of Domestic
Collateral and by Canadian Agent at the direction of Canadian Lender and
Canadian Participating Lenders in the case of Canadian Collateral.  Upon request
by Administrative Agent or Canadian Agent, as the case may be, at any time,
Lenders will confirm in writing Administrative Agent’s or Canadian Agent’s, as
the case may be, authority to release particular types or items of Collateral
pursuant hereto. Neither Administrative Agent nor Canadian Agent shall have any
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by the applicable Borrowers or Subsidiaries of
Borrowers or is cared for, protected or insured or has been encumbered or that
the Liens granted to Administrative Agent or Canadian Agent, as the case may be,
herein or pursuant to the Security Documents have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of its
rights, authorities and powers granted or available to Administrative Agent or
Canadian Agent, as the case may be, in this Section 11.7 or in any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, Administrative Agent or Canadian
Agent, as the case may be, may act in any manner it may deem appropriate, in its
sole discretion, but consistent with the provisions of this Agreement, including
given Administrative Agent’s or Canadian Agent’s own interest in the Collateral
as a Lender and that neither Administrative Agent nor Canadian Agent shall have
any duty or liability whatsoever to any Lender.

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11.8         Administrative Agent’s and Canadian Agent’s Right to Purchase
Commitments.

Administrative Agent and Canadian Agent shall have the right, but shall not be
obligated, at any time upon written notice to any Lender and with the consent of
such Lender, which may be granted or withheld in such Lender’s sole discretion,
to purchase for Administrative Agent’s or Canadian Agent’s, as the case may be,
own account all of such Lender’s interests in this Agreement, the other Loan
Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.

11.9         Right of Sale, Assignment, Participations.

Each Borrower hereby consents to any Lender’s participation, sale, assignment,
transfer or other disposition, at any time or times hereafter, of this Agreement
and any of the other Loan Documents, or of any portion hereof or thereof,
including, without limitation, such Lender’s rights, title, interests, remedies,
powers, and duties hereunder or thereunder subject to the terms and conditions
set forth below:

11.9.1      Sales, Assignments.  Each Lender hereby agrees that, with respect to
any sale or assignment (other than pursuant to Section 3.2.6) (a) no such sale
or assignment shall be for an amount of less than $5,000,000 (or the aggregate
principal amount of Loans owing to such Lender, if less), (b) each such sale or
assignment shall be made on terms and conditions which are customary in the
industry at the time of the transaction, (c) Administrative Agent and, in the
absence of a Default or Event of Default, Borrowers, must consent, such consent
not to be unreasonably withheld, to each such assignment to a Person that is not
an original signatory to this Agreement, and (d) the assignee Lender shall pay
to Administrative Agent a processing and recordation fee of $3,500 and any
out-of-pocket legal fees and expenses incurred by Administrative Agent in
connection with any such sale or assignment.  After such sale or assignment has
been consummated (i) the assignee Lender thereupon shall become a “Lender” for
all purposes of this Agreement and (ii) the assigning Lender shall have no
further liability for funding Loans under this Agreement to the extent such
liability was assumed by such other Lender.

11.9.2      Participations.  Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a “Participant”), provided that (a) no such participation shall be for an
amount of less than $5,000,000 (or the aggregate principal amount of Loans owing
to such Lender, if less), (b) no Participant shall thereby acquire any direct
rights under this Agreement, (c) no Participant shall be granted any right to
consent to any amendment, except to the extent any of the same pertain to
(i) reducing the aggregate principal amount of, or interest rate on, or fees
applicable to, any Loan in which such Participant has an interest, or
(ii) extending the final stated maturity of any Loan in which such Participant
has an interest or the stated maturity of any portion of any payment of
principal of, or interest or fees applicable to, any of the Loans;

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provided, that the rights described in this subclause (ii) shall not be deemed
to include the right to consent to any amendment with respect to or which has
the effect of requiring any mandatory prepayment of any portion of any Loan or
any amendment or waiver of any Default or Event of Default, (d) no sale of a
participation in extensions of credit shall in any manner relieve the
originating Lender of its obligations hereunder, (e) the originating Lender
shall remain solely responsible for the performance of such obligations,
(f) Borrowers and Administrative Agent shall continue to deal solely and
directly with the originating Lender in connection with the originating Lender’s
rights and obligations under this Agreement and the other Loan Documents, (g) in
no event shall any financial institution purchasing the participation grant a
participation in its participation interest in the Loans without the prior
written consent of Administrative Agent, and, in the absence of a Default or an
Event of Default, Borrowers, which consents shall not unreasonably be withheld
and (h) all amounts payable by Borrowers hereunder shall be determined as if the
originating Lender had not sold any such participation.  For greater certainty,
the provisions of this Section 11.9.2 do not apply to the Canadian Participating
Lenders in their capacities as such.

11.9.3      Certain Agreements of Borrowers.  Each Borrower agrees that (a) it
will use its reasonable efforts to assist and cooperate with each Lender in any
manner reasonably requested by such Lender to effect the sale of participations
in or assignments of any of the Loan Documents or any portion thereof or
interest therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and
Participants; and (b) subject to the provisions of Section 12.14 hereof, such
Lender may disclose credit information regarding such Borrower and its
Subsidiaries to any potential Participant or assignee.

11.10       Amendment.

No amendment or waiver of any provision of this Agreement or any other Loan
Document (including without limitation any Note), nor consent to any departure
by Borrowers or any of their Subsidiaries therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
and Borrower Representative and/or such Subsidiaries of Borrowers, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no amendment, waiver or consent
shall be effective, unless (a) in writing and signed by each Lender, to do any
of the following:  (i) increase or decrease the aggregate Domestic Revolving
Credit Commitments, the Canadian Revolving Credit Sub-Limit, the Domestic Cap Ex
Commitments, or any Lender’s Domestic Revolving Credit Commitment, or its
Domestic Cap Ex Commitment, or its Canadian Percentage, (ii) reduce the
principal of, or interest on, any amount payable hereunder or under any Note,
other than those payable only to Bank of America in its capacity as
Administrative Agent, which may be reduced by Bank of America unilaterally,

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and other than those payable only to Bank of America Canada in its capacity as
Canadian Agent, which may be reduced by Bank of America Canada unilaterally,
(iii) postpone any date fixed for any payment of principal of, or interest on,
any amounts payable hereunder or under any Note, other than those payable only
to Bank of America in its capacity as Administrative Agent, which may be
postponed by Bank of America unilaterally and other than those payable only to
Bank of America Canada in its capacity as Canadian Agent, which may be postponed
by Bank of America Canada unilaterally, (iv) reduce the number of Lenders that
shall be required for Lenders or any of them to take any action hereunder,
(v) release or discharge any Person liable for the performance of any
obligations of Borrowers hereunder or under any of the Loan Documents,
(vi) amend any provision of this Agreement that requires the consent of all
Lenders or consent to or waive any breach thereof, (vii) amend the definition of
the term “Majority Lenders”, (viii) amend this Section 11.10 or (ix) release any
substantial portion of the Collateral, unless otherwise permitted pursuant to
Section 11.7 hereof or the other terms of this Agreement; or (b) in writing and
signed by Administrative Agent or Canadian Agent, as the case may be, in
addition to the Lenders required above to take such action, to affect the rights
or duties of Administrative Agent or Canadian Agent, as the case may be, under
this Agreement, any Note or any other Loan Document.

11.11       Resignation of Administrative Agent or Canadian Agent; Appointment
of Successor.

Administrative Agent or Canadian Agent may resign as Administrative Agent or
Canadian Agent, as the case may be, by giving not less than thirty (30) days’
prior written notice to the Lenders and Borrower Representative.  If
Administrative Agent or Canadian Agent shall resign under this Agreement, then,
(a) subject to the consent of Borrower Representative (which consent shall not
be unreasonably withheld and which consent shall not be required during any
period in which a Default or an Event of Default exists), the Majority Lenders
shall appoint from among the Lenders a successor Administrative Agent or
Canadian Agent for the Lenders or (b) if a successor Administrative Agent or
Canadian Agent shall not be so appointed and approved within the thirty (30) day
period following Administrative Agent’s or Canadian Agent’s notice to the
Lenders and Borrower Representative of its resignation, then Administrative
Agent or Canadian Agent, as the case may be, shall appoint a successor
Administrative Agent or Canadian Agent, as the case may be, who shall serve as
Administrative Agent or Canadian Agent, as the case may be, until such time as
the Majority Lenders appoint a successor Administrative Agent or Canadian Agent,
as the case may be, subject to Borrower Representative’s consent as set forth
above.  Upon its appointment, such successor Administrative Agent or Canadian
Agent, as the case may be, shall succeed to the rights, powers and duties of
Administrative Agent or Canadian Agent, as the case may be, and the term
“Administrative Agent” or “Canadian Agent”, as the case may be, shall mean such
successor effective upon its appointment, and the former Administrative Agent’s
or Canadian Agent’s rights, powers and duties as Administrative Agent or
Canadian Agent, as the case may be, shall be terminated without any other or
further act or deed on the part of such former Administrative Agent or Canadian
Agent, as the case may be, or any of the parties to this Agreement.  After the
resignation of any Administrative Agent or Canadian Agent hereunder, the
provisions of this Section 11 shall inure to the benefit of such former
Administrative Agent or Canadian Agent, as the case may be, and such former
Administrative Agent or Canadian Agent, as the case may be, shall not by reason
of such resignation be deemed to be released from liability for any actions
taken or not taken by it while it was an Administrative Agent or Canadian Agent,
as the case may be, under this

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Agreement.  Notwithstanding the foregoing, without the consent of Lenders or the
Borrowers, an Affiliate of Bank of America Canada or Bank of America may be
appointed by Bank of America Canada to replace Bank of America Canada as
Canadian Agent hereunder; provided, that, such replacement Canadian Agent shall
provide prior notice to Borrowers of such replacement.

SECTION 12. MISCELLANEOUS

12.1         Power of Attorney.

Domestic Borrower hereby irrevocably designates, makes, constitutes and appoints
Administrative Agent (and all Persons designated by Administrative Agent) as
Domestic Borrower’s true and lawful attorney (and agent-in-fact), solely with
respect to the matters set forth in this Section 12.1, and Administrative Agent,
or Administrative Agent’s agent, may, without notice to Domestic Borrower and in
Domestic Borrower’s or Administrative Agent’s name, but at the cost and expense
of Domestic Borrower, do the following, and Canadian Borrower hereby irrevocably
designates, makes, constitutes and appoints Canadian Agent (and all Persons
designated by Canadian Agent) as Canadian Borrower’s true and lawful attorney
(and agent-in-fact), solely with respect to the matters set forth in this
Section 12.1, and Canadian Agent, or Canadian Agent’s agent, may, without notice
to Canadian Borrower and in Canadian Borrower’s or Canadian Agent’s name, but at
the cost and expense of Canadian Borrower, do the following:

12.1.1      At such time or times as Administrative Agent or Canadian Agent, as
the case may be, or said agent, in its sole discretion, may determine, endorse
such Borrower’s name on any checks, notes, acceptances, drafts, money orders or
any other evidence of payment or proceeds of the Collateral which come into the
possession of Administrative Agent or Canadian Agent, as the case may be, or
under Administrative Agent’s or Canadian Agent’s, as the case may be, control.

12.1.2      At such time or times upon or after the occurrence and during the
continuance of an Event of Default (provided that the occurrence of an Event of
Default shall not be required with respect to clauses (d) and (f) below), as
Administrative Agent or Canadian Agent, as the case may be, or its agent in its
sole discretion may determine: (a) demand payment of the Accounts from the
Account Debtors, enforce payment of the Accounts by legal proceedings or
otherwise, and generally exercise all of such Borrower’s rights and remedies
with respect to the collection of the Accounts; (b) settle, adjust, compromise,
discharge or release any of the Accounts or other Collateral or any legal
proceedings brought to collect any of the Accounts or other Collateral; (c) sell
or assign any of the Accounts and other Collateral upon such terms, for such
amounts and at such time or times as Administrative Agent or Canadian Agent, as
the case may be, deems advisable; (d) take control, in any manner, of any item
of payment or proceeds relating to any Collateral; (e) prepare, file and sign
such Borrower’s name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of lien, assignment or satisfaction
of lien or similar document in connection with any of the Collateral;
(f) receive, open and dispose of all mail addressed to such Borrower; (g) notify
postal authorities to change the

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address for delivery thereof to such address as Administrative Agent or Canadian
Agent, as applicable, may designate; (h) endorse the name of such Borrower upon
any of the items of payment or proceeds relating to any Collateral and deposit
the same to the account of Administrative Agent or Canadian Agent, as the case
may be, on account of the Obligations; (i) endorse the name of such Borrower
upon any chattel paper, document, instrument, invoice, freight bill, bill of
lading or similar document or agreement relating to the Accounts, Inventory and
any other Collateral; (j) use such Borrower’s stationery and sign the name of
such Borrower to verifications of the Accounts and notices thereof to Account
Debtors; (k) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Accounts,
Inventory, Equipment and any other Collateral; (l) make and adjust claims under
policies of insurance; and (m) do all other acts and things necessary, in
Administrative Agent’s or Canadian Agent’s, as the case may be, determination,
to fulfill such Borrower’s obligations under this Agreement.

The power of attorney granted hereby shall constitute a power coupled with an
interest and shall be irrevocable.

12.2         Indemnity.

Each Borrower hereby agrees to indemnify Administrative Agent, Canadian Agent,
and each Lender (and each of their Affiliates, officers, directors, employees,
agents and advisors (each an “Indemnitee”)) and hold each Indemnitee harmless
from and against any liability, expense, loss, damage, suit, action or
proceeding ever suffered or incurred by any Indemnitee (including reasonable
legal fees and expenses) as the result of (a) Borrowers’ or their Subsidiaries’
failure to observe, perform or discharge Borrowers’ or their Subsidiaries’
duties hereunder or under the other Loan Documents, or (b) any suit, action,
proceeding or investigation arising out of or related to the Loan Documents and
the transactions contemplated thereby (except any liabilities, expenses, losses,
damages, suits, actions or proceedings identified above which (i) are determined
by a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or intentional misconduct of any such
Indemnitee or (ii) relate to a dispute between any Borrower or its Subsidiaries
and any Indemnitee with respect to the Loan Documents and which dispute is
determined adversely to such Indemnitee (and is not the subject of any
settlement (unless the settlement provides for a similar exclusion from
Borrowers’ indemnification obligations hereunder)) by a final, nonappealable
judgment by a court of competent jurisdiction).  In addition, each Borrower
shall defend the Indemnitees against and save them harmless from all claims of
any Person with respect to the Collateral (except those determined by a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or intentional misconduct of any such Indemnitee). 
Without limiting the generality of the foregoing, these indemnities shall extend
to any claims asserted against any Indemnitee by any Person under any
Environmental Laws with respect to the Owned Properties by reason of any
Borrower’s or any other Person’s failure to comply with laws applicable to solid
or hazardous waste materials or other toxic substances.  Notwithstanding any
contrary provision in this Agreement, the obligations of Borrowers under this
Section 12.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.

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12.3         Sale of Interest.

No Borrower may sell, assign or transfer any interest in this Agreement, any of
the other Loan Documents, or any of the Obligations, or any portion thereof,
including, without limitation, such Borrower’s rights, title, interests,
remedies, powers, and duties hereunder or thereunder.

12.4         Severability.

Wherever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

12.5         Successors and Assigns.

This Agreement, the Other Agreements and the Security Documents shall be binding
upon and inure to the benefit of the successors and assigns of each Borrower,
Administrative Agent, Canadian Agent, and each Lender permitted under
Section 11.9 or Section 11.11 hereof.

12.6         Cumulative Effect; Conflict of Terms.

The provisions of the Other Agreements and the Security Documents are hereby
made cumulative with the provisions of this Agreement.  Except as otherwise
provided in any of the other Loan Documents by specific reference to the
applicable provision of this Agreement, if any provision contained in this
Agreement is in direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.

12.7         Execution in Counterparts.

This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument.

12.8         Notices.

Except as otherwise provided herein, all notices, requests and demands to or
upon a party hereto, to be effective, shall be in writing and shall be sent by
certified or registered mail, return receipt requested, by personal delivery
against receipt, by overnight courier or by facsimile and, unless otherwise
expressly provided herein, shall be deemed to have been validly served, given,
delivered or received immediately when delivered against receipt, one Business
Day after deposit with an overnight courier or, in the case of facsimile notice,
when sent, addressed in the case of each Lender to such Lender at such Lender’s

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address set forth on the signature page to this Agreement (or set forth in the
applicable assignment agreement by which such Lender became a Lender under this
Agreement), and with respect to the following Persons, as follows:

 

If to Administrative Agent:

Bank of America, N.A.
55 South Lake Avenue, Suite 900
Pasadena, California 91101
Attention: Portfolio Manager
Facsimile No.: (626) 584-4602

 

 

 

 

With a copy to:

Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: Brent E. Horstman, Esq.
Facsimile No.: (213) 620-1398

 

 

 

 

If to Canadian Agent:

Bank of America, N.A., Canada Branch
200 Front Street West,
Toronto, Ontario
M5V 3L2 Canada
Attention: General Manager
Facsimile No.: (416) 236-4572

 

 

 

 

With a copy to:

Bank of America, N.A.
55 South Lake Avenue, Suite 900
Pasadena, California 91101
Attention: Portfolio Manager
Facsimile No.: (626) 584-4602

 

 

 

 

If to Borrowers or Borrower Representative:

c/o Channell Commercial Corporation
26040 Ynez Road
Temecula, California 92589-9022
Attention: Patrick McCready
Facsimile No.: (951) 296-3965

 

 

 

 

With a copy to:

Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067

Attention: Anthony T. Iler
Facsimile No.: (310) 203-7199

or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon Administrative Agent, Canadian Agent, or a Lender
pursuant to Section 3.1.1 or 4.2.2 hereof shall not be effective until received
by Administrative Agent, Canadian Agent, or such Lender.

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12.9         Consent.

Whenever Administrative Agent’s, Canadian Agent’s, or Majority Lenders’ consent
is required to be obtained under this Agreement, any of the Other Agreements or
any of the Security Documents as a condition to any action, inaction, condition
or event, except as otherwise specifically provided herein, Administrative
Agent, Canadian Agent, or Majority Lenders, as applicable, shall be authorized
to give or withhold such consent in their sole and absolute discretion.

12.10       Credit Inquiries.

Subject to the confidentiality provisions of Section 12.14 hereof, each Borrower
hereby authorizes and permits Administrative Agent, Canadian Agent, and each
Lender to respond to usual and customary credit inquiries from third parties
concerning such Borrower or any of its Subsidiaries.

12.11       Time of Essence.

Time is of the essence of this Agreement, the Other Agreements and the Security
Documents.

12.12       Entire Agreement.

This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.

12.13       Interpretation.

No provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.

12.14       Confidentiality.

Administrative Agent, Canadian Agent, and each Lender (and each of their
officers, directors and employees) shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement and the other Loan Documents in
confidence in accordance with Administrative Agent’s, Canadian Agent’s, and such
Lender’s customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices, shall use such
information solely for the purposes contemplated by this Agreement and in any
event may make disclosure reasonably required by a

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prospective participant or assignee in connection with the contemplated
participation or assignment or as required by any governmental authority or
representative thereof (provided that, if possible, Administrative Agent shall
provide reasonable prior notice of any such disclosure) or as compelled by legal
process (provided that, if possible, Administrative Agent shall provide
reasonable prior notice of any such disclosure) and shall require any such
participant or assignee to agree to comply with this Section 12.14.

12.15       Judgment.

If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder or under any other Loan Document in one currency
into another currency, the rate of exchange used shall be that at which in
accordance with normal banking procedures Administrative Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given.  The obligation of each Borrower in respect of
any such sum due from it to Administrative Agent, Canadian Agent, or any Lender
hereunder or under the other Loan Documents shall, notwithstanding any judgment
in a currency (the “Judgment Currency”) other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
“Agreement Currency”), be discharged only to the extent that on the Business Day
following receipt by Administrative Agent, Canadian Agent, or such Lender of any
sum adjudged to be so due in the Judgment Currency, Administrative Agent,
Canadian Agent, or such Lender may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency.  If the amount of
the Agreement Currency so purchased is less than the sum originally due to
Administrative Agent, Canadian Agent, or such Lender in the Agreement Currency,
each Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Administrative Agent, Canadian Agent, or such Lender or
the Person to whom such obligation was owing against such loss.  If the amount
of the Agreement Currency so purchased is greater than the sum originally due to
Administrative Agent, Canadian Agent, or such Lender in such currency,
Administrative Agent, Canadian Agent, or such Lender agrees to return the amount
of any excess to the applicable Borrower (or to any other Person who may be
entitled thereto under applicable law).

12.16       GOVERNING LAW; CONSENT TO FORUM.

THIS AGREEMENT HAS BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE
BEEN MADE IN LOS ANGELES, CALIFORNIA.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN CALIFORNIA,  THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF, OR REALIZATION UNDER, ADMINISTRATIVE
AGENT’S OR CANADIAN AGENT’S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF
ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S OTHER REMEDIES IN RESPECT OF SUCH
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF

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CALIFORNIA.  AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS
OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY
BORROWER, ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER, EACH BORROWER
HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY,
CALIFORNIA, OR, AT ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S OPTION, THE UNITED
STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY BORROWER
ON THE ONE HAND AND ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER ON THE
OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT; PROVIDED THAT ADMINISTRATIVE AGENT, CANADIAN AGENT,
AND/OR ANY LENDER MAY INITIATE LEGAL OR EQUITABLE PROCEEDINGS IN ANY OTHER COURT
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY
OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE BORROWER REPRESENTATIVE AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
THE BORROWER REPRESENTATIVE’S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID.  NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT, CANADIAN AGENT,
OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER
OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.

12.17       WAIVERS BY BORROWERS.

EACH BORROWER WAIVES (a) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE AGENT,
CANADIAN AGENT, AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE
LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;

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(b) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT,
NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF
ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS ,
CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT, CANADIAN
AGENT, OR ANY LENDER ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY
LENDER MAY DO IN THIS REGARD; (c) NOTICE PRIOR TO ADMINISTRATIVE AGENT’S OR
CANADIAN AGENT’S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE
AGENT OR CANADIAN AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT’S OR CANADIAN
AGENT’S REMEDIES; (d) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION
LAWS; AND (e) NOTICE OF ACCEPTANCE HEREOF.  EACH BORROWER ACKNOWLEDGES THAT THE
FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S, CANADIAN
AGENT’S, AND EACH LENDER’S ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE
AGENT, CANADIAN AGENT, AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN
ITS FUTURE DEALINGS WITH BORROWERS.  EACH BORROWER WARRANTS AND REPRESENTS THAT
IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY
AND VOLUNTARILY WAIVED ITS JURY TRIAL 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.

12.18       Further Assurances.

Without limiting in any manner any other obligation, requirement or agreement
hereunder or under any of the other Loan Documents or otherwise, Borrowers
shall, at their expense and without expense to the Lenders, Administrative Agent
or Canadian Agent, do, execute and deliver such further acts and documents as
the Majority Lenders, Administrative Agent or the Canadian Agent from time to
time require for the assuring and confirming unto the Lenders, Administrative
Agent or the Canadian Agent of the rights hereby created or intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.

12.19       Interest Act (Canada).

For the purpose of complying with the Interest Act (Canada), it is expressly
stated that:

12.19.1      where interest is calculated pursuant hereto at a rate based upon a
360-day period (for the purposes of this Section 12.19.1, the “first rate”), the
yearly rate or percentage of interest to which the first rate is equivalent is
the first rate multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by 360; and

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12.19.2      the parties hereto acknowledge that there is a material distinction
between the nominal and effective rates of interest and that they are capable of
making the calculations necessary to compare such rates and that the
calculations herein are to be made using the nominal rate method and not on any
basis that gives effect to the principle of deemed reinvestment of interest.

12.20       Arbitration.  Notwithstanding any other provision of this Agreement
to the contrary, any controversy or claim among the parties relating in any way
to any Obligations or Loan Documents, including any alleged tort, shall at the
request of any party hereto be determined by binding arbitration conducted in
accordance with the United States Arbitration Act (Title 9 U.S. Code).
Arbitration proceedings will be determined in accordance with the Act, the
then-current rules and procedures for the arbitration of financial services
disputes of the American Arbitration Association (“AAA”), and the terms of this
Section.  In the event of any inconsistency, the terms of this Section shall
control.  If AAA is unwilling or unable to serve as the provider of arbitration
or to enforce any provision of this Section, Administrative Agent or Canadian
Agent may designate another arbitration organization with similar procedures to
serve as the provider of arbitration.  The arbitration proceedings shall be
conducted in Los Angeles or Pasadena, California.  The arbitration hearing shall
commence within 90 days of the arbitration demand and close within 90 days
thereafter.  The arbitration award must be issued within 30 days after close of
the hearing (subject to extension by the arbitrator for up to 60 days upon a
showing of good cause), and shall include a concise written statement of reasons
for the award.  The arbitrator shall give effect to applicable statutes of
limitation in determining any controversy or claim, and for these purposes,
service on AAA under applicable AAA rules of a notice of claim is the equivalent
of the filing of a lawsuit.  Any dispute concerning this Section or whether a
controversy or claim is arbitrable shall be determined by the arbitrator.  The
arbitrator shall have the power to award legal fees to the extent provided by
this Agreement.  Judgment upon an arbitration award may be entered in any court
having jurisdiction.  The institution and maintenance of an action for judicial
relief or pursuant to a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.  No controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the proposed submission,
such controversy or claim relates to an obligation secured by real property, but
if all parties do not consent to submission of such a controversy or claim to
arbitration, it shall be determined as provided in the next sentence.  At the
request of any party, a controversy or claim that is not submitted to
arbitration as provided above shall be determined by judicial reference; and if
such an election is made, the parties shall designate to the court a referee or
referees selected under the auspices of the AAA in the same manner as
arbitrators are selected in AAA sponsored proceedings and the presiding referee
of the panel (or the referee if there is a single referee) shall be an active
attorney or retired judge; and judgment upon the award rendered by such referee
or referees shall be entered in the court in which proceeding was commenced. 
None of the foregoing provisions of this Section shall limit the right of
Administrative Agent, Canadian Agent, or Lenders to exercise self-help remedies,
such as setoff, foreclosure or sale

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of any Collateral or to obtain provisional or ancillary remedies from a court of
competent jurisdiction before, after or during any arbitration proceeding.  The
exercise of a remedy does not waive the right of any party to resort to
arbitration or reference.  At Administrative Agent’s or Canadian Agent’s option,
foreclosure under a Mortgage may be accomplished either by exercise of power of
sale thereunder or by judicial foreclosure.

12.21       Patriot Act Notice.  Administrative Agent and Lenders hereby notify
Borrowers that pursuant to the requirements of the Patriot Act, Administrative
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 Administrative Agent and Lenders to identify
it in accordance with the Patriot Act.  Administrative 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.

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IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year
specified at the beginning of this Agreement.

 

CHANNELL COMMERCIAL CORPORATION,
a Delaware corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

   /s/ Patrick E. McCready

 

 

Name:

  Patrick E. McCready

 

 

Title:

   CFO

 

 

 

 

 

 

 

CHANNELL COMMERCIAL CANADA INC.,
an Ontario corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ William H. Channell, Jr.

 

 

Name:

William H. Channell, Jr

 

 

Title:

President and CEO

 

 

 

 

 

 

 

BANK OF AMERICA, N.A.,
as Administrative Agent and as a Domestic Lender

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/Matthew R. Van Steenhuyse

 

 

 

Matthew R. Van Steenhuyse

 

 

 

Senior Vice President

 

 

 

BANK OF AMERICA, N.A., CANADA BRANCH,
as Canadian Agent and Canadian Lender

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/Nelson Lam

 

 

Name:

Nelson Lam

 

 

Title:

Vice President

 

100

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APPENDIX A

GENERAL DEFINITIONS

When used in the Amended and Restated Loan and Security Agreement dated as of
July 30, 2007, by and among Bank of America, N.A., individually and as
Administrative Agent, the other financial institutions which are or become
parties thereto, Bank of America, N.A., Canada Branch, individually and as
Canadian Agent,  Channell Commercial Corporation, a Delaware corporation, and
Channell Commercial Canada Inc., an Ontario corporation, (a) the terms
Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account,
Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Security, Payment Intangibles,  Proceeds, Security
Entitlement, Software, Supporting Obligations, Tangible Chattel Paper and
Uncertificated Security, have the respective meanings assigned thereto under the
UCC (as defined below) or the PPSA (as defined below), as applicable; (b) all
terms indicating Collateral having the meanings assigned thereto under the UCC
or the PPSA, as applicable shall be deemed to mean such Property, whether now
owned or hereafter created or acquired by Borrowers and their applicable
Subsidiaries or in which Borrowers and their applicable Subsidiaries now have or
hereafter acquire any interest; (c) to the extent that any term reflecting
Collateral has different meanings under the PPSA and the UCC, such term shall be
defined in the alternative so as to include both meanings; (d) capitalized terms
which are not otherwise defined have the respective meanings assigned thereto in
said Amended and Restated Loan and Security Agreement; and (e) the following
terms shall have the following meanings (terms defined in the singular to have
the same meaning when used in the plural and vice versa):

“AAA” – as defined in Section 12.20 of the Agreement.

“Account” – has the meaning assigned thereto under the UCC and, in addition
thereto, shall include all “accounts receivable” and “accounts,” as such terms
are defined in the PPSA and shall include as to UK Guarantors the amounts now or
subsequently standing to the credit of any account which each UK Guarantor has,
or has an interest in, with any person and the debts represented thereby and all
book and other debts and monetary claims now or subsequently due or owing to
each UK Guarantor, the proceeds of the same and the benefit of all securities or
investments, Liens and guarantees or other rights of any nature now or
subsequently enjoyed or held by it in relation thereto (other than Accounts).

“Account Creditor” – collectively, Domestic Borrower, Canadian Borrower, UK
Guarantors and any other Subsidiary of Domestic Borrower, if any, approved by
Administrative Agent and Majority Lenders in writing from time to time for
inclusion as an “Account Creditor” for purposes of the Loan Documents.

“Account Debtor” – any Person who is or may become obligated on or under or on
account of any Account, Contract Right, Chattel Paper or General Intangible.

“Adjustment Date” – as defined in the definition of “Applicable Margin”.

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“Administrative Agent” – Bank of America in its capacity as administrative agent
for the Lenders under the Agreement and any successor in that capacity appointed
pursuant to Section 11.11 of the Agreement.

“Affiliate” - a Person: (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with, a
Person; (b) which beneficially owns or holds 5% or more of any class of the
Voting Stock of a Person; or (c) 5% or more of the Voting Stock (or in the case
of a Person which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by a Person or a Subsidiary of a Person.

“Agents” – collectively, Administrative Agent and Canadian Agent.

“Aggregate Availability” – the sum of the Domestic Availability and the Canadian
Availability.

“Aggregate Borrowing Base” means, as of each date of determination, the sum of
the Domestic Borrowing Base and the UK Borrowing Base.

“Aggregate Percentage” - with respect to each Lender, the percentage equal to
the quotient of (a) such Lender’s Domestic Revolving Credit Commitment  divided
by (b) the aggregate of all Domestic Revolving Credit Commitments.

“Agreement” - the Loan and Security Agreement referred to in the first sentence
of this Appendix A, all Exhibits and Schedules thereto and this Appendix A, in
each case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.

“Agreement Currency” – as defined in Section 12.15 of the Agreement.

“Applicable Margin” - from the Closing Date to, but not including, the first
Adjustment Date (as hereinafter defined) the per annum rates set forth below
with respect to Domestic Base Rate Loans, Domestic LIBOR Loans, and Canadian
Revolving Credit Loans:

Domestic Base Rate Loans (Revolving)

 

0.50

%

Domestic Base Rate Loans (Term)

 

0.75

%

Domestic Base Rate Loans (Cap Ex)

 

0.75

%

Domestic LIBOR Loans (Revolving)

 

2.25

%

Domestic LIBOR Loans (Term)

 

2.50

%

Domestic LIBOR Loans (Cap Ex)

 

2.50

%

Canadian Revolving Credit Loans

 

2.50

%

Unused Line Fee

 

0.375

%

 

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The per annum rates set forth above will be adjusted quarterly on the first day
of each month after Administrative Agent’s receipt of the monthly financial
statements delivered by Borrowers to Administrative Agent pursuant to
Section 8.1.3(b) of the Agreement with respect to each month (beginning with
September 2007) which is a final month in a fiscal quarter of Domestic Borrower
(each such date an “Adjustment Date”), effective prospectively, by reference to
the Leverage Ratio as of the last day of each such month, determined on the
basis of such monthly financial statements, in accordance with the following:

Leverage Ratio

 

Domestic Base
Rate Loans
(Revolving)

 

Domestic Base
Rate Loans
(Term and Cap Ex)

 

Domestic
LIBOR Loans
(Revolving)

 

Domestic LIBOR Loans (Term
and Cap Ex) and Canadian
Revolving Credit Loans

 

Unused
Line Fee

 

>2.50

 

0.50

%

0.75

%

2.25

%

2.50

%

0.375

%

>1.00 and ≤2.50

 

0.25

%

0.50

%

2.00

%

2.25

%

0.375

%

≤1.00

 

0.00

%

0.25

%

1.75

%

2.00

%

0.25

%

 

provided that, (a) if Domestic Borrower’s audited financial statements for any
fiscal year delivered pursuant to Section 8.1.3(a) of the Agreement reflect a
Leverage Ratio that yields a different Applicable Margin than that yielded by
the monthly financial statements previously delivered pursuant to
Section 8.1.3(b) of the Agreement for the last month of such fiscal year, the
Applicable Margin shall be readjusted retroactive to the preceding Adjustment
Date and (b) if Borrowers fail to deliver the financial statements required to
be delivered pursuant to Section 8.1.3(a) or Section 8.1.3(b) of the Agreement
on or before the due date thereof, the interest rate shall automatically adjust
to the highest interest rate set forth above, effective prospectively from such
due date until the next Adjustment Date.

“Bank of America Canada” — as defined in the preamble to the Agreement, or its
successor.

“Bank Product” - any of the following products, services or facilities extended
to any Borrower or any of its Subsidiaries by any Lender or any of its
Affiliates (each a “Bank Product Provider”) : (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 any of its Subsidiaries, other than Domestic
Letters of Credit.

“Bank Product Debt” - Indebtedness and other obligations of any Borrower or any
of its Subsidiaries relating to Bank Products.

“Bank Product Provider” – as defined in the definition of Bank Product.

“Bank Product Reserve” - the aggregate amount of reserves established by
Administrative Agent from time to time in its reasonable discretion in respect
of Bank Product Debt.

“Bankruptcy Event” – with respect to any Person, such Person shall suffer the
appointment of a receiver, trustee, administrator, administrative receiver,
interim receiver, sheriff, monitor, sequestrator, custodian or similar
fiduciary, or shall pass or convene any

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meeting for the purpose of considering any resolution for winding up or
administration, or shall make an assignment, composition or arrangement for the
benefit of creditors, or any petition for an order for relief (or similar
proceedings, including, without limitation, an application for a stay order or
filing of a proposal or notice of intention to make a proposal) shall be filed
by or against such Person under the United States federal bankruptcy laws, the
Insolvency Laws of Canada, England’s Insolvency Act of 1986 or any other
insolvency laws in the United Kingdom (and the continuation of such proceeding
for more than 30 days or, with respect to any proceeding in the United Kingdom,
14 days), or such Person shall make any offer of settlement, extension or
composition to their respective unsecured creditors generally.  With respect to
any Person organized under the laws of the United Kingdom, a petition has been
presented or a meeting convened or application made for the purpose of
appointing an administrator or receiver or other similar officer of, or for the
making of an administration order in respect of such Person and (other than in
the case of a petition to appoint an administrator or receiver to which a grace
period shall not apply), such petition or application is not stayed or
discharged within 14 days or in any event before it is heard.

“Borrowers” – as defined in the preamble to the Agreement.

“Borrower Representative” – Domestic Borrower.

“Borrowing Base Certificate” – a certificate by a responsible officer of
Borrower Representative, substantially in the form of Exhibit 8.1.4 (or another
form acceptable to Administrative Agent) setting forth the calculation of the
Domestic Borrowing Base, the Canadian Borrowing Base and the UK Borrowing Base,
including a calculation of each component thereof, all in such detail as shall
be satisfactory to Administrative Agent.  All calculations of the Domestic
Borrowing Base, Canadian Borrowing Base and UK Borrowing Base in connection with
the preparation of any Borrowing Base Certificate shall originally be made by
Borrower Representative and certified to Administrative Agent; provided, that
each of Administrative Agent and Canadian Agent, as applicable, shall have the
right to review and adjust, in the exercise of its reasonable credit judgment,
any such calculation after giving notice thereof to Borrower Representative,
(a) to reflect its reasonable estimate of declines in value of any of the
Collateral described therein, and (b) to the extent that such calculation is not
in accordance with this Agreement.

“Business Day” - (a) any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of California or is a day on which
banking institutions located in the State of California are closed, (b) with
respect to any disbursements and payments in and calculations pertaining to any
Canadian Revolving Credit Loan, any day which is a Business Day in clause (a)
above and which is also not a day on which commercial banks in Toronto, Canada,
Atlanta, Georgia and New York, New York are authorized or required by law to
close, and (c) with respect to the making, continuing, prepaying or repaying of
any Domestic LIBOR Loan, any day which is a Business Day described in
clauses (a), (b) and (c) above and which is also a day on which dealings in U.S.
Dollars are carried on in the London interbank eurodollar market.

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“Canadian Agent” – Bank of America Canada in its capacity as Canadian Agent for
the Canadian Lender and the Canadian Participating Lenders under the Agreement
and any successor in that capacity appointed pursuant to Section 11.11 of the
Agreement.

“Canadian Availability” – the amount of additional money which Canadian Borrower
is entitled to borrow from time to time as Canadian Revolving Credit Loans, such
amount being the lesser of (i) the Revolving Credit Maximum Amount minus the
aggregat amount of the Domestic Revolving Credit Exposure of all the Domestic
Lenders (which, for purposes of clarification, includes the Domestic LC Amount
and outstanding Domestic LC Obligations, as further set forth in the definition
of “Domestic Revolving Credit Exposure”) minus the aggregate Canadian Revolving
Credit Exposure, and (ii) the difference derived when the sum of the Dollar
Equivalent of the principal amount of Canadian Revolving Credit Loans to
Canadian Borrower then outstanding (including any amounts which Administrative
Agent, Canadian Agent or Canadian Lender may have paid for the account of
Canadian Borrower pursuant to any of the Loan Documents and which have not been
reimbursed by Canadian Borrower), and the Dollar Equivalent of any Reserves is
subtracted from the Dollar Equivalent of the Canadian Borrowing Base, subject in
each case to the other limitations in Section 1.1.2 of the Agreement.  If the
aggregate amount outstanding under the Canadian Revolving Credit Loans is equal
to or greater than the Canadian Revolving Credit Sub-Limit or the Canadian
Borrowing Base, Canadian Availability is $0.

“Canadian Base Rate” – the Canadian Prime.

“Canadian Benefit Plans” – all material employee benefit plans, programs or
arrangements of any nature or kind whatsoever that are not Canadian Pension
Plans and are maintained or contributed to by, or to which there is or may be an
obligation to contribute by, Canadian Borrower or its Subsidiaries in respect to
their employees or former employees in Canada.

“Canadian Borrower” – as defined in the preamble to the Agreement.

“Canadian Borrower Guaranty” - the continuing guaranty agreement executed by the
Canadian Borrower, in form and substance satisfactory to Administrative Agent.

“Canadian Borrowing Base” – as at any date of determination thereof, the Dollar
Equivalent of an amount equal to the lesser of the following:

(a)         the Canadian Revolving Credit Sub-Limit; and

(b)         an amount equal to 85% of the net amount of Eligible Accounts of
Canadian Borrower outstanding at such date.

The advance rate set forth above may be adjusted downward by Canadian Agent as
Canadian Agent shall deem necessary or appropriate in its reasonable credit
judgment, including, without limitation, adjustments with respect to Prior
Claims or inventory subject to rights of suppliers under Section 81.1 of
Bankruptcy and Insolvency Act (Canada).  For purposes hereof, the net amount of
Eligible Accounts at any time shall be the face amount

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of such Eligible Accounts less any and all returns, rebates, discounts (which
may, at Canadian Agent’s option, be calculated on shortest terms), credits,
allowances or excise taxes of any nature at any time issued, owing, claimed by
Account Debtors, granted, outstanding or payable in connection with such
Accounts at such time.

“Canadian Collateral” – all of the Property and interests in Property of
Canadian Borrower described in Section 5 of the Agreement, and all other
Property and interests in Property of Canadian Borrower that now or hereafter
secures the payment and performance of any of the Canadian Obligations, and all
other Property and interest in Property of any Person that is identified in a
Loan Document as “Canadian Collateral”.

“Canadian Dollar Equivalent” – at any time, as to any amount denominated in U.S.
Dollars, the equivalent amount in Canadian Dollars determined by Administrative
Agent at such time on the basis of the spot rate for the purchase by Canadian
Agent of such U.S. Dollars with Canadian Dollars through a foreign exchange
trading office selected by Canadian Agent or such other rate which
Administrative Agent may select based on reasonable commercial practices.

“Canadian Dollar Refunding Amount” – as defined in Section 3.2.6 of the
Agreement.

“Canadian Dollars and cdn$” – each, lawful currency of Canada.

“Canadian Fronting Fee” – as defined in Section 2.6(a) of the Agreement.

“Canadian Lender” – Bank of America Canada, in its capacity as provider of
Canadian Revolving Credit Loans.

“Canadian Loan Account” – as defined in Section 3.6 of the Agreement.

“Canadian Non-Excluded Taxes” – as defined in Section 2.13.9 of the Agreement.

“Canadian Obligations” – all Loans made by the Canadian Lender and all other
advances, debts, liabilities, obligations, covenants and duties, together with
all interest (including, without limitation, whether accruing prior to or
subsequent to the commencement of a bankruptcy or similar proceeding with
Canadian Borrower as a debtor thereof and whether or not such interest is an
allowed claim in any such proceeding), fees and other charges thereon, owing,
arising, due or payable from Canadian Borrower to Canadian Agent, for its own
benefit, or from Canadian Borrower to Canadian Agent for the benefit of Canadian
Lender or Canadian Participating Lenders, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under the Agreement or any of the other Loan Documents or
otherwise, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, including without limitation any
Derivative Obligations owing by Canadian Borrower to Canadian Agent, Canadian
Lender or any Canadian Participating Lender.

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“Canadian Participating Lender” – each Lender (other than Canadian Lender) that
has a Canadian Percentage as identified on Schedule 1.1; it being understood and
agreed that each Canadian Affiliate of a Domestic Lender (other than Bank of
America) which is not a non-resident of Canada for purposes of Part XIII of the
Income Tax Act (Canada) or any successor provision thereto shall be a Canadian
Participating Lender.

“Canadian Participation Fee” – as defined in Section 2.6 of the Agreement.

“Canadian Pension Plan” – each plan, program or arrangement which is considered
to be a pension plan under any applicable pension benefits standard or tax
statute and/or regulation in Canada established, maintained or contributed to
by, or to which there is or may be an obligation to contribute by, Canadian
Borrower or its Subsidiaries in respect of its employees or former employees.

“Canadian Percentage” – relative to the Canadian Lender and any Canadian
Participating Lender, the applicable percentage relating to such Person’s
obligation to fund Canadian Revolving Credit Loans pursuant to Section 3.2.6 of
the Agreement as set forth opposite its name on Schedule 1.1 to the Agreement,
as such percentage may be adjusted from time to time pursuant to assignment
agreements executed by such Lender and delivered pursuant to Section 11.9 of the
Agreement.  A Lender shall not have any Canadian Percentage if its percentage
under the Canadian Percentage column is zero or is blank.

“Canadian Prime” – the annual rate of interest announced by the Canadian Agent
as its “reference rate” for commercial loans made by it in Canada in Canadian
Dollars.  The “reference rate” is a rate set by the Canadian Agent based upon
various factors including its cost and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.  Any change
in the reference rate announced by the Canadian Agent shall take effect at the
opening of business on the day specified in the public announcement of such
change.

“Canadian Revolving Credit Exposure” – at any date, the amount equal to the
Dollar Equivalent of the aggregate principal amount of all Canadian Revolving
Credit Loans.

“Canadian Revolving Credit Loan” – as defined in Section 1.1.2 of the Agreement.

“Canadian Revolving Credit Sub-Limit” – $1,000,000, as such amount may be
reduced from time to time in accordance with the provisions of the Agreement.

“Capital Expenditures” - expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year, including the
total principal portion of Capitalized Lease Obligations; provided that “Capital
Expenditures” shall exclude (i) an

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amount up to $250,000 during each consecutive twelve-month period corresponding
to the net proceeds of dispositions of Equipment and Fixed Assets made in
accordance with Section 6.4.2(a), and (ii) replacements of Equipment or fixed
assets made in accordance with Section 6.4.2(b).

“Capitalized Lease Obligation” - any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

“Cash Management Services” - any services provided from time to time by any
Lender or any of its Affiliates to any Borrower or any of their Subsidiaries 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.

“CCEL” – Channell Commercial Europe Limited, a limited liability company
incorporated under the laws of England and Wales (Company number 02837910), with
its registered office and principal place of business at 2nd Floor Bayheath
House, Fairway, Petts Wood Kent, United Kingdom  BR5 1EG.

“CERCLA” – as defined in the definition of “Environmental Laws”.

“Channell Australia Entities” – collectively, Channell Bushman, Bushmans Group
Pty Limited, Channell Pty Limited, Bushmans Engineering Pty Limited, Polyrib
Tanks Pty Limited  and Australian Bushman Tanks Pty Limited.

“Channell Bushman” – Channell Bushman Pty Limited.

“Channell Bushman Credit Facility” – the credit facilities provided pursuant to
the Corporate Letter of Offer, dated May 16, 2007, by and among National
Australia Bank Limited, Channell Bushman, Bushmans Group Pty Limited, Channell
Pty Limited, Bushmans Engineering Pty Limited, Polyrib Tanks Pty Limited  and
Australian Bushman Tanks Pty Limited, as such agreement may be amended, amended
and restated, supplemented, modified, refinanced, replaced or otherwise
restructured, in whole or in part from time to time (including increasing the
amount of available borrowings thereunder and whether or not with the same or
any other agent, lender or group of lenders).

“Closing Date” - the date on which all of the conditions precedent in Section 9
of the Agreement are satisfied or waived by the Agents and the Lenders and the
initial Loans are made or the initial Domestic Letters of Credit or Domestic LC
Guaranties are issued under the Agreement.

“Closing Date Lenders” – Bank of America and Bank of America Canada.

“CLU” – Channell Limited, a limited liability company incorporated under the
laws of England and Wales (Company number 00912862), with its registered office
and principal place of business at 2nd Floor Bayheath House, Fairway, Petts Wood
Kent, United Kingdom  BR5 1EG.

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“Code” – the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.

“Collateral” – collectively, the Canadian Collateral, the Domestic Collateral
and the UK Collateral.

“Commitment Termination” – collectively, the termination of the Domestic
Revolving Credit Commitments and the termination of the obligation of Canadian
Lender to fund Canadian Revolving Credit Loans to Canadian Borrower under
Section 1.1.2 of the Agreement.

“Computer Hardware and Software” – all of Borrowers’ rights (including rights as
licensee and lessee) with respect to (a) computer and other electronic data
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (b) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (a) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever);
(c) any firmware associated with any of the foregoing; and (d) any
documentation  for hardware, Software and firmware described in clauses (a), (b)
and (c) above, including flow charts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes.

“Consolidated” - the consolidation in accordance with GAAP of the accounts or
other items as to which such term applies.

“Contract Right” -  any right of Borrowers to payment under a contract for the
sale or lease of goods or the rendering of services, which right is at the time
not yet earned by performance.

“Current Assets” – at any date means the amount at which all of the current
assets of a Person would be properly classified as current assets shown on a
balance sheet at such date in accordance with GAAP.

“Dated Account” – those Accounts of Domestic Borrower with respect to which
Domestic Borrower has granted seasonal or promotional terms up to 90 days from
normal terms.

“Default” - an event or condition the occurrence of which would, with the lapse
of time or the giving of notice, or both, become an Event of Default.

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“Default Rate” - as defined in Section 2.1.2 of the Agreement.

“Derivative Obligations” - every obligation of a Person under any forward
contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, Bank Product Debt), the value of
which is dependent upon interest rates, currency exchange rates, commodities or
other indices.

“Designated Affiliate” - a Person: (a) which is not an officer of any Borrower
or any Subsidiary of Domestic Borrower, or an immediate family member of the
family of William H. Channell, Jr.; (b) which directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under common control
with, a Person; (c) which beneficially owns or holds 10% or more of any class of
the Voting Stock of a Person; or (d) 10% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 10% or more of the equity interest)
of which is beneficially owned or held by a Person or a Subsidiary of a Person.

“Distribution” - in respect of any Person means and includes: (a) the payment of
any dividends or other distributions on Securities (except distributions in such
Securities) and (b) the redemption or acquisition of Securities of such Person,
as the case may be, unless made contemporaneously from the net proceeds of the
sale of Securities.

“Dollars”, “dollar”, “U.S. Dollar”, “U.S. dollar” and “$” – each, lawful
currency of the United States.

“Dollar Equivalent” – at any time (a) as to any amount denominated in U.S.
Dollars, the amount thereof at such time, (b) as to any amount denominated in
Canadian Dollars, the equivalent amount in U.S. Dollars determined by
Administrative Agent at such time on the basis of the spot rate for the purchase
by Canadian Agent of such Canadian Dollars with U.S. Dollars through a foreign
exchange trading office selected by Canadian Agent or such other rate which
Administrative Agent may select based on reasonable commercial practices, and
(c) as to any amount denominated in Sterling, the equivalent amount in U.S.
Dollars determined by Administrative Agent at such time on the basis of the spot
rate for the purchase by Administrative Agent of such Sterling with U.S. Dollars
through a foreign exchange trading office selected by Administrative Agent or
such other rate which Administrative Agent may select based on reasonable
commercial practices.

“Domestic Availability” – the amount of additional money which Domestic Borrower
is entitled to borrow from time to time as Domestic Revolving Credit Loans, such
amount being the lesser of:

(i) the Revolving Credit Maximum Amount minus the aggregate amount of the
Domestic Revolving Credit Exposure of all the Domestic Lenders (which, for
purposes of clarification, includes the Domestic LC Amount and the outstanding
Domestic LC Obligations, as further set forth in the definition of “Domestic
Revolving Credit Exposure”) minus the aggregate Canadian Revolving Credit
Exposure; and

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(ii) the result of:

(A)  the Aggregate Borrowing Base; minus

(B)  the outstanding principal amount of Domestic Revolving Credit Loans
(including any amounts which Administrative Agent or any Lender may have paid
for the account of Domestic Borrower pursuant to any of the Loan Documents and
which have not been reimbursed by Domestic Borrower), the Domestic LC Amount and
the outstanding Domestic LC Obligations, and any Reserves.

If the aggregate amount outstanding under the Domestic Revolving Credit Loans is
equal to or greater than the aggregate Domestic Revolving Credit Commitments or
the Aggregate Borrowing Base, Domestic Availability is $0.

“Domestic Base Rate” - the rate of interest announced or quoted by Bank of
America from time to time as its prime rate for commercial loans, whether or not
such rate is the lowest rate charged by Bank of America to its most preferred
borrowers; and, if such prime rate for commercial loans is discontinued by Bank
of America as a standard, a comparable reference rate designated by Bank of
America as a substitute therefor shall be the Domestic Base Rate.

“Domestic Base Rate Loan” - any Loan hereunder bearing interest computed by
reference to the Domestic Base Rate, including, without limitation, those
portions of the outstanding principal amounts of the Domestic Term Loan and the
Domestic Cap Ex Loans bearing interest with reference to the Domestic Base Rate.

“Domestic Borrower” – as defined in the preamble to the Agreement.

“Domestic Borrower Guaranty” - the continuing guaranty agreement executed by the
Domestic Borrower, in form and substance satisfactory to Agents.

“Domestic Borrowing Base” - as at any date of determination thereof, an amount
equal to (without duplication) the sum of (a) 85% of the net amount of Eligible
Accounts of the Domestic Borrower plus (b) the Inventory Component.  The advance
rate set forth above in clause (a) may be adjusted downward by Administrative
Agent as Administrative Agent shall deem necessary or appropriate in its
reasonable credit judgment.  For purposes hereof, the net amount of Eligible
Accounts at any time shall be the face amount of such Eligible Accounts less any
and all returns, rebates, discounts (which may, at Administrative Agent’s
option, be calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time.

“Domestic Cap Ex Loan” – as defined in Section 1.3.2 of the Agreement.

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“Domestic Cap Ex Loan Commitment” - with respect to any Domestic Lender, the
amount of such Domestic Lender’s commitment to make a term loan to Domestic
Borrower pursuant to Section 1.3.2 of the Agreement, as set forth below such
Domestic Lender’s name on Schedule 1.1 hereto under the heading “Domestic Cap Ex
Loan Commitment”.  The Domestic Cap Ex Commitments of all the Lenders shall not
exceed $5,000,000, as such amount may be reduced from time to time in accordance
with the provisions of this Agreement.

“Domestic Cap Ex Loan Percentage” - with respect to each Domestic Lender, the
percentage equal to the quotient of such Domestic Lender’s Domestic Cap Ex
Commitment divided by the aggregate of all Domestic Cap Ex Commitments.

“Domestic Cap Ex Notes” - the secured promissory notes to be executed by
Borrowers in favor of each applicable Lender to evidence the Domestic Cap Ex
Loans, which shall be in the form of Exhibit 1.3 to the Agreement, together with
any replacement or successor notes therefor.

“Domestic Collateral” - all of the Property and interests in Property of
Domestic Borrower described in Section 5 of the Agreement, and all other
Property and interests in Property of Domestic Borrower or any Subsidiary of
Domestic Borrower (other than Restricted Subsidiaries and Canadian Borrower)
that now or hereafter secures the payment and performance of any of the Domestic
Obligations, and all other Property and interest in Property of any Person that
is identified in a Loan Document as “Domestic Collateral”.

“Domestic LC Amount” - at any time, the aggregate undrawn available amount of
all Domestic Letters of Credit and Domestic LC Guaranties then outstanding.

“Domestic LC Guaranty” - any guaranty pursuant to which Administrative Agent or
any Affiliate of Administrative Agent shall guaranty the payment or performance
by Domestic Borrower of its reimbursement obligation under any Domestic Letter
of Credit.

“Domestic LC Margin” – the Applicable Margin then in effect for Domestic LIBOR
Loans which are Domestic Revolving Credit Loans per annum.

“Domestic LC Obligations” - any Obligations that arise from any draw against any
Domestic Letter of Credit or against any Domestic Letter of Credit supported by
a Domestic LC Guaranty.

“Domestic Lender” – as defined in Section 1.1.1 of the Agreement.

“Domestic Letter of Credit” - any standby or commercial letter of credit issued
by Administrative Agent, or any Affiliate of Administrative Agent for the
account of Domestic Borrower.

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“Domestic LIBOR Loan” – any Loan made hereunder to Domestic Borrower bearing
interest computed by reference to the LIBOR, including, without limitation, that
portion of the outstanding principal amount of the Domestic Term Loan bearing
interest with reference to the LIBOR.

“Domestic Loan Account” - as defined in Section 3.6 of the Agreement.

“Domestic Non-Excluded Taxes” – as defined in Section 2.13.1 of the Agreement.

“Domestic Obligations” - all Loans made by any Domestic Lender, all Domestic LC
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties, together with all interest (including, without limitation, whether
accruing prior to or subsequent to the commencement of a bankruptcy or similar
proceeding with Domestic Borrower as a debtor thereof and whether or not such
interest is an allowed claim in any such proceeding), fees and other charges
thereon, owing, arising, due or payable from Domestic Borrower to Administrative
Agent or Canadian Agent, for its own benefit and the benefit of the Lenders, or
from Domestic Borrower to Bank of America or to any other affiliate of Bank of
America, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, whether arising under the Agreement or
any of the other Loan Documents or otherwise, whether direct or indirect
(including those acquired by assignment), absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising and however
acquired, including without limitation any Derivative Obligations owing by
Domestic Borrower to Administrative Agent, Canadian Agent, or any Lender.

“Domestic Revolving Credit Commitment” – as to any Lender, the obligation of
such Lender to make Domestic Revolving Credit Loans and to participate in
Domestic Letters of Credit issued for the account of Domestic Borrower, subject
in each case to the limitations provided herein and the other terms hereof, in
an aggregate principal amount at any one time outstanding not to exceed the
amount set forth below such Lender’s name on Schedule 1.1 hereto under the
heading “Domestic Revolving Credit Commitment”, as such amount may be reduced
from time to time in accordance with the provisions of this Agreement.  The
Domestic Revolving Credit Commitments of all the Lenders shall not exceed
$12,500,000, as such amount may be reduced from time to time in accordance with
the provisions of this Agreement.

“Domestic Revolving Credit Exposure” – at any date, (a) as to all Domestic
Lenders, the amount equal to the sum of the aggregate outstanding principal
amount of all Domestic Revolving Credit Loans, the Domestic LC Amount and all
Domestic LC Obligations then outstanding, and (b) as to any Domestic Lender, the
amount equal to the sum of  (i) the aggregate principal amount of all then
outstanding Domestic Revolving Credit Loans made by such Domestic Lender, and
(ii) such Domestic Lender’s Domestic Revolving Loan Percentage of the Domestic
LC Amount and the then outstanding Domestic LC Obligations.

“Domestic Revolving Credit Loan” – as defined in Section 1.1.1 of the Agreement.

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“Domestic Revolving Loan Percentage” - with respect to each Domestic Lender, the
percentage equal to the quotient of such Domestic Lender’s Domestic Revolving
Credit Commitment divided by the aggregate of all Domestic Revolving Credit
Commitments.

“Domestic Subsidiary” – a Subsidiary of a Borrower that is not a Foreign
Subsidiary or a Borrower.

“Domestic Term Loan” – as defined in Section 1.3.1 of the Agreement.

“Domestic Term Loan Commitment” - with respect to any Domestic Lender, the
amount of such Domestic Lender’s commitment to make a term loan to Domestic
Borrower pursuant to Section 1.3.1 of the Agreement, as set forth below such
Domestic Lender’s name on Schedule 1.1 hereto under the heading “Domestic Term
Loan Commitment”.  The Domestic Term Loan Commitments of all the Lenders shall
not exceed $2,500,000, as such amount may be reduced from time to time in
accordance with the provisions of this Agreement.

“Domestic Term Notes” - the secured promissory notes to be executed by Borrowers
in favor of each applicable Lender to evidence the Domestic Term Loan, which
shall be in the form of Exhibit 1.4 to the Agreement, together with any
replacement or successor notes therefor.

“Dominion Account” - a special bank account or accounts of Administrative Agent
or Canadian Agent, as the case may be, established by Borrowers and their
Subsidiaries pursuant to Section 6.2.4 of the Agreement at a bank or banks
selected by Borrowers (provided that UK Guarantors shall select Bank of America)
and their Subsidiaries, but acceptable to Administrative Agent or Canadian
Agent, as the case may be, in its reasonable discretion, and over which
Administrative Agent and Canadian Agent, as the case may be, shall have access
and control for withdrawal purposes in accordance with the terms of the
applicable blocked account arrangements approved by the applicable Agents.

“EBITDA” - for any period, without duplication, the Consolidated net income (or
loss) of Borrowers and UK Guarantors, plus (a) Borrowers’ and UK Guarantors’
Consolidated interest expense for that period (including fees paid in cash
associated with this Agreement), including without limitation any rent payable
with respect to Capitalized Lease Obligations which should, in accordance with
GAAP, be treated as interest expense, to the extent paid during that period in
cash, plus (b) the aggregate amount of federal, state and provincial income
taxes on or measured by such Consolidated net income of Borrowers and UK
Guarantors to the extent paid or accrued for that period, plus (c) the
Consolidated depreciation and amortization expense of Borrowers and UK
Guarantors for that period, plus (d) the Consolidated non-cash expenses of
Borrowers and UK Guarantors for that period, minus (e) any Consolidated non-cash
income of Borrowers and UK Guarantors for that period, in each case determined
in accordance with GAAP, consistently applied.

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“Egerton” – A.C. Egerton (Holdings) Limited (Company number 00818919), a limited
liability company incorporated under the laws of England and Wales and whose
registered office is c/o Channell Limited, 2nd Floor Bayheath House, Fairway,
Petts Wood Kent, United Kingdom  BR5 1EG.

“Eligible Account” - an Account of an Account Creditor arising in the ordinary
course of the business of the applicable Account Creditor from the sale of goods
or rendition of services which Administrative Agent, in its reasonable credit
judgment, deems to be an Eligible Account.  Without limiting the generality of
the foregoing, no Account shall be an Eligible Account if:

(a)           it arises out of a sale made or services rendered by the
applicable Account Creditor to a Subsidiary of any Borrower or an Affiliate of
any Borrower (excluding, with respect to Accounts arising out of sale, such
portion of such Accounts which arises out of services rendered in connection
with such sales); or

(b)           it remains unpaid more than 90 days after the original invoice
date or more than 60 days after its due date unless (i) such Account is a Dated
Account, or (ii) the sale pertaining to such Account is on letter of credit,
guaranty or acceptance terms, or is insured by credit insurance, in each case
acceptable to Administrative Agent in its reasonable credit judgment; or

(c)           it is owed by an Account Debtor with respect to which the     
total unpaid Accounts of such Account Debtor exceed 20% of the net amount of all
Eligible Accounts, but only to the extent of such excess; except with respect to
Accounts with Comcast Corporation or one of its affiliates, as the Account
Debtor, and Verizon Communications, Inc. or one of its affiliates, as the
Account Debtor, for which Accounts the foregoing 20% concentration limit shall
be increased to 40% in the aggregate for all such Accounts during such periods
as such Account Debtor maintains a Dun & Bradstreet rating of not less than 5A2;
or

(d)           any material covenant, representation or warranty contained in the
Agreement with respect to such Account has been breached; or

(e)           it is a “contra” account; or

(f)            the Account Debtor is also a creditor or supplier of the
applicable Account Creditor or any Subsidiary of the applicable Account
Creditor, or the Account Debtor has disputed liability with respect to such
Account, or the Account Debtor has made any claim with respect to any other
Account due from such Account Debtor to the applicable Account Creditor or any
Subsidiary of the applicable Account Creditor, or the Account otherwise is or
may become subject to right of setoff by the Account Debtor, provided, that any
such Account shall be eligible to the extent such amount thereof exceeds such
contract, dispute, claim, setoff or similar right; or

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(g)           the Account Debtor has commenced a voluntary case under the United
States federal bankruptcy laws, the Insolvency Laws of Canada or England’s
Insolvency Act of 1986 (or any other applicable insolvency laws) as now
constituted or hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the Account Debtor in an involuntary
case under the United States federal bankruptcy laws, the Insolvency Laws of
Canada or England’s Insolvency Act of 1986 (or any other applicable insolvency
laws), as now constituted or hereafter amended, or any other petition or other
application for relief under the United States federal bankruptcy laws, the
Insolvency Laws of Canada or England’s Insolvency Act of 1986 (or any other
applicable insolvency laws), as now constituted or hereafter amended, has been
filed against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs, unless in any such case the sale pertaining to
such Account is on letter of credit, guaranty or acceptance terms, or is insured
by credit insurance, in each case acceptable to Administrative Agent in its
reasonable credit judgment; or

(h)           (i) in the case of Domestic Borrower, it arises from a sale made
or services rendered to an Account Debtor headquartered outside the United
States of America, unless the sale is either (A) to an Account Debtor
headquartered in Ontario or any other province of Canada in which the PPSA has
been adopted in substantially the same form or with the same effect as currently
in effect in Ontario, or (B) on letter of credit, guaranty or acceptance terms,
in each case acceptable to Administrative Agent in its reasonable credit
judgment (or insured by credit insurance acceptable to Administrative Agent in
its sole discretion), and (ii) in the case of Canadian Borrower, it arises from
a sale made or services rendered to an Account Debtor headquartered outside
Canada, unless the sale is either (A) to an Account Debtor headquartered in the
United States of America, or (B) on letter of credit, guaranty or acceptance
terms, in each case acceptable to Administrative Agent and the Canadian Agent in
their reasonable credit judgment (or insured by credit insurance acceptable to
Canadian Agent in its sole discretion), and (iii) in the case of UK Guarantors,
it arises from a sale made or services rendered to an Account Debtor
headquartered outside of the United Kingdom, the United States of America or
Canada unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Administrative Agent in their reasonable credit
judgment; or

(i)            (i) in the case of Domestic Borrower, it arises from a sale made
or services rendered to an Account Debtor not organized under the laws of the
United States of America, unless the sale is either (A) to an Account Debtor
organized under the laws of Ontario or any other province of Canada in which the
PPSA has been adopted in substantially the same form or with the same effect as
currently in effect in Ontario, or (B) on letter of credit, guaranty or
acceptance terms, in each case acceptable to Administrative Agent in its
reasonable credit judgment (or insured by

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credit insurance acceptable to Administrative Agent in its sole discretion), and
(ii) in the case of Canadian Borrower, it arises from a sale made or services
rendered to an Account Debtor not organized under the laws of Canada, unless the
sale is either (A) to an Account Debtor organized under the laws of the United
States of America, or (B) on letter of credit, guaranty or acceptance terms, in
each case acceptable to Administrative Agent and the Canadian Agent in their
reasonable credit judgment (or insured by credit insurance acceptable to
Canadian Agent in its sole discretion), and (iii) in the case of UK Guarantors,
it arises from a sale made or services rendered to an Account Debtor not
organized under the laws of the United Kingdom, the United States of America or
Canada unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Administrative Agent in their reasonable credit
judgment; or

(j)            (a) it arises from a sale to the Account Debtor on a
bill-and-hold or consignment basis; or (b) it is subject to a reserve
established by the applicable Account Creditor or any of its Subsidiaries for
potential returns or refunds, to the extent of such reserve; or

(k)           the Account Debtor is the United States of America, the United
Kingdom (or any country therein), or Her Majesty the Queen in right of Canada,
or any department, agency or instrumentality of any of the foregoing, unless the
applicable Account Creditor assigns its right to payment of such Account to
Administrative Agent, in a manner satisfactory to Administrative Agent, in its
reasonable credit judgment, so as to comply with the Assignment of Claims Act of
1940 (31 U.S.C. §203 et seq., as amended) or the Financial Administration Act
(Canada) as applicable; or

(l)            it is not at all times subject to Administrative Agent’s or
Canadian Agent’s, as the case may be, duly perfected, first priority security
interest and to no other Lien that is not a Permitted Lien; or

(m)          the goods giving rise to such Account have not been shipped to the
Account Debtor or the services giving rise to such Account have not been
performed by the applicable Account Creditor and accepted by the Account Debtor
or the Account otherwise does not represent a final sale; or

(n)           the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or

(o)           if such Account is a Dated Account, such account remains unpaid
more than 120 days after the original invoice date; or

(p)           the applicable Account Creditor or a Subsidiary of the applicable
Account Creditor has made any agreement with the Account Debtor for any
deduction or rebate therefrom (but only to the extent of such deduction or
rebate), except for discounts or allowances which are made in the ordinary
course of business for prompt payment or otherwise and which discounts or
allowances are reflected in the calculation of the face value of each invoice
related to such Account; or

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(q)           more than 25% of the Accounts owing from the Account Debtor are
not Eligible Accounts hereunder; or

(r)            it is not otherwise acceptable to Administrative Agent in its
reasonable credit judgment.

“Eligible Inventory” – Inventory of Domestic Borrower (other than packaging
materials and supplies, tooling, samples and literature) which Administrative
Agent, in its reasonable credit judgment, deems to be Eligible Inventory. 
Without limiting the generality of the foregoing, no Inventory shall be Eligible
Inventory if:

(a)           it is not raw materials or finished goods; or

(b)           it is not in good, new and saleable condition; or

(c)           it is slow-moving, obsolete or unmerchantable; or

(d)           it does not meet all standards imposed by any governmental agency
or authority; or

(e)           it does not conform in all material respect to any covenants,
warranties and representations set forth in the Agreement; or

(f)            it is not at all times subject to Administrative Agent’s duly
perfected, first priority security interest and no other Lien except a Permitted
Lien; or

(g)           it is not situated at a location in compliance with the Agreement
or is in transit, provided that Inventory situated at a location not owned by
Domestic Borrower will be Eligible Inventory only if Administrative Agent has
received a satisfactory landlord’s agreement or bailee letter, as applicable,
with respect to such location; or

(h)           it is not otherwise acceptable to Administrative Agent in its
reasonable credit judgment.

“Environmental Claim” - any written accusation, allegation, notice of violation,
claim, demand, order, directive, cost recovery action or other cause of action
by, or on behalf of, any governmental authority or any Person for damages,
injunctive or equitable relief, personal injury (including sickness, disease or
death), remedial action costs, tangible or intangible property damage, natural
resource damages, nuisance relating to Hazardous Material, pollution, any
adverse effect on the environment caused by any Hazardous Material, or fines,
penalties or restrictions, resulting from or based upon: (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases); (b) exposure to any Hazardous Material;
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.

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“Environmental Laws” – all applicable federal, provincial, state, municipal or
local (whether in the United States of America, Canada or United Kingdom) laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental
authorities, in each case relating to environmental, health, safety and land use
matters, including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, and, to the extent legally enforceable, the Emergency Planning and
Community Right-to-Know Act, the Environmental Protection Act (Ontario) or any
other act, rule, guideline or policy of Canada or any jurisdiction thereof
having the force of law relating to environmental, health, safety and land use
matters.

“Environmental Permit” – any applicable permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
governmental authority pursuant to any Environmental Law.

“ERISA” - the Employee Retirement Income Security Act of 1974, as amended, and
all rules and regulations from time to time promulgated thereunder.

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

“Event of Default” - as defined in Section 10.1 of the Agreement.

“Fee Letter” – as defined in Section 2.3 of the Agreement.

“Foreign Subsidiary” – a Subsidiary of a Borrower that (a) is organized under
the laws of a country (or political subdivision thereof) other than the United
States of America and (b) holds all or substantially all of its assets outside
the United States of America.

“Further Taxes” – any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges (including
net income taxes and franchise taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts payable or paid pursuant to
Section 2.13 of the Agreement.

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

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“Guarantors” – each Borrower, and each Subsidiary of Domestic Borrower which is
neither a Borrower nor a Restricted Subsidiary, and each other Person who now or
hereafter guarantees payment or performance of the whole or any part of the
Obligations.

“Guaranty Agreements” – the Domestic Borrower Guaranty, the UK Guaranty and the
continuing guaranty agreements executed by the Subsidiaries of Domestic Borrower
which are neither Borrowers nor Restricted Subsidiaries, in form and substance
satisfactory to Administrative Agent, together with each other guaranty
hereafter executed by any Guarantor.

“Guaranty Security Agreements” – the security agreements executed by the
Subsidiaries of Domestic Borrower which are neither Borrowers nor Restricted
Subsidiaries, in form and substance satisfactory to Administrative Agent, as
collateral security for the payment and performance of the obligations of the
Guarantors under the applicable Guaranty Agreements.

“Hazardous Materials” - all explosive or radioactive substances or wastes,
hazardous or toxic substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates, friable asbestos or
asbestos-containing materials, polychlorinated biphenyls (“PCBs”) or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
regulated pursuant to any Environmental Law and all other substances or wastes
of any nature regulated pursuant to any Environmental Law.

“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.

“Indebtedness” - as applied to a Person means, without duplication:

(a)           all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations;

(b)           all obligations of other Persons which such Person has guaranteed;

(c)           all reimbursement obligations in connection with letters of credit
or letter of credit guaranties issued for the account of such Person;

(d)           Derivative Obligations; and

(e)           in the case of Borrowers (without duplication), the applicable
Obligations.

“Indemnitee” – as defined in Section 12.2 of the Agreement.

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“Insolvency Laws of Canada” – each of the Bankruptcy and Insolvency Act (Canada)
and the Companies Creditors’ Arrangement Act (Canada), each as now and hereafter
in effect, any successors to such statutes and any other applicable insolvency
or other similar law of any Canadian jurisdiction including, without limitation,
any law of any Canadian jurisdiction permitting a debtor to obtain a stay or a
compromise of the claims of its creditors against it.

“Intellectual Property” – all past, present and future: trade secrets, know-how
and other proprietary information; trademarks, internet domain names, service
marks, trade dress, trade names, business names, designs, logos, slogans (and
all translations, adaptations, derivations and combinations of the foregoing)
indicia and other source and/or business identifiers, and the goodwill of the
business relating thereto and all registrations or applications for
registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights; unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.

“Interest Payment Date” – as to any Domestic Base Rate Loan, Domestic LIBOR
Loan, or Canadian Revolving Credit Loan, the first calendar day of each month
(for the immediately preceding month), computed through the last calendar day of
the preceding month.

“Interest Period” – as applicable to any Domestic LIBOR Loan, a period
commencing on the date such Domestic LIBOR Loan is made, continued or converted,
and ending on the date which is one (1) month, two (2) months, three (3) months,
or six (6) months later, as may then be requested by Borrower Representative;
provided that (a) any Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next preceding or succeeding Business Day
as is Administrative Agent’s custom in the market to which such Domestic LIBOR
Loan relates; (b) there remains a minimum of one (1) month, two (2) months,
three (3) months or six (6) months (depending upon which Interest Period
Borrower Representative in the Term; and (c) all Interest Periods of the same
duration which commence on the same date shall end on the same date.

“Inventory Component” – as at any date of determination, the lesser of (a)
$8,000,000 and (b) the sum of (i) 50% of the value of Eligible Inventory
consisting of raw materials, plus (ii) 70% of the value of Eligible Inventory
consisting of finished goods.  As used herein, “value” shall be determined on a
first-in, first-out, lower of cost or market basis in accordance with GAAP.

“Judgment Currency” – as defined in Section 12.15 of the Agreement.

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“Judgments” – as defined in Section 10.1.15 of the Agreement.

“Legal Requirement” - any requirement imposed upon Administrative Agent,
Canadian Agent, or any Lender by any law of the United States of America or
Canada or the United Kingdom or by any regulation, order, interpretation, ruling
or official directive (whether or not having the force of law) of the Federal
Reserve Board, the Bank of Canada, the Bank of England or any other board,
central bank or governmental or administrative agency, institution or authority
of the United States of America, Canada, the United Kingdom or any political
subdivision of either thereof.

“Lender” –as defined in the preamble to the Agreement.

“Leverage Ratio” - as of the last day of any fiscal quarter of Domestic
Borrower, the ratio of (a) Consolidated Indebtedness for Money Borrowed of
Borrowers as of such date, to (b) EBITDA for the most recently ended twelve
month period ending on such date.

“LIBOR” –  as applicable to any Domestic LIBOR Loan, the rate per annum (rounded
upward, if necessary, to the nearest 1/32nd of one percent) as determined on the
basis of the offered rates for deposits in U.S. dollars for a period of time
comparable to such Domestic LIBOR Loan which appears on the Telerate page 3750
as of 11:00 a.m. (London Time) on the date that is two (2) London Banking Days
preceding the first day of such Domestic LIBOR Loan; provided, however, if the
rate described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR rate shall be the rate (rounded upwards
as described above, if necessary) for deposits in U.S. dollars for a period
substantially equal to the interest period on the Reuters Page “LIBO” (or such
other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the day that is two
(2) London Banking Days prior to the beginning of such interest period.  If both
the Telerate and Reuters systems are unavailable, then the rate for that date
will be determined on the basis of the offered rates for deposits in U.S.
dollars for a period of time comparable to such Domestic LIBOR Loan which are
offered by four (4) major banks in the London interbank market at approximately
11:00 a.m. (London time), on the day that is two (2) London Banking Days
preceding the first day of such Domestic LIBOR Loan as selected by
Administrative Agent.  The principal London office of each of the major London
banks so selected will be requested to provide a quotation of its U.S. dollar
deposit offered rate.  If at least two (2) such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations.  If fewer than
two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in U.S. dollars to leading
European banks for a period of time comparable to such Domestic LIBOR Loan
offered by major banks in New York City at approximately 11:00 a.m. (New York
City time), on the date that is two (2) London Banking Days preceding the first
day of such Domestic LIBOR Loan.  In the event that Administrative Agent is
unable to obtain any such quotation as provided above, it will be determined
that LIBOR pursuant to such Domestic LIBOR Loan cannot be determined.  In the
event that the Board of Governors of the Federal Reserve System shall impose a
Reserve Percentage with respect to LIBOR deposits of Bank of America then, for
any period during which such Reserve Percentage shall apply, LIBOR shall be
equal to the amount determined above divided by an amount equal to 1 minus the
Reserve Percentage.

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“Lien” - any interest in Property securing an obligation owed to, or a claim by,
a Person other than the owner of the Property, whether such interest is based on
common law, statute or contract.  The term “Lien” shall also include hypothecs,
rights of sellers under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, Borrowers
(and their applicable Subsidiaries) shall be deemed to be the owner of any
Property which they have acquired or hold subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.

“Loan Account” – as defined in Section 3.6 of the Agreement.

“Loan Documents” - the Agreement, the Other Agreements and the Security
Documents.

“Loan Party” — collectively, Borrowers, each Subsidiary of a Borrower which has
either guarantied any of the Obligations or provided a security interest in any
of its assets to secure any of the Obligations, each Guarantor, and any other
Person which has provided a security interest in any of its assets to secure any
of the Obligations.

“Loans” - all loans and advances of any kind made by Administrative Agent,
Canadian Agent, or any Lender (or by any affiliate of Bank of America) pursuant
to the Agreement.

“London Banking Day” – any date on which commercial banks are open for business
in London, England.

“Majority Lenders” – as of any date, Domestic Lenders holding 51% of the sum of
the aggregate Domestic Revolving Credit Commitments plus the aggregate
outstanding principal amount of the Domestic Term Loan and following the
termination of the Domestic Revolving Credit Commitments, Lenders holding 51% or
more of the outstanding Loans (including affiliates of such Domestic Lenders
which are Canadian Participating Lenders, whether or not a refunding has
occurred), Domestic LC Amounts, Domestic LC Obligations not yet reimbursed by
Domestic Borrower or funded with a Domestic Revolving Credit Loan, provided,
that (a) in each case, if there are 2 or more Lenders with outstanding Loans, a
portion of the Domestic LC Amount, unfunded and unreimbursed Domestic LC
Obligations or Domestic Revolving Credit Commitments, at least 2 Lenders shall
be required to constitute Majority Lenders; and (b) prior to termination of the
Domestic Revolving Credit Commitments, if any Domestic Lender breaches its
obligation to fund any requested Domestic Revolving Credit Loan, for so long as
such breach exists, its voting rights hereunder shall be calculated with
reference to its outstanding Loans, portion of the Domestic LC Amount and
unfunded and unreimbursed Domestic LC Obligations, rather than its Domestic
Revolving Credit Commitment.

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“Material Adverse Effect” - (a) a material adverse effect on the business,
condition (financial or otherwise), operation, performance or properties of
Borrowers and their Subsidiaries taken as a whole, (b) a material adverse effect
on the rights and remedies of Administrative Agent, Canadian Agent, or Lenders
under the Loan Documents, or (c) the material impairment of the ability of
Borrowers or any of their Subsidiaries to perform their obligations hereunder or
under any other Loan Document.

“Maximum Rate” – as defined in Section 2.1.3(a) of the Agreement.

“Money Borrowed” - means, without duplication, (a) Indebtedness arising from the
lending of money by any Person to any Borrower or any of its Subsidiaries;
(b) Indebtedness, whether or not in any such case arising from the lending by
any Person of money to any Borrower or any of its Subsidiaries, (i) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (ii) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (iii) upon which interest charges are customarily
paid (other than accounts payable) or that was issued or assumed as full or
partial payment for Property; (c) Indebtedness that constitutes a Capitalized
Lease Obligation; (d) reimbursement obligations with respect to letters of
credit or guaranties of letters of credit and (e) Indebtedness of any Borrower
or any of its Subsidiaries under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under clauses (a) through (c) hereof,
if owed directly by such Borrower or any of its Subsidiaries.  Money Borrowed
shall not include trade payables or accrued expenses.

“Mortgages” - all mortgages, deeds of trust and comparable documents now or at
any time hereafter securing the whole or any part of the Obligations.

“Multiemployer Plan” - has the meaning set forth in Section 4001(a)(3) of ERISA.

“Notes” – the Revolving Notes and the Domestic Term Notes.

“Notice of Canadian Revolving Loan Refunding” – as defined in Section 3.2.6 of
the Agreement.

“Obligations” – the Canadian Obligations and the Domestic Obligations,
collectively.

“Organizational I.D. Number” – with respect to any Borrower or any Subsidiary of
any Borrower, the organizational identification number assigned to such Borrower
or such Subsidiary by the applicable governmental unit or agency of the
jurisdiction of organization of such Borrower or such Subsidiary.

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“Other Agreements” - any and all agreements, instruments and documents (other
than the Agreement and the Security Documents), heretofore, now or hereafter
executed by any Borrower, any Subsidiary of any Borrower or any other third
party and delivered to Administrative Agent, Canadian Agent, or any Lender in
respect of the transactions contemplated by the Agreement, in each case either
as originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.

“Overadvance” – as defined in Section 10.1.1 of the Agreement.

“Owned Properties” – as defined in Section 7.1.26(a) of the Agreement.

“Participant” – as defined in Section 11.9.2 of the Agreement.

“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).

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

“PCBs” – as defined in the definition of “Hazardous Materials”.

“Permitted Intercompany Loans” – collectively, (a) any intercompany loans in
existence on the Closing Date and identified on Schedule 8.2.3(b), (b)
intercompany loans and advances made by any Borrower to another Borrower or any
Subsidiary of any Borrower or by any Subsidiary to any Borrower, provided that
(i) each Borrower and each Subsidiary shall record all such intercompany
transactions on its books and records in a manner reasonably satisfactory to
Administrative Agent, (ii) the obligations of any recipient of any such
intercompany loans or advances which is a Borrower or Subsidiary which has
guarantied any of the Obligations shall be subordinated to the applicable
Obligations of such Borrower or such guarantied Obligations in a manner
reasonably satisfactory to Agents, (iii) at the time any such intercompany loan
or advance is made and after giving effect thereto, the applicable Borrower or
Subsidiary making the loan or advance shall be Solvent and the applicable
recipient of the proceeds of the intercompany loan or advance shall not have
suffered a Bankruptcy Event, (iv) no Default or Event of Default would occur and
be continuing after giving effect to any such proposed intercompany loan or
advance, (v) all such intercompany loans or advances shall at all times be
unsecured, (vi) Administrative Agent shall not have reasonably determined that
any such intercompany loan could result in any material adverse legal
consequences to any Administrative Agent or any Lender or could have any
material adverse effect whatsoever on the enforceability of any of the Loan
Documents, (vii) no such intercompany loan or advance shall be illegal or
otherwise violate any law applicable to Borrowers and their Subsidiaries, (viii)
the aggregate principal amount of all such outstanding loans and advances
described in this clause (b) which are made by Canadian Borrower to Domestic
Borrower shall not exceed $1,500,000 at any time, (ix) the aggregate principal
amount of all such outstanding loans and advances described in this clause (b)
which are made by Borrowers to any of the Channell Australia Entities shall not
exceed (A) $0 if Aggregate Availability is less than $2,000,000 as of such date
of determination, (B)

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$2,000,000 for all times when Availability is equal to $2,000,000 as of such
date of determination, and (C) for all times that Aggregate Availability is
greater than $2,000,000, the amount of Aggregate Availability as of such date of
determination, but not to exceed $4,000,000 at any time, and (x) other than as
provided for in clauses (b)(viii) and (b)(ix) the aggregate principal amount of
all such outstanding loans and advances described in this clause (b) which are
made by Borrowers to all Subsidiaries shall not exceed $250,000 at any time, and
(c) intercompany loans and advances made by any Channell Australia Entity to
another Borrower or Subsidiary.

“Permitted Liens” - any Lien of a kind specified in Section 8.2.5 of the
Agreement.

“Permitted Purchase Money Indebtedness” - Purchase Money Indebtedness of
Borrowers permitted pursuant to Section 8.2.3(g) hereof.

“Person” - an individual, partnership, corporation, limited liability company,
joint stock company, land trust, business trust, or unincorporated organization,
or a government or agency or political subdivision thereof.

“Plan” – in the case of Domestic Borrower or a Domestic Subsidiary, an employee
benefit plan (as defined in Section 3(3) of ERISA) subject to ERISA which any
Borrower or any ERISA Affiliate sponsors or maintains or to which any Borrower
or any ERISA Affiliate makes, is making, or is obligated to make contributions
or otherwise has any liability.

“PPSA” – the Personal Property Security Act (Ontario) as in effect from time to
time; provided that in the event that, by reason of mandatory provisions of law,
the validity, perfection and effect of perfection or non-perfection of a
security interest or other applicable Lien is governed by other personal
property security laws, the term “PPSA” means such other personal property
security laws, including, without limitation, the Civil Code of Quebec.

“Preferential Creditors” – as to UK Guarantors, holders of “preferential debts”
as interpreted in Section 386 of the Insolvency Act 1986 of England and Wales
and listed in Schedule 6 of that Act.

“Prior Claims” – all Liens created by applicable law (in contrast with Liens
voluntarily granted) which rank or are capable of ranking prior or pari passu
with Canadian Agent’s or Administrative Agent’s, as applicable, Lien (or the
applicable equivalent of such Liens) against all or part of the Canadian
Collateral or the UK Collateral, as applicable, including for amounts owing for
vacation pay, employee deductions and contributions, goods and services taxes,
sales taxes, realty taxes, business taxes, workers’ compensation, pension plan
or fund obligations and overdue rents (to the extent, in the case of rents, that
such rents are not already the subject of a reserve).

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“Projections” – Borrowers’ forecasted Consolidated and consolidating (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements and (d)
capitalization statements, all prepared on a consistent basis with the
historical financial statements of Borrowers and their Subsidiaries, together
with appropriate supporting details and a statement of underlying assumptions.

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

“Purchase Money Indebtedness” - means and includes (a) Indebtedness (other than
the Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (b) any Indebtedness (other than the Obligations) incurred at the
time of or within 10 days prior to or after the acquisition of any fixed assets
for the purpose of financing all or any part of the purchase price thereof, and
(c) any renewals, extensions or refinancings thereof, but not any increases in
the principal amounts thereof outstanding at the time.

“Purchase Money Lien” - a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
fixed assets the purchase price of which was financed through the incurrence of
the Purchase Money Indebtedness secured by such Lien.

“RBC Account” – the account maintained at The Royal Bank of Canada of Canadian
Borrower, Account Number 1068840, Account Transit Number 00002.

“Reference Banks” – with respect to LIBOR, the principal London offices of
Barclays Bank PLC, The Royal Bank of Scotland and HSBC or such other banks as
may be appointed by Bank of America (acting on the instructions of the Majority
Lenders) in consultation with the Borrower Representative.

“Release” - any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injection, escaping, leaching, dumping, disposing, or depositing,
or threat thereof, of any Hazardous Material in, into, onto or through the
environment.

“Reportable Event” - any of the events set forth in Section 4043(b) of ERISA.

“Reserve Percentage” - the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against “Eurocurrency Liabilities” as
defined in Regulation D.

“Reserves” – as defined in Section 1.1.4 of the Agreement.

“Restricted Investment” - any investment made in cash or by delivery of Property
to any Person, whether by acquisition of stock, Indebtedness for Money Borrowed
or other obligation or Security, or by loan, advance or capital contribution, or
otherwise, or in any Property except the following:

(a)           Permitted Intercompany Loans and any other investments by any
Borrower or any Subsidiary, to the extent existing on the Closing Date, in one
or more Subsidiaries of any Borrower or any Subsidiary;

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(b)           Property to be used in the ordinary course of business;

(c)           Current Assets arising from the sale of goods and services in the
ordinary course of business of Borrowers or any of their Subsidiaries;

(d)           investments in direct obligations of the United States of America,
or any agency thereof or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof;

(e)           investments in certificates of deposit maturing within one year
from the date of acquisition and fully insured by the Federal Deposit Insurance
Corporation;

(f)            investments in commercial paper given the highest rating by a
national credit rating agency and maturing not more than 270 days from the date
of creation thereof;

(g)           investments in money market, mutual or similar funds having assets
in excess of $100,000,000 and the investments of which are limited to investment
grade securities;

(h)           investments existing on the date hereof and listed on
Schedule 8.2.13 hereto;

(i)            written agreements between any Borrower and one or more financial
institutions providing for “swap”, “cap”, “collar” or other interest rate
protection with respect to Indebtedness for Money Borrowed; and

(j)            investments otherwise expressly permitted pursuant to the
Agreement.

“Restricted Subsidiary” – as of any date of determination, a Subsidiary of
Domestic Borrower which (a) possesses less than 2.5% of Consolidated assets of
Domestic Borrower, determined in accordance with GAAP and does not own any
material Intellectual Property, or (b) a Foreign Subsidiary which the Majority
Lenders have agreed, in writing, prior to such date, to classify as a
“Restricted Subsidiary” because of “deemed dividend” concerns with respect to
such Foreign Subsidiary under United States tax laws; provided, however, that
the term “Restricted Subsidiary” shall not include Canadian Borrower or UK
Guarantors.  As of the Closing Date, the Subsidiaries listed on Schedule 7.1.4B
hereto are the sole Restricted Subsidiaries.

“Revolving Credit Loans” – collectively, the Domestic Revolving Credit Loans and
Canadian Revolving Credit Loans made by any Lender pursuant to Section 1.1 of
the Agreement.

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“Revolving Credit Maximum Amount” - $12,500,000, as such amount may be reduced
from time to time pursuant to the terms of this Agreement.

“Revolving Notes” - the secured promissory notes to be executed by Borrowers in
favor of each Lender to evidence the Revolving Credit Loans, which shall be in
the form of Exhibit 1.2 to the Agreement, together with any replacement or
successor notes therefor.

“Security” - all shares of stock, partnership interests, membership interests,
membership units or other ownership interests in any other Person and all
warrants, options or other rights to acquire the same.

“Security Documents” - the Guaranty Agreements, the Guaranty Security
Agreements, the Mortgages and all other instruments and agreements now or at any
time hereafter securing the whole or any part of the Obligations, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.

“Solvent” - as to any Person, such Person (a) organized under the laws of any
state of the United States of America, (i) owns Property whose fair saleable
value is greater than the amount required to pay all of such Person’s
Indebtedness (including contingent debts discounted based on the likelihood of
their having to be paid), (ii) is able to pay all of its Indebtedness as such
Indebtedness matures and (iii) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage, (b) organized under the laws of the United Kingdom, that at the time of
determination such Person is not unable to pay its debts as they fall due within
the meaning of Section 123 of the Insolvency Act of 1986, and (c) with respect
to any Person on a particular date, (i) the property of such Person is
sufficient, if disposed of at a fairly conducted sale under legal process, to
enable payment of all its obligations, due and accruing due, (ii) the property
of such Person is, at a fair valuation, greater than the total amount of
liabilities, including contingent liabilities, of such Person, and (iii) such
Person has not ceased paying its current obligations in the ordinary course of
business as they generally become due.

“Sterling” – the lawful currency of Great Britain.

“Sterling Equivalent” – at any time, as to any amount denominated in U.S.
Dollars, the equivalent amount in Sterling determined by Administrative Agent at
such time on the basis of the spot rate for the purchase by Administrative Agent
of such U.S. Dollars, as applicable, with Sterling through a foreign exchange
trading office selected by Administrative Agent or such other rate which
Administrative Agent may select based on reasonable commercial practices.

“Subject UK Leaseholds” - the leaseholds held by the indicated party in the
following real Property locations in the United Kingdom: (i) 18 Hardwicke
Grange, Warrington (leased to Egerton) and (ii) 2nd Floor Bayheath House,
Fairway, Petts Wood Kent (leased to CLU).

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“Subordinated Debt” – Indebtedness of any Borrower or any Subsidiary of any
Borrower that is subordinated to the Obligations in a manner satisfactory to
Agents, and contains terms, including without limitation, payment terms,
satisfactory to Agents.  For the avoidance of doubt, the Channell Bushman Credit
Facility shall not constitute Subordinated Debt.

“Subsidiary” - any Person of which another Person owns, directly or indirectly
through one or more intermediaries, more than 50% of the Voting Stock at the
time of determination.

“Term” - as defined in Section 4.1 of the Agreement.

“Total Credit Facility” - $20,000,000, as may be reduced from time to time
pursuant to the terms hereof.

“Transferee” — as defined in Section 2.13.1 of the Agreement.

“Type of Organization” – with respect to any Borrower or any Subsidiary of any
Borrower, the kind or type of entity by which such Borrower or such Subsidiary
is organized, such as a corporation or limited liability company.

“UCC” – the Uniform Commercial Code as in effect in the State of California on
the date of this Agreement, as the UCC may be amended or otherwise modified.

“UK Borrowing Base” - “UK Borrowing Base” - as at any date of determination
thereof, the Dollar Equivalent of an amount equal to 85% of the net amount of
Eligible Accounts of UK Guarantors outstanding at such date.  The advance rate
set forth above may be adjusted downward by Administrative Agent as
Administrative Agent shall deem necessary or appropriate in its reasonable
credit judgment, including, without limitation, adjustments with respect to
Prior Claims.  For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at UK Administrative Agent’s option, be
calculated on shortest terms), credits, allowances or excise taxes of any nature
at any time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with such Accounts at such time.

“UK Collateral” - all of the Property and interests in Property of any UK
Guarantor that now or hereafter secures the payment and performance of any of
the Domestic Obligations, and all other Property and interest in Property of any
Person that is identified in a Loan Document as “UK Collateral”.

“UK Guarantors” – collectively, CLU, CCEL and Egerton.

“UK Guaranty” - the continuing guaranty agreement executed by the UK Guarantors,
in form and substance satisfactory to Administrative Agent.

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“UK Loss” - for any period, without duplication, the difference between (a)(i)
net income (or loss) of UK Guarantors, plus (ii) UK Guarantors’ interest expense
for that period, including without limitation any rent payable with respect to
Capitalized Lease Obligations which should, in accordance with GAAP, be treated
as interest expense, to the extent paid during that period in cash, plus
(iii) the aggregate amount of federal, state and provincial income taxes on or
measured by such net income to the extent paid or accrued for that period, plus
(iv) the depreciation and amortization expense of UK Guarantors for that period,
plus (v) the non-cash expenses of UK Guarantors for that period, minus (vi) any
non-cash income for that period, in each case determined in accordance with
GAAP, consistently applied minus (b) Capital Expenditures of UK Guarantors for
that period.

“Unused Line Fee” – as defined in Section 2.5 of the Agreement.

“Voting Stock” - Securities of any class or classes of a corporation, limited
partnership or limited liability company or any other entity the holders of
which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of corporate directors (or Persons performing similar
functions if the entity is not a corporation).

“Withdrawal Liability” – the liability to a Multiemployer Plan, as defined in
Section 4201 of ERISA.

“yield maintenance fee” – as defined in Section 3.2.5 of the Agreement.

Other Terms.  All other terms contained in the Agreement shall have, when the
context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein.

Certain Matters of Construction.  The terms “herein”, “hereof” and “hereunder”
and other words of similar import refer to the Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders.  The section titles, table of contents and list of
exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement.  All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations.  All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.  Any
reference herein to “Borrowers and their Subsidiaries” or the like shall refer
solely to Borrowers during such times, if any, as Borrowers do not have any
Subsidiaries.

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LIST OF EXHIBITS AND SCHEDULES

Exhibit 1.2

 

Form of Revolving Note

Exhibit 1.3

 

Form of Domestic Cap Ex Note

Exhibit 1.4

 

Form of Domestic Term Note

Exhibit 8.1.3

 

Compliance Certificate

Exhibit 8.1.3(g)

 

Statutory Payables Certificate

Exhibit 8.1.4

 

Borrowing Base Certificate

Exhibit 8.3

 

Financial Covenants

Schedule 1.1

 

Lender Commitments

Schedule 1.1.3

 

Existing Indebtedness to be Repaid with Loan Proceeds

Schedule 6.1.1

 

Business Locations

Schedule 7.1.1

 

Jurisdictions in which Borrowers and each Subsidiary are Authorized to do
Business

Schedule 7.1.4

 

Capital Structure of Borrowers and each Subsidiary

Schedule 7.1.4A

 

Corporate Organization Chart

Schedule 7.1.4B

 

Closing Date Restricted Subsidiaries

Schedule 7.1.5

 

Names, State of Incorporation, Type of Organization and Organizational I.D.
Number

Schedule 7.1.12

 

Solvency

Schedule 7.1.13

 

Surety Obligations

Schedule 7.1.14

 

Taxes

Schedule 7.1.15

 

Brokers’ Fees

Schedule 7.1.16

 

Patents, Trademarks, Copyrights and Licenses

Schedule 7.1.18

 

Compliance With Laws

Schedule 7.1.20

 

Litigation

Schedule 7.1.22

 

Capitalized and Operating Leases

Schedule 7.1.23

 

Pension Plans

Schedule 7.1.25

 

Labor Relations

Schedule 8.2.3(b)

 

Existing Indebtedness

Schedule 8.2.3(i)

 

Certain existing guaranties

Schedule 8.2.4

 

Affiliate Transactions

Schedule 8.2.5

 

Permitted Liens

Schedule 8.2.9

 

Operating Leases

Schedule 8.2.13

 

Restricted Investments

 

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