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Exhibit 10.1

CREDIT AGREEMENT

by and among

PATRICK INDUSTRIES, INC.,

as Borrower,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO CAPITAL FINANCE, LLC

as the Agent

Dated as of March 31, 2011

 
 

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TABLE OF CONTENTS

     
Page
       
1.
DEFINITIONS AND CONSTRUCTION.
1
         
1.1.
Definitions.
1
         
1.2.
Accounting Terms.
1
         
1.3.
Code.
1
         
1.4.
Construction.
2
         
1.5.
Schedules and Exhibits.
2
       
2.
LOAN AND TERMS OF PAYMENT.
3
         
2.1.
Revolver Advances.
3
         
2.2.
[Intentionally Omitted].
4
         
2.3.
Borrowing Procedures and Settlements.
4
         
2.4.
Payments; Reduction of Commitments; Prepayments.
10
         
2.5.
Overadvances.
15
         
2.6.
Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.
15
         
2.7.
Crediting Payments.
17
         
2.8.
Designated Account.
17
         
2.9.
Maintenance of Loan Account; Statements of Obligations.
17
         
2.10.
Fees.
18
         
2.11.
Letters of Credit.
19
         
2.12.
LIBOR Option.
23
         
2.13.
Capital Requirements.
25
       
3.
CONDITIONS; TERM OF AGREEMENT.
27
         
3.1.
Conditions Precedent to the Initial Extension of Credit.
27
         
3.2.
Conditions Precedent to all Extensions of Credit.
27
         
3.3.
Maturity.
27
         
3.4.
Effect of Maturity.
28
         
3.5.
Early Termination by Borrower.
28
         
3.6.
Conditions Subsequent.
28
       
4.
REPRESENTATIONS AND WARRANTIES.
28
         
4.1.
Due Organization and Qualification; Subsidiaries.
29
         
4.2.
Due Authorization; No Conflict.
29

 
 
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TABLE OF CONTENTS
(continued)
 

      Page  
4.3.
Governmental Consents.
30
         
4.4.
Binding Obligations; Perfected Liens.
30
         
4.5.
Title to Assets; No Encumbrances.
30
         
4.6.
Jurisdiction of Organization; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims.
31
         
4.7.
Litigation.
31
         
4.8.
Compliance with Laws.
31
         
4.9.
No Material Adverse Change.
32
         
4.10.
Fraudulent Transfer.
32
         
4.11.
Employee Benefits.
32
         
4.12.
Environmental Condition.
32
         
4.13.
Intellectual Property.
33
         
4.14.
Leases.
33
         
4.15.
Deposit Accounts and Securities Accounts.
33
         
4.16.
Complete Disclosure.
33
         
4.17.
Material Contracts.
34
         
4.18.
Patriot Act.
34
         
4.19.
Indebtedness.
34
         
4.20.
Payment of Taxes.
34
         
4.21.
Margin Stock.
35
         
4.22.
Governmental Regulation.
35
         
4.23.
OFAC.
35
         
4.24.
Employee and Labor Matters.
35
         
4.25.
Subordinated Debt Documents.
36
         
4.26.
Eligible Accounts.
36
         
4.27.
Eligible Inventory and Eligible In-Transit Inventory.
36
         
4.28.
Eligible Equipment.
37
         
4.29.
Eligible Real Property.
37
         
4.30.
Locations of Inventory and Equipment.
37
         
4.31.
Inventory Records.
37
         
4.32.
Inactive Subsidiary.
37

 
 
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TABLE OF CONTENTS
(continued)
 

      Page  
4.33.
Harlan Machinery Company.
37
       
5.
AFFIRMATIVE COVENANTS.
37
         
5.1.
Financial Statements, Reports, Certificates.
37
         
5.2.
Collateral Reporting.
38
         
5.3.
Existence.
38
         
5.4.
Maintenance of Properties.
38
         
5.5.
Taxes.
38
         
5.6.
Insurance.
39
         
5.7.
Inspection.
39
         
5.8.
Compliance with Laws.
39
         
5.9.
Environmental.
40
         
5.10.
Disclosure Updates.
40
         
5.11.
Formation of Subsidiaries.
40
         
5.12.
Further Assurances.
41
         
5.13.
Lender Meetings.
42
         
5.14.
Material Contracts.
42
         
5.15.
Location of Inventory and Equipment.
42
         
5.16.
Assignable Material Contracts.
42
       
6.
NEGATIVE COVENANTS.
43
         
6.1.
Indebtedness.
43
         
6.2.
Liens.
43
         
6.3.
Restrictions on Fundamental Changes.
43
         
6.4.
Disposal of Assets.
43
         
6.5.
Change Name.
44
         
6.6.
Nature of Business.
44
         
6.7.
Prepayments and Amendments.
44
         
6.8.
Change of Control.
44
         
6.9.
Restricted Junior Payments.
45
         
6.10.
Accounting Methods.
45
         
6.11.
Investments; Controlled Investments.
45
         
6.12.
Transactions with Affiliates.
46

 
 
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TABLE OF CONTENTS
(continued)
 

      Page  
6.13.
Use of Proceeds.
47
         
6.14.
Limitation on Issuance of Stock.
47
         
6.15.
Consignments.
47
         
6.16.
Inactive Subsidiary.
47
       
7.
FINANCIAL COVENANTS.
47
       
8.
EVENTS OF DEFAULT.
48
       
9.
RIGHTS AND REMEDIES.
50
         
9.1.
Rights and Remedies.
50
         
9.2.
Remedies Cumulative.
51
       
10.
WAIVERS; INDEMNIFICATION.
51
         
10.1.
Demand; Protest; etc.
51
         
10.2.
The Lender Group's Liability for Collateral.
51
         
10.3.
Indemnification.
51
       
11.
NOTICES.
52
       
12.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
53
       
13.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
54
         
13.1.
Assignments and Participations.
54
         
13.2.
Successors.
58
       
14.
AMENDMENTS; WAIVERS.
58
         
14.1.
Amendments and Waivers.
58
         
14.2.
Replacement of Certain Lenders.
60
         
14.3.
No Waivers; Cumulative Remedies.
61
       
15.
AGENT; THE LENDER GROUP.
61
         
15.1.
Appointment and Authorization of Agent.
61
         
15.2.
Delegation of Duties.
62
         
15.3.
Liability of Agent.
62
         
15.4.
Reliance by Agent.
62
         
15.5.
Notice of Default or Event of Default.
63
         
15.6.
Credit Decision.
63
         
15.7.
Costs and Expenses; Indemnification.
64
         
15.8.
Agent in Individual Capacity.
65

 
 
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TABLE OF CONTENTS
(continued)
 

      Page  
15.9.
Successor Agent.
65
         
15.10.
Lender in Individual Capacity.
66
         
15.11.
Collateral Matters.
66
         
15.12.
Restrictions on Actions by Lenders; Sharing of Payments.
68
         
15.13.
Agency for Perfection.
68
         
15.14.
Payments by Agent to the Lenders.
68
         
15.15.
Concerning the Collateral and Related Loan Documents.
69
         
15.16.
Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information.
69
         
15.17.
Several Obligations; No Liability.
70
       
16.
WITHHOLDING TAXES.
70
       
17.
GENERAL PROVISIONS.
73
         
17.1.
Effectiveness.
73
         
17.2.
Section Headings.
73
         
17.3.
Interpretation.
73
         
17.4.
Severability of Provisions.
73
         
17.5.
Bank Product Providers.
74
         
17.6.
Debtor-Creditor Relationship.
74
         
17.7.
Counterparts; Electronic Execution.
75
         
17.8.
Revival and Reinstatement of Obligations.
75
         
17.9.
Confidentiality.
75
         
17.10.
Lender Group Expenses.
76
         
17.11.
Survival.
77
         
17.12.
Patriot Act.
77
         
17.13.
Integration.
77

 
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EXHIBITS AND SCHEDULES
 
Exhibit A-1
Form of Assignment and Acceptance
Exhibit B-1
Form of Borrowing Base Certificate
Exhibit B-2
Form of Bank Product Provider Letter Agreement
Exhibit C-1
Form of Compliance Certificate
Exhibit L-1
Form of LIBOR Notice
   
Schedule A-1
Agent's Account
Schedule A-2
Authorized Persons
Schedule C-1
Commitments
Schedule D-1
Designated Account
Schedule E-1
Eligible Inventory Locations
Schedule E-3
Eligible Equipment Locations
Schedule E-4
Eligible Real Property
Schedule L-1
Legal Description
Schedule P-1
Permitted Investments
Schedule P-2
Permitted Liens
Schedule R-1
Real Property Collateral
Schedule 1.1
Definitions
Schedule 3.1
Conditions Precedent
Schedule 3.6
Conditions Subsequent
Schedule 4.1(b)
Capitalization of Borrower
Schedule 4.1(c)
Capitalization of Borrower's Subsidiaries
Schedule 4.6(a)
States of Organization
Schedule 4.6(b)
Chief Executive Offices
Schedule 4.6(c)
Organizational Identification Numbers
Schedule 4.6(d)
Commercial Tort Claims
Schedule 4.7(b)
Litigation
Schedule 4.11
Employee Benefits
Schedule 4.12
Environmental Matters
Schedule 4.13
Intellectual Property
Schedule 4.15
Deposit Accounts and Securities Accounts
Schedule 4.17
Material Contracts
Schedule 4.19
Permitted Indebtedness
Schedule 4.30
Locations of Inventory and Equipment
Schedule 5.1
Financial Statements, Reports, Certificates
Schedule 5.2
Collateral Reporting
Schedule 6.6
Nature of Business

 
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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this "Agreement"), is entered into as of March 31, 2011,
by and among the lenders identified on the signature pages hereof (each of such
lenders, together with their respective successors and permitted assigns, are
referred to hereinafter as a "Lender", as that term is hereinafter further
defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability
company, as administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, "Agent"), PATRICK INDUSTRIES,
INC., an Indiana corporation ("Borrower").

The parties agree as follows:

1.             DEFINITIONS AND CONSTRUCTION.

1.1.           Definitions.

Capitalized terms used in this Agreement shall have the meanings specified
therefor on Schedule 1.1.

1.2.           Accounting Terms.

All accounting terms not specifically defined herein shall be construed in
accordance with GAAP; provided, however, that if Borrower notifies Agent that
Borrower requests an amendment to any provision hereof to eliminate the effect
of any Accounting Change occurring after the Closing Date or in the application
thereof on the operation of such provision (or if Agent notifies Borrower that
the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
Accounting Change or in the application thereof, then Agent and Borrower agree
that they will negotiate in good faith amendments to the provisions of this
Agreement that are directly affected by such Accounting Change with the intent
of having the respective positions of the Lenders and Borrower after such
Accounting Change conform as nearly as possible to their respective positions as
of the date of this Agreement and, until any such amendments have been agreed
upon and agreed to by the Required Lenders, the provisions in this Agreement
shall be calculated as if no such Accounting Change had occurred; provided,
further, that any Operating Lease (including any Operating Lease that is amended
or replaced after the Closing Date) shall be treated as an Operating Lease for
all purposes hereof regardless of any Accounting Change.  When used herein, the
term "financial statements" shall include the notes and schedules
thereto.  Whenever the term "Borrower" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Borrower and
its Subsidiaries on a consolidated basis, unless the context clearly requires
otherwise.

1.3.           Code.

Any terms used in this Agreement that are defined in the Code shall be construed
and defined as set forth in the Code unless otherwise defined herein; provided,
however, that to the extent that the Code is used to define any term herein and
such term is defined differently in

 
 

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different Articles of the Code, the definition of such term contained in Article
9 of the Code shall govern.

 
1.4.           Construction.

Unless the context of this Agreement or any other Loan Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms "includes" and  "including" are not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or."  The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be.  Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise
specified.  Any reference in this Agreement or in any other Loan Document to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein).  The words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties.  Any reference herein or in any other Loan Document to
the satisfaction, repayment, or payment in full of the Obligations shall mean
the repayment in full in cash or immediately available funds (or, (a) in the
case of contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, and (b) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization) of all of the Obligations (including the payment of
any Lender Group Expenses that have accrued irrespective of whether demand has
been made therefor and the payment of any termination amount then applicable (or
which would or could become applicable as a result of the repayment of the other
Obligations) under Hedge Agreements provided by Hedge Providers) other than
(i) unasserted contingent indemnification Obligations, (ii) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (iii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid.  Any reference herein to any
Person shall be construed to include such Person's successors and assigns.  Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.

1.5.           Schedules and Exhibits.

All of the schedules and exhibits attached to this Agreement shall be deemed
incorporated herein by reference.

 
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2.             LOAN AND TERMS OF PAYMENT.

2.1.           Revolver Advances.

(a)           Subject to the terms and conditions of this Agreement, and during
the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make revolving loans
("Advances") to Borrower in an amount at any one time outstanding not to exceed
the lesser of:

(i)            such Lender's Revolver Commitment, or

(ii)           such Lender's Pro Rata Share of an amount equal to the lesser of:

(A)           the Maximum Revolver Amount less the sum of (1) the Letter of
Credit Usage at such time, plus (2) the principal amount of Swing Loans
outstanding at such time, and

(B)           the Borrowing Base at such time less the sum of (1) the Letter of
Credit Usage at such time, plus (2) the principal amount of Swing Loans
outstanding at such time.

(b)           Amounts borrowed pursuant to this Section 2.1 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.  The outstanding principal amount of the
Advances, together with interest accrued and unpaid thereon, shall be due and
payable on the Maturity Date or, if earlier, on the date on which they are
declared due and payable pursuant to the terms of this Agreement.

(c)           Anything to the contrary in this Section 2.1 notwithstanding,
Agent shall have the right (but not the obligation) to establish, increase,
reduce, eliminate, or otherwise adjust reserves from time to time against the
Borrowing Base (or any component thereof) or the Maximum Revolver Amount in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, including (i) reserves in an amount equal
to the aggregate amount of Bank Product Reserves, and (ii) reserves with respect
to (A) sums that Borrower or its Subsidiaries are required to pay under this
Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and has failed to pay when due, and (B) amounts owing by Borrower
or its Subsidiaries to any Person to the extent secured by a Lien on, or trust
over, any of the Collateral (other than a Permitted Lien which is a permitted
purchase money Lien or the interest of a lessor under a Capital Lease), which
Lien or trust, in the Permitted Discretion of Agent likely would have a priority
superior to Agent's Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral.  Such reserves
shall have a reasonable relationship to the event, condition or other matter
which is the basis for such reserve and shall not otherwise result in
duplicative adverse effect on Availability under the Borrowing Base to the
extent the condition or circumstance giving rise to such reserve is already
addressed in the eligibility criteria for the applicable assets.

 
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2.2.           [Intentionally Omitted].

2.3.           Borrowing Procedures and Settlements.

(a)           Procedure for Borrowing.  Each Borrowing shall be made by a
written request by an Authorized Person delivered to Agent.  Unless Swing Lender
is not obligated to make a Swing Loan pursuant to Section 2.3(b) below, such
notice must be received by Agent no later than 11:00 a.m. (California time) on
the Business Day that is the requested Funding Date specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day; provided, however, that if Swing Lender is not obligated to make a Swing
Loan as to a requested Borrowing, such notice must be received by Agent no later
than 11:00 a.m. (California time) on the Business Day prior to the date that is
the requested Funding Date.  At Agent's election, in lieu of delivering the
above-described written request, any Authorized Person may give Agent telephonic
notice of such request by the required time.  In such circumstances, Borrower
agrees that any such telephonic notice will be confirmed in writing within 24
hours of the giving of such telephonic notice, but the failure to provide such
written confirmation shall not affect the validity of the request.

(b)           Making of Swing Loans.  In the case of a request for an Advance
and so long as either (i) the aggregate amount of Swing Loans made since the
last Settlement Date, minus the amount of Collections or payments applied to
Swing Loans since the last Settlement Date, plus the amount of the requested
Advance does not exceed $5,000,000, or (ii) Swing Lender, in its sole
discretion, shall agree to make a Swing Loan notwithstanding the foregoing
limitation, Swing Lender shall make an Advance in the amount of such requested
Borrowing (any such Advance made solely by Swing Lender pursuant to this Section
2.3(b) being referred to as a "Swing Loan" and such Advances being referred to
as "Swing Loans") available to Borrower on the Funding Date applicable thereto
by transferring immediately available funds to the Designated Account.  Anything
contained herein to the contrary notwithstanding, the Swing Lender may, but
shall not be obligated to, make Swing Loans at any time that one or more of the
Lenders is a Defaulting Lender.  Each Swing Loan shall be deemed to be an
Advance hereunder and shall be subject to all the terms and conditions
(including Section 3) applicable to other Advances, except that all payments on
any Swing Loan shall be payable to Swing Lender solely for its own
account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall
not make and shall not be obligated to make any Swing Loan if Swing Lender has
actual knowledge that (i) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date.  Swing Lender shall not otherwise be required
to determine whether the applicable conditions precedent set forth in Section 3
have been satisfied on the Funding Date applicable thereto prior to making any
Swing Loan.  The Swing Loans shall be secured by Agent's Liens, constitute
Advances and Obligations hereunder, and bear interest at the rate applicable
from time to time to Advances that are Base Rate Loans.

(c)           Making of Loans.

(i)            In the event that Swing Lender is not obligated to make a Swing
Loan, then promptly after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately preceding the Funding Date
applicable thereto, by telecopy, telephone, or other

 
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similar form of transmission, of the requested Borrowing.  Each Lender shall
make the amount of such Lender's Pro Rata Share of the requested Borrowing
available to Agent in immediately available funds, to Agent's Account, not later
than 10:00 a.m. (California time) on the Funding Date applicable thereto.  After
Agent's receipt of the proceeds of such Advances, Agent shall make the proceeds
thereof available to Borrower on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(d)(ii), Agent shall not request any Lender to make any Advance if it
has knowledge that, and no Lender shall have the obligation to make any Advance,
if (1) one or more of the applicable conditions precedent set forth in Section 3
will not be satisfied on the requested Funding Date for the applicable Borrowing
unless such condition has been waived, or (2) the requested Borrowing would
exceed the Availability on such Funding Date.

 
(ii)           Unless Agent receives notice from a Lender prior to 9:00 a.m.
(California time) on the date of a Borrowing, that such Lender will not make
available as and when required hereunder to Agent for the account of Borrower
the amount of that Lender's Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrower on
such date a corresponding amount.  If any Lender shall not have made its full
amount available to Agent in immediately available funds and if Agent in such
circumstances has made available to Borrower such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period.  A notice submitted by Agent to any Lender with respect to amounts
owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest
error.  If such amount is so made available, such payment to Agent shall
constitute such Lender's Advance on the date of Borrowing for all purposes of
this Agreement.  If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Borrower of such failure to
fund and, upon demand by Agent, Borrower shall pay such amount to Agent for
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing.

(d)           Protective Advances and Optional Overadvances.

(i)           Any contrary provision of this Agreement or any other Loan
Document notwithstanding, but subject to Section 2.3(d)(iv), Agent hereby is
authorized by Borrower and the Lenders, from time to time in Agent's sole
discretion, (A) after the occurrence and during the continuance of a Default or
an Event of Default, or (B) at any time that any of the other applicable
conditions precedent set forth in Section 3 are not satisfied, to make Advances
to, or for the benefit of, Borrower on behalf of the Lenders (in an aggregate
amount for all such Advances taken together not exceeding $5,000,000 outstanding
at any one time) that Agent, in its Permitted Discretion deems necessary or
desirable (1) to preserve or protect the Collateral, or any portion thereof, or
(2) to enhance the likelihood of repayment of the Obligations (other than the
Bank Product Obligations) (any of the Advances described in this Section
2.3(d)(i) shall be referred to as "Protective Advances").

 
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(ii)           Any contrary provision of this Agreement or any other Loan
Document notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby
authorize Agent or Swing Lender, as applicable, and either Agent or Swing
Lender, as applicable, may, but is not obligated to, knowingly and
intentionally, continue to make Advances (including Swing Loans) to Borrower
notwithstanding that an Overadvance exists or would be created thereby, so long
as (A) after giving effect to such Advances, the outstanding Revolver Usage does
not exceed the Borrowing Base by more than $10,000,000, and (B) after giving
effect to such Advances, the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount.  In the event Agent
obtains actual knowledge that the Revolver Usage exceeds the amounts permitted
by the immediately foregoing provisions, regardless of the amount of, or reason
for, such excess, Agent shall notify the Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value, in which case Agent may make such
Overadvances and provide notice as promptly as practicable thereafter), and the
Lenders with Revolver Commitments thereupon shall, together with Agent, jointly
determine the terms of arrangements that shall be implemented with Borrower
intended to reduce, within a reasonable time, the outstanding principal amount
of the Advances to Borrower to an amount permitted by the preceding
sentence.  In such circumstances, if any Lender with a Revolver Commitment
objects to the proposed terms of reduction or repayment of any Overadvance, the
terms of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders.  In any event: (x) if any unintentional
Overadvance remains outstanding for more than 30 days, unless otherwise agreed
to by the Required Lenders, Borrower shall immediately repay Advances in an
amount sufficient to eliminate all such unintentional Overadvances, and
(y) after the date all such Overadvances have been eliminated, there must be at
least five consecutive days before intentional Overadvances are made.  The
foregoing provisions are meant for the benefit of the Lenders and Agent and are
not meant for the benefit of Borrower, which shall continue to be bound by the
provisions of Section 2.5.  Each Lender with a Revolver Commitment shall be
obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g),
as applicable) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.3(d)(ii), and any
Overadvances resulting from the charging to the Loan Account of interest, fees,
or Lender Group Expenses.

(iii)           Each Protective Advance and each Overadvance shall be deemed to
be an Advance hereunder, except that no Protective Advance or Overadvance shall
be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all
payments on the Protective Advances shall be payable to Agent solely for its own
account.  The Protective Advances and Overadvances shall be repayable on demand,
secured by Agent's Liens, constitute Obligations hereunder, and bear interest at
the rate applicable from time to time to Advances that are Base Rate Loans.  The
ability of Agent to make Protective Advances is separate and distinct from its
ability to make Overadvances and its ability to make Overadvances is separate
and distinct from its ability to make Protective Advances.  For the avoidance of
doubt, the limitations on Agent's ability to make Protective Advances do not
apply to Overadvances and the limitations on Agent's ability to make
Overadvances do not apply to Protective Advances.  The provisions of this

 
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Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the
Lenders and are not intended to benefit Borrower in any way.

 
(iv)           Notwithstanding anything contained in this Agreement or any other
Loan Document to the contrary:  (A) no Overadvance or Protective Advance may be
made by Agent if such Advance would cause the aggregate principal amount of
Overadvances and Protective Advances outstanding to exceed an amount equal to
ten percent (10%) of the Maximum Revolver Amount; and (B) to the extent any
Protective Advance causes the aggregate Revolver Usage to exceed the Maximum
Revolver Amount, such portion of such Protective Advance shall be for Agent's
sole and separate account and not for the account of any Lender and shall be
entitled to priority in repayment in accordance with Section 2.4(b).

(e)           Settlement.  It is agreed that each Lender's funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender's Pro
Rata Share of the outstanding Advances.  Such agreement notwithstanding, Agent,
Swing Lender, and the other Lenders agree (which agreement shall not be for the
benefit of Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:

(i)           Agent shall request settlement ("Settlement") with the Lenders on
a weekly basis, or on a more frequent basis if so determined by Agent (1) on
behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for
itself, with respect to the outstanding Protective Advances or Overadvances, and
(3) with respect to Borrower's or its Subsidiaries' Collections or payments
received, as to each by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later than 2:00
p.m. (California time) on the Business Day immediately prior to the date of such
requested Settlement (the date of such requested Settlement being the
"Settlement Date").  Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing  Loans, Overadvances, and
Protective Advances for the period since the prior Settlement Date.  Subject to
the terms and conditions contained herein (including Section 2.3(g)):  (y) if
the amount of the Advances (including Swing Loans, Overadvances, and Protective
Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender's
Pro Rata Share of the Advances (including Swing Loans, Overadvances, and
Protective Advances) as of a Settlement Date, then Agent shall, by no later than
12:00 p.m. (California time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans, Overadvances, and Protective Advances), and (z) if the
amount of the Advances (including Swing Loans, Overadvances, and Protective
Advances) made by a Lender is less than such Lender's Pro Rata Share of the
Advances (including Swing Loans, Overadvances, and Protective Advances) as of a
Settlement Date, such Lender shall no later than 12:00 p.m. (California time) on
the Settlement Date transfer in immediately available funds to Agent's Account,
an amount such that each such Lender shall, upon transfer of such amount, have
as of the Settlement Date, its Pro Rata Share of the Advances (including Swing
Loans, Overadvances, and Protective Advances).  Such amounts made available to
Agent under clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loans,

 
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Overadvances, or Protective Advances and, together with the portion of such
Swing Loans, Overadvances, or Protective Advances representing Swing Lender's
Pro Rata Share thereof, shall constitute Advances of such Lenders.  If any such
amount is not made available to Agent by any Lender on the Settlement Date
applicable thereto to the extent required by the terms hereof, Agent shall be
entitled to recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate.
 
(ii)           In determining whether a Lender's balance of the Advances, Swing
Loans, Overadvances, and Protective Advances is less than, equal to, or greater
than such Lender's Pro Rata Share of the Advances, Swing Loans, Overadvances,
and Protective Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest, fees
payable by Borrower and allocable to the Lenders hereunder, and proceeds of
Collateral.

(iii)           Between Settlement Dates, Agent, to the extent Protective
Advances, Overadvances, or Swing Loans are outstanding, may pay over to Agent or
Swing Lender, as applicable, any Collections or payments received by Agent, that
in accordance with the terms of this Agreement would be applied to the reduction
of the Advances, for application to the Protective Advances, Overadvances, or
Swing Loans.  Between Settlement Dates, Agent, to the extent no Protective
Advances, Overadvances, or Swing Loans are outstanding, may pay over to Swing
Lender any Collections or payments received by Agent, that in accordance with
the terms of this Agreement would be applied to the reduction of the Advances,
for application to Swing Lender's Pro Rata Share of the Advances.  If, as of any
Settlement Date, Collections or payments of Borrower or its Subsidiaries
received since the then immediately preceding Settlement Date have been applied
to Swing Lender's Pro Rata Share of the Advances other than to Swing Loans, as
provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders (other than a
Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to
be applied to the outstanding Advances of such Lenders, an amount such that each
such Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Advances.  During the period between Settlement
Dates, Swing Lender with respect to Swing Loans, Agent with respect to
Protective Advances and Overadvances, and each Lender with respect to the
Advances other than Swing Loans, Overadvances, and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.

(iv)           Anything in this Section 2.3(e) to the contrary notwithstanding,
in the event that a Lender is a Defaulting Lender, Agent shall be entitled to
refrain from remitting settlement amounts to the Defaulting Lender and, instead,
shall be entitled to elect to implement the provisions set forth in Section
2.3(g).

(f)            Notation.  Agent, as a non-fiduciary agent for Borrower, shall
maintain a register showing the principal amount of the Advances, owing to each
Lender, including the Swing Loans owing to Swing Lender, and Protective Advances
and Overadvances owing to Agent, and the interests therein of each Lender, from
time to time and such register shall, absent manifest error, conclusively be
presumed to be correct and accurate.

 
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(g)           Defaulting Lenders.  Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to Agent for the Defaulting
Lender's benefit or any Collections or proceeds of Collateral that would
otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of
such transfer to the Defaulting Lender, Agent shall transfer any such payments
(A) first, to Swing Lender to the extent of any Swing Loans that were made by
Swing Lender and that were required to be, but were not, paid by the Defaulting
Lender, (B) second, to the Issuing Lender, to the extent of the portion of a
Letter of Credit Disbursement that was required to be, but was not, paid by the
Defaulting Lender, (C) third, to each non-Defaulting Lender ratably in
accordance with their Commitments (but, in each case, only to the extent that
such Defaulting Lender's portion of an Advance (or other funding obligation) was
funded by such other non-Defaulting Lender), (D) to a suspense account
maintained by Agent, the proceeds of which shall be retained by Agent and may be
made available to be re-advanced to or for the benefit of Borrower as if such
Defaulting Lender had made its portion of Advances (or other funding
obligations) hereunder, and (E) from and after the date on which all other
Obligations have been paid in full, to such Defaulting Lender in accordance with
tier (L) of Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and,
in its discretion, re-lend to Borrower for the account of such Defaulting Lender
the amount of all such payments received and retained by Agent for the account
of such Defaulting Lender.  Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be
a "Lender" and such Lender's Commitment shall be deemed to be zero.  The
provisions of this Section 2.3(g) shall remain effective with respect to such
Defaulting Lender until the earlier of (y) the date on which all of the
non-Defaulting Lenders, Agent, Issuing Lender, and Borrower shall have waived,
in writing, the application of this Section 2.3(g) to such Defaulting Lender, or
(z) the date on which such Defaulting Lender makes payment of all amounts that
it was obligated to fund hereunder, pays to Agent all amounts owing by
Defaulting Lender in respect of the amounts that it was obligated to fund
hereunder, and, if requested by Agent, provides adequate assurance of its
ability to perform its future obligations hereunder.  The operation of this
Section 2.3(g) shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by Borrower of its duties and
obligations hereunder to Agent, Issuing Lender, or to the Lenders other than
such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that
it was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrower, at its option,
upon written notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be reasonably
acceptable to Agent.  In connection with the arrangement of such a substitute
Lender, the Defaulting Lender shall have no right to refuse to be replaced
hereunder, and agrees to execute and deliver a completed form of Assignment and
Acceptance in favor of the substitute Lender (and agrees that it shall be deemed
to have executed and delivered such document if it fails to do so) subject only
to being paid its share of the outstanding Obligations (other than Bank Product
Obligations, but including (1) all interest, fees, and other amounts that may be
due and payable in respect thereof, and (2) an assumption of its Pro Rata Share
of its participation in the Letters of Credit); provided, however, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups' or Borrower's rights or
remedies against any such Defaulting Lender arising out of or in relation to

 
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such failure to fund.  In the event of a direct conflict between the priority
provisions of this Section 2.3(g) and any other provision contained in this
Agreement or any other Loan Document, it is the intention of the parties hereto
that such provisions be read together and construed, to the fullest extent
possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.

 
(h)           Independent Obligations.  All Advances (other than Swing Loans,
Overadvances, and Protective Advances) shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares.  It is
understood that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Advance (or other extension of
credit) hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations
hereunder.

2.4.           Payments; Reduction of Commitments; Prepayments.

(a)           Payments by Borrower.

(i)           Except as otherwise expressly provided herein, all payments by
Borrower shall be made to Agent's Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 12:00 noon
(California time) on the date specified herein.  Any payment received by Agent
later than 12:00 noon. (California time) shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.

(ii)           Unless Agent receives notice from Borrower prior to the date on
which any payment is due to the Lenders that Borrower will not make such payment
in full as and when required, Agent may assume that Borrower has made (or will
make) such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent Borrower does not make such payment in
full to Agent on the date when due, each Lender severally shall repay to Agent
on demand such amount distributed to such Lender, together with interest thereon
at the Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.

(b)           Apportionment and Application.

(i)            So long as no Application Event has occurred and is continuing
and except as otherwise provided herein with respect to Defaulting Lenders, all
principal and interest payments received by Agent shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and
expenses received by Agent (other than fees or expenses that are for Agent's
separate account or for the separate account of the Issuing Lender) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee or expense relates.  All
payments to be made hereunder by

 
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Borrower shall be remitted to Agent and all (subject to Section 2.4(b)(iv) and
Section 2.4(e)) such payments, and all proceeds of Collateral received by Agent,
shall be applied, so long as no Application Event has occurred and is
continuing, to reduce the balance of the Advances outstanding and, thereafter,
to Borrower (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.
 
(ii)           At any time that an Application Event has occurred and is
continuing and except as otherwise provided herein with respect to Defaulting
Lenders, all payments remitted to Agent and all proceeds of Collateral received
by Agent shall be applied as follows:

(A)           first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,

(B)           second, to pay any fees or premiums then due to Agent under the
Loan Documents until paid in full,

(C)           third, to pay interest due in respect of all Protective Advances
until paid in full,

(D)           fourth, to pay the principal of all Protective Advances until paid
in full,

(E)           fifth, ratably, to pay any Lender Group Expenses (including cost
or expense reimbursements) or indemnities then due to any of the Lenders under
the Loan Documents, until paid in full,

(F)           sixth, ratably, to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,

(G)           seventh, to pay interest accrued in respect of the Swing Loans
until paid in full,

(H)           eighth, to pay the principal of all Swing Loans until paid in
full,

(I)           ninth, ratably, to pay interest accrued in respect of the Advances
(other than Protective Advances) until paid in full,

(J)           tenth, ratably (i) to pay the principal of all Advances until paid
in full, (ii) to Agent, to be held by Agent, for the benefit of Issuing Lender
(and for the ratable benefit of each of the Lenders that have an obligation to
pay to Agent, for the account of the Issuing Lender, a share of each Letter of
Credit Disbursement), as cash collateral in an amount up to 105% of the Letter
of Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Letter of Credit Disbursement as
and when such disbursement occurs and, if a Letter of Credit expires undrawn,
the cash collateral held by Agent in respect of such Letter of Credit shall, to
the extent permitted by applicable law, be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof), (iii) up to the

 
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Aggregate Bank Product Reserve Amount in the aggregate (after taking into
account any amounts previously paid pursuant to this clause (iii) during the
continuation of the applicable Application Event), ratably (based upon the Bank
Product Reserve established by Agent for each Bank Product of a Bank Product
Provider), to the Bank Product Providers based upon amounts then certified by
the applicable Bank Product Provider to Agent (in form and substance
satisfactory to Agent) to be due and payable to such Bank Product Providers on
account of Bank Product Obligations,
 
(K)           eleventh, to pay any other Obligations other than Obligations owed
to Defaulting Lenders (including being paid, ratably, to the Bank Product
Providers on account of all amounts then due and payable in respect of Bank
Product Obligations, with any balance to be paid to Agent, to be held by Agent,
for the ratable benefit of the Bank Product Providers, as cash collateral (which
cash collateral may be released by Agent to the applicable Bank Product Provider
and applied by such Bank Product Provider to the payment or reimbursement of any
amounts due and payable with respect to Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Bank Product Obligations are paid
or otherwise satisfied in full, the cash collateral held by Agent in respect of
such Bank Product Obligations shall be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof),

(L)            twelfth, ratably to pay any Obligations owed to Defaulting
Lenders; and

(M)          thirteenth, to Borrower (to be wired to the Designated Account) or
such other Person entitled thereto under applicable law.

(iii)           Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e).

(iv)           In each instance, so long as no Application Event has occurred
and is continuing, Section 2.4(b)(i) shall not apply to any payment made by
Borrower to Agent and specified by Borrower to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement or any other Loan Document.

(v)           For purposes of Section 2.4(b)(ii), "paid in full" of a type of
Obligation means payment in cash or immediately available funds of all amounts
owing on account of such type of Obligation, including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.

(vi)           In the event of a direct conflict between the priority provisions
of this Section 2.4 and any other provision contained in this Agreement or any
other Loan Document, it is the intention of the parties hereto that such
provisions be read together and construed, to the fullest extent possible, to be
in concert with each other.  In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, if the conflict relates to the provisions
of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g)
shall

 
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control and govern, and if otherwise, then the terms and provisions of this
Section 2.4 shall control and govern.
 
(c)           Reduction of Commitments.  The Revolver Commitments shall
terminate on the Maturity Date.  Borrower may reduce the Revolver Commitments,
without premium or penalty, to an amount (which may be zero) not less than the
sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of
all Advances not yet made as to which a request has been given by Borrower under
Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as
to which a request has been given by Borrower pursuant to Section 2.11(a).  Each
such reduction shall be in an amount which is not less than $5,000,000 (unless
the Revolver Commitments are being reduced to zero and the amount of the
Revolver Commitments in effect immediately prior to such reduction are less than
$5,000,000), shall be made by providing not less than 10 Business Days prior
written notice to Agent, and shall be irrevocable.  Unless the Revolver
Commitments are being reduced to zero, in no event shall the Revolver
Commitments be reduced pursuant to this Section 2.4(c) to be less than
$35,000,000.  Once reduced, the Revolver Commitments may not be increased.  Each
such reduction of the Revolver Commitments shall reduce the Revolver Commitments
of each Lender proportionately in accordance with its ratable share thereof.

(d)           Optional Prepayments.

(i)            Advances.  Borrower may prepay the principal of any Advance at
any time in whole or in part, without premium or penalty.

(e)           Mandatory Prepayments.

(i)            Borrowing Base.  If, at any time, (A) the Revolver Usage on such
date exceeds (B) the Borrowing Base (such excess being referred to as the
"Borrowing Base Excess"), then Borrower shall promptly, but in any event, within
1 Business Day (or such later date upon Agent's demand with respect to a
Borrowing Base Excess occurring solely as a result of any Protective Advance or
intentional Overadvance in accordance with Section 2.3(d)) prepay the
Obligations in accordance with Section 2.4(f) in an aggregate amount equal to
the Borrowing Base Excess.

(ii)           Dispositions.  Within 1 Business Day of the date of receipt by
Borrower or any of its Subsidiaries of the Net Cash Proceeds of any voluntary or
involuntary sale or disposition by Borrower or any of its Subsidiaries of assets
(including casualty losses or condemnations but excluding sales or dispositions
which qualify as Permitted Dispositions under clauses (a), (b), (c), or (d) of
the definition of Permitted Dispositions), Borrower shall prepay the outstanding
principal amount of the Obligations in accordance with Section 2.4(f) in an
amount equal to 100% of such Net Cash Proceeds (including condemnation awards
and payments in lieu thereof) received by such Person in connection with such
sales or dispositions; provided that, so long as (A) no Default or Event of
Default shall have occurred and is continuing or would result therefrom,
(B) Borrower shall have given Agent prior written notice of Borrower's intention
to apply such monies to the costs of replacement of the properties or assets
that are the subject of such sale or disposition or the cost of purchase or
construction of other assets useful in the business of Borrower or its
Subsidiaries, (C) the monies are held in a Deposit Account in which Agent has a
perfected first-priority security interest, and (D) Borrower or its
Subsidiaries, as

 
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applicable, complete such replacement, purchase, or construction within 180 days
after the initial receipt of such monies, then the Loan Parties shall have the
option to apply such monies to the costs of replacement of the assets that are
the subject of such sale or disposition or the costs of purchase or construction
of other assets useful in the business of such Loan Party unless and to the
extent that such applicable period shall have expired without such replacement,
purchase, or construction being made or completed, in which case, any amounts
remaining in the Deposit Account referred to in clause (C) above shall be paid
to Agent and applied in accordance with Section 2.4(f); provided, however, that
Borrower and its Subsidiaries shall not have the right to use such Net Cash
Proceeds to make such replacements, purchases, or construction in excess of
$1,000,000 in any given fiscal year.  Nothing contained in this Section
2.4(e)(ii) shall permit Borrower or any of its Subsidiaries to sell or otherwise
dispose of any assets other than in accordance with Section 6.4.
 
(iii)           Extraordinary Receipts.  Within 1 Business Day of the date of
receipt by Borrower or any of its Subsidiaries of Net Cash Proceeds of any
Extraordinary Receipts, Borrower shall prepay the outstanding principal amount
of the Obligations in accordance with Section 2.4(f) in an amount equal to 100%
of the Net Cash Proceeds of such Extraordinary Receipts.

(iv)           Indebtedness.  Within 1 Business Day of the date of incurrence by
Borrower or any of its Subsidiaries of any Indebtedness (other than Permitted
Indebtedness), Borrower shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(f) in an amount equal to 100% of the
Net Cash Proceeds received by such Person in connection with such
incurrence.  The provisions of this Section 2.4(e)(iv) shall not be deemed to be
implied consent to any such incurrence otherwise prohibited by the terms and
conditions of this Agreement.

(v)           Equity.  Within 1 Business Day of the date of the issuance by
Borrower or any of its Subsidiaries of any shares of its or their Stock (other
than (A) in the event that Borrower or any of its Subsidiaries forms any
Subsidiary in accordance with the terms hereof, the issuance by such Subsidiary
of Stock to Borrower or such Subsidiary, as applicable, (B) so long as no Event
of Default has occurred and is continuing, the issuance of Stock by Borrower to
Existing Lenders in connection with the exercise of the Existing Warrants, or
Subordinated Lenders in connection with the exercise of the Subordinated Lender
Warrants, (C) the issuance of Stock of Borrower to directors, officers and
employees of Borrower and its Subsidiaries pursuant to employee or director
stock option plans (or other employee or director incentive plans or other
compensation arrangements, and (D) the issuance of Stock of Borrower in order to
finance the purchase consideration (or a portion thereof) in connection with a
Permitted Acquisition) approved by the Board of Directors, Borrower shall prepay
the outstanding principal amount of the Obligations in accordance with Section
2.4(f) in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such issuance.  The provisions of this Section
2.4(e)(v) shall not be deemed to be implied consent to any such issuance
otherwise prohibited by the terms and conditions of this Agreement.

(vi)           Excess Cash Flow.  Within 10 Business Days of delivery to Agent
of audited annual financial statements pursuant to Section 5.1, commencing with
the delivery to Agent of the financial statements for Borrower's fiscal year
ended December 31, 2011 or, if such financial statements are not delivered to
Agent on the date such statements are required to be

 
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delivered pursuant to Section 5.1, within 10 Business Days after the date such
statements were required to be delivered to Agent pursuant to Section 5.1,
Borrower shall prepay the outstanding principal amount of the Obligations in
accordance with Section 2.4(f) in an amount equal to 25% of the Excess Cash Flow
of Borrower and its Subsidiaries for such fiscal year; provided, however, that
in the case of the fiscal year ended December 31, 2011, Borrower shall only be
obligated to prepay the outstanding principal amount of the Obligations in an
amount equal to the applicable percentage of the Excess Cash Flow of the
Borrower and its Subsidiaries for the period commencing with March 28, 2011 and
ending on December 31, 2011.
 
(f)           Application of Payments.  Each prepayment pursuant to
Section 2.4,  (shall, (A) so long as no Application Event shall have occurred
and be continuing, be applied, first, to the outstanding principal amount of the
Advances until paid in full, and second, to cash collateralize the Letters of
Credit in an amount equal to 105% of the then extant Letter of Credit Usage, and
(B) if an Application Event shall have occurred and be continuing, be applied in
the manner set forth in Section 2.4(b)(ii).

2.5.           Overadvances.

If, at any time or for any reason, the amount of Obligations owed by Borrower to
the Lender Group pursuant to Section 2.1 or Section 2.11 is greater than any of
the limitations set forth in Section 2.1 or Section 2.11, as applicable (an
"Overadvance"), Borrower shall promptly, but in any event within 1 Business Day
of the initial occurrence of such Overadvance, pay to Agent, in cash, the amount
of such excess, which amount shall be used by Agent to reduce the Obligations in
accordance with the priorities set forth in Section 2.4(b).  Borrower promises
to pay the Obligations (including principal, interest, fees, costs, and
expenses) in full on the Maturity Date or, if earlier, on the date on which the
Obligations (other than the Bank Product Obligations) become due and payable
pursuant to the terms of this Agreement.

2.6.           Interest Rates and Letter of Credit Fee:  Rates, Payments, and
Calculations.

(a)           Interest Rates.  Except as provided in Section 2.6(c), all
Obligations (except for undrawn Letters of Credit) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows:

(i)           if the relevant Obligation is a LIBOR Rate Loan, at a per annum
rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and

(ii)           otherwise, at a per annum rate equal to the Base Rate plus the
Base Rate Margin.

(b)           Letter of Credit Fee.  Borrower shall pay Agent (for the ratable
benefit of the Lenders with a Revolver Commitment), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section
2.11(f)) which shall accrue at a per annum rate equal to the LIBOR Rate Margin
applicable to LIBOR Rate Loans predicated on Current Asset Availability times
the Daily Balance of the undrawn amount of all outstanding Letters of Credit.

 
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(c)           Default Rate.  Upon the occurrence and during the continuation of
an Event of Default and at the election of the Required Lenders,

(i)            all Obligations (except for undrawn Letters of Credit) that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable thereunder, and

(ii)           the Letter of Credit fee provided for in Section 2.6(b) shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.

(d)           Payment.  Except to the extent provided to the contrary in Section
2.10 or Section 2.12(a), all interest, all Letter of Credit fees, all other fees
payable hereunder or under any of the other Loan Documents, all costs and
expenses payable hereunder or under any of the other Loan Documents, and all
Lender Group Expenses shall be due and payable, in arrears, on the first day of
each month at any time that Obligations or Commitments are
outstanding.  Borrower hereby authorizes Agent, from time to time without prior
notice to Borrower, to charge all interest, Letter of Credit fees, and all other
fees payable  hereunder or under any of the other Loan Documents (in each case,
as and when due and payable), all costs and expenses payable hereunder or under
any of the other Loan Documents (in each case, as and when incurred), and all
Lender Group Expenses (as and when incurred), all charges, commissions, fees,
and costs provided for in Section 2.11(f) (as and when incurred), all fees and
costs provided for in Section 2.10 (as and when accrued or incurred), and all
other payment obligations as and when due and payable under any Loan Document or
any Bank Product Agreement (including any amounts due and payable to the Bank
Product Providers in respect of Bank Products) to the Loan Account, which
amounts thereafter shall constitute Advances hereunder and, initially, shall
accrue interest at the rate then applicable to Advances that are Base Rate
Loans.  Any interest, fees, costs, expenses, Lender Group Expenses, or other
amounts payable hereunder or under any other Loan Document or under any Bank
Product Agreement that are charged to the Loan Account shall thereupon
constitute Advances hereunder and shall initially accrue interest at the rate
then applicable to Advances that are Base Rate Loans (unless and until converted
into LIBOR Rate Loans in accordance with the terms of this Agreement).  With
respect solely to costs and expenses described in this Section 2.6(d) that are
charged to the Loan Account, Agent agrees to use reasonable efforts to provide
prior notice to Borrower of any such costs and expenses; provided, that (x) any
failure by Agent to give such notice or delay by Agent in giving such notice
shall not affect Borrowers obligations to pay such costs and expenses and
(y) delivery of such notice shall not be required during the occurrence and
continuance of an Event of Default.

(e)           Computation.  All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year, in each case, for
the actual number of days elapsed in the period during which the interest or
fees accrue.  In the event the Base Rate is changed from time to time hereafter,
the rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

(f)           Intent to Limit Charges to Maximum Lawful Rate.  In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in

 
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connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable.  Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if such rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum amount as is allowed by law, and payment received from
Borrower in excess of such legal maximum, whenever received, shall be applied to
reduce the principal balance of the Obligations to the extent of such excess.
 
2.7.           Crediting Payments.

The receipt of any payment item by Agent shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to Agent's Account or unless and until such payment item is
honored when presented for payment.  Should any payment item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly.  Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into Agent's Account on a Business Day on or before
12:00 noon (California time).  If any payment item is received into Agent's
Account on a non-Business Day or after 12:00 noon (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.

2.8.           Designated Account.

Agent is authorized to make the Advances and Issuing Lender is authorized to
issue the Letters of Credit, under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person or,
without instructions, if pursuant to Section 2.6(d).  Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank
for the purpose of receiving the proceeds of the Advances requested by Borrower
and made by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent
and Borrower, any Advance or Swing Loan requested by Borrower and made by Agent
or the Lenders hereunder shall be made to the Designated Account.

2.9.           Maintenance of Loan Account; Statements of Obligations.

Agent shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances (including
Protective Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders
to Borrower or for Borrower's account, the Letters of Credit issued or arranged
by Issuing Lender for Borrower's account, and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest, fees
and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the
Loan Account will be credited with all payments received by Agent from Borrower
or for Borrower's account.  Agent shall render monthly statements regarding the
Loan Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated

 
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between Borrower and the Lender Group unless, within 30 days after receipt
thereof by Borrower, Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.

 
2.10.        Fees.

Borrower shall pay to Agent,

(a)           for the account of Agent, as and when due and payable under the
terms of the Fee Letter, the fees set forth in the Fee Letter.

(b)           for the ratable account of those Lenders with Revolver
Commitments, on the first day of each month from and after the Closing Date up
to the first day of the month prior to the Payoff Date and on the Payoff Date,
an unused line fee in an amount equal to the applicable percentage in the
following table that corresponds to the average Daily Balance of the Revolver
Usage during the immediately preceding month (or portion thereof), per annum
times the result of (i) the aggregate amount of the Revolver Commitments, less
(ii) the average Daily Balance of the Revolver Usage during the immediately
preceding month (or portion thereof):

Applicable Percentage
Average Daily Balance of Revolver Usage
0.375%
Greater than or equal to $25,000,000
0.500%
Less than $25,000,000 but greater
than or equal to $15,000,000
0.625%
Less than $15,000,000

(c)           audit, appraisal, field exam, and valuation fees and charges, as
and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per
auditor, plus reasonable out-of-pocket expenses for each financial audit of
Borrower or its Subsidiaries performed by personnel employed by Agent, (ii) if
implemented, a fee of $1,000 per day, per applicable individual, plus reasonable
out of pocket expenses for the establishment of electronic collateral reporting
systems, and (iii) the actual charges paid or incurred by Agent if it elects to
employ the services of one or more third Persons to perform financial audits,
field exams or quality of earnings analyses of Borrower or its Subsidiaries, to
establish electronic collateral reporting systems, to appraise the Collateral,
or any portion thereof, or to assess Borrower's or its Subsidiaries' business
valuation; provided, however, that with respect to field exams and appraisals,
so long as no Event of Default shall have occurred and be continuing, Borrower
shall not be obligated to reimburse Agent for more than (x) 2 field exams during
any calendar year, (y) more than 2 appraisals of the assets of Borrower and its
Subsidiaries other than Equipment, and (z) 1 appraisal during any calendar year
with respect to the Equipment of Borrower and its Subsidiaries.

 
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2.11.        Letters of Credit.

(a)           Subject to the terms and conditions of this Agreement, upon the
request of Borrower made in accordance herewith, the Issuing Lender agrees to
issue, or to cause an Underlying Issuer (including, as Issuing Lender's agent)
to issue, a requested Letter of Credit.  If Issuing Lender, at its option,
elects to cause an Underlying Issuer to issue a requested Letter of Credit, then
Issuing Lender agrees that it will enter into arrangements relative to the
reimbursement of such Underlying Issuer (which may include, among, other means,
by becoming an applicant with respect to such Letter of Credit or entering into
undertakings which provide for reimbursements of such Underlying Issuer with
respect to such Letter of Credit; each such obligation or undertaking,
irrespective of whether in writing, a "Reimbursement Undertaking") with respect
to Letters of Credit issued by such Underlying Issuer.  By submitting a request
to Issuing Lender for the issuance of a Letter of Credit, Borrower shall be
deemed to have requested that Issuing Lender issue or that an Underlying Issuer
issue the requested Letter of Credit and to have requested Issuing Lender to
issue a Reimbursement Undertaking with respect to such requested Letter of
Credit if it is to be issued by an Underlying Issuer (it being expressly
acknowledged and agreed by Borrower that Borrower is and shall be deemed to be
an applicant (within the meaning of Section 5-102(a)(2) of the Code) with
respect to each Underlying Letter of Credit).  Each request for the issuance of
a Letter of Credit, or the amendment, renewal, or extension of any outstanding
Letter of Credit, shall be made in writing by an Authorized Person and delivered
to the Issuing Lender via hand delivery, telefacsimile, or other electronic
method of transmission reasonably in advance of the requested date of issuance,
amendment, renewal, or extension.  Each such request shall be in form and
substance reasonably satisfactory to the Issuing Lender and shall specify
(i) the amount of such Letter of Credit, (ii) the date of issuance, amendment,
renewal, or extension of such Letter of Credit, (iii) the proposed expiration
date of such Letter of Credit, (iv) the name and address of the beneficiary of
the Letter of Credit, and (v) such other information (including, the conditions
of drawing, and, in the case of an amendment, renewal, or extension,
identification of the Letter of Credit to be so amended, renewed, or extended)
as shall be necessary to prepare, amend, renew, or extend such Letter of
Credit.  Anything contained herein to the contrary notwithstanding, the Issuing
Lender may, but shall not be obligated to, issue or cause the issuance of a
Letter of Credit or to issue a Reimbursement Undertaking in respect of an
Underlying Letter of Credit, in either case, that supports the obligations of
Borrower or its Subsidiaries (1) in respect of (A) a lease of real property, or
(B) an employment contract, or (2) at any time that one or more of the Lenders
is a Defaulting Lender.  The Issuing Lender shall have no obligation to issue a
Letter of Credit or a Reimbursement Undertaking in respect of an Underlying
Letter of Credit, in either case, if any of the following would result after
giving effect to the requested issuance:

(i)            the Letter of Credit Usage would exceed the Borrowing Base less
the outstanding amount of Advances (inclusive of Swing Loans), or

(ii)           the Letter of Credit Usage would exceed $6,000,000, or

(iii)           the Letter of Credit Usage would exceed the Maximum Revolver
Amount less the outstanding amount of Advances (including Swing Loans).

Each Letter of Credit shall be in form and substance reasonably acceptable to
the Issuing Lender, including the requirement that the amounts payable
thereunder must be payable

 
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in Dollars.  If Issuing Lender makes a payment under a Letter of Credit or an
Underlying Issuer makes a payment under an Underlying Letter of Credit, Borrower
shall pay to Agent an amount equal to the applicable Letter of Credit
Disbursement on the date such Letter of Credit Disbursement is made and, in the
absence of such payment, the amount of the Letter of Credit Disbursement
immediately and automatically shall be deemed to be an Advance hereunder and,
initially, shall bear interest at the rate then applicable to Advances that are
Base Rate Loans.  If a Letter of Credit Disbursement is deemed to be an Advance
hereunder (notwithstanding any failure to satisfy any condition precedent set
forth in Section 3), Borrower's obligation to pay the amount of such Letter of
Credit Disbursement to Issuing Lender shall be automatically converted into an
obligation to pay the resulting Advance.  Promptly following receipt by Agent of
any payment from Borrower pursuant to this paragraph, Agent shall distribute
such payment to the Issuing Lender or, to the extent that Lenders have made
payments pursuant to Section 2.11(b) to reimburse the Issuing Lender, then to
such Lenders and the Issuing Lender as their interests may appear.
 
(b)           Promptly following receipt of a notice of a Letter of Credit
Disbursement pursuant to Section 2.11(a), each Lender with a Revolver Commitment
agrees to fund its Pro Rata Share of any Advance deemed made pursuant to Section
2.11(a) on the same terms and conditions as if Borrower had requested the amount
thereof as an Advance and Agent shall promptly pay to Issuing Lender the amounts
so received by it from the Lenders.  By the issuance of a Letter of Credit or a
Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of
Credit or a Reimbursement Undertaking) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit issued by Issuing Lender and
each Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to
pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata
Share of any Letter of Credit Disbursement made by Issuing Lender or an
Underlying Issuer under the applicable Letter of Credit.  In consideration and
in furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of each Letter of Credit
Disbursement made by Issuing Lender or an Underlying Issuer and not reimbursed
by Borrower on the date due as provided in Section 2.11(a), or of any
reimbursement payment required to be refunded (or that Agent or Issuing Lender
elects, based upon the advice of counsel, to refund) to Borrower for any
reason.  Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section 2.11(b) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation of an
Event of Default or Default or the failure to satisfy any condition set forth in
Section 3.  If any such Lender fails to make available to Agent the amount of
such Lender's Pro Rata Share of a Letter of Credit Disbursement as provided in
this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of the Issuing Lender) shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Defaulting
Lender Rate until paid in full.

 
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(c)           Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group and each Underlying Issuer harmless from any damage, loss, cost,
expense, or liability (other than for Taxes, which shall be governed by Section
16), and reasonable attorneys fees incurred by Issuing Lender, any other member
of the Lender Group, or any Underlying Issuer arising out of or in connection
with any Reimbursement Undertaking or any Letter of Credit; provided, however,
that Borrower shall not be obligated hereunder to indemnify for any loss, cost,
expense, or liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of the Issuing
Lender, any other member of the Lender Group, or any Underlying
Issuer.  Borrower agrees to be bound by the Underlying Issuer's regulations and
interpretations of any Letter of Credit or by Issuing Lender's interpretations
of any Reimbursement Undertaking even though this interpretation may be
different from Borrower's own, and Borrower understands and agrees that none of
the Issuing Lender, any other member of the Lender Group, or any Underlying
Issuer shall be liable for any error, negligence, or mistake, whether of
omission or commission, in following Borrower's instructions or those contained
in the Letter of Credit or any modifications, amendments, or supplements
thereto.  Borrower understands that the Reimbursement Undertakings may require
Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrower against such Underlying
Issuer.  Borrower hereby agrees to indemnify, save, defend, and hold Issuing
Lender and the other members of the Lender Group harmless with respect to any
loss, cost, expense (including reasonable attorneys fees), or liability (other
for than Taxes, which shall be governed by Section 16) incurred by them as a
result of the Issuing Lender's indemnification of an Underlying Issuer;
provided, however, that Borrower shall not be obligated hereunder to indemnify
for any such loss, cost, expense, or liability to the extent that it is caused
by the gross negligence or willful misconduct of the Issuing Lender or any other
member of the Lender Group.  Borrower hereby acknowledges and agrees that none
of the Issuing Lender, any other member of the Lender Group, or any Underlying
Issuer shall be responsible for delays, errors, or omissions resulting from the
malfunction of equipment in connection with any Letter of Credit.

(d)           The obligation of Borrower to reimburse the Issuing Lender for
each drawing under each Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

(i)           any lack of validity or enforceability of such Letter of Credit,
this Agreement, or another Loan Document,

(ii)           the existence of any claim, counterclaim, setoff, defense or
other right that Borrower or any of its Subsidiaries may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee maybe acting), the
Issuing Lender or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction,

(iii)           any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, or any loss or delay in the

 
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transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit,
 
(iv)           any payment by the Issuing Lender under such Letter of Credit
against presentation of a draft or certificate that does not substantially or
strictly comply with the terms of such Letter of Credit (including, without
limitation, any requirement that presentation be made at a particular place or
by a particular time of day), or any payment made by the Issuing Lender under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,

(v)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or discharge of, Borrower or any of
its Subsidiaries, or

(vi)           the fact that any Event of Default shall have occurred and be
continuing.

(e)           Borrower hereby authorizes and directs any Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.

(f)           Borrower acknowledges and agrees that any and all issuance
charges, usage charges, commissions, fees, and costs incurred by the Issuing
Lender relating to Underlying Letters of Credit shall be Lender Group Expenses
for purposes of this Agreement and shall be reimbursable promptly, but in any
event within 1 Business Day, by Borrower to Agent for the account of the Issuing
Lender; it being acknowledged and agreed by Borrower that, as of the Closing
Date, the usage charge imposed by the Underlying Issuer is .825% per annum times
the undrawn amount of each Underlying Letter of Credit, that such usage charge
may be changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.

(g)           If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Issuing Lender, any other member of the Lender Group, or Underlying Issuer with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Federal Reserve Board as from time to time in effect (and
any successor thereto):

(i)            any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued or caused to be
issued hereunder or hereby, or

 
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(ii)           there shall be imposed on the Issuing Lender, any other member of
the Lender Group, or Underlying Issuer any other condition regarding any Letter
of Credit or Reimbursement Undertaking,

and the result of the foregoing is to increase, directly or indirectly, the cost
to the Issuing Lender, any other member of the Lender Group, or an Underlying
Issuer of issuing, making, participating in, or maintaining any Reimbursement
Undertaking or Letter of Credit or to reduce the amount receivable in respect
thereof, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Borrower, and Borrower shall pay within 30 days after demand therefor,
such amounts as Agent may specify to be necessary to compensate the Issuing
Lender, any other member of the Lender Group, or an Underlying Issuer for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder; provided, however, that Borrower shall
not be required to provide any compensation pursuant to this Section 2.11(g) for
any such amounts incurred more than 180 days prior to the date on which the
demand for payment of such amounts is first made to Borrower (provided, that
notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, regulations,
guidelines or directives thereunder or issued in connection therewith shall be
deemed to be a change in applicable law or compliance requirement enacted after
the Closing Date regardless of the date actually enacted, adopted or issued);
provided further, however, that if an event or circumstance giving rise to such
amounts is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.  The determination
by Agent of any amount due pursuant to this Section 2.11(g), as set forth in a
certificate setting forth the calculation thereof in reasonable detail, shall,
in the absence of manifest or demonstrable error, be final and conclusive and
binding on all of the parties hereto.

2.12.        LIBOR Option.

(a)           Interest and Interest Payment Dates.  In lieu of having interest
charged at the rate based upon the Base Rate, Borrower shall have the option,
subject to Section 2.12(b) below (the "LIBOR Option") to have interest on all or
a portion of the Advances be charged (whether at the time when made (unless
otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR
Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a
rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period applicable
thereto; (ii) the date on which all or any portion of the Obligations are
accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof.  On the last day of each
applicable Interest Period, unless Borrower properly has exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder.  At any time that an Event of Default has
occurred and is continuing, at the written election of the Required Lenders,
Borrower no longer shall have the option to request that Advances bear interest
at a rate based upon the LIBOR Rate.

 
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(b)           LIBOR Election.

(i)           Borrower may, at any time and from time to time, so long as
Borrower has not received a notice from Agent, after the occurrence and during
the continuance of an Event of Default, of the election of the Required Lenders
to terminate the right of Borrower to exercise the LIBOR Option during the
continuance of such Event of Default, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. (California time) at least 3 Business Days
prior to the commencement of the proposed Interest Period (the "LIBOR
Deadline").  Notice of Borrower's election of the LIBOR Option for a permitted
portion of the Advances and an Interest Period pursuant to this Section shall be
made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR
Deadline, or by telephonic notice received by Agent before the LIBOR Deadline
(to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior
to 5:00 p.m. (California time) on the same day).  Promptly upon its receipt of
each such LIBOR Notice, Agent shall provide a copy thereof to each of the
affected Lenders.

(ii)           Each LIBOR Notice shall be irrevocable and binding on
Borrower.  In connection with each LIBOR Rate Loan, Borrower shall indemnify,
defend, and hold Agent and the Lenders harmless against any loss, cost, or
expense actually incurred by Agent or any Lender as a result of (A) the payment
of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (B) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (C) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
"Funding Losses").  A certificate of Agent or a Lender delivered to Borrower
setting forth in reasonable detail any amount or amounts that Agent or such
Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive
absent manifest error.  Borrower shall pay such amount to Agent or the Lender,
as applicable, within 30 days of the date of its receipt of such
certificate.  If a payment of a LIBOR Rate Loan on a day other than the last day
of the applicable Interest Period would result in a Funding Loss, Agent may, in
its sole discretion at the request of Borrower, hold the amount of such payment
as cash collateral in support of the Obligations until the last day of such
Interest Period and apply such amounts to the payment of the applicable LIBOR
Rate Loan on such last day, it being agreed that Agent has no obligation to so
defer the application of payments to any LIBOR Rate Loan and that, in the event
that Agent does not defer such application, Borrower shall be obligated to pay
any resulting Funding Losses.

(iii)           Borrower shall have not more than 5 LIBOR Rate Loans in effect
at any given time.  Borrower only may exercise the LIBOR Option for proposed
LIBOR Rate Loans of at least $1,000,000.

(c)           Conversion.  Borrower may convert LIBOR Rate Loans to Base Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are converted or prepaid on any date that is not the last day of the Interest
Period applicable thereto, including as a result of any automatic prepayment
through the required application by Agent of proceeds of Borrower's and its
Subsidiaries' Collections in accordance with Section 2.4(b) or for any other
reason, including early termination of the term of this Agreement or
acceleration of all or any portion of the Obligations pursuant to the terms
hereof, Borrower shall indemnify, defend, and hold Agent and the Lenders and
their Participants harmless against any and all Funding Losses in accordance
with Section 2.12 (b)(ii).

 
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(d)           Special Provisions Applicable to LIBOR Rate.

(i)           The LIBOR Rate may be adjusted by Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or increased
costs, in each case, due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period, including changes in
tax laws (except changes of general applicability in income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), which additional or increased costs
would increase the cost of funding or maintaining loans bearing interest at the
LIBOR Rate.  In any such event, the affected Lender shall give Borrower and
Agent notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender,  Borrower may, by notice to such affected Lender
(y) require such Lender to furnish to Borrower a statement setting forth the
basis for adjusting such LIBOR Rate and the method for determining the amount of
such adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

(ii)           In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
or application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrower shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.

(e)           No Requirement of Matched Funding.  Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.

2.13.        Capital Requirements.

(a)           If, after the date hereof, any Lender determines that (i) the
adoption of or change in any law, rule, regulation or guideline regarding
capital or reserve requirements for banks or bank holding companies, or any
change in the interpretation, implementation, or application thereof by any
Governmental Authority charged with the administration thereof, or
(ii) compliance by such Lender or its parent bank holding company with any
guideline, request or directive of any such entity regarding capital adequacy
(whether or not having the force of law), has the effect of reducing the return
on such Lender's or such holding company's capital as a consequence of such
Lender's Commitments hereunder to a level below that which such Lender or such
holding company could have achieved but for such adoption, change, or compliance
(taking into consideration such Lender's or such holding company's then existing

 
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policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Lender to be material, then
such Lender may notify Borrower and Agent thereof; provided, that
notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, regulations,
guidelines or directives thereunder or issued in connection therewith shall be
deed to be a change in law or compliance requirement enacted after the Closing
Date regardless of the date actually enacted, adopted or issued.  Following
receipt of such notice, Borrower agrees to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined,
payable within 30 days after presentation by such Lender of a statement in the
amount and setting forth in reasonable detail such Lender's calculation thereof
and the assumptions upon which such calculation was based (which statement shall
be deemed true and correct absent manifest error).  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.  Failure
or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender's right to demand such
compensation; provided that Borrower shall not be required to compensate a
Lender pursuant to this Section for any reductions in return incurred more than
180 days prior to the date that such Lender notifies Borrower of such law, rule,
regulation or guideline giving rise to such reductions and of such Lender's
intention to claim compensation therefor; provided further that if such claim
arises by reason of the adoption of or change in any law, rule, regulation or
guideline that is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.
 
(b)           If any Lender requests additional or increased costs referred to
in Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under
Section 2.12(d)(i) relative to increased or additional costs or Section
2.12(d)(ii) relative to changed circumstances (any such Lender, an "Affected
Lender"), then such Affected Lender shall use reasonable efforts to promptly
designate a different one of its lending offices or to assign its rights and
obligations hereunder to another of its offices or branches, if (i) in the
reasonable judgment of such Affected Lender, such designation or assignment
would eliminate or reduce amounts payable pursuant to Section 2.12(d)(i) or
Section 2.13(a), as applicable, or would eliminate the illegality or
impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the
reasonable judgment of such Affected Lender, such designation or assignment
would not subject it to any material unreimbursed cost or expense and would not
otherwise be materially disadvantageous to it.  Borrower agrees to pay all
reasonable out-of-pocket costs and expenses incurred by such Affected Lender in
connection with any such designation or assignment.  If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrower's obligation to pay any future amounts to such Affected
Lender pursuant to Section 2.12(d)(i), Section 2.12(d)(ii) or Section 2.13(a),
as applicable, or to enable Borrower to obtain LIBOR Rate Loans, then Borrower
(without prejudice to any amounts then due to such Affected Lender under Section
2.12(d)(i), Section 2.12(d)(ii) or Section 2.13(a), as applicable) may, unless
prior to the effective date of any such assignment the Affected Lender withdraws
its request for such additional amounts under Section 2.12(d)(i), Section
2.12(d)(ii) or Section 2.13(a), as applicable, or indicates that it is no longer
unlawful or impractical to fund or maintain LIBOR Rate Loans, may seek a
substitute Lender reasonably acceptable to Agent to purchase the Obligations
owed to such Affected Lender and such Affected Lender's Commitments hereunder (a
"Replacement Lender"), and if such Replacement Lender agrees to such purchase,
such Affected Lender shall

 
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assign to the Replacement Lender its Obligations and Commitments, pursuant to an
Assignment and Acceptance Agreement, and upon such purchase by the Replacement
Lender, such Replacement Lender shall be deemed to be a "Lender" for purposes of
this Agreement and such Affected Lender shall cease to be a "Lender" for
purposes of this Agreement.  In connection with the arrangement of such a
Replacement Lender, the Affected Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the Replacement Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit).
 
3.             CONDITIONS; TERM OF AGREEMENT.

3.1.           Conditions Precedent to the Initial Extension of Credit.

The obligation of each Lender to make its initial extension of credit provided
for hereunder is subject to the fulfillment, to the satisfaction of Agent and
each Lender, of each of the conditions precedent set forth on Schedule 3.1 (the
making of such initial extension of credit by a Lender being conclusively deemed
to be its satisfaction or waiver of the conditions precedent).

3.2.           Conditions Precedent to all Extensions of Credit.

The obligation of the Lender Group (or any member thereof) to make any Advances
hereunder (or to extend any other credit hereunder) at any time shall be subject
to the following conditions precedent:

(a)           the representations and warranties of Borrower or its Subsidiaries
contained in this Agreement or in the other Loan Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date
of such extension of credit, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of such
earlier date); and

(b)           no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof.

3.3.           Maturity.

This Agreement shall continue in full force and effect for a term ending on
March 31, 2015 (the "Maturity Date").  The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this

 
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Agreement upon the occurrence and during the continuation of an Event of Default
in accordance with Section 9.
 
3.4.           Effect of Maturity.

On the Maturity Date, all commitments of the Lender Group to provide additional
credit hereunder shall automatically be terminated and all of the Obligations
immediately shall become due and payable without notice or demand and Borrower
shall be required to repay all of the Obligations in full.  No termination of
the obligations of the Lender Group (other than payment in full of the
Obligations and termination of the Commitments) shall relieve or discharge any
Loan Party of its duties, obligations, or covenants hereunder or under any other
Loan Document and Agent's Liens in the Collateral shall continue to secure the
Obligations and shall remain in effect until all Obligations have been paid in
full and the Commitments have been terminated.  When all of the Obligations have
been paid in full and the Lender Group's obligations to provide additional
credit under the Loan Documents have been terminated irrevocably, Agent will, at
Borrower's sole expense, execute and deliver any termination statements, lien
releases, discharges of security interests, and other similar discharge or
release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, Agent's Liens and all notices of security
interests and liens previously filed by Agent.

3.5.           Early Termination by Borrower.

Borrower has the option, at any time upon 10 Business Days (or such shorter time
as Agent may agree) prior written notice to Agent, to terminate this Agreement
and terminate the Commitments hereunder by repaying to Agent all of the
Obligations in full.

3.6.           Conditions Subsequent.

The obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of the conditions subsequent set forth
on Schedule 3.6 (the failure by Borrower to so perform or cause to be performed
such conditions subsequent as and when required by the terms thereof, shall
constitute an Event of Default).

4.             REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, Borrower makes
the following representations and warranties to the Lender Group which shall be
true and correct, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
Closing Date, and shall be true and correct, in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date in which case such
representations and warranties shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by

 
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materiality in the text thereof on and as of such earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
 
4.1.           Due Organization and Qualification; Subsidiaries.

(a)           Each Loan Party (i) is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified would
reasonably be expected to result in a Material Adverse Change, and (iii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated thereby.

(b)           Set forth on Schedule 4.1(b) is a complete and accurate
description of the authorized capital Stock of Borrower, by class, and, as of
the Closing Date, a description of the number of shares of each such class that
are issued and outstanding.  Other than as described on Schedule 4.1(b), there
are no subscriptions, options, warrants, or calls relating to any shares of
Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument.  Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.

(c)           Set forth on Schedule 4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement), is a complete and accurate list of the Loan Parties' direct and
indirect Subsidiaries, showing:  (i) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries, and
(ii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Borrower.  All of the outstanding capital Stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable.

(d)           Except as set forth on Schedule 4.1(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower's
Subsidiaries' capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument.  Neither Borrower nor any of its
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries'
capital Stock or any security convertible into or exchangeable for any such
capital Stock.

4.2.           Due Authorization; No Conflict.

(a)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Loan Party.

(b)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party do not and will not
(i) violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other Governmental Authority binding on any Loan Party or its Subsidiaries,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of

 
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time or both) a default under any Material Contract of any Loan Party or its
Subsidiaries except to the extent that any such conflict, breach or default
could not individually or in the aggregate reasonably be expected to have a
Material Adverse Change, (iii) result in or require the creation or imposition
of any Lien of any nature whatsoever upon any assets of any Loan Party, other
than Permitted Liens, or (iv) require any approval of any Loan Party's
interestholders or any approval or consent of any Person under any Material
Contract of any Loan Party, other than consents or approvals that have been
obtained and that are still in force and effect and except, in the case of
Material Contracts, for consents or approvals, the failure to obtain could not
individually or in the aggregate reasonably be expected to cause a Material
Adverse Change.
 
4.3.           Governmental Consents.

The execution, delivery, and performance by each Loan Party of the Loan
Documents to which such Loan Party is a party and the consummation of the
transactions contemplated by the Loan Documents do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority, other than registrations, consents,
approvals, notices, or other actions that have been obtained and that are still
in force and effect and except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Agent for filing or
recordation, as of the Closing Date.

4.4.           Binding Obligations; Perfected Liens.

(a)           Each Loan Document has been duly executed and delivered by each
Loan Party that is a party thereto and is the legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors' rights generally.

(b)           Agent's Liens are validly created, perfected (other than (i) in
respect of motor vehicles that are subject to a certificate of title and as to
which Agent has not caused its Lien to be noted on the applicable certificate of
title, and (ii) any Deposit Accounts and Securities Accounts not subject to a
Control Agreement as permitted by Section 6.11, and subject only to the filing
of financing statements and the recordation of the Mortgages, in each case, in
the appropriate filing offices), and first priority Liens, subject only to
Permitted Liens which are either permitted purchase money Liens or the interests
of lessors under Capital Leases.

4.5.           Title to Assets; No Encumbrances.

Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal
title to (in the case of fee interests in Real Property), (b) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
and (c) good and marketable title to (in the case of all other personal
property), all of their respective assets reflected in their most recent
financial statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements to the extent
permitted hereby.  All of such assets are free and clear of Liens except for
Permitted Liens.

 
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4.6.           Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.

(a)           The name of (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of each Loan Party and each of its Subsidiaries is
set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time
to reflect changes resulting from transactions permitted under this Agreement).

(b)           The chief executive office of each Loan Party and each of its
Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such
Schedule may be updated from time to time to reflect changes resulting from
transactions permitted under this Agreement).

(c)           Each Loan Party's and each of its Subsidiaries' tax identification
numbers and organizational identification numbers, if any, are identified on
Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect
changes resulting from transactions permitted under this Agreement).

(d)           As of the Closing Date, no Loan Party and no Subsidiary of a Loan
Party holds any commercial tort claims that exceed $250,000 in amount, except as
set forth on Schedule 4.6(d).

4.7.           Litigation.

(a)           There are no actions, suits, or proceedings pending or, to the
knowledge of Borrower, after due inquiry, threatened in writing against a Loan
Party or any of its Subsidiaries that either individually or in the aggregate
would reasonably be expected to result in a Material Adverse Change.

(b)           Schedule 4.7(b) sets forth a complete and accurate description,
with respect to each of the actions, suits, or proceedings with asserted
liabilities in excess of, or that would reasonably be expected to result in
liabilities in excess of $500,000 that, as of the Closing Date, is pending or,
to the knowledge of Borrower, after due inquiry, threatened against a Loan Party
or any of its Subsidiaries, of (i) the parties to such actions, suits, or
proceedings, (ii) the nature of the dispute that is the subject of such actions,
suits, or proceedings, (iii) the status, as of the Closing Date, with respect to
such actions, suits, or proceedings, and (iv) whether any liability of the Loan
Parties' and their Subsidiaries in connection with such actions, suits, or
proceedings is covered by insurance.

4.8.           Compliance with Laws.

No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable
laws, rules, regulations, executive orders, or codes (including Environmental
Laws) that, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Change, or (b) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Change.

 
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4.9.           No Material Adverse Change.

All historical financial statements relating to the Loan Parties and their
Subsidiaries that have been delivered by Borrower to Agent have been prepared in
accordance with GAAP (except, in the case of unaudited financial statements, for
the lack of footnotes and being subject to year-end audit adjustments) and
present fairly in all material respects, the Loan Parties' and their
Subsidiaries' consolidated financial condition as of the date thereof and
results of operations for the period then ended.  Since December 31, 2009, no
event, circumstance, or change has occurred that has or would reasonably be
expected to result in a Material Adverse Change with respect to the Loan Parties
and their Subsidiaries.

4.10.         Fraudulent Transfer.

(a)           Each of Borrower and each other Loan Party that owns assets that
are included in the Borrowing Base is Solvent, and the other Loan Parties, whose
assets are not included in the Borrowing Base, taken as a whole, are Solvent.

(b)           No transfer of property is being made by any Loan Party and no
obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of such
Loan Party.

4.11.        Employee Benefits.

Except as set forth on Schedule 4.11 (as such Schedule may be updated from time
to time), no Loan Party, none of their Subsidiaries, nor any of their ERISA
Affiliates maintains or contributes to any Benefit Plan.

4.12.        Environmental Condition.

Except as set forth on Schedule 4.12, (a) to Borrower's knowledge, no Loan
Party's nor any of its Subsidiaries' properties or assets has ever been used by
a Loan Party, its Subsidiaries, or by previous owners or operators for the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such disposal, production, storage, handling,
treatment, release or transport was in violation, in any material respect, of
any applicable Environmental Law, (b) to Borrower's knowledge, no Loan Party's
nor any of its Subsidiaries' properties or assets is designated or identified in
any manner pursuant to any Environmental Law as a Hazardous Materials disposal
site, (c) no Loan Party nor any of its Subsidiaries has received notice that a
Lien arising under any Environmental Law has attached to any revenues or to any
Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no
Loan Party nor any of its Subsidiaries nor any of their respective facilities or
operations is subject to any outstanding written order, consent decree, or
settlement agreement with any Person relating to any Environmental Law or
Environmental Liability that, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Change.

 
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4.13.        Intellectual Property.

Each Loan Party and its Subsidiaries own, or hold licenses in, all trademarks,
trade names, copyrights, patents, and licenses that are material and necessary
to the conduct of its business as currently conducted, and attached hereto as
Schedule 4.13 (as updated from time to time) is a true, correct, and complete
listing of all material trademarks, trade names, copyrights, patents, and
licenses as to which Borrower or one of its Subsidiaries is the owner or is an
exclusive licensee; provided, however, that Borrower may amend Schedule 4.13 to
add additional intellectual property so long as such amendment occurs by written
notice to Agent at the time that Borrower provides its Compliance Certificate
pursuant to Section 5.1.

4.14.        Leases.

Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession
under all leases material to their business and to which they are parties or
under which they are operating, and, subject to Permitted Protests, all of such
material leases are valid and subsisting and no material default by the
applicable Loan Party or its Subsidiaries exists under any of them.

4.15.        Deposit Accounts and Securities Accounts.

Set forth on Schedule 4.15 (as updated pursuant to the provisions of the
Security Agreement from time to time) is a listing of all of the Loan Parties'
Deposit Accounts and Securities Accounts, including, with respect to each bank
or securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.

4.16.        Complete Disclosure.

All factual information taken as a whole (other than forward-looking information
and projections and information of a general economic nature and general
information about Borrower's industry) furnished by or on behalf of a Loan Party
or its Subsidiaries in writing to Agent or any Lender (including all information
contained in the Schedules hereto or in the other Loan Documents) for purposes
of or in connection with this Agreement or the other Loan Documents, and all
other such factual information taken as a whole (other than forward-looking
information and projections and information of a general economic nature and
general information about Borrower's industry) hereafter furnished by or on
behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided.  The Projections delivered to Agent on January 8, 2011
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent, Borrower's good faith estimate, on
the date such Projections are delivered, of the Loan Parties' and their
Subsidiaries' future performance for the periods covered thereby based upon
assumptions believed by Borrower to be reasonable at the time of the delivery
thereof to Agent (it being understood that such Projections are subject to
uncertainties and contingencies, many of which are beyond the control of the
Loan Parties and their Subsidiaries, that no assurances can

 
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be given that such Projections will be realized, and that actual results may
differ in a material manner from such Projections).
 
4.17.        Material Contracts.

Set forth on Schedule 4.17 (as such Schedule may be updated from time to time in
accordance herewith) is a reasonably detailed description of the Material
Contracts of each Loan Party and its Subsidiaries as of the most recent date on
which Borrower provided its Compliance Certificate pursuant to Section 5.1;
provided, however, that Borrower may amend Schedule 4.17 to add additional
Material Contracts so long as such amendment occurs by written notice to Agent
on the date that Borrower provides its Compliance Certificate.  Except for
matters which, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change, each Material Contract (other
than those that have expired at the end of their normal terms) (a) is in full
force and effect and is binding upon and enforceable against the applicable Loan
Party or its Subsidiary and, to Borrower's knowledge, after due inquiry, each
other Person that is a party thereto in accordance with its terms and (b) is not
in default due to the action or inaction of the applicable Loan Party or its
Subsidiary.

4.18.        Patriot Act.

To the extent applicable, each Loan Party is in compliance, in all material
respects, with the (a) Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act of 2001) (the "Patriot Act").  No part of the proceeds of the loans
made hereunder will be used by any Loan Party or any of their Affiliates,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.19.        Indebtedness.

Set forth on Schedule 4.19 is a true and complete list of all Indebtedness
(other than Indebtedness described in clause (k) of the definition of Permitted
Indebtedness to the extent such Indebtedness does not exceed $250,000 in the
aggregate) of each Loan Party and each of its Subsidiaries outstanding
immediately prior to the Closing Date that is to remain outstanding immediately
after giving effect to the closing hereunder on the Closing Date and such
Schedule accurately sets forth the aggregate principal amount of such
Indebtedness as of the Closing Date.

4.20.        Payment of Taxes.

Except as otherwise permitted under Section 5.5, all federal, state and other
material tax returns and reports of each Loan Party and its Subsidiaries
required to be filed by any of them have been timely filed, and all taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon a Loan Party and its

 
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Subsidiaries and upon their respective assets, income, businesses and franchises
that are due and payable have been paid when due and payable (other than filings
for which the aggregate liability would not exceed $100,000).  Each Loan Party
and each of its Subsidiaries have made adequate provision in accordance with
GAAP for all taxes not yet due and payable.
 
4.21.        Margin Stock.

No Loan Party nor any of its Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.  No part of the proceeds of the loans
made to Borrower will be used to purchase or carry any such Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates the provisions of Regulation T, U
or X of the Board of Governors of the United States Federal Reserve.

4.22.        Governmental Regulation.

No Loan Party nor any of its Subsidiaries is subject to regulation under the
Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.  No Loan Party nor any of its Subsidiaries is a "registered
investment company" or a company "controlled" by a "registered investment
company" or a "principal underwriter" of a "registered investment company" as
such terms are defined in the Investment Company Act of 1940.

4.23.        OFAC.

No Loan Party nor any of its Subsidiaries is in violation of any of the country
or list based economic and trade sanctions administered and enforced by
OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a
Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be
used to fund any operations in, finance any investments or activities in, or
make any payments to, a Sanctioned Person or a Sanctioned Entity.

4.24.        Employee and Labor Matters.

There is (i) no unfair labor practice complaint pending or, to the knowledge of
Borrower, threatened against Borrower or its Subsidiaries before any
Governmental Authority and no grievance or arbitration proceeding pending or
threatened against Borrower or its Subsidiaries which arises out of or under any
collective bargaining agreement and that would reasonably be expected to result
in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened in writing against Borrower or
its Subsidiaries that would reasonably be expected to result in a material
liability, or (iii) to the knowledge of Borrower, after due inquiry, no union
representation question existing with respect to the employees of Borrower or
its Subsidiaries and no union organizing activity taking place with respect to
any of the employees of Borrower or its Subsidiaries.  None of Borrower or its
Subsidiaries has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act or similar state law, which remains
unpaid or unsatisfied.  The hours worked

 
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and payments made to employees of Borrower or its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable legal
requirements, except to the extent such violations could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Change.  All material payments due from Borrower or its Subsidiaries on account
of wages and employee health and welfare insurance and other benefits have been
paid or accrued as a liability on the books of Borrower, except where the
failure to do so could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.
 
4.25.        Subordinated Debt Documents.

Borrower has delivered to Agent a complete and correct copy of the Subordinated
Debt Documents, including all schedules and exhibits thereto.  The execution,
delivery and performance of each of the Subordinated Debt Documents has been
duly authorized by all necessary action on the part of Borrower.  Each
Subordinated Debt Document is the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, in each
case, except (i) as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
generally the enforcement of creditors' rights and (ii) the availability of the
remedy of specific performance or injunctive or other equitable relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.  Borrower is not in default in the performance or compliance with
any provisions thereof.  All representations and warranties made by Borrower in
the Subordinated Debt Documents and in the certificates delivered in connection
therewith are true and correct in all material respects.

4.26.        Eligible Accounts.

As to each Account that is identified by Borrower as an Eligible Account in the
most recent Borrowing Base Certificate submitted to Agent, such Account is (a) a
bona fide existing payment obligation of the applicable Account Debtor created
by the sale and delivery of Inventory or the rendition of services to such
Account Debtor in the ordinary course of Borrower's business, (b) owed to
Borrower, and (c) not excluded as ineligible by virtue of one or more of the
excluding criteria (other than Agent-discretionary criteria) set forth in the
definition of Eligible Accounts.

4.27.        Eligible Inventory and Eligible In-Transit Inventory.

As to each item of Inventory that is identified by Borrower as Eligible
Inventory in the most recent Borrowing Base Certificate submitted to Agent, such
Inventory is (a) of good and merchantable quality, free from known defects, and
(b) not excluded as ineligible by virtue of one or more of the excluding
criteria (other than Agent-discretionary criteria) set forth in the definition
of Eligible Inventory.  As to each item of Inventory that is identified by
Borrower as Eligible In-Transit Inventory in the most recent Borrowing Base
Certificate submitted to Agent, such Inventory is (a) of good and merchantable
quality, free from known defects, and (b) not excluded as ineligible by virtue
of its failure to satisfy one or more of the criteria (other than
Agent-discretionary criteria) set forth in the definition of Eligible In-Transit
Inventory.

 
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4.28.        Eligible Equipment.

As to each item of Equipment that is identified as Eligible Equipment, such
Equipment is (a) of good and merchantable quality, free from known defects, and
(b) not excluded as ineligible by virtue of its failure to satisfy one or more
of the criteria (other than Agent-discretionary criteria) set forth in the
definition of Eligible Equipment.

4.29.        Eligible Real Property.

As to each parcel of Real Property that is identified as Eligible Real Property,
Borrower has good, sufficient and legal title to such parcel of Real Property,
and such Real Property is not excluded as ineligible by virtue of its failure to
satisfy one or more of the criteria (other than Agent-discretionary criteria)
set forth in the definition of Eligible Real Property.

4.30.        Locations of Inventory and Equipment.

The Inventory and Equipment (other than vehicles or Equipment out for repair and
Inventory and Equipment with an aggregate fair market value of less than
$250,000) of the Loan Parties are not stored with a bailee, warehouseman, or
similar party and are located only at, or in-transit between or to, the
locations identified on Schedule 4.30 (as such Schedule may be updated pursuant
to Section 5.15).

4.31.        Inventory Records.

Each Loan Party keeps correct and accurate records in all material respects
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries' Inventory and the book value thereof.

4.32.        Inactive Subsidiary.

The Inactive Subsidiary does not (i) have any liabilities, (ii) own any assets,
or (iii) engage in any operations or business.

4.33.        Harlan Machinery Company.

Harlan Machinery Company, Inc., a Nevada corporation has been revoked pursuant
to Section 78.175 of the Nevada Revised Statutes and is not in existence.

5.             AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that, until termination of all of the Commitments
and payment in full of the Obligations, the Loan Parties shall and shall cause
each of their Subsidiaries to comply with each of the following:

5.1.           Financial Statements, Reports, Certificates.

Deliver to Agent, with copies to each Lender, each of the financial statements,
reports, and other items set forth on Schedule 5.1 no later than the times
specified therein.  In addition, Borrower agrees that no Subsidiary of a Loan
Party will have a fiscal year different

 
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from that of Borrower.  In addition, Borrower agrees to maintain a system of
accounting that enables Borrower to produce financial statements in accordance
with GAAP.  Each Loan Party shall also (a) keep a reporting system that shows
all additions, sales, claims, returns, and allowances with respect to its and
its Subsidiaries' sales, and (b) maintain its billing systems/practices
substantially as in effect as of the Closing Date and shall only make material
modifications thereto with notice to, and with the consent of, Agent.
 
5.2.          Collateral Reporting.

Provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the reports set forth on Schedule 5.2 at the times specified
therein.  In addition, Borrower agrees to use commercially reasonable efforts in
cooperation with Agent to facilitate and implement a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth on such Schedule.

5.3.          Existence.

Except as otherwise permitted under Section 6.3 or Section 6.4, at all times
maintain and preserve in full force and effect its existence (including being in
good standing in its jurisdiction of organization) and all rights and
franchises, licenses and permits material to its business.

5.4.          Maintenance of Properties.

Maintain and preserve all of its assets that are material and necessary in the
proper conduct of its business in good working order and condition, ordinary
wear, tear, and casualty excepted and Permitted Dispositions excepted, and
comply in all material respects with all leases to which it is a party as lessee
that are material and necessary in the proper conduct of its business, so as to
prevent the loss or forfeiture thereof, unless such provisions are the subject
of a Permitted Protest.

5.5.          Taxes.

Cause all assessments and taxes imposed, levied, or assessed against any Loan
Party or its Subsidiaries, or any of their respective assets or in respect of
any of its income, businesses, or franchises to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that in the case of state assessments and state taxes, the aggregate
liabilities from such state assessments or state taxes would not exceed $250,000
or that the validity of such assessment or tax shall be the subject of a
Permitted Protest and so long as, in the case of an assessment or tax that has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such assessment or tax.  Borrower will and will cause each of its
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of it and them by applicable laws, including those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Agent with proof
reasonably satisfactory to Agent indicating that Borrower and its Subsidiaries
have made such payments or deposits.

 
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5.6.          Insurance.

At Borrower's expense, maintain insurance respecting each of the Loan Parties'
and their Subsidiaries' assets wherever located, covering loss or damage by
fire, theft, explosion, and all other hazards and risks as ordinarily are
insured against by other Persons engaged in the same or similar businesses.
Borrower also shall maintain (with respect to each of the Loan Parties and their
Subsidiaries) business interruption for any location where a material portion of
Borrower's business is conducted, general liability, product liability
insurance, director's and officer's liability insurance, fiduciary liability
insurance, and employment practices liability insurance, as well as insurance
against larceny, embezzlement, and criminal misappropriation, environmental
liability insurance, and if any Real Property is in a flood zone, flood
insurance.  All such policies of insurance shall be with responsible and
reputable insurance companies acceptable to Agent and in such amounts as is
carried generally in accordance with sound business practice by companies in
similar businesses similarly situated and located and in any event in amount,
adequacy and scope reasonably satisfactory to Agent.  All property insurance
policies covering the Collateral are to be made payable to Agent for the benefit
of Agent and the Lenders, as their interests may appear, in case of loss,
pursuant to a standard loss payable endorsement with a standard non contributory
"lender" or "secured party" clause and are to contain such other provisions as
Agent may reasonably require to fully protect the Lenders' interest in the
Collateral and to any payments to be made under such policies.  All certificates
of property and general liability insurance are to be delivered to Agent, with
the loss payable (but only in respect of Collateral) and additional insured
endorsements in favor of Agent and shall provide for not less than 30 days (10
days in the case of non-payment) prior written notice to Agent of the exercise
of any right of cancellation.  If Borrower fails to maintain such insurance,
Agent may arrange for such insurance, but at Borrower's expense and without any
responsibility on Agent's part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of
claims.  Borrower shall give Agent prompt notice of any loss exceeding $250,000
covered by its casualty or business interruption insurance.  Upon the occurrence
and during the continuance of an Event of Default, Agent shall have the sole
right to file claims under any property and general liability insurance policies
in respect of the Collateral, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.

5.7.          Inspection.

Permit Agent and each of its duly authorized representatives or agents to visit
any of its properties and inspect any of its assets or books and records, to
conduct appraisals and valuations, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent may designate and, so long as no Default or Event of
Default exists, with reasonable prior notice to Borrower.

5.8.          Compliance with Laws.

Comply with the requirements of all applicable laws, rules, regulations, and
orders of any Governmental Authority, other than laws, rules, regulations, and
orders the non-

 
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compliance with which, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Change.
 
5.9.          Environmental.

(a)           Keep any property either owned or operated by Borrower or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,

(b)           Comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests,

(c)           Except for matters disclosed on Schedule 4.12, promptly notify
Agent of any release of which Borrower acquires knowledge of a Hazardous
Material in any reportable quantity from or onto property owned or operated by
Borrower or its Subsidiaries and take any Remedial Actions required by
Environmental Laws to abate said release or otherwise to come into compliance,
in all material respects, with applicable Environmental Law, and

(d)           Promptly, but in any event within 5 Business Days of its receipt
thereof, provide Agent with written notice of any of the following:  (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of Borrower or its Subsidiaries, (ii) commencement of any Environmental
Action or written notice that an Environmental Action will be filed against
Borrower or its Subsidiaries that would reasonably be expected to involve
liabilities in excess of $250,000 in any individual case, and (iii) written
notice of a violation, citation, or other administrative order from a
Governmental Authority that would reasonably be expected to involve liabilities
in excess of $250,000 in any individual case.

5.10.        Disclosure Updates.

Promptly and in no event later than 5 Business Days after obtaining knowledge
thereof, notify Agent if any written information, exhibit, or report furnished
to Agent or the Lenders contained, at the time it was furnished, any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made.  The foregoing to the contrary notwithstanding, any
notification pursuant to the foregoing provision will not cure or remedy the
effect of the prior untrue statement of a material fact or omission of any
material fact nor shall any such notification have the effect of amending or
modifying this Agreement or any of the Schedules hereto.

5.11.        Formation of Subsidiaries.

At the time that any Loan Party forms any direct or indirect Subsidiary or
acquires any direct or indirect Subsidiary after the Closing Date, such Loan
Party shall (a) within 15 days of such formation or acquisition (or such later
date as permitted by Agent in its sole discretion) cause any such new Subsidiary
to provide to Agent a joinder to the Guaranty and the Security Agreement,
together with such other security documents (including mortgages with respect to
any Real Property owned in fee of such new Subsidiary with a fair market value
of at least $250,000), as well as appropriate financing statements (and with
respect to all property subject to

 
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a mortgage, fixture filings), all in form and substance reasonably satisfactory
to Agent (including being sufficient to grant Agent a first priority Lien
(subject to Permitted Liens) in and to the assets of such newly formed or
acquired Subsidiary); provided that the Guaranty, the Security Agreement, and
such other security documents shall not be required to be provided to Agent with
respect to any Subsidiary of Borrower that is a CFC if providing such documents
would result in adverse tax consequences or the costs to the Loan Parties of
providing such Guaranty, executing any security documents or perfecting the
security interests created thereby are unreasonably excessive (as determined by
Agent in consultation with Borrower) in relation to the benefits of Agent and
the Lenders of the security or guarantee afforded thereby, (b) within 15 days of
such formation or acquisition (or such later date as permitted by Agent in its
sole discretion) provide to Agent a pledge agreement (or an addendum to the
Security Agreement) and appropriate certificates and powers or financing
statements, pledging all of the direct or beneficial ownership interest in such
new Subsidiary reasonably satisfactory to Agent; provided that only 65% of the
total outstanding voting Stock of any first tier Subsidiary of Borrower that is
a CFC (and none of the Stock of any Subsidiary of such CFC) shall be required to
be pledged if pledging a greater amount would result in adverse tax consequences
or the costs to the Loan Parties of providing such pledge or perfecting the
security interests created thereby are unreasonably excessive (as determined by
Agent in consultation with Borrower) in relation to the benefits of Agent and
the Lenders of the security or guarantee afforded thereby (which pledge, if
reasonably requested by Agent, shall be governed by the laws of the jurisdiction
of such Subsidiary), and (c) within 15 days of such formation or acquisition (or
such later date as permitted by Agent in its sole discretion) provide to Agent
all other documentation, including, if requested, one or more opinions of
counsel reasonably satisfactory to Agent, which in its opinion is appropriate
with respect to the execution and delivery of the applicable documentation
referred to above (including policies of title insurance or other documentation
with respect to all Real Property owned in fee and subject to a mortgage).  Any
document, agreement, or instrument executed or issued pursuant to this Section
5.11 shall be a Loan Document.
 
5.12.        Further Assurances.

At any time upon the reasonable request of Agent, execute or deliver to Agent
any and all financing statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, mortgages, deeds of trust,
opinions of counsel, and all other documents (the "Additional Documents") that
Agent may reasonably request in form and substance reasonably satisfactory to
Agent, to create, perfect, and continue perfected or to better perfect Agent's
Liens in all of the assets of Borrower and its Subsidiaries (whether now owned
or hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Agent in any Real Property acquired by
Borrower or its Subsidiaries after the Closing Date with a fair market value in
excess of $250,000, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents; provided that the
foregoing shall not apply to any Subsidiary of Borrower that is a CFC if
providing such documents would result in adverse tax consequences or the costs
to the Loan Parties of providing such documents are unreasonably excessive (as
determined by Agent in consultation with Borrower) in relation to the benefits
of Agent and the Lenders of the benefits afforded thereby.  To the maximum
extent permitted by applicable law, if Borrower refuses or fails to execute or
deliver any reasonably requested Additional Documents within a reasonable period
of time following the request to do so, Borrower hereby authorizes Agent to
execute any such Additional

 
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Documents in the applicable Loan Party's or its Subsidiary's name, as
applicable, and authorizes Agent to file such executed Additional Documents in
any appropriate filing office.  In furtherance and not in limitation of the
foregoing, each Loan Party shall take such actions as Agent may reasonably
request from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Borrower and
its Subsidiaries and all of the outstanding capital Stock of Borrower's
Subsidiaries (subject to exceptions and limitations contained in the Loan
Documents with respect to CFCs).
 
5.13.        Lender Meetings.

Within 90 days after the close of each fiscal year of Borrower (or such later
date as permitted by Agent), at the request of Agent or of the Required Lenders
and upon reasonable prior notice, hold a meeting (at a mutually agreeable
location and time or, at the option of Agent, by conference call) with all
Lenders who choose to attend such meeting at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial condition of
Borrower and its Subsidiaries and the projections presented for the current
fiscal year of Borrower.

5.14.        Material Contracts.

Contemporaneously with the delivery of each Compliance Certificate pursuant to
Section 5.1, provide Agent with copies of each Material Contract entered into
since the delivery of the previous Compliance Certificate.

5.15.        Location of Inventory and Equipment.

Keep each Loan Parties' and its Subsidiaries' Inventory and Equipment (other
than (i) vehicles and Equipment out for repair, (ii) Inventory in transit and
(iii) other Inventory and Equipment with a fair market value in the aggregate
not in excess of $500,000) only at the locations identified on Schedule 4.30 and
their chief executive offices only at the locations identified on Schedule
4.6(b); provided, however, that Borrower may amend Schedule 4.30 or Schedule
4.6(b) so long as such amendment occurs by written notice to Agent not less than
10 days prior to the date on which such Inventory or Equipment is moved to such
new location or such chief executive office is relocated and so long as such new
location is within the continental United States.

5.16.        Assignable Material Contracts.

Use commercially reasonable efforts to ensure that any Material Contract entered
into after the Closing Date by Borrower or one of its Subsidiaries that
generates or, by its terms, will generate revenue, permits the assignment of
such agreement (and all rights of Borrower or such Subsidiary, as applicable,
thereunder) to Borrower's or such Subsidiary's lenders or an agent for any
lenders (and any transferees of such lenders or such agent, as applicable).

 
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6.             NEGATIVE COVENANTS.

Borrower covenants and agrees that, until termination of all of the Commitments
and payment in full of the Obligations, the Loan Parties will not and will not
permit any of their Subsidiaries to do any of the following:

6.1.          Indebtedness.

Create, incur, assume, suffer to exist, guarantee, or otherwise become or
remain, directly or indirectly, liable with respect to any Indebtedness, except
for Permitted Indebtedness.

6.2.           Liens.

Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on
or with respect to any of its assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except for Permitted
Liens.

6.3.           Restrictions on Fundamental Changes.

(a)           Other than in order to consummate a Permitted Acquisition, enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock, except for any merger between Borrower and its
Subsidiaries so long as Borrower is the surviving entity of any such merger,

(b)           Liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), except for (i) the liquidation or dissolution of non-operating
Subsidiaries of Borrower with nominal assets and nominal liabilities, (ii) the
liquidation or dissolution of a Loan Party (other than Borrower) or any of its
wholly-owned Subsidiaries so long as all of the assets (including any interest
in any Stock) of such liquidating or dissolving Loan Party or Subsidiary are
transferred to a Loan Party that is not liquidating or dissolving, or (iii) the
liquidation or dissolution of a Subsidiary of Borrower that is not a Loan Party
(other than any such Subsidiary the Stock of which (or any portion thereof) is
subject to a Lien in favor of Agent) so long as all of the assets of such
liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrower
that is not liquidating or dissolving, or

(c)           With respect to the Loan Parties, suspend or go out of a
substantial portion of its or their business, except as permitted pursuant to
clauses (a) or (b) above or in connection with the transactions permitted
pursuant to Section 6.4.

6.4.          Disposal of Assets.

Other than Permitted Dispositions or transactions expressly permitted by
Sections 6.3 or 6.11, convey, sell, lease, license, assign, transfer, or
otherwise dispose of (or (other than in connection with the exercise by Borrower
of its option to terminate this Agreement and terminate the Commitments by
repaying to Agent all of the Obligations in full in accordance with Section 3.5)
enter into an agreement to convey, sell, lease, license, assign, transfer, or
otherwise dispose of) any of Borrower's or its Subsidiaries assets.

 
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6.5.          Change Name.

Change Borrower's or any of its Subsidiaries' name, organizational
identification number, state of organization or organizational identity;
provided, however, that Borrower or any of its Subsidiaries may change its name
upon at least 10 days prior written notice to Agent of such change.

6.6.          Nature of Business.

Make any change in the nature of its or their business as described in Schedule
6.6 or acquire any properties or assets that are not reasonably related to the
conduct of such business activities; provided, however, that the foregoing shall
not prevent Borrower and its Subsidiaries from engaging in any business that is
reasonably related or ancillary to its or their business or acquiring assets
that are reasonably related or ancillary to its or their business, allowing for
reasonable expansion and diversification of products and lines of business.

6.7.          Prepayments and Amendments.

(a)           Except in connection with Refinancing Indebtedness permitted by
Section 6.1,

(i)           optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Borrower or its Subsidiaries, other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Subordinated Debt Redemptions
if such payment or redemption, as applicable, is permitted at such time under
the Subordination Agreement), and (C) Permitted Intercompany Advances, or

(ii)           make any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the Obligations if such
payment is not permitted at such time under the subordination terms and
conditions, or

(b)           Directly or indirectly, amend, modify, or change any of the terms
or provisions of

(i)           any agreement, instrument, document, indenture, or other writing
evidencing or concerning Permitted Indebtedness other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Intercompany Advances, and
(C) Indebtedness permitted under clauses (c), (h), (j) and (k) of the definition
of Permitted Indebtedness, or

(ii)           the Governing Documents of any Loan Party or any of its
Subsidiaries if the effect thereof, either individually or in the aggregate,
would reasonably be expected to be materially adverse to the interests of the
Lenders.

6.8.          Change of Control.

Cause, permit, or suffer, directly or indirectly, any Change of Control.

 
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6.9.          Restricted Junior Payments.

Make any Restricted Junior Payment; provided, however, that, so long as it is
permitted by law, and so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom,

(a)           Borrower may make distributions to current or former employees,
officers, or directors of Borrower (or any spouses, ex-spouses, trusts or
estates of any of the foregoing) on account of redemptions of Stock of Borrower
held by such Persons, provided, however, that the aggregate amount of such
redemptions made by Borrower during the term of this Agreement plus the amount
of Indebtedness outstanding under clause (l) of the definition of Permitted
Indebtedness, does not exceed $500,000 in the aggregate,

(b)           Borrower may make distributions to current or former employees,
officers, or directors of Borrower (or any spouses, ex-spouses, or estates of
any of the foregoing), solely in the form of forgiveness of Indebtedness of such
Persons owing to Borrower on account of repurchases of the Stock of Borrower
held by such Persons; provided that such Indebtedness was incurred by such
Persons solely to acquire Stock of Borrower,

(c)           any (i) Loan Party (other than Borrower) may make Restricted
Junior Payments to another Loan Party, and (ii) any Subsidiary that is not a
Loan Party may make Restricted Junior Payments to any Loan Party or to any other
Subsidiary that is not a Loan Party,

(d)           Borrower may make Restricted Junior Payments consisting of noncash
repurchases of Stock deemed to occur upon exercise of Stock options or similar
equity incentive awards if such repurchased Stock represents a portion of the
exercise price of such Stock options or similar equity incentive awards,

(e)           Borrower may make Restricted Junior Payments in lieu of the
issuance of fractional shares, upon the exercise of warrants or upon the
conversion or exchange of Stock, and

(f)            to the extent such action constitutes a Restricted Junior
Payment, Borrower and its Subsidiaries may enter into and consummate
transactions expressly permitted by Section 6.3, 6.4, and 6.11.

6.10.        Accounting Methods.

Modify or change its fiscal year or its method of accounting (other than as may
be required to conform to GAAP).

6.11.        Investments; Controlled Investments.

(a)           Except for Permitted Investments, directly or indirectly, make or
acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment.

(b)           Other than (i) amounts deposited into Deposit Accounts specially
and exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for Borrower's or its Subsidiaries' employees, (ii) an
aggregate amount of not more than

 
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$250,000 (calculated at current exchange rates) at any one time, in the case of
Subsidiaries of Borrower that are CFCs), and (iii) an aggregate amount of not
more than $100,000 at any one time, in the case of Borrower and its Subsidiaries
(other than those Subsidiaries that are CFCs), make, acquire, or permit to exist
Permitted Investments consisting of cash, Cash Equivalents, or amounts credited
to Deposit Accounts or Securities Accounts unless Borrower or its Subsidiary, as
applicable, and the applicable bank or securities intermediary have entered into
Control Agreements with Agent governing such Permitted Investments in order to
perfect (and further establish) Agent's Liens in such Permitted Investments.
Except as provided in Section 6.11(b)(i) and (ii), Borrower shall not and shall
not permit its Subsidiaries to establish or maintain any Deposit Account or
Securities Account unless Agent shall have received a Control Agreement in
respect of such Deposit Account or Securities Account.
 
6.12.        Transactions with Affiliates.

Directly or indirectly enter into any transaction with any Affiliate of Borrower
or any of its Subsidiaries except for:

(a)           transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one
hand, and any Affiliate of Borrower or its Subsidiaries, on the other hand, so
long as such transactions (i) are fully disclosed to Agent prior to the
consummation thereof, if they involve one or more payments by Borrower or its
Subsidiaries in excess of $500,000 for any single transaction or series of
related transactions, and (ii) are no less favorable, taken as a whole, to
Borrower or its Subsidiaries, as applicable, than would be obtained in an arm's
length transaction with a non-Affiliate,

(b)           so long as it has been approved by Borrower's or its applicable
Subsidiary's board of directors (or comparable governing body) in accordance
with, and to the extent such approval is required by, applicable law, any
indemnity provided for the benefit of officers and directors (or comparable
managers) of Borrower or its applicable Subsidiary,

(c)           so long as it has been approved by Borrower's or its applicable
Subsidiary's board of directors (or comparable governing body) in accordance
with, and to the extent such approval is required by, applicable law, the
payment of reasonable compensation, severance, or employee benefit arrangements
to employees, officers, and outside directors of Borrower and its Subsidiaries
in the ordinary course of business and consistent with industry practice,

(d)           the issuance of the Subordinated Lender Warrants, the issuance of
Subordinated Debt, or the issuance of Stock by Borrower to the Subordinated
Lenders in connection with the exercise of the Subordinated Lender Warrants or
otherwise (other than Prohibited Preferred Stock) and the other transactions
contemplated by the Subordinated Debt Documents, and

(e)           transactions permitted by Section 6.3 or Section 6.9, or any
Permitted Intercompany Advance.

 
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Notwithstanding anything contained in the Loan Documents to the contrary, no
Loan Party or any of its Subsidiaries shall make an Investment in, sell, lease,
license, assign, contribute or otherwise transfer any assets to, make any
distributions or payments to, or otherwise engage in, or enter into, any
transaction with, any Inactive Subsidiary.

6.13.        Use of Proceeds.

Use the proceeds of any loan made hereunder for any purpose other than (a) on
the Closing Date, (i) to repay, in full, the outstanding principal, accrued
interest, and accrued fees and expenses owing under or in connection with the
Existing Credit Facility, and (ii) to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, the other Loan Documents,
and the transactions contemplated hereby and thereby, and (b) thereafter,
consistent with the terms and conditions hereof, for their lawful and permitted
purposes (including that no part of the proceeds of the loans made to Borrower
will be used to purchase or carry any such Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock or for
any purpose that violates the provisions of Regulation T, U or X of the Board of
Governors of the United States Federal Reserve).

6.14.        Limitation on Issuance of Stock.

Except for the issuance or sale of common stock or Permitted Preferred Stock by
Borrower, issue or sell or enter into any agreement or arrangement for the
issuance and sale of any of its Stock.

6.15.       Consignments.

Consign any of its or their Inventory with a value in excess of $250,000 in the
aggregate or sell any of its or their Inventory with a value in excess of
$250,000 in the aggregate on bill and hold, sale or return, sale on approval, or
other conditional terms of sale.

6.16.       Inactive Subsidiary.

Permit the Inactive Subsidiary to (i) incur any liabilities, (ii) own or acquire
any asset or (iii) engage in any operations or business.

7.             FINANCIAL COVENANTS.

Borrower covenants and agrees that, until termination of all of the Commitments
and payment in full of the Obligations, Borrower will:

(a)           Excess Availability.  Maintain Excess Availability plus Qualified
Cash at all times of at least $2,000,000.

(b)           Fixed Charge Coverage Ratio.  Have a Fixed Charge Coverage Ratio,
measured on a month-end basis (commencing with the fiscal month ending April 24,
2011), of at least 1.25:1.00 for the 12 month period ending on such month-end.

(c)           Capital Expenditures.  Make Capital Expenditures (excluding the
amount, if any, of Capital Expenditures made with Net Cash Proceeds reinvested
pursuant to the

 
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proviso in Section 2.4(e)(ii)) in any fiscal year in an amount less than or
equal to, but not greater than, the amount set forth in the following table for
the applicable period:
 
Fiscal Year 2011
   
Fiscal Year 2012
   
Fiscal Year 2013
   
Fiscal Year 2014
   
Fiscal Year 2015
  $ 4,000,000     $ 4,000,000     $ 7,000,000     $ 7,000,000     $ 7,000,000  

8.             EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an "Event of Default") under this Agreement:

8.1.           If Borrower fails to pay when due and payable, or when declared
due and payable, (a) all or any portion of the Obligations consisting of
interest, fees, or charges due the Lender Group, reimbursement of Lender Group
Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of 3 Business Days, or
(b) all or any portion of the principal of the Obligations;

8.2.           If any Loan Party or any of its Subsidiaries:

(a)           fails to perform or observe any covenant or other agreement
contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if Borrower is not
in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if
Borrower refuses to allow Agent or its representatives or agents to visit
Borrower's properties, inspect its assets or books or records, examine and make
copies of its books and records, or discuss Borrower's affairs, finances, and
accounts with officers and employees of Borrower), 5.10, 5.11, 5.13, 5.14, or
5.15 of this Agreement, (ii) Sections 6.1 through 6.16 of this Agreement,
(iii) Section 7 of this Agreement, or (iv) Section 6 of the Security Agreement;

(b)           fails to perform or observe any covenant or other agreement
contained in any of Sections 5.3 (other than if Borrower is not in good standing
in its jurisdiction of organization), 5.4, 5.5, 5.8, 5.12 and 5.16 of this
Agreement and such failure continues for a period of 10 days after the earlier
of (i) the date on which such failure shall first become known to any officer of
Borrower or (ii) the date on which written notice thereof is given to Borrower
by Agent; or

(c)           fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 8 (in which event such other provision of this Section
8 shall govern), and such failure continues for a period of 30 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of Borrower or (ii) the date on which written notice thereof is given to
Borrower by Agent;

8.3.           If one or more judgments, orders, or awards for the payment of
money involving an aggregate amount of $500,000, or more (except to the extent
fully covered (other than to the

 
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extent of customary deductibles) by insurance pursuant to which the insurer has
not denied coverage) is entered or filed against a Loan Party or any of its
Subsidiaries, or with respect to any of their respective assets, and either
(a) there is a period of 30 consecutive days at any time after the entry of any
such judgment, order, or award during which (1) the same is not discharged,
satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement
thereof is not in effect, or (b) enforcement proceedings are commenced upon such
judgment, order, or award;
 
8.4.           If an Insolvency Proceeding is commenced by a Loan Party or any
of its Subsidiaries;

8.5.           If an Insolvency Proceeding is commenced against a Loan Party or
any of its Subsidiaries and any of the following events occur:  (a) such Loan
Party or such Subsidiary consents to the institution of such Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 60 calendar days of the date of the filing thereof,
(d) an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party or its Subsidiary, or (e) an order
for relief shall have been issued or entered therein;

8.6.           If a Loan Party or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of the business affairs of Borrower and its
Subsidiaries, taken as a whole;

8.7.           If there is (a) a default under the Subordinated Debt Documents,
or (b) a default in one or more agreements to which a Loan Party or any of its
Subsidiaries is a party with one or more third Persons relative to a Loan
Party's or any of its Subsidiaries' Indebtedness involving an aggregate amount
of $500,000 or more, and such default (i) occurs at the final maturity of the
obligations thereunder, or (ii) results in a right by such third Person,
irrespective of whether exercised, to accelerate the maturity of such Loan
Party's or its Subsidiary's obligations thereunder;

8.8.           If any warranty, representation, certificate, statement, or
Record made herein or in any other Loan Document or delivered in writing to
Agent or any Lender in connection with this Agreement or any other Loan Document
proves to be untrue in any material respect (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) as of the
date of issuance or making or deemed making thereof;

8.9.           If the obligation of any Guarantor under the Guaranty is limited
or terminated by operation of law or by such Guarantor (other than in accordance
with the terms of this Agreement);

8.10.         If the Security Agreement or any other Loan Document that purports
to create a Lien, shall, for any reason, fail or cease to create a valid and
perfected (to the extent perfection is required by this Agreement or any other
Loan Document) and, except to the extent of Permitted Liens which are permitted
purchase money Liens or the interests of lessors under Capital Leases, first
priority Lien on the Collateral covered thereby, except (a) as a result of a
disposition of the

 
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applicable Collateral in a transaction permitted under this Agreement, or (b) as
the result of an action or failure to act on the part of Agent; or
 
8.11.         The validity or enforceability of any Loan Document shall at any
time for any reason (other than solely as the result of an action or failure to
act on the part of Agent) be declared to be null and void, or a proceeding shall
be commenced by a Loan Party or its Subsidiaries, or by any Governmental
Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to
establish the invalidity or unenforceability thereof, or a Loan Party or its
Subsidiaries shall deny that such Loan Party or its Subsidiaries has any
liability or obligation purported to be created under any Loan Document.

9.             RIGHTS AND REMEDIES.

9.1.           Rights and Remedies.

Upon the occurrence and during the continuation of an Event of Default, Agent
may, and, at the instruction of the Required Lenders, shall (in each case under
clauses (a) or (b) by written notice to Borrower), in addition to any other
rights or remedies provided for hereunder or under any other Loan Document or by
applicable law, do any one or more of the following:

(a)           declare the Obligations (other than the Bank Product Obligations),
whether evidenced by this Agreement or by any of the other Loan Documents
immediately due and payable, whereupon the same shall become and be immediately
due and payable and Borrower shall be obligated to repay all of such Obligations
in full, without presentment, demand, protest, or further notice or other
requirements of any kind, all of which are hereby expressly waived by Borrower;

(b)           declare the Commitments terminated, whereupon the Commitments
shall immediately be terminated together with (i) any obligation of any Lender
hereunder to make Advances, (ii) the obligation of the Swing Lender to make
Swing Loans, and (iii) the obligation of the Issuing Lender to issue Letters of
Credit; and

(c)           exercise all other rights and remedies available to Agent or the
Lenders under the Loan Documents or applicable law.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of all accrued
and unpaid interest thereon and all fees and all other amounts owing under this
Agreement or under any of the other Loan Documents, shall automatically and
immediately become due and payable and Borrower shall be obligated to repay all
of such Obligations in full, without presentment, demand, protest, or notice of
any kind, all of which are expressly waived by Borrower.

 
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9.2.           Remedies Cumulative.

The rights and remedies of the Lender Group under this Agreement, the other Loan
Documents, and all other agreements shall be cumulative.  The Lender Group shall
have all other rights and remedies not inconsistent herewith as provided under
the Code, by law, or in equity.  No exercise by the Lender Group of one right or
remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver.  No delay by the Lender
Group shall constitute a waiver, election, or acquiescence by it.

10.           WAIVERS; INDEMNIFICATION.

10.1.        Demand; Protest; etc.

Borrower waives demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of documents, instruments, chattel
paper, and guarantees at any time held by the Lender Group on which Borrower may
in any way be liable.

10.2.        The Lender Group's Liability for Collateral.

Borrower hereby agrees that:  (a) so long as Agent complies with its
obligations, if any, under the Code, the Lender Group shall not in any way or
manner be liable or responsible for:  (i) the safekeeping of the Collateral,
(ii) any loss or damage thereto occurring or arising in any manner or fashion
from any cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other
Person, and (b) all risk of loss, damage, or destruction of the Collateral shall
be borne by Borrower.

10.3.        Indemnification.

Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the
Lender-Related Persons, and each Participant (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, liabilities,
fines, costs, penalties, and damages, and all reasonable and documented
out-of-pocket fees and disbursements of attorneys, experts, or consultants and
all other reasonable and documented out-of-pocket costs and expenses actually
incurred in connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution and
delivery (provided that Borrower shall not be liable for costs and expenses
(including attorneys fees) of any Lender (other than WFCF) incurred in advising,
structuring, drafting, reviewing, administering or syndicating the Loan
Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Borrower's and its Subsidiaries' compliance with the terms of the
Loan Documents (provided, however, that the indemnification in this clause (a)
shall not extend to (i) disputes solely between or among the Lenders,
(ii) disputes solely between or among the Lenders and their respective
Affiliates; it being understood and agreed that the indemnification in this
clause (a) shall extend to Agent (but not the Lenders) relative to disputes
between or

 
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among Agent on the one hand, and one or more Lenders, or one or more of their
Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to
Taxes, which shall be governed by Section 16), (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto, and (c) in
connection with or arising out of any presence or release of Hazardous Materials
at, on, under, to or from any assets or properties owned, leased or operated by
Borrower or any of its Subsidiaries or any Environmental Actions, Environmental
Liabilities or Remedial Actions related in any way to any such assets or
properties of Borrower or any of its Subsidiaries (each and all of the
foregoing, the "Indemnified Liabilities").  The foregoing to the contrary
notwithstanding, Borrower shall have no obligation to any Indemnified Person
under this Section 10.3 with respect to any Indemnified Liability that a court
of competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of such Indemnified Person or its officers,
directors, employees, attorneys, or agents.  This provision shall survive the
termination of this Agreement and the repayment of the Obligations.  If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY
TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF
SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
 
11.           NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile.  In the case of notices or
demands to Borrower or Agent, as the case may be, they shall be sent to the
respective address set forth below:

 
If to Borrower:
PATRICK INDUSTRIES, INC.

107 West Franklin Street
Elkhart, Indiana  46515
Attn:  Andy Nemeth
Fax No. (574) 522-5213

 
with copies to:
MCDERMOTT WILL & EMERY LLP

227 West Monroe Street
Chicago, Illinois  60606
Attn:  John Hammond, Esq.
Fax No. (312) 984 7700

 
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If to Agent:
WELLS FARGO CAPITAL FINANCE, LLC

150 South Wacker Drive, Suite 2200
MAC N2814-220
Chicago, Illinois  60606-4204
Attn:  Laura Dixon
Fax No. (312) 332-0424

 
with copies to:
GOLDBERG KOHN LTD.

55 East Monroe Street, Suite 3300
Chicago, Illinois  60603
Attn:  David L. Dranoff, Esq.
Fax No. (312) 332-2196

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received,
(b) notices by facsimile shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient) and (c) notices by electronic mail shall be deemed received
upon the sender's receipt of an acknowledgment from the intended recipient (such
as by the "return receipt requested" function, as available, return email or
other written acknowledgment).

12.           CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a)           THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS.

(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND.  BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT

 
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EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
12(b).
 
(c)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND
EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

(d)           BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS  LOCATED IN THE COUNTY OF
COOK AND THE STATE OF ILLINOIS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

13.           ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1.        Assignments and Participations.

(a)           With the prior written consent of Borrower, which consent of
Borrower shall not be unreasonably withheld, delayed or conditioned, and shall
not be required (1) if an Event of Default has occurred and is continuing, or
(2) in connection with an assignment to a Person that is a Lender or an
Affiliate (other than individuals) of a Lender; provided, that Borrower shall be
deemed to have consented to a proposed assignment unless it objects thereto by
written notice to Agent within 5 Business Days after having received notice
thereof, and with the prior written consent of Agent, which consent of Agent
shall not be unreasonably withheld, delayed or conditioned, and shall not be
required in connection with an assignment to a Person that is a Lender or an
Affiliate (other than individuals) of a Lender, any Lender may assign and
delegate to one or more assignees so long as such prospective assignee is an
Eligible Transferee (each, an "Assignee"; provided, however, that no Loan Party
or Affiliate of a Loan Party shall be permitted to become an Assignee) all or
any portion of the Obligations, the Commitments and 

 
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the other rights and obligations of such Lender hereunder and under the other
Loan Documents, in a minimum amount (unless waived by Agent) of $5,000,000
(except such minimum amount shall not apply to (x) an assignment or delegation
by any Lender to any other Lender or an Affiliate of any Lender or (y) a group
of new Lenders, each of which is an Affiliate of each other or a Related Fund of
such new Lender to the extent that the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000); provided, however, that Borrower and
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Borrower and Agent
by such Lender and the Assignee, (ii) such Lender and its Assignee have
delivered to Borrower and Agent an Assignment and Acceptance and Agent has
notified the assigning Lender of its receipt thereof in accordance with Section
13.1(b), and (iii) unless waived by Agent, the assigning Lender or Assignee has
paid to Agent for Agent's separate account a processing fee in the amount of
$5,000.
 
(b)           From and after the date that Agent notifies the assigning Lender
(with a copy to Borrower) that it has received an executed Assignment and
Acceptance and, if applicable, payment of the required processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall be a "Lender" and shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 10.3) and be released from any future
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto); provided, however, that nothing
contained herein shall release any assigning Lender from obligations that
survive the termination of this Agreement, including such assigning Lender's
obligations under Section 15 and Section 17.9(a).

(c)           By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto,
(iii) such Assignee confirms that it has received a copy of this Agreement,
together with such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such Assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement,
(v) such

 
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Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
 
(d)           Immediately upon Agent's receipt of the required processing fee,
if applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom.  The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.

(e)           Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a "Participant") participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the "Originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the Originating
Lender shall remain a "Lender" for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, and (v) all amounts payable by Borrower
hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement.  The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrower, the Collections of Borrower or its Subsidiaries, the
Collateral, or otherwise in respect

 
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of the Obligations.  No Participant shall have the right to participate directly
in the making of decisions by the Lenders among themselves.
 
(f)           In connection with any such assignment or participation or
proposed assignment or participation or any grant of a security interest in, or
pledge of, its rights under and interest in this Agreement, a Lender may,
subject to the provisions of Section 17.9,  disclose all documents and
information which it now or hereafter may have relating to Borrower and its
Subsidiaries and their respective businesses.

(g)           Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

(h)           Agent (as a non-fiduciary agent on behalf of Borrower) shall
maintain, or cause to be maintained, a register (the "Register") on which it
enters the name and address of each Lender as the registered owner of the
Revolver Commitment (and the principal amount thereof and stated interest
thereon) held by such Lender (each, a "Registered Loan").  Other than in
connection with an assignment by a Lender of all or any portion of its portion
of the Revolver Commitment to an Affiliate of such Lender or a Related Fund of
such Lender (i) a Registered Loan (and the registered note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration of
such assignment or sale on the Register (and each registered note shall
expressly so provide) and (ii) any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s).  Prior to the registration of assignment or sale
of any Registered Loan (and the registered note, if any evidencing the same),
Borrower shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.  In the case of any assignment by a
Lender of all or any portion of its Revolver Commitment to an Affiliate of such
Lender or a Related Fund of such Lender, and which assignment is not recorded in
the Register, the assigning Lender, on behalf of Borrower, shall maintain a
register comparable to the Register.

(i)           In the event that a Lender sells participations in the Registered
Loan, such Lender, as a non-fiduciary agent on behalf of Borrower, shall
maintain (or cause to be maintained) a register on which it enters the name of
all participants in the Registered Loans held by it (and the principal amount
(and stated interest thereon) of the portion of such Registered Loans that is
subject to such participations) (the "Participant Register").  A Registered Loan
(and the Registered Note, if any, evidencing the same) may be participated in
whole or in part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide).  Any
participation of such Registered Loan (and the registered note, if

 
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any, evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
 
(j)           Agent shall make a copy of the Register (and each Lender shall
make a copy of its Participant Register in the extent it has one) available for
review by Borrower from time to time as Borrower may reasonably request.

13.2.        Successors.

This Agreement shall bind and inure to the benefit of the respective successors
and assigns of each of the parties; provided, however, that Borrower may not
assign this Agreement or any rights or duties hereunder without the Lenders'
prior written consent and any prohibited assignment shall be absolutely void ab
initio.  No consent to assignment by the Lenders shall release Borrower from its
Obligations.  A Lender may assign this Agreement and the other Loan Documents
and its rights and duties hereunder and thereunder pursuant to Section 13.1 and,
except as expressly required pursuant to Section 13.1, no consent or approval by
Borrower is required in connection with any such assignment.

14.           AMENDMENTS; WAIVERS.

14.1.        Amendments and Waivers.

(a)           No amendment, waiver or other modification of any provision of
this Agreement or any other Loan Document (other than Bank Product Agreements or
the Fee Letter), and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and the Loan Parties that are party thereto and then any such waiver or
consent shall be effective, but only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
directly affected thereby and all of the Loan Parties that are party thereto, do
any of the following:

(i)            increase the amount of or extend the expiration date of any
Commitment of any Lender or amend, modify, or eliminate the last sentence of
Section 2.4(c),

(ii)           postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

(iii)           reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except in connection with the waiver
of applicability of Section 2.6(c) (which waiver shall be effective with the
written consent of the Required Lenders),

(iv)           amend, modify, or eliminate this Section or any provision of this
Agreement providing for consent or other action by all Lenders,

(v)           amend, modify, or eliminate Section 15.11,

 
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(vi)           other than as permitted by Section 15.11, release Agent's Lien in
and to all or substantially all of the Collateral,

(vii)         amend, modify, or eliminate the definition of "Required Lenders"
or "Pro Rata Share",

(viii)        contractually subordinate any of Agent's Liens other than in
respect of a Permitted Lien which is a purchase money Lien or the interests of
lessors under Capital Leases securing Permitted Purchase Money Indebtedness,

(ix)           other than in connection with a merger, liquidation, dissolution
or sale of such Person expressly permitted by the terms hereof or the other Loan
Documents, release Borrower or any Guarantor from any obligation for the payment
of money or consent to the assignment or transfer by Borrower or any Guarantor
of any of its rights or duties under this Agreement or the other Loan Documents,

(x)            amend, modify, or eliminate any of the provisions of Section
2.4(b)(i) or (ii),

(xi)           amend, modify, or eliminate any of the provisions of Section
13.1(a) to permit a Loan Party or an Affiliate of a Loan Party to be permitted
to become an Assignee, or

(xii)          amend, modify, or eliminate the definition of Borrowing Base or
any of the defined terms (including the definitions of Eligible Accounts,
Eligible Inventory, Eligible In-Transit Inventory, Eligible Real Property and
Eligible Equipment) that are used in such definition to the extent that any such
change results in more credit being made available to Borrower based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount.

(b)           No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive (i) the definition of, or any of the terms or provisions
of, the Fee Letter, without the written consent of Agent and Borrower (and shall
not require the written consent of any of the Lenders), and (ii) any provision
of Section 15 pertaining to Agent, or any other rights or duties of Agent under
this Agreement or the other Loan Documents, without the written consent of
Agent, Borrower, and the Required Lenders,

(c)           No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Issuing Lender, or any other rights or duties of Issuing
Lender under this Agreement or the other Loan Documents, without the written
consent of Issuing Lender, Agent, Borrower, and the Required Lenders,

(d)           No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Swing Lender, or any other rights or duties of Swing
Lender under this Agreement or the other Loan Documents, without the written
consent of Swing Lender, Agent, Borrower, and the Required Lenders,

 
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(e)           Anything in this Section 14.1 to the contrary notwithstanding,
(i) any amendment, modification, elimination, waiver, consent, termination, or
release of, or with respect to, any provision of this Agreement or any other
Loan Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Borrower,
shall not require consent by or the agreement of any Loan Party, and (ii) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender.

14.2.       Replacement of Certain Lenders.

(a)           If (i) any action to be taken by the Lender Group or Agent
hereunder requires the consent, authorization, or agreement of all Lenders or
all Lenders affected thereby and if such action has received the consent,
authorization, or agreement of the Required Lenders but not of all Lenders or
all Lenders affected thereby, or (ii) any Lender makes a claim for compensation
under Section 16, then Borrower or Agent, upon at least 5 Business Days prior
irrevocable written notice, may permanently replace any Lender that failed to
give its consent, authorization, or agreement (a "Holdout Lender") or any Lender
that made a claim for compensation (a "Tax Lender") with one or more Replacement
Lenders, and the Holdout Lender or Tax Lender, as applicable, shall have no
right to refuse to be replaced hereunder.  Such notice to replace the Holdout
Lender or Tax Lender, as applicable, shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.

(b)           Prior to the effective date of such replacement, the Holdout
Lender or Tax Lender, as applicable, and each Replacement Lender shall execute
and deliver an Assignment and Acceptance, subject only to the Holdout Lender or
Tax Lender, as applicable, being repaid in full its share of the outstanding
Obligations (without any premium or penalty of any kind whatsoever, but
including (i) all interest, fees and other amounts that may be due in payable in
respect thereof, and (ii) an assumption of its Pro Rata Share of participations
in the Letters of Credit).  If the Holdout Lender or Tax Lender, as applicable,
shall refuse or fail to execute and deliver any such Assignment and Acceptance
prior to the effective date of such replacement, Agent may, but shall not be
required to, execute and deliver such Assignment and Acceptance in the name or
and on behalf of the Holdout Lender or Tax Lender, as applicable, and
irrespective of whether Agent executes and delivers such Assignment and
Acceptance, the Holdout Lender or Tax Lender, as applicable, shall be deemed to
have executed and delivered such Assignment and Acceptance.  The replacement of
any Holdout Lender or Tax Lender, as applicable, shall be made in accordance
with the terms of Section 13.1.  Until such time as one or more Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender or Tax Lender, as applicable,
hereunder and under the other Loan Documents, the Holdout Lender or Tax Lender,
as applicable, shall remain obligated to make the Holdout Lender's or Tax
Lender's, as applicable, Pro Rata Share of Advances and to purchase a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of such Letters of Credit.

 
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14.3.        No Waivers; Cumulative Remedies.

No failure by Agent or any Lender to exercise any right, remedy, or option under
this Agreement or any other Loan Document, or delay by Agent or any Lender in
exercising the same, will operate as a waiver thereof.  No waiver by Agent or
any Lender will be effective unless it is in writing, and then only to the
extent specifically stated.  No waiver by Agent or any Lender on any occasion
shall affect or diminish Agent's and each Lender's rights thereafter to require
strict performance by Borrower of any provision of this Agreement.  Agent's and
each Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.

15.           AGENT; THE LENDER GROUP.

15.1.        Appointment and Authorization of Agent.

Each Lender hereby designates and appoints WFCF as its agent under this
Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to designate, appoint, and authorize) Agent to execute
and deliver each of the other Loan Documents on its behalf and to take such
other action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.  Agent
agrees to act as agent for and on behalf of the Lenders (and the Bank Product
Providers) on the conditions contained in this Section 15.  Any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein or in the other Loan Documents, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender (or Bank
Product Provider), and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against Agent.  Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement or
the other Loan Documents with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only a representative
relationship between independent contracting parties.  Each Lender hereby
further authorizes (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to authorize) Agent to act as the secured party
under each of the Loan Documents that create a Lien on any item of
Collateral.  Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents.  Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect:  (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Borrower and its Subsidiaries, and related matters,
(b) execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices

 
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and other written agreements with respect to the Loan Documents, (c) make
Advances, for itself or on behalf of Lenders, as provided in the Loan Documents,
(d) exclusively receive, apply, and distribute the Collections of Borrower and
its Subsidiaries as provided in the Loan Documents, (e) open and maintain such
bank accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of Borrower and its
Subsidiaries, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Borrower or its Subsidiaries, the
Obligations, the Collateral, the Collections of Borrower and its Subsidiaries,
or otherwise related to any of same as provided in the Loan Documents, and
(g) incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.
 
15.2.        Delegation of Duties.

Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  Agent shall not be responsible for the negligence or misconduct of any
agent or attorney in fact that it selects as long as such selection was made
without gross negligence or willful misconduct.

15.3.        Liability of Agent.

None of the Agent-Related Persons shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (b) be responsible in any manner
to any of the Lenders (or Bank Product Providers) for any recital, statement,
representation or warranty made by Borrower or any of its Subsidiaries or
Affiliates, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of Borrower or its Subsidiaries or
any other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Agent-Related Person shall be under any obligation to any
Lenders (or Bank Product Providers) to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the books and
records or properties of Borrower or its Subsidiaries.

15.4.        Reliance by Agent.

Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, telefacsimile or other electronic method of transmission, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrower or counsel to any Lender), independent accountants and other
experts selected by Agent.  Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or

 
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concurrence of the Lenders as it deems appropriate and until such instructions
are received, Agent shall act, or refrain from acting, as it deems
advisable.  If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product
Providers) against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.  Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders (and Bank Product
Providers).
 
15.5.        Notice of Default or Event of Default.

Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest, fees, and expenses required to be paid to Agent for the
account of the Lenders and, except with respect to Events of Default of which
Agent has actual knowledge, unless Agent shall have received written notice from
a Lender or Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default."  Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge.  If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.

15.6.        Credit Decision.

Each Lender (and Bank Product Provider) acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender (or Bank
Product Provider).  Each Lender represents (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to represent) to Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such due diligence, documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower or any other Person party to a Loan Document, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrower.  Each Lender also represents (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to represent) that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower or any other Person

 
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party to a Loan Document.  Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of Borrower or any other Person party to a Loan Document that
may come into the possession of any of the Agent-Related Persons.  Each Lender
acknowledges (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that Agent does not have any duty or
responsibility, either initially or on a continuing basis (except to the extent,
if any, that is expressly specified herein) to provide such Lender (or Bank
Product Provider) with any credit or other information with respect to Borrower,
its Affiliates or any of their respective business, legal, financial or other
affairs, and irrespective of whether such information came into Agent's or its
Affiliates' or representatives' possession before or after the date on which
such Lender became a party to this Agreement (or such Bank Product Provider
entered into a Bank Product Agreement).
 
15.7.        Costs and Expenses; Indemnification.

Agent may incur and pay Lender Group Expenses to the extent Agent reasonably
deems necessary or appropriate for the performance and fulfillment of its
functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys fees and expenses, fees and expenses of financial
accountants, advisors, consultants, and appraisers, costs of collection by
outside collection agencies, auctioneer fees and expenses, and costs of security
guards or insurance premiums paid to maintain the Collateral, whether or not
Borrower is obligated to reimburse Agent or Lenders for such expenses pursuant
to this Agreement or otherwise.  Agent is authorized and directed to deduct and
retain sufficient amounts from the Collections of Borrower and its Subsidiaries
received by Agent to reimburse Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders (or Bank Product
Providers).  In the event Agent is not reimbursed for such costs and expenses by
Borrower or its Subsidiaries, each Lender hereby agrees that it is and shall be
obligated to pay to Agent such Lender's ratable thereof.  Whether or not the
transactions contemplated hereby are consummated, each of the Lenders, on a
ratable basis, shall indemnify and defend the Agent-Related Persons (to the
extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so) from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder.  Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender's ratable share of any costs or out of pocket expenses (including
attorneys, accountants, advisors, and consultants fees and expenses) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any other Loan Document to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrower.  The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.

 
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15.8.        Agent in Individual Capacity.

WFCF and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, provide Bank Products to, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Document as though WFCF were
not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group.  The other members of the Lender Group
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, pursuant to such activities, WFCF
or its Affiliates may receive information regarding Borrower or its Affiliates
or any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders (or Bank Product
Providers), and the Lenders acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in
such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to
them.  The terms "Lender" and "Lenders" include WFCF in its individual capacity.

15.9.        Successor Agent.

Agent may resign as Agent upon 30 days prior written notice to the Lenders
(unless such notice is waived by the Required Lenders) and Borrower (unless such
notice is waived by Borrower) and without any notice to the Bank Product
Providers.  If Agent resigns under this Agreement, the Required Lenders shall be
entitled, with (so long as no Event of Default has occurred and is continuing)
the consent of Borrower (such consent not to be unreasonably withheld, delayed,
or conditioned), appoint a successor Agent for the Lenders (and the Bank Product
Providers).  If, at the time that Agent's resignation is effective, it is acting
as the Issuing Lender or the Swing Lender, such resignation shall also operate
to effectuate its resignation as the Issuing Lender or the Swing Lender, as
applicable, and it shall automatically be relieved of any further obligation to
issue Letters of Credit, to cause the Underlying Issuer to issue Letters of
Credit, or to make Swing Loans.  If no successor Agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with the Lenders and Borrower, a successor Agent.  If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders with (so long as no Event of
Default has occurred and is continuing) the consent of Borrower (such consent
not to be unreasonably withheld, delayed, or conditioned).  In any such event,
upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be
terminated.  After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.  If no
successor Agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of

 
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the duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.
 
15.10.      Lender in Individual Capacity.

Any Lender and its respective Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, provide Bank Products to,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though such Lender were not a Lender hereunder without notice to or consent of
the other members of the Lender Group (or the Bank Product Providers).  The
other members of the Lender Group acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge)
that, pursuant to such activities, such Lender and its respective Affiliates may
receive information regarding Borrower or its Affiliates or any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.

15.11.      Collateral Matters.

(a)           The Lenders hereby irrevocably authorize (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrower of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrower certifies to
Agent that the sale or disposition is permitted under Section 6.4 (and Agent may
rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which Borrower or its Subsidiaries owned no
interest at the time Agent's Lien was granted nor at any time thereafter, or
(iv) constituting property leased to Borrower or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this
Agreement or subject to a Permitted Lien securing Permitted Purchase Money
Indebtedness.  The Loan Parties and the Lenders hereby irrevocably authorize
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to authorize) Agent, based upon the instruction of the Required
Lenders, to (a) consent to, credit bid or purchase (either directly or through
one or more acquisition vehicles) all or any portion of the Collateral at any
sale thereof conducted under the provisions of the Bankruptcy Code, including
under Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either
directly or through one or more acquisition vehicles) all or any portion of the
Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral at any other sale or
foreclosure conducted by Agent (whether by judicial action or otherwise) in
accordance with applicable law.  In connection with any such credit bid or
purchase, the Obligations owed to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or

 
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unliquidated claims being estimated for such purpose if the fixing or
liquidation thereof would not unduly delay the ability of Agent to credit bid or
purchase at such sale or other disposition of the Collateral and, if such claims
cannot be estimated without unduly delaying the ability of Agent to credit bid,
then such claims shall be disregarded, not credit bid, and not entitled to any
interest in the asset or assets purchased by means of such credit bid) and the
Lenders and the Bank Product Providers whose Obligations are credit bid shall be
entitled to receive interests (ratably based upon the proportion of their
Obligations credit bid in relation to the aggregate amount of Obligations so
credit bid) in the asset or assets so purchased (or in the Stock of the
acquisition vehicle or vehicles that are used to consummate such
purchase).  Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers).  Upon request by Agent or Borrower at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent's authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.  The Lenders further
hereby irrevocably authorize (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to authorize) Agent, at its option
and in its sole discretion, to subordinate any Lien granted to or held by Agent
under any Loan Document to the holder of any Permitted Lien on such property if
such Permitted Lien secures Permitted Purchase Money Indebtedness.
 
(b)           Agent shall have no obligation whatsoever to any of the Lenders
(or the Bank Product Providers) to assure that the Collateral exists or is owned
by Borrower or its Subsidiaries or is cared for, protected, or insured or has
been encumbered, or that Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or that any particular items of Collateral meet the
eligibility criteria applicable in respect thereof or whether to impose,
maintain, reduce, or eliminate any particular reserve hereunder or whether the
amount of any such reserve is appropriate or not, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender (or Bank
Product Provider) as to any of the foregoing, except as otherwise provided
herein.

 
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15.12.      Restrictions on Actions by Lenders; Sharing of Payments.

(a)           Each of the Lenders agrees that it shall not, without the express
written consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrower or its Subsidiaries or
any deposit accounts of Borrower or its Subsidiaries now or hereafter maintained
with such Lender.  Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against Borrower or any Guarantor or to foreclose any
Lien on, or otherwise enforce any security interest in, any of the Collateral.

(b)           If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

15.13.      Agency for Perfection.

Agent hereby appoints each other Lender (and each Bank Product Provider) as its
agent (and each Lender hereby accepts (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to accept) such
appointment) for the purpose of perfecting Agent's Liens in assets which, in
accordance with Article 8 or Article 9, as applicable, of the Code can be
perfected by possession or control.  Should any Lender obtain possession or
control of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver possession or control of
such Collateral to Agent or in accordance with Agent's instructions.

15.14.      Payments by Agent to the Lenders.

All payments to be made by Agent to the Lenders (or Bank Product Providers)
shall be made by bank wire transfer of immediately available funds pursuant to
such wire transfer instructions as each party may designate for itself by
written notice to Agent.  Concurrently with each such payment, Agent shall
identify whether such payment (or any portion thereof) represents principal,
premium, fees, or interest of the Obligations.

 
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15.15.      Concerning the Collateral and Related Loan Documents.

Each member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents.  Each member of the Lender Group agrees
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to agree) that any action taken by Agent in accordance with the terms
of this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).

15.16.      Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information.

By becoming a party to this Agreement, each Lender:

(a)           is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report respecting Borrower or its Subsidiaries (each, a "Report") prepared by or
at the request of Agent, and Agent shall so furnish each Lender with such
Reports,

(b)           expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

(c)           expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and its Subsidiaries and will rely significantly upon Borrower's and its
Subsidiaries' books and records, as well as on representations of Borrower's
personnel,

(d)           agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner in
accordance with Section 17.9, and

(e)           without limiting the generality of any other indemnification
provision contained in this Agreement, agrees:  (i) to hold Agent and any other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or fail to take or any conclusion the indemnifying Lender may reach or draw
from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing:  (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower or its

 
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Subsidiaries to Agent that has not been contemporaneously provided by Borrower
or such Subsidiary to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower or its Subsidiaries, any Lender
may, from time to time, reasonably request Agent to exercise such right as
specified in such Lender's notice to Agent, whereupon Agent promptly shall
request of Borrower the additional reports or information reasonably specified
by such Lender, and, upon receipt thereof from Borrower or such Subsidiary,
Agent promptly shall provide a copy of same to such Lender, and (z) any time
that Agent renders to Borrower a statement regarding the Loan Account, Agent
shall send a copy of such statement to each Lender.
 
15.17.      Several Obligations; No Liability.

Notwithstanding that certain of the Loan Documents now or hereafter may have
been or will be executed only by or in favor of Agent in its capacity as such,
and not by or in favor of the Lenders, any and all obligations on the part of
Agent (if any) to make any credit available hereunder shall constitute the
several (and not joint) obligations of the respective Lenders on a ratable
basis, according to their respective Commitments, to make an amount of such
credit not to exceed, in principal amount, at any one time outstanding, the
amount of their respective Commitments.  Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or
in respect of, the business, assets, profits, losses, or liabilities of any
other Lender.  Each Lender shall be solely responsible for notifying its
Participants of any matters relating to the Loan Documents to the extent any
such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender.  Except as provided in Section
15.7, no member of the Lender Group shall have any liability for the acts of any
other member of the Lender Group.  No Lender shall be responsible to Borrower or
any other Person for any failure by any other Lender (or Bank Product Provider)
to fulfill its obligations to make credit available hereunder, nor to advance
for such Lender (or Bank Product Provider) or on its behalf, nor to take any
other action on behalf of such Lender (or Bank Product Provider) hereunder or in
connection with the financing contemplated herein.

16.           WITHHOLDING TAXES.

(a)           All payments made by Borrower hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense.  In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, Borrower shall comply with the
next sentence of this Section 16(a).  If any Taxes are so levied or imposed,
Borrower agrees to pay the full amount of such Taxes and such additional amounts
as may be necessary so that every payment of all amounts due under this
Agreement, any note, or Loan Document, including any amount paid pursuant to
this Section 16(a) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Borrower shall not be required to increase any such amounts if the increase
in such amount payable results from Agent's or such Lender's own willful
misconduct or gross negligence (as finally determined by a court of competent
jurisdiction).  Borrower will furnish to Agent as promptly as practicable after
the date the payment of any Tax is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by Borrower.

 
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(b)           Borrower agrees to pay any present or future stamp, value added or
documentary taxes or any other excise or property taxes, charges, or similar
levies that arise from any payment made hereunder or from the execution,
delivery, performance, recordation, or filing of, or otherwise with respect to
this Agreement or any other Loan Document.

(c)           If a Lender or Participant is entitled to claim an exemption or
reduction from United States withholding tax, such Lender or Participant agrees
with and in favor of Agent, to deliver to Agent (or, in the case of a
Participant, to the Lender granting the participation only) one of the following
before receiving its first payment under this Agreement:

(i)             if such Lender or Participant is entitled to claim an exemption
from United States withholding tax pursuant to the portfolio interest exception,
(A) a statement of the Lender or Participant, signed under penalty of perjury,
that it is not a (I) a "bank" as described in Section 881(c)(3)(A) of the IRC,
(II) a 10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B)
of the IRC), or (III) a controlled foreign corporation related to Borrower
within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed
and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

(ii)            if such Lender or Participant is entitled to claim an exemption
from, or a reduction of, withholding tax under a United States tax treaty, a
properly completed and executed copy of IRS Form W-8BEN;

(iii)           if such Lender or Participant is entitled  to claim that
interest paid under this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade or business of
such Lender, a properly completed and executed copy of IRS Form W-8ECI;

(iv)           if such Lender or Participant is entitled to claim that interest
paid under this Agreement is exempt from United States withholding tax because
such Lender or Participant serves as an intermediary, a properly completed and
executed copy of IRS Form W-8IMY (with proper attachments); or

(v)           a properly completed and executed copy of any other form or forms,
including IRS Form W-9, as may be required under the IRC or other laws of the
United States as a condition to exemption from, or reduction of, United States
withholding or backup withholding tax.

Each Lender or Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

(d)           If a Lender or Participant claims an exemption from withholding
tax in a jurisdiction other than the United States, such Lender or such
Participant agrees with and in favor of Agent, to deliver to Agent (or, in the
case of a Participant, to the Lender granting the participation only) any such
form or forms, as may be required under the laws of such jurisdiction as a
condition to exemption from, or reduction of, foreign withholding or backup
withholding tax before receiving its first payment under this Agreement, but
only if such Lender

 
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or such Participant is legally able to deliver such forms, provided, however,
that nothing in this Section 16(d) shall require a Lender or Participant to
disclose any information that it deems to be confidential (including without
limitation, its tax returns).  Each Lender and each Participant shall provide
new forms (or successor forms) upon the expiration or obsolescence of any
previously delivered forms and to promptly notify Agent (or, in the case of a
Participant, to the Lender granting the participation only) of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
 
(e)           If a Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrower to such Lender or Participant, such Lender or Participant agrees to
notify Agent (or, in the case of a sale of a participation interest, to the
Lender granting the participation only) of  the percentage amount in which it is
no longer the beneficial owner of Obligations of Borrower to such Lender or
Participant.  To the extent of such percentage amount, Agent will treat such
Lender's or such Participant's documentation provided pursuant to Section 16(c)
or 16(d) as no longer valid.  With respect to such percentage amount, such
Participant or Assignee may provide new documentation, pursuant to Section 16(c)
or 16(d), if applicable.  Borrower agrees that each Participant shall be
entitled to the benefits of this Section 16 with respect to its participation in
any portion of the Commitments and the Obligations so long as such Participant
complies with the obligations set forth in this Section 16 with respect thereto.

(f)            If a Lender or a Participant is entitled to a reduction in the
applicable withholding tax, Agent (or, in the case of a Participant, to the
Lender granting the participation) may withhold from any interest payment to
such Lender or such Participant an amount equivalent to the applicable
withholding tax after taking into account such reduction.  If the forms or other
documentation required by Section 16(c) or 16(d) are not delivered to Agent (or,
in the case of a Participant, to the Lender granting the participation), then
Agent (or, in the case of a Participant, to the Lender granting the
participation) may withhold from any interest payment to such Lender or such
Participant not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.

(g)           If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent (or, in the case of a
Participant, to the Lender granting the participation) did not properly withhold
tax from amounts paid to or for the account of any Lender or any Participant due
to a failure on the part of the Lender or any Participant (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent (or such Participant failed to notify the Lender
granting the participation) of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless (or, in the case of
a Participant, such Participant shall indemnify and hold the Lender granting the
participation harmless) for all amounts paid, directly or indirectly, by Agent
(or, in the case of a Participant, to the Lender granting the participation), as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Agent (or, in the case of
a Participant, to the Lender granting the participation only) under this Section
16, together with all costs and expenses (including attorneys fees and

 
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expenses).  The obligation of the Lenders and the Participants under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
 
(h)           If Agent or a Lender determines, in its sole discretion, that it
has received a refund (or credit elected in lieu of a refund) of any Taxes as to
which it has been indemnified by Borrower or with respect to which Borrower has
paid additional amounts pursuant to this Section 16, so long as no Default or
Event of Default has occurred and is continuing, it shall pay over such refund
(or credit elected in lieu of a refund) to Borrower (but only to the extent of
payments made, or additional amounts paid, by Borrower under this Section 16
with respect to Taxes giving rise to such a refund (or credit elected in lieu of
a refund)), net of all out-of-pocket expenses of Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such a refund (or credit elected in lieu of a
refund)); provided, that Borrower, upon the request of Agent or such Lender,
agrees to repay the amount paid over to Borrower (plus any penalties, interest
or other charges, imposed by the relevant Governmental Authority, other than
such penalties, interest or other charges imposed as a result of the willful
misconduct or gross negligence of Agent hereunder) to Agent or such Lender in
the event Agent or such Lender is required to repay such refund (or credit
elected in lieu of a refund) to such Governmental Authority.  Notwithstanding
anything in this Agreement to the contrary, this Section 16 shall not be
construed to require Agent or any Lender to make available its tax returns (or
any other information which it deems confidential) to Borrower or any other
Person.

17.           GENERAL PROVISIONS.

17.1.        Effectiveness.

This Agreement shall be binding and deemed effective when executed by Borrower,
Agent, and each Lender whose signature is provided for on the signature pages
hereof.

17.2.        Section Headings.

Headings and numbers have been set forth herein for convenience only.  Unless
the contrary is compelled by the context, everything contained in each Section
applies equally to this entire Agreement.

17.3.        Interpretation.

Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed against the Lender Group or Borrower, whether under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.

17.4.        Severability of Provisions.

Each provision of this Agreement shall be severable from every other provision
of this Agreement for the purpose of determining the legal enforceability of any
specific provision.

 
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17.5.        Bank Product Providers.

Each Bank Product Provider shall be deemed a third party beneficiary hereof and
of the provisions of the other Loan Documents for purposes of any reference in a
Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to
act as agent for such Bank Product Providers and, by virtue of entering into a
Bank Product Agreement, the applicable Bank Product Provider shall be
automatically deemed to have appointed Agent as its agent and to have accepted
the benefits of the Loan Documents; it being understood and agreed that the
rights and benefits of each Bank Product Provider under the Loan Documents
consist exclusively of such Bank Product Provider's being a beneficiary of the
Liens and security interests (and, if applicable, guarantees) granted to Agent
and the right to share in payments and collections out of the Collateral as more
fully set forth herein. In addition, each Bank Product Provider, by virtue of
entering into a Bank Product Agreement, shall be automatically deemed to have
agreed that Agent shall have the right, but shall have no obligation, to
establish, maintain, relax, or release reserves in respect of the Bank Product
Obligations and that if reserves are established there is no obligation on the
part of Agent to determine or insure whether the amount of any such reserve is
appropriate or not.  In addition, Agent shall not be obligated to establish or
increase a Bank Product Reserve for any Bank Product unless after giving effect
to such establishment or increase, the sum of the Bank Product Reserves
established for all Bank Products does not exceed the Aggregate Bank Product
Reserve Amount.  In connection with any such distribution of payments or
proceeds of Collateral, Agent shall be entitled to assume no amounts are due or
owing to any Bank Product Provider unless such Bank Product Provider has
provided a written certification (setting forth a reasonably detailed
calculation) to Agent as to the amounts that are due and owing to it and such
written certification is received by Agent a reasonable period of time prior to
the making of such distribution.  Agent shall have no obligation to calculate
the amount due and payable with respect to any Bank Products, but may rely upon
the written certification of the amount due and payable from the relevant Bank
Product Provider.  In the absence of an updated certification, Agent shall be
entitled to assume that the amount due and payable to the relevant Bank Product
Provider is the amount last certified to Agent by such Bank Product Provider as
being due and payable (less any distributions made to such Bank Product Provider
on account thereof).  Borrower may obtain Bank Products from any Bank Product
Provider, although Borrower is not required to do so.  Borrower acknowledges and
agrees that no Bank Product Provider has committed to provide any Bank Products
and that the providing of Bank Products by any Bank Product Provider is in the
sole and absolute discretion of such Bank Product Provider.  Notwithstanding
anything to the contrary in this Agreement or any other Loan Document, no
provider or holder of any Bank Product shall have any voting or approval rights
hereunder (or be deemed a Lender) solely by virtue of its status as the provider
or holder of such agreements or products or the Obligations owing thereunder,
nor shall the consent of any such provider or holder be required (other than in
their capacities as Lenders, to the extent applicable) for any matter hereunder
or under any of the other Loan Documents, including as to any matter relating to
the Collateral or the release of Collateral or Guarantors.

17.6.        Debtor-Creditor Relationship.

The relationship between the Lenders and Agent, on the one hand, and the Loan
Parties, on the other hand, is solely that of creditor and debtor.  No member of
the Lender Group has (or shall be deemed to have) any fiduciary relationship or
duty to any Loan Party arising out

 
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of or in connection with the Loan Documents or the transactions contemplated
thereby, and there is no agency or joint venture relationship between the
members of the Lender Group, on the one hand, and the Loan Parties, on the other
hand, by virtue of any Loan Document or any transaction contemplated therein.
 
17.7.        Counterparts; Electronic Execution.

This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.

17.8.        Revival and Reinstatement of Obligations.

If the incurrence or payment of the Obligations by Borrower or Guarantor or the
transfer to the Lender Group of any property should for any reason subsequently
be asserted, or declared, to be void or voidable under any state or federal law
relating to creditors' rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property (each, a "Voidable
Transfer"), and if the Lender Group is required to repay or restore, in whole or
in part, any such Voidable Transfer, or elects to do so upon the advice of
counsel, then, as to any such Voidable Transfer, or the amount thereof that the
Lender Group is required or elects to repay or restore, and as to all reasonable
costs, expenses, and attorneys fees of the Lender Group related thereto, the
liability of Borrower or Guarantor automatically shall be revived, reinstated,
and restored and shall exist as though such Voidable Transfer had never been
made.

17.9.        Confidentiality.

(a)           Agent and Lenders each individually (and not jointly or jointly
and severally) agree that material, non-public information regarding Borrower
and its Subsidiaries, their operations, assets, and existing and contemplated
business plans ("Confidential Information") shall be treated by Agent and the
Lenders in a confidential manner, and shall not be disclosed by Agent and the
Lenders to Persons who are not parties to this Agreement, except:  (i) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group  and to employees, directors and officers of any
member of the Lender Group (the Persons in this clause (i), "Lender Group
Representatives") on a "need to know" basis in connection with this Agreement
and the transactions contemplated hereby and on a confidential basis, (ii) to
Subsidiaries and Affiliates of any member of the Lender Group (including the
Bank Product Providers), provided that any such Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
Section 17.9, (iii) as may be required by regulatory authorities so long as such
authorities are informed of the confidential nature of such information, (iv) as
may be required by statute, decision, or judicial or administrative order, rule,

 
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or regulation; provided that (x) prior to any disclosure under this clause (iv),
the disclosing party agrees to provide Borrower with prior notice thereof, to
the extent that it is practicable to do so and to the extent that the disclosing
party is permitted to provide such prior notice to Borrower pursuant to the
terms of the applicable statute, decision, or judicial or administrative order,
rule, or regulation and (y) any disclosure under this clause (iv) shall be
limited to the portion of the Confidential Information as may be required by
such statute, decision, or judicial or administrative order, rule, or
regulation, (v) as may be agreed to in advance in writing by Borrower, (vi) as
requested or required by any Governmental Authority pursuant to any subpoena or
other legal process, provided, that, (x) prior to any disclosure under this
clause (vi) the disclosing party agrees to provide Borrower with prior written
notice thereof, to the extent that it is practicable to do so and to the extent
that the disclosing party is permitted to provide such prior written notice to
Borrower pursuant to the terms of the subpoena or other legal process and
(y) any disclosure under this clause (vi) shall be limited to the portion of the
Confidential Information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders or the Lender Group
Representatives), (viii) in connection with any assignment, participation or
pledge of any Lender's interest under this Agreement, provided that prior to
receipt of Confidential Information any such assignee, participant, or pledgee
shall have agreed in writing to receive such Confidential Information hereunder
subject to the terms of this Section, (ix) in connection with any litigation or
other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents; provided, that, prior
to any disclosure to any Person (other than any Loan Party, Agent, any Lender,
any of their respective Affiliates, or their respective counsel) under this
clause (ix) with respect to litigation involving any Person (other than
Borrower, Agent, any Lender, any of their respective Affiliates, or their
respective counsel), the disclosing party agrees to provide Borrower with prior
written notice thereof, and (x) in connection with, and to the extent reasonably
necessary for, the exercise of any secured creditor remedy under this Agreement
or under any other Loan Document.
 
(b)           Anything in this Agreement to the contrary notwithstanding, Agent
may (i) provide customary information concerning the terms and conditions of
this Agreement and the other Loan Documents to loan syndication and pricing
reporting services, and (ii) use the name, logos, and other insignia of Borrower
and the Loan Parties and the Total Commitments provided hereunder in any
"tombstone" or comparable advertising, on its website or in other marketing
materials of Agent.

17.10.     Lender Group Expenses.

Borrower agrees to pay the Lender Group Expenses on the earlier of (a) the first
day of the month following the date on which such Lender Group Expenses were
first incurred or (b) the date on which demand therefor is made by
Agent.  Borrower agrees that its obligations contained in this Section 17.10
shall survive payment or satisfaction in full of all other Obligations.

 
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17.11.      Survival.

All representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instru­ments delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that Agent,
the Issuing Lender, or any Lender may have had notice or knowledge of any
Default or Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any loan or any fee or any
other amount payable under this Agreement is outstand­ing and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated.

17.12.      Patriot Act.

Each Lender that is subject to the requirements of the Patriot Act hereby
notifies Borrower that pursuant to the requirements of the Act, it is required
to obtain, verify and record information that identifies Borrower, which
information includes the name and address of Borrower and other information that
will allow such Lender to identify Borrower in accordance with the Patriot
Act.  In addition, if Agent is required by law or regulation or internal
policies to do so, it shall have the right to periodically conduct (a) Patriot
Act searches, OFAC/PEP searches, and customary individual background checks for
the Loan Parties and (b) OFAC/PEP searches and customary individual  background
checks for the Loan Parties' senior management and key principals, and Borrower
agrees to cooperate in respect of the conduct of such searches and further
agrees that the reasonable costs and charges for such searches shall constitute
Lender Expenses hereunder and be for the account of Borrower.

17.13.      Integration.

This Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.  The foregoing to the contrary
notwithstanding, all Bank Product Agreements, if any, are independent agreements
governed by the written provisions of such Bank Product Agreements, which will
remain in full force and effect, unaffected by any repayment, prepayments,
acceleration, reduction, increase, or change in the terms of any credit extended
hereunder, except as otherwise expressly provided in such Bank Product
Agreement.

[Signature pages to follow.]

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

 
PATRICK INDUSTRIES, INC.,
an Indiana corporation
 
 
By:
    /s/ Andy L. Nemeth
 
Title:
    Chief Financial Officer
     
WELLS FARGO CAPITAL FINANCE, LLC.,
a Delaware limited liability company, as Agent and as a Lender
 
 
By:
    /s/ Ernest May
 
Title:
    Director

 
Signature Page to Credit Agreement

 
 

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Schedule 1.1

As used in the Agreement, the following terms shall have the following
definitions:

"Account" means an account (as that term is defined in the Code).

"Account Debtor" means any Person who is obligated on an Account, chattel paper,
or a general intangible.

"Accounting Changes" means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).

"Acquired Indebtedness" means Indebtedness of a Person whose assets or Stock is
acquired by Borrower or any of its Subsidiaries in a Permitted Acquisition;
provided, however, that such Indebtedness (a) is either Purchase Money
Indebtedness or a Capital Lease with respect to Equipment or mortgage financing
with respect to Real Property, (b) was in existence prior to the date of such
Permitted Acquisition, and (c) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.

"Acquisition" means (a) the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all or substantially all of the Stock of any other Person.

"Additional Documents" has the meaning specified therefor in Section 5.12 of the
Agreement.

"Advances" has the meaning specified therefor in Section 2.1(a) of the
Agreement.

"Affected Lender" has the meaning specified therefor in Section 2.13(b) of the
Agreement.

"Affiliate" means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person.  For purposes of
this definition, "control" means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
provided, however, that, for purposes of the definition of Eligible Accounts and
Section 6.12 of the Agreement: (a) any Person which owns directly or indirectly
10% or more of the Stock having ordinary voting power for the election of
directors or other members of the governing body of a Person or 10% or more of
the partnership or other ownership interests of a Person (other than as a
limited partner of such Person) shall be deemed an Affiliate of such Person,
(b) each director (or comparable manager) of a Person shall be

 
Schedule 1.1 - Page 1

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deemed to be an Affiliate of such Person, and (c) each partnership in which a
Person is a general partner shall be deemed an Affiliate of such Person.
 
"Agent" has the meaning specified therefor in the preamble to the Agreement.

"Agent-Related Persons" means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

"Agent's Account" means the Deposit Account of Agent identified on Schedule A-1.

"Agent's Liens" means the Liens granted by Borrower or its Subsidiaries to Agent
under the Loan Documents.

"Aggregate Bank Product Reserve Amount" means, as of any date of determination,
the lesser of (a) $5,000,000 and (b) the sum of the Bank Product Reserve that
have been established by Agent as of such date of determination.

"Agreement" means the Credit Agreement to which this Schedule 1.1 is attached.

"Application Event" means the occurrence of (a) a failure by Borrower to repay
all of the Obligations in full on the Maturity Date, or (b) an Event of Default
and the election by Agent or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the
Agreement.

"Assignee" has the meaning specified therefor in Section 13.1(a) of the
Agreement.

"Assignment and Acceptance" means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.

"Authorized Person" means any one of the individuals identified on Schedule A-2,
as such schedule is updated from time to time by written notice from Borrower to
Agent.

"Availability" means, as of any date of determination, the amount that Borrower
is entitled to borrow as Advances under Section 2.1 of the Agreement (after
giving effect to all then outstanding Obligations (other than Bank Product
Obligations)).

"Bank Product" means any one or more of the following financial products or
accommodations extended to Borrower or its Subsidiaries by a Bank Product
Provider:  (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) stored value cards, (e) purchase cards (including so-called
"procurement cards" or "P-cards"), (f) Cash Management Services, or
(g) transactions under Hedge Agreements.

"Bank Product Agreements" means those agreements entered into from time to time
by Borrower or its Subsidiaries with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.

 
Schedule 1.1 - Page 2

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"Bank Product Collateralization" means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).

"Bank Product Obligations" means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Borrower or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by a Bank Product Agreement and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
(b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is
obligated to pay to a Bank Product Provider as a result of Agent or such Lender
purchasing participations from, or executing guarantees or indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Borrower or its Subsidiaries;
provided, however, in order for any item described in clauses (a) (b), or (c)
above, as applicable, to constitute "Bank Product Obligations", (i) if the
applicable Bank Product Provider is Wells Fargo or its Affiliates, then, if
requested by Agent, Agent shall have received a Bank Product Provider Letter
Agreement within 10 days after the date of such request, or (ii) if the
applicable Bank Product Provider is any other Person, the applicable Bank
Product must have been provided on or after the Closing Date and Agent shall
have received a Bank Product Provider Letter Agreement within 10 days after the
date of the provision of the applicable Bank Product to Borrower or its
Subsidiaries.

"Bank Product Provider" means any Lender or any of its Affiliates; provided,
however, that no such Person (other than Wells Fargo or its Affiliates) shall
constitute a Bank Product Provider with respect to a Bank Product unless and
until Agent shall have received a Bank Product Provider Letter Agreement from
such Person and with respect to the applicable Bank Product within 10 days after
the provision of such Bank Product to Borrower or its Subsidiaries; provided
further, however, that if, at any time, a Lender ceases to be a Lender under the
Agreement, then, from and after the date on which it ceases to be a Lender
thereunder, neither it nor any of its Affiliates shall constitute Bank Product
Providers and the obligations with respect to Bank Products provided by such
former Lender or any of its Affiliates shall no longer constitute Bank Product
Obligations.

"Bank Product Provider Letter Agreement" means a letter agreement in
substantially the form attached hereto as Exhibit B-2, in form and substance
satisfactory to Agent, duly executed by the applicable Bank Product Provider,
Borrower, and Agent.

"Bank Product Reserve" means, as of any date of determination, with respect to a
Bank Product, the Dollar amount of reserves that Agent has determined it is
necessary or appropriate to establish (based upon the Bank Product Providers'
reasonable determination of their credit exposure to Borrower and its
Subsidiaries in respect of Bank Product Obligations) in respect of Bank Products
then provided or outstanding.

"Bankruptcy Code" means title 11 of the United States Code, as in effect from
time to time.

 
Schedule 1.1 - Page 3

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"Base Rate" means the greatest of (a) 3.25 percentage points per annum, (b) the
Federal Funds Rate plus 1%, (c) the LIBOR Rate (which rate shall be calculated
based upon an Interest Period of 3 months and shall be determined on a daily
basis), plus 1 percentage point, and (d) the rate of interest announced, from
time to time, within Wells Fargo at its principal office in San Francisco as its
"prime rate", with the understanding that the "prime rate" is one of Wells
Fargo's base rates (not necessarily the lowest of such rates) and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Wells Fargo may designate.

"Base Rate Loan" means each portion of the Advances that bears interest at a
rate determined by reference to the Base Rate.

"Base Rate Margin" means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a Base Rate Loan), the
applicable margin set forth in the following table that corresponds to the
average daily Excess Availability for the most recently ended month (the
"Monthly Average Excess Availability"); provided, however, that for the period
from the Closing Date through June 30, 2011 the Base Rate Margin shall be at the
margin in the row styled "Level IV":

Level
 
Monthly Average Excess Availability
 
Base Rate Margin for Base Rate Loans predicated on Current Asset Availability
 
Base Rate Margin for Base Rate Loans predicated on Fixed Asset Availability
I
 
If the Monthly Average Excess Availability is greater than or equal to
$15,000,000
 
1.50 percentage points
 
2.00 percentage points
II
 
If the Monthly Average Excess Availability is less than $15,000,000 and greater
than or equal to $10,000,000
 
1.75percentage points
 
2.25 percentage points
III
 
If the Monthly Average Excess Availability is less than $10,000,000 and greater
than or equal to $5,000,000
 
2.00 percentage points
 
2.50 percentage points
IV
 
If the Monthly Average Excess Availability is less than $5,000,000
 
2.25 percentage points
 
2.75 percentage points

Except as set forth in the foregoing proviso, the Base Rate Margin shall be
based upon the most recent Monthly Average Excess Availability, which will be
calculated as of the end of each fiscal month.  Except as set forth in the
foregoing proviso, the Base Rate Margin shall be re-determined monthly on the
first day of the month; provided, however, that if Borrower fails to provide any
Borrowing Base Certificate or other information with respect

 
Schedule 1.1 - Page 4

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thereto for any period on the date required hereunder, the Base Rate Margin
shall be set at the margin in the row styled "Level IV" as of the first day of
the month following the date on which such Borrowing Base Certificate or other
information was required to be delivered until the date on which such Borrowing
Base Certificate or other information is delivered (on which date (but not
retroactively), without constituting a waiver of any Default or Event of Default
occasioned by the failure to timely deliver such certification, the Base Rate
Margin shall be set at the margin based upon the calculations disclosed by such
Borrowing Base Certificate or other information.  In the event that the
information regarding the Monthly Average Excess Availability contained in any
Borrowing Base Certificate or other information delivered by Borrower to Agent
is shown to be inaccurate, and such inaccuracy, if corrected, would have led to
the application of a higher Base Rate Margin for any period (a "Base Rate
Period") than the Base Rate Margin actually applied for such Base Rate Period,
then (i) Borrower shall immediately deliver to Agent a correct Borrowing Base
Certificate for such Base Rate Period, (ii) the Base Rate Margin shall be
determined as if the correct Base Rate Margin (as set forth in the table above)
were applicable for such Base Rate Period, and (iii) Borrower shall immediately
deliver to Agent full payment in respect of the accrued additional interest as a
result of such increased Base Rate Margin for such Base Rate Period, which
payment shall be promptly applied by Agent to the affected Obligations.
 
"Benefit Plan" means a "defined benefit plan" (as defined in Section 3(35) of
ERISA) for which Borrower or any of its Subsidiaries or ERISA Affiliates has
been an "employer" (as defined in Section 3(5) of ERISA) within the past six
years.

"Board of Directors" means the board of directors (or comparable managers) of
Borrower or any committee thereof duly authorized to act on behalf of the board
of directors (or comparable managers).

"Borrower" has the meaning specified therefor in the preamble to the Agreement.

"Borrowing" means a borrowing consisting of Advances made on the same day by the
Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing
Loan, or by Agent in the case of a Protective Advance.

"Borrowing Base" means, as of any date of determination, the result of:

(a)           Current Asset Availability plus

(b)           Fixed Asset Availability minus

(c)           the aggregate amount of reserves, if any, established by Agent
under Section 2.1(c) of the Agreement.

"Borrowing Base Certificate" means a certificate in the form of Exhibit B-1.

"Borrowing Base Excess Amount" has the meaning set forth in Section 2.4(e)(i).

"Business Day" means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of Illinois, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day"

 
Schedule 1.1 - Page 5

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also shall exclude any day on which banks are closed for dealings in Dollar
deposits in the London interbank market.
 
"Capital Expenditures" means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed; provided, however, that
Capital Expenditures shall not include expenditures that are made with proceeds
of insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, Equipment or other property to
the extent such expenditures are made to replace or repair such lost, destroyed,
damaged or condemned assets, Equipment or other property or otherwise to
acquire, maintain, develop, construct, improve, upgrade or repair assets or
properties useful in the business of the Loan Parties within 180 days of receipt
of such proceeds.

"Capitalized Lease Obligation" means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

"Capital Lease" means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Rating Group ("S&P") or Moody's Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit, time
deposits, overnight bank deposits or bankers' acceptances maturing within 1 year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States or any state thereof or the District of Columbia or any
United States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in clause (d)
above, or (ii) any other bank organized under the laws of the United States or
any state thereof so long as the full amount maintained with any such other bank
is insured by the Federal Deposit Insurance Corporation, (f) repurchase
obligations of any commercial bank satisfying the requirements of clause (d) of
this definition or recognized securities dealer having combined capital and
surplus of not less than $250,000,000, having a term of not more than seven
days, with respect to securities satisfying the criteria in clauses (a) or (d)
above, (g) debt securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by any commercial bank
satisfying the criteria described in clause (d) above, and (h) Investments in
money market funds substantially all of whose assets are invested in the types
of assets described in clauses (a) through (g) above.

"Cash Management Services" means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement,  merchant store

 
Schedule 1.1 - Page 6

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value cards, e-payables services, electronic funds transfer, interstate
depository network, automatic clearing house transfer (including the Automated
Clearing House processing of electronic funds transfers through the direct
Federal Reserve Fedline system) and other cash management arrangements.
 
"CFC" means a controlled foreign corporation (as that term is defined in the
IRC).

"Change of Control" means that (a) any "person" or "group" (within the meaning
of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders,
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 30%, or more, of the Stock of Borrower having the
right to vote for the election of members of the Board of Directors, (b) a
majority of the members of the Board of Directors do not constitute Continuing
Directors, or (c)  Borrower fails to own and control, directly or indirectly,
100% of the Stock of each other Loan Party.

"Closing Date" means the date of the making of the initial Advance (or other
extension of credit) under the Agreement.

"Code" means the Illinois Uniform Commercial Code, as in effect from time to
time.

"Collateral" means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by Borrower or its Subsidiaries in or upon which a
Lien is granted by such Person in favor of Agent or the Lenders under any of the
Loan Documents.

"Collateral Access Agreement" means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Loan Party's books and records, Equipment, or Inventory, in each case, in
form and substance reasonably satisfactory to Agent.

"Collections" means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds, and tax refunds).

"Commitment" means, with respect to each Lender, its Revolver Commitment or its
Total Commitment, as the context requires, and, with respect to all Lenders,
their Revolver Commitments or their Total Commitments, as the context requires,
in each case as such Dollar amounts are set forth beside such Lender's name
under the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender under the Agreement, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement.

"Compliance Certificate" means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Borrower to Agent.

"Confidential Information" has the meaning specified therefor in Section 17.9(a)
of the Agreement.

 
Schedule 1.1 - Page 7

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"Continuing Director" means (a) any member of the Board of Directors who was a
director (or comparable manager) of Borrower on the Closing Date, and (b) any
individual who becomes a member of the Board of Directors after the Closing Date
if such individual was approved, appointed or nominated for election to the
Board of Directors by either the Permitted Holders or a majority of the
Continuing Directors, but excluding any such individual originally proposed for
election in opposition to the Board of Directors in office at the Closing Date
in an actual or threatened election contest relating to the election of the
directors (or comparable managers) of Borrower and whose initial assumption of
office resulted from such contest or the settlement thereof.

"Control Agreement" means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Borrower or one of its
Subsidiaries, Agent, and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).

"Controlled Account Agreement" has the meaning specified therefor in the
Security Agreement.

"Current Asset Availability" means, as of any date of determination, the result
of:

(a)           85% of the amount of Eligible Accounts, less the amount, if any of
the Dilution Reserve, plus

(b)           the lesser of

(i)           65% of the value (calculated at the lower of cost or market on a
basis consistent with Borrower's historical accounting practices) of Eligible
Inventory and Eligible In-Transit Inventory; provided, that in no event shall
the aggregate Advances against Eligible Inventory consisting of work in process
exceed $2,000,000 unless and until Borrower has fully implemented a perpetual
reporting system with respect to Borrower's Inventory acceptable to Agent, and

(ii)           85% times the most recently determined Net Liquidation Percentage
times the value (calculated at the lower of cost or market on a basis consistent
with Borrower's historical accounting practices) of Borrower's Inventory.

"Daily Balance" means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.

"Default" means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.
 
"Defaulting Lender" means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement on the date that it is required
to do so under the Agreement (including the failure to make available to Agent
amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified the Borrower,
Agent, or any Lender in writing that it does not intend to comply with all or
any portion of its funding obligations under the Agreement, (c) has made a
public
 
 
Schedule 1.1 - Page 8

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statement to the effect that it does not intend to comply with its funding
obligations under the Agreement or under other agreements generally (as
reasonably determined by Agent) under which it has committed to extend credit,
(d) failed, within 1 Business Day after written request by Agent, to confirm
that it will comply with the terms of the Agreement relating to its obligations
to fund any amounts required to be funded by it under the Agreement,
(e) otherwise failed to pay over to Agent or any other Lender any other amount
required to be paid by it under the Agreement on the date that it is required to
do so under the Agreement, or (f) (i) becomes or is insolvent or has a parent
company that has become or is insolvent or (ii) becomes the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, or custodian or appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.

"Defaulting Lender Rate" means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Advances that are Base Rate Loans (inclusive of the Base
Rate Margin applicable thereto).

"Deposit Account" means any deposit account (as that term is defined in the
Code).

"Designated Account" means the Deposit Account of Borrower identified on
Schedule D-1.

"Designated Account Bank" has the meaning specified therefor in Schedule D-1.

"Dilution" means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 30 consecutive days, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to Borrower's Accounts
during such period, by (b) Borrower's billings with respect to Accounts during
such period.

"Dilution Reserve" means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.

"Dollars" or "$" means United States dollars.

"EBITDA" means, with respect to any fiscal period, Borrower's consolidated net
earnings (or loss), minus extraordinary, one-time, or non-recurring gains, gains
on sales of fixed assets, interest income and gain in connection with the
revaluation of warrants to purchase Stock, plus (i) extraordinary, one-time or
non-recurring charges, expenses or losses to the extent such charges, expenses
or losses are non-operating items, (ii) losses on the sale of fixed assets,
(iii) interest expense, (iv) income taxes, (v) depreciation, (vi) amortization,
(vii) Restructuring Charges, (viii) Stock option based compensation expenses,
deferred compensation expenses and other non-cash equity based compensation
expenses, (iv) losses in connection with the revaluation of warrants to purchase
Stock, (x) fees and expenses incurred in connection with any

 
Schedule 1.1 - Page 9

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Permitted Acquisition (to the extent not capitalized), and (xi) fees and
expenses paid to Existing Lenders under the Existing Credit Facility on or prior
to the Closing Date in an aggregate amount not to exceed $500,000, in each case
for such period in each case, determined on a consolidated basis in accordance
with GAAP.  EBITDA shall be calculated after giving pro forma effect for any
Permitted Acquisition made during such fiscal period (including pro forma
adjustments arising out of events which are directly attributable to such
Permitted Acquisition, are factually supportable and are expected to have a
continuing impact, in each case to be mutually and reasonably agreed upon by
Borrower and Agent.
 
"Eligible Accounts" means those Accounts created by Borrower in the ordinary
course of its business, that arise out of Borrower's sale of goods or rendition
of services, that comply with each of the representations and warranties
respecting Eligible Accounts made in the Loan Documents, and that are not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth below; provided, however, that such criteria may be revised from time to
time by Agent in Agent's Permitted Discretion to address the results of any
audit performed by Agent from time to time after the Closing Date.  In
determining the amount to be included, Eligible Accounts shall be calculated net
of customer deposits and unapplied cash.  Eligible Accounts shall not include
the following:

(a)           Accounts that the Account Debtor has failed to pay within 90 days
of original invoice date or Accounts with selling terms of more than 60 days,

(b)           Accounts owed by an Account Debtor (or its Affiliates) where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above,

(c)           Accounts with respect to which the Account Debtor is an Affiliate
of Borrower or an employee or agent of Borrower or any Affiliate of Borrower,

(d)           Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional,

(e)           Accounts that are not payable in Dollars,

(f)           Accounts with respect to which the Account Debtor either (i) does
not maintain its chief executive office in the United States or Canada, or
(ii) is not organized under the laws of the United States or any state thereof
or Canada, or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof, unless (y) the Account is supported by an irrevocable letter of credit
reasonably satisfactory to Agent (as to form, substance, and issuer or domestic
confirming bank) that has been delivered to Agent and is directly drawable by
Agent, or (z) the Account is covered by credit insurance in form, substance, and
amount, and by an insurer, reasonably satisfactory to Agent,

 
Schedule 1.1 - Page 10

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(g)           Accounts with respect to which the Account Debtor is either
(i) the United States or any department, agency, or instrumentality of the
United States (exclusive, however, of Accounts with respect to which Borrower
has complied, to the reasonable satisfaction of Agent, with the Assignment of
Claims Act, 31 USC §3727), or (ii) any state of the United States (exclusive,
however, of Accounts with respect to which Borrower has complied, to the
reasonable satisfaction of Agent, with any applicable state assignment of claims
act),

(h)           Accounts with respect to which the Account Debtor is a creditor of
Borrower, has or has asserted a right of setoff, or has disputed its obligation
to pay all or any portion of the Account, to the extent of such claim, right of
setoff, or dispute,

(i)            Accounts with respect to an Account Debtor whose total
obligations owing to Borrower exceed 10% (or, with respect to Forest River,
Inc., 40%, with respect to Thor Industries, Inc. and its direct and indirect
subsidiaries, 25%, with respect to Clayton Homes, Inc., 25%, and with respect to
Champion Home Builders, Inc., 25%) (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage; provided, however, that, in each case, the amount of
Eligible Accounts that are excluded because they exceed the foregoing percentage
shall be determined by Agent based on all of the otherwise Eligible Accounts
prior to giving effect to any eliminations based upon the foregoing
concentration limit,

(j)            Accounts with respect to which Borrower has knowledge that the
Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone
out of business, or as to which Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,

(k)            Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor's financial
condition,

(l)             Accounts that are not subject to a valid and perfected first
priority Agent's Lien,

(m)           Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,

(n)           Accounts with respect to which the Account Debtor is a Sanctioned
Person or Sanctioned Entity, or

(o)           Accounts that represent the right to receive progress payments or
other advance billings that are due prior to the completion of performance by
Borrower of the subject contract for goods or services.

"Eligible Equipment" means Equipment of Borrower that complies with each of the
representations and warranties respecting Eligible Equipment made in the Loan
Documents and meets all of the criteria set forth below; provided, however, that
such criteria may be revised

 
Schedule 1.1 - Page 11

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from time to time by Agent in Agent's Permitted Discretion to address the
results of any audit or appraisal performed by Agent from time to time after the
Closing Date:
 
(a)           such Equipment is included in the Equipment appraisal delivered to
Agent prior to the Closing Date and each subsequent Equipment appraisal
delivered to Agent,

(b)           such Equipment is in good order, repair, running and marketable
condition (ordinary wear and tear excepted) and not damaged or defective, and
used in the operation of Borrower's business or in storage and available for use
in the operation of Borrower's business,

(c)           Borrower has good, valid, and marketable title to such Equipment
on the Closing Date and such Equipment is not leased to a third party,

(d)           it does not constitute fixtures unless (i) such fixtures are
located on Real Property Collateral that is subject to a Mortgage or (ii) it is
subject to a Collateral Access Agreement executed by the lessor, pursuant to
which the lessor agrees that the Collateral shall be deemed to be personal
property, and not fixtures, regardless of the manner or mode of the attachment
of any item of Collateral to the applicable leased premises,

(e)           Borrower has actual and exclusive possession of such Equipment,

(f)            it is located at one of the locations in the continental United
States set forth on Schedule E-3 (or is in transit from one such location to
another such location),

(g)           it is located on real property owned by Borrower or leased by
Borrower and at which Agent has received a Collateral Access Agreement from the
owner and lessor of such Real Property location,

(h)           such Equipment is subject to the first priority, valid and
perfected security interest of Agent and is subject to no other lien, security
interest, claim or encumbrance in favor of any other Person, except as permitted
in this Agreement and which is subject to an intercreditor agreement with Agent,
in form and substance satisfactory to Agent,

(i)            such Equipment is not worn out or obsolete; and

(j)            it is not otherwise deemed unacceptable by Agent in Agent's
reasonable judgment.

"Eligible In-Transit Inventory" means, Inventory of Borrower that satisfies each
of the following criteria:

(a)           such Inventory is not excluded from Eligible Inventory as
ineligible by virtue of one or more of the excluding criteria contained in the
definition of such term, other than clause (d) thereof,

(b)           such Inventory is located in the United States in transit from the
supplier thereof to Borrower on a domestic common carrier,

 
Schedule 1.1 - Page 12

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(c)           the supplier of such Inventory of which has delivered to Agent, in
form and substance satisfactory to Agent, such handling agreements, warehouse
receipts, waivers and other documents as Agent shall require,

(d)           such Inventory as to which title has passed to Borrower,

(e)           such Inventory as to which the applicable domestic common carrier
has issued a non-negotiable bill of lading or other applicable non-negotiable
shipping document in the name of Borrower,

(f)            such Inventory which is covered by property insurance
satisfactory to Agent,

(g)           such Inventory was purchased with and is subject to a letter of
credit, and

(h)           such Inventory is not otherwise deemed unacceptable by Agent in
Agent's reasonable judgment.

"Eligible Inventory" means Inventory consisting of first quality finished goods
held for sale in the ordinary course of Borrower's business, raw materials and
work in process, that complies with each of the representations and warranties
respecting Eligible Inventory made in the Loan Documents, and that is not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth below; provided, however, that such criteria may be revised from time to
time by Agent in Agent's Permitted Discretion to address the results of any
audit or appraisal performed by Agent from time to time after the Closing
Date.  In determining the amount to be so included, Inventory shall be valued at
the lower of cost or market on a basis consistent with Borrower's historical
accounting practices.  An item of Inventory shall not be included in Eligible
Inventory if:

(a)           Borrower does not have good, valid, and marketable title thereto,

(b)           Borrower does not have actual and exclusive possession thereof
(either directly or through a bailee or agent of Borrower),

(c)           it is not located at one of the locations in the continental
United States set forth on Schedule E-1 (or in-transit from one such location to
another such location),

(d)           it is in-transit to or from a location of Borrower (other than
in-transit from one location set forth on Schedule E-1 to another location set
forth on Schedule E-1),

(e)           it is the subject of a bill of lading or other document of title,

(f)            it is not subject to a valid and perfected first priority Agent's
Lien,

(g)           it consists of goods that are obsolete or slow moving, restrictive
items, or goods that constitute spare parts, packaging and shipping materials,
supplies used or consumed in Borrower's business, bill and hold goods, defective
goods, "seconds," or Inventory held on consignment, or

 
Schedule 1.1 - Page 13

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(h)           it is subject to third party trademark, licensing or other
proprietary rights, unless Agent is satisfied that such Inventory can be freely
sold by Agent on and after the occurrence of an Event of a Default despite such
third party rights.

"Eligible Real Property" means the Real Property owned by Borrower that is
subject to a Mortgage and is listed on Schedule E-4.

"Eligible Transferee" means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a pre-existing
Lender, (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by Agent and Borrower (such approval by Borrower not to be
unreasonably withheld, conditioned or delayed), and (f) during the continuation
of an Event of Default, any other Person approved by Agent.

"Environmental Action" means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials generated by
any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.

"Environmental Law" means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on
Borrower or its Subsidiaries, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time.

"Environmental Liabilities" means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

"Environmental Lien" means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

 
Schedule 1.1 - Page 14

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"Equipment" means equipment (as that term is defined in the Code).

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

"ERISA Affiliate" means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries is a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o).

"Event of Default" has the meaning specified therefor in Section 8 of the
Agreement.

"Excess Availability" means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Borrower and its Subsidiaries aged in excess of historical levels with respect
thereto and all book overdrafts of Borrower and its Subsidiaries in excess of
historical practices with respect thereto, in each case as determined by Agent
in its Permitted Discretion.

"Excess Cash Flow" means, with respect to any fiscal period and with respect to
Borrower determined on a consolidated basis in accordance with GAAP (a) TTM
EBITDA, minus (b) the sum of (i) the cash portion of Interest Expense paid
during such fiscal period, (ii) the cash portion of income taxes paid during
such period, (iii) the amount by which Fixed Asset Availability has decreased
during such fiscal period to the extent such change results solely from the
operation of clause (i) of the last sentence of the definition of Fixed Asset
Availability, (iv) of all scheduled principal payments made in respect of the
Subordinated Debt during such period, (v) the cash portion of Capital
Expenditures (net of (y) any proceeds reinvested in accordance with the proviso
to Section 2.4(e)(ii) of the Agreement, and (z) any proceeds of related
financings with respect to such expenditures) made during such period, (vi) the
cash portion of extraordinary, one-time or non-recurring, charges, expenses or
losses during such fiscal period to the extent such charges, expenses or losses
are non-operating items, (viii) the cash portion of Restructuring Charges paid
during such fiscal period, (viii) fees and expenses incurred in connection with
any Permitted Acquisition (to the extent not capitalized) and paid during such
fiscal period, and (ix) fees and expenses paid during such fiscal period to
Existing Lenders under the Existing Credit Facility on or prior to the Closing
Date in an aggregate amount not to exceed $500,000.

"Exchange Act" means the Securities Exchange Act of 1934, as in effect from time
to time.

 
Schedule 1.1 - Page 15

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"Existing Credit Facility" means the financing provided pursuant to that certain
Credit Agreement dated as of May 18, 2007 among Borrower, JPMorgan Chase Bank,
N.A., as agent and a lender, and the other lenders thereto.

"Existing Lenders" means JPMorgan Chase Bank, N.A., as agent and the other
lenders under the Existing Credit Facility.

"Extraordinary Receipts" means any payments received by Borrower or any of its
Subsidiaries not in the ordinary course of business (and not consisting of
proceeds described in Section 2.4(e)(ii) of the Agreement) consisting of
(a) proceeds of judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, (b) indemnity payments (other than
to the extent such indemnity payments are (i) immediately payable to a Person
that is not an Affiliate of Borrower or any of its Subsidiaries, or
(ii) received by Borrower or any of its Subsidiaries as reimbursement for any
payment previously made to such Person), (c) any purchase price adjustment
(other than a working capital adjustment) received in connection with any
purchase agreement, and (d) proceeds of life insurance policies.

"Fee Letter" means that certain fee letter, dated as of even date with the
Agreement, between Borrower and Agent, in form and substance reasonably
satisfactory to Agent.

"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by it.

"Fixed Asset Availability" means the lesser of:

(a)           $12,578,000 and

(b)           the sum of:

(i)            75% times the fair market value of Eligible Real Property as set
forth in the most recent appraisal received by and acceptable to Agent pursuant
to methodology acceptable to Agent in accordance with the Loan Documents (the
"Advanced Amount"); provided, that with respect to the Eligible Real Property
located at 1930 West Lusher (also known as 2044 West Lusher), Elkhart, Indiana
46517, (i) until the earlier of (a) 180 days after the Closing Date and (b) such
time as Borrower delivers to Agent evidence in form and substance satisfactory
to Agent that Borrower has indefeasible fee simple title to the real property
described on Schedule L-1, the Advanced Amount shall be reduced by an amount
equal to 40% of the Advanced Amount and (ii) with respect to the period
commenting on the 181st day after the Closing Date, the Advanced Amount shall be
reduced by an amount equal to 100% of the Advanced Amount until such time as
Borrower delivers to Agent evidence in form and substance

 
Schedule 1.1 - Page 16

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satisfactory to Agent that Borrower has indefeasible fee simple title to the
real property described on Schedule L-1, plus
 
(ii)           85% times the Net Orderly Liquidation Value of Eligible
Equipment.

The Fixed Asset Availability will be reduced (i) on the first day of each month
commencing with the first month after the date hereof by an amount equal to the
initial Fixed Asset Availability divided by 72 and (ii) on an annual basis on
the earlier of (x) the date each prepayment under Section 2.4(e)(vi) is due
pursuant to Section 2.4(e)(vi) and (y) the date each prepayment under Section
2.4(e)(vi) is paid by Borrower to Agent, by an amount equal to such required
prepayment under Section 2.4(e)(vi).

"Fixed Charges" means, with respect to any fiscal period and with respect to
Borrower determined on a consolidated basis in accordance with GAAP, the sum,
without duplication, of (a) Interest Expense accrued (other than interest
paid-in-kind, amortization of financing fees, and other non-cash Interest
Expense) during such period, (b) principal payments in respect of Indebtedness
that are required to be paid during such period, and (c) all federal, state, and
local income taxes accrued during such period, and (d) all Restricted Junior
Payments paid (whether in cash or other property, other than common Stock)
during such period.

"Fixed Charge Coverage Ratio" means, with respect to Borrower and its
Subsidiaries for any period, the ratio of (i) EBITDA for such period minus
Capital Expenditures made (to the extent not already incurred in a prior period)
or incurred during such period to the extent such Capital Expenditures are not
financed with proceeds of Indebtedness (other than Advances under the
Agreement), to (ii) Fixed Charges for such period.

"Foreign Lender" means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).

"Funding Date" means the date on which a Borrowing occurs.

"Funding Losses" has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.

"GAAP" means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied; provided, however, that all
calculations relative to liabilities shall be made without giving effect to
Statement of Financial Accounting Standards No. 159.

"Governing Documents" means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

"Governmental Authority" means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

 
Schedule 1.1 - Page 17

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"Guarantors" means (a) each Subsidiary of Borrower (other than any Subsidiary
that is not required to become a Guarantor pursuant to Section 5.11), and
(b) each other Person that becomes a guarantor after the Closing Date pursuant
to Section 5.11 of the Agreement, and "Guarantor" means any one of them.

"Guaranty" means that certain general continuing guaranty, dated as of even date
with the Agreement, executed and delivered by each extant Guarantor in favor of
Agent, for the benefit of the Lender Group and the Bank Product Providers, in
form and substance reasonably satisfactory to Agent.

"Hazardous Materials" means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

"Hedge Agreement" means a "swap agreement" as that term is defined in Section
101(53B)(A) of the Bankruptcy Code.

"Hedge Obligations" means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Borrower or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Bank Product
Providers.

"Hedge Provider" means Wells Fargo or any of its Affiliates.

"Holdout Lender" has the meaning specified therefor in Section 14.2(a) of the
Agreement.

"Inactive Subsidiary" means Adorn Holdings, Inc., a Delaware corporation.

"Indebtedness" as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, (e) all obligations of such Person to pay the deferred purchase price
of assets (other than (i) trade payables incurred in the ordinary course of
business and repayable in accordance with customary trade practices and
(ii) purchase price holdbacks incurred in the ordinary course of business in
respect of a portion of the purchase price of an asset held back by the buyer in
connection with the unperformed obligations of the seller of such asset),
(f) all obligations of such Person owing

 
Schedule 1.1 - Page 18

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under Hedge Agreements (which amount shall be calculated based on the amount
that would be payable by such Person if the Hedge Agreement were terminated on
the date of determination), (g) any Prohibited Preferred Stock of such Person,
and (h) any obligation of such Person guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (g) above.  For purposes of this
definition, (i) the amount of any Indebtedness represented by a guaranty or
other similar instrument shall be the lesser of the principal amount of the
obligations guaranteed and still outstanding and the maximum amount for which
the guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Indebtedness, and (ii) the amount of any Indebtedness described
in clause (d) above shall be the lower of the amount of the obligation and the
fair market value of the assets of such Person securing such obligation;
provided, that Indebtedness shall not include accrued expenses arising in the
ordinary course of business.
 
"Indemnified Liabilities" has the meaning specified therefor in Section 10.3 of
the Agreement.

"Indemnified Person" has the meaning specified therefor in Section 10.3 of the
Agreement.

"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

"Interest Expense" means, for any period, the aggregate of the interest expense
of Borrower for such period, determined on a consolidated basis in accordance
with GAAP.

"Interest Period" means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2 or 3 months thereafter; provided, however, that
(a) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (b) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (c) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2 or 3 months
after the date on which the Interest Period began, as applicable, and
(d) Borrower may not elect an Interest Period which will end after the Maturity
Date.

"Inventory" means inventory (as that term is defined in the Code).

"Investment" means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital

 
Schedule 1.1 - Page 19

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contributions (excluding (a) commission, travel, and similar advances to
officers and employees of such Person made in the ordinary course of business,
and (b) bona fide Accounts arising in the ordinary course of business), or
acquisitions of Indebtedness, Stock, or all or substantially all of the assets
of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
 
"IRC" means the Internal Revenue Code of 1986, as in effect from time to time.

"Issuing Lender" means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent, agrees, in such Lender's sole discretion, to
become an Issuing Lender for the purpose of issuing Letters of Credit or
Reimbursement Undertakings pursuant to Section 2.11 of the Agreement and the
Issuing Lender shall be a Lender.

"Key Person Life Insurance Policies" means (i) the life insurance policy issued
by Massachusetts Mutual Life Insurance Company with policy number 6 069 237
naming Keith Kandel as the insured, (ii) the life insurance policy issued by
Bankers United Life Assurance Company with policy number D-1 naming Mervin Lung
as the insured, (iii) the life insurance policy issued by Equitable Variable
Life Insurance Company with policy number AA39227508 naming Harold E. Wyland as
the insured, (iv) the life insurance policy issued by Equitable Variable Life
Insurance Company with policy number 37206710 naming Keith V. Kankel as the
insured, (v) the life insurance policy issued by Equitable Variable Life
Insurance Company with policy number 37206713 naming Mervin D. Lung as the
insured, (vi) the life insurance policy issued by Jackson National Life
Insurance Company with policy number 07953170 naming Mervin D. Lung as the
insured, (vii) the life insurance policy issued by Jackson National Life
Insurance Company with policy number 676114U naming Mervin D. Lung as the
insured.

"Lender" has the meaning set forth in the preamble to the Agreement, shall
include the Issuing Lender and the Swing Lender, and shall also include any
other Person made a party to the Agreement pursuant to the provisions of Section
13.1 of the Agreement and "Lenders" means each of the Lenders or any one or more
of them.

"Lender Group" means each of the Lenders (including the Issuing Lender and the
Swing Lender) and Agent, or any one or more of them.

"Lender Group Expenses" means all (a) reasonable and documented out-of-pocket
costs or expenses (including taxes, and insurance premiums) required to be paid
by Borrower or its Subsidiaries under any of the Loan Documents that are paid,
advanced, or incurred by the Lender Group, (b) reasonable and documented
out-of-pocket fees or charges paid or incurred by Agent in connection with the
Lender Group's transactions with Borrower or its Subsidiaries under any of the
Loan Documents, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, litigation, and UCC searches and including searches with the patent
and trademark office, the copyright office, or the department of motor
vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in the Agreement or
the Fee Letter), real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) Agent's customary fees and charges
(as adjusted from time to time) with respect to the

 
Schedule 1.1 - Page 20

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disbursement of funds (or the receipt of funds) to or for the account of
Borrower (whether by wire transfer or otherwise), together with any
out-of-pocket costs and expenses incurred in connection therewith,
(d) reasonable and documented out-of-pocket charges paid or incurred by Agent
resulting from the dishonor of checks payable by or to any Loan Party,
(e) reasonable out-of-pocket costs and expenses paid or incurred by the Lender
Group to correct any default or enforce any provision of the Loan Documents, or
during the continuance of an Event of Default, in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) reasonable out-of-pocket
audit fees and expenses (including travel, meals, and lodging) of Agent related
to any inspections or audits to the extent of the fees and charges (and up to
the amount of any limitation) contained in the Agreement or the Fee Letter,
(g) reasonable out-of-pocket costs and expenses of third party claims or any
other suit paid or incurred by the Lender Group in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group's relationship with Borrower or any of its
Subsidiaries, (h) Agent's reasonable costs and expenses (including reasonable
attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering (including travel, meals, and lodging), syndicating, or amending
the Loan Documents, (i) Agent's and each Lender's reasonable costs and expenses
(including reasonable attorneys, accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning Borrower or any of its Subsidiaries or in exercising rights or
remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral, and (j) usage charges, charges, fees, costs and
expenses for amendments, renewals, extensions, transfers, or drawings from time
to time imposed by the Underlying Issuer or incurred by the Issuing Lender in
respect of Letters of Credit and out-of-pocket charges, fees, costs and expenses
paid or incurred by the Underlying Issuer or Issuing Lender in connection with
the issuance, amendment, renewal, extension, or transfer of, or drawing under,
any Letter of Credit or any demand for payment thereunder.
 
"Lender Group Representatives" has the meaning specified therefor in Section
17.9 of the Agreement.

"Lender-Related Person" means, with respect to any Lender, such Lender, together
with such Lender's Affiliates, officers, directors, employees, attorneys, and
agents.

"Letter of Credit" means a letter of credit (as that term is defined in the
Code) issued by Issuing Lender or a letter of credit (as that term is defined in
the Code) issued by Underlying Issuer, as the context requires.

"Letter of Credit Collateralization" means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit fee and all usage charges set
forth in the Agreement will continue to accrue while the Letters of Credit are
outstanding) to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the then existing Letter of
Credit Usage, (b) delivering to Agent documentation executed by all
beneficiaries under the Letters of Credit, in form and substance reasonably
satisfactory to Agent and the Issuing Lender, terminating all of such
beneficiaries' rights under the Letters of Credit, or (c) providing Agent

 
Schedule 1.1 - Page 21

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with a standby letter of credit, in form and substance reasonably satisfactory
to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in
an amount equal to 105% of the then existing Letter of Credit Usage (it being
understood that the Letter of Credit fee and all usage charges set forth in the
Agreement will continue to accrue while the Letters of Credit are outstanding
and that any such fees that accrue must be an amount that can be drawn under any
such standby letter of credit).
 
"Letter of Credit Disbursement" means a payment made by Issuing Lender or
Underlying Issuer pursuant to a Letter of Credit.

"Letter of Credit Usage" means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

"LIBOR Deadline" has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement.

"LIBOR Notice" means a written notice in the form of Exhibit L-1.

"LIBOR Option" has the meaning specified therefor in Section 2.12(a) of the
Agreement.

"LIBOR Rate" means the rate per annum rate appearing on Bloomberg L.P.'s (the
"Service") Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service) 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period
and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base
Rate Loan to a LIBOR Rate Loan) by Borrower in accordance with the Agreement,
which determination shall be conclusive in the absence of manifest error.

"LIBOR Rate Loan" means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate.

"LIBOR Rate Margin" means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the
applicable margin set forth in the following table that corresponds to the
Monthly Average Excess Availability; provided, however, that for the period from
the Closing Date through June 30, 2011, the LIBOR Rate Margin shall be at the
margin in the row styled "Level IV":
 
Level
 
Monthly Average Excess Availability
 
LIBOR Rate Margin for LIBOR Rate Loans predicated on Current Asset Availability
 
LIBOR Rate Margin for LIBOR Rate Loans predicated on Fixed Asset Availability
I
 
If the Monthly Average Excess Availability is greater than or equal to
$15,000,000
 
2.50 percentage points
 
3.00 percentage points

 
 
Schedule 1.1 - Page 22

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Level
 
Monthly Average Excess Availability
 
LIBOR Rate Margin for LIBOR Rate Loans predicated on Current Asset Availability
 
LIBOR Rate Margin for LIBOR Rate Loans predicated on Fixed Asset Availability

II
 
If the Monthly Average Excess Availability is less than $15,000,000 and greater
than or equal to $10,000,000
 
2.75 percentage points
 
3.25 percentage points
III
 
If the Monthly Average Excess Availability is less than $10,000,000 and greater
than or equal to $5,000,000
 
3.00 percentage points
 
3.50 percentage points
IV
 
If the Monthly Average Excess Availability is less than $5,000,000
 
3.25 percentage points
 
3.75 percentage points

 
Except as set forth in the foregoing proviso, the LIBOR Rate Margin shall be
based upon the most recent Monthly Average Excess Availability, which will be
calculated as of the end of each fiscal month.  Except as set forth in the
foregoing proviso, the LIBOR Rate Margin shall be re-determined monthly on the
first day of the month; provided, however, that if Borrower fails to provide any
Borrowing Base Certificate or other information with respect thereto for any
period on the date required hereunder, the LIBOR Rate Margin shall be set at the
margin in the row styled "Level IV" as of the first day of the month following
the date on which such Borrowing Base Certificate or other information was
required to be delivered until the date on which such Borrowing Base Certificate
or other information is delivered (on which date (but not retroactively),
without constituting a waiver of any Default or Event of Default occasioned by
the failure to timely deliver such Borrowing Base Certificate or other
information, the LIBOR Rate Margin shall be set at the margin based upon the
calculations disclosed by such Borrowing Base Certificate or other
information.  In the event that the information regarding the Monthly Average
Excess Availability contained in any Borrowing Base Certificate or other
information delivered by Borrower to Agent is shown to be inaccurate, and such
inaccuracy, if corrected, would have led to the application of a higher LIBOR
Rate Margin for any period (a "LIBOR Rate Period") than the LIBOR Rate Margin
actually applied for such LIBOR Rate Period, then (i) Borrower shall immediately
deliver to Agent a correct Borrowing Base Certificate for such LIBOR Rate
Period, (ii) the LIBOR Rate Margin shall be determined as if the correct LIBOR
Rate Margin (as set forth in the table above) were applicable for such LIBOR
Rate Period, and (iii) Borrower shall immediately deliver to Agent full payment
in respect of the accrued additional interest and Letter of Credit fees as a
result of such increased LIBOR Rate Margin for such LIBOR Rate Period, which
payment shall be promptly applied by Agent to the affected Obligations.

"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention

 
Schedule 1.1 - Page 23

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agreement, the interest of a lessor under a Capital Lease and any synthetic or
other financing lease having substantially the same economic effect as any of
the foregoing.
 
"Loan Account" has the meaning specified therefor in Section 2.9 of the
Agreement.

"Loan Documents" means the Agreement, any Borrowing Base Certificate, the
Controlled Account Agreements, the Control Agreements, the Fee Letter, the
Guaranty, the Letters of Credit, the Mortgages, the Patent Security Agreement,
the Security Agreement, any note or notes executed by Borrower in connection
with the Agreement and payable to any member of the Lender Group, any letter of
credit application or letter of credit agreement entered into by Borrower in
connection with the Agreement, and any other instrument or agreement entered
into, now or in the future, by Borrower or any of its Subsidiaries and any
member of the Lender Group in connection with the Agreement.

"Loan Party" means Borrower or any Guarantor.

"Margin Stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

"Material Adverse Change" means (a) a material adverse change in the business,
operations, results of operations, assets, liabilities or financial condition of
Borrower and its Subsidiaries, taken as a whole, (b) a material impairment of
Borrower's and its Subsidiaries ability to perform their obligations taken as a
whole under the Loan Documents to which they are parties or of the Lender
Group's ability to enforce the Obligations or realize upon the Collateral, or
(c) a material impairment of the enforceability or priority of Agent's Liens
with respect to the Collateral as a result of an action or failure to act on the
part of Borrower or its Subsidiaries.

"Material Contract" means, with respect to any Person, (i) each contract or
agreement to which such Person or any of its Subsidiaries is a party involving
aggregate consideration payable in any fiscal year to or by such Person or such
Subsidiary of $1,000,000 or more (other than purchase orders in the ordinary
course of the business of such Person or such Subsidiary and other than
contracts that by their terms may be terminated by such Person or Subsidiary in
the ordinary course of its business upon less than 60 days notice without
penalty or premium), and (ii) all other contracts or agreements, the loss of
which would reasonably be expected to result in a Material Adverse Change.

"Maturity Date" has the meaning specified therefor in Section 3.3 of the
Agreement.

"Maximum Revolver Amount" means $50,000,000, decreased by the amount of
reductions in the Revolver Commitments made in accordance with Section 2.4(c) of
the Agreement.

"Moody's" has the meaning specified therefor in the definition of Cash
Equivalents.

"Mortgage Policy" has the meaning specified therefor in Schedule 3.1(v).

 
Schedule 1.1 - Page 24

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"Mortgages" means, individually and collectively, one or more mortgages, deeds
of trust, or deeds to secure debt, executed and delivered by Borrower or its
Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral.

"Net Cash Proceeds" means:

(a)           with respect to any sale or disposition by Borrower or any of its
Subsidiaries of assets, the amount of cash proceeds received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of Borrower or its
Subsidiaries, in connection therewith after deducting therefrom only (i) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (A) Indebtedness owing to Agent or any Lender under the Agreement or the
other Loan Documents and (B) Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such sale or
disposition, (ii) reasonable fees, commissions, and expenses related thereto and
required to be paid by Borrower or such Subsidiary in connection with such sale
or disposition and (iii) taxes paid or payable to any taxing authorities by
Borrower or such Subsidiary in connection with such sale or disposition, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid or payable to a Person that is
not an Affiliate of Borrower or any of its Subsidiaries, and are properly
attributable to such transaction;

(b)           with respect to the issuance or incurrence of any Indebtedness by
Borrower or any of its Subsidiaries, or the issuance by Borrower or any of its
Subsidiaries of any shares of its Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
Borrower or such Subsidiary in connection with such issuance or incurrence,
after deducting therefrom only (i) reasonable fees, commissions, and expenses
related thereto and required to be paid by Borrower or such Subsidiary in
connection with such issuance or incurrence, (ii) taxes paid or payable to any
taxing authorities by Borrower or such Subsidiary in connection with such
issuance or incurrence, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
or payable to a Person that is not an Affiliate of Borrower or any of its
Subsidiaries, and are properly attributable to such transaction; and

(c)           with respect to Extraordinary Receipts, the aggregate amount of
such Extraordinary Receipts after deducting therefrom (i) reasonable fees,
commissions, and expenses related thereto and required to be paid by Borrower or
such Subsidiary in connection with such Extraordinary Receipt, (ii) taxes paid
or payable to any taxing authorities by Borrower or such Subsidiary in
connection with such Extraordinary Receipt, in each case to the extent, but only
to the extent, that the amounts so deducted are, at the time of receipt of such
case, actually paid or payable to a Person that is not an Affiliate of Borrower
or any of its Subsidiaries, and are properly attributable to such Extraordinary
Receipt.

"Net Liquidation Percentage" means the percentage of the book value of
Borrower's Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by an
appraisal company selected by Agent.

 
Schedule 1.1 - Page 25

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"Net Orderly Liquidation Value" means, at any time, the net orderly liquidation
value of Eligible Equipment as set forth in the most recent appraisal of
Borrower's Equipment received by and acceptable to Agent pursuant to methodology
acceptable to Agent in accordance with the Loan Documents.

"Obligations" means (a) all loans (including the Advances (inclusive of
Protective Advances and Swing Loans)), debts, principal, interest (including any
interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Reimbursement Undertakings or with respect to Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Loan Account pursuant to the Agreement), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, and all covenants and duties of any other kind and
description owing by any Loan Party pursuant to or evidenced by the Agreement or
any of the other Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all interest not paid when due
and all other expenses or other amounts that Borrower is required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents, (b) all debts, liabilities, or obligations (including
reimbursement obligations, irrespective of whether contingent) owing by Borrower
or any other Loan Party to an Underlying Issuer now or hereafter arising from or
in respect of an Underlying Letters of Credit, and (c) all Bank Product
Obligations.  Any reference in the Agreement or in the Loan Documents to the
Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.

"OFAC" means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

"Operating Lease" means any lease characterized as an operating lease in
accordance with GAAP as in effect on the date hereof.

"Originating Lender" has the meaning specified therefor in Section 13.1(e) of
the Agreement.

"Overadvance" has the meaning specified therefor in Section 2.5 of the
Agreement.

"Participant" has the meaning specified therefor in Section 13.1(e) of the
Agreement.

"Participant Register" has the meaning set forth in Section 13.1(i) of the
Agreement.

 
Schedule 1.1 - Page 26

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"Patent Security Agreement" has the meaning specified therefor in the Security
Agreement.

"Patriot Act" has the meaning specified therefor in Section 4.18 of the
Agreement.

"Payoff Date" means the first date on which all of the Obligations are paid in
full and the Commitments of the Lenders are terminated.

"Permitted Acquisition" means any Acquisition so long as:

(a)           no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the proposed Acquisition and
the proposed Acquisition is consensual,

(b)           no Indebtedness will be incurred, assumed, or would exist with
respect to Borrower or its Subsidiaries as a result of such Acquisition, other
than Indebtedness permitted under clause (g) of the definition of Permitted
Indebtedness and no Liens will be incurred, assumed, or would exist with respect
to the assets of Borrower or its Subsidiaries as a result or such Acquisition
other than Permitted Liens,

(c)           Borrower has provided Agent with written confirmation, supported
by reasonably detailed calculations, that on a pro forma basis (including pro
forma adjustments arising out of events which are directly attributable to such
proposed Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually and reasonably agreed upon by Borrower and Agent)
created by adding the historical combined financial statements of Borrower
(including the combined financial statements of any other Person or assets that
were the subject of a prior Permitted Acquisition during the relevant period) to
the historical consolidated financial statements of the Person to be acquired
(or the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition, Borrower and its Subsidiaries (i) would
have had a Fixed Charge Coverage Ratio for the 12 fiscal month period ended
immediately prior to the proposed date of consummation of such proposed
Acquisition of at least 1.50:1.00, and (ii) are projected to be in compliance
with the financial covenants in Section 7 for the 4 fiscal quarter period ended
one year after the proposed date of consummation of such proposed Acquisition,

(d)           Borrower has provided Agent with its due diligence package
relative to the proposed Acquisition, including forecasted balance sheets,
profit and loss statements, and cash flow statements of the Person or assets to
be acquired, all prepared on a basis consistent with such Person's (or assets')
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions for the 1 year period following the
date of the proposed Acquisition, on a quarter by quarter basis), in form and
substance (including as to scope and underlying assumptions) reasonably
satisfactory to Agent,

(e)           Borrower shall have Excess Availability in an amount equal to or
greater than $4,500,000 immediately after giving effect to the consummation of
the proposed Acquisition,

 
Schedule 1.1 - Page 27

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(f)           the assets being acquired or the Person whose Stock is being
acquired did not have negative EBITDA during the 12 consecutive month period
most recently concluded prior to the date of the proposed Acquisition,

(g)           Borrower has provided Agent with written notice of the proposed
Acquisition at least 15 Business Days prior to the anticipated closing date of
the proposed Acquisition and, not later than 5 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and other material documents relative to the proposed Acquisition,
which agreement and documents must be reasonably acceptable to Agent,

(h)           the assets being acquired (other than a de minimis amount of
assets in relation to Borrower's and its Subsidiaries' total assets), or the
Person whose Stock is being acquired, are useful in or engaged in, as
applicable, the business of Borrower and its Subsidiaries as described on
Schedule 6.6 are reasonably related or ancillary thereto, allowing for
reasonable expansion and diversification of products and lines of business,

(i)           the assets being acquired (other than a de minimis amount of
assets in relation to the assets being acquired) are located within the United
States or the Person whose Stock is being acquired is organized in a
jurisdiction located within the United States,

(j)           the subject assets or Stock, as applicable, are being acquired
directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in
connection therewith, Borrower or the applicable Loan Party shall have complied
with Section 5.11 or 5.12, as applicable, of the Agreement and, in the case of
an acquisition of Stock, Borrower or the applicable Loan Party shall have
demonstrated to Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties, and

(k)           the purchase consideration payable in respect of all Permitted
Acquisitions (including the proposed Acquisition and including deferred payment
obligations) shall not exceed $10,000,000 in the aggregate.

"Permitted Discretion" means a determination made in the exercise of reasonable
(from the perspective of a secured lender) business judgment.

"Permitted Dispositions" means:

(a)           sales, abandonment, or other dispositions of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business,

(b)           sales of Inventory to buyers in the ordinary course of business,

(c)           the use or transfer of money or Cash Equivalents in a manner that
is not prohibited by the terms of the Agreement or the other Loan Documents,

(d)           the licensing, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business,

 
Schedule 1.1 - Page 28

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(e)           the granting of Permitted Liens,

(f)           the sale or discount, in each case without recourse, of Accounts
arising in the ordinary course of business, but only in connection with the
compromise, settlement or collection thereof,

(g)           any involuntary loss, damage or destruction of property,

(h)           any involuntary condemnation, seizure or taking, by exercise of
the power of eminent domain or otherwise, or confiscation or requisition of use
of property,

(i)            the leasing or subleasing of assets of Borrower or its
Subsidiaries in the ordinary course of business and the leasing of real property
owned by Borrower consistent with its historical practices to the extent such
real property location is not necessary or useful in the conduct of the Loan
Parties' business,

(j)            the sale or issuance of Stock (other than Prohibited Preferred
Stock) of Borrower,

(k)           the lapse of registered patents, trademarks and other intellectual
property of Borrower and its Subsidiaries to the extent not economically
desirable in the conduct of their business and so long as such lapse is not
materially adverse to the interests of the Lenders,

(l)            the making of a Restricted Junior Payment that is expressly
permitted to be made pursuant to the Agreement,

(m)           the making of a Permitted Investment,

(n)           the sale of the owned Real Property located at 44017 US Highway 52
N, New London, North Carolina so long as (i) the purchase price paid in
connection with such sale is not less than $2,000,000 and (ii) not less than 80%
of the purchase price for such sale is paid in cash on the closing date of such
sale, and

(o)           dispositions of assets (other than Accounts, intellectual
property, licenses, Stock of Subsidiaries of Borrower, or Material Contracts)
not otherwise permitted in clauses (a) through (m) above so long as made at fair
market value and the aggregate fair market value of all assets disposed of in
all such dispositions since the Closing Date (including the proposed
disposition) would not exceed $10,000,000.

"Permitted Holder" means Tontine Capital Management, L.L.C., Tontine Capital
Partners, L.P., Tontine Capital Overseas Master Fund, LP, Tontine Capital
Overseas Master Fund II, LP and their Affiliates.

"Permitted Indebtedness" means

(a)           Indebtedness evidenced by the Agreement or the other Loan
Documents, as well as Indebtedness owed to Underlying Issuers with respect to
Underlying Letters of Credit,

 
Schedule 1.1 - Page 29

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(b)           Indebtedness set forth on Schedule 4.19 and any Refinancing
Indebtedness in respect of such Indebtedness,

(c)           Permitted Purchase Money Indebtedness and any Refinancing
Indebtedness in respect of such Indebtedness,

(d)           endorsement of instruments or other payment items for deposit,

(e)           Indebtedness consisting of (i) unsecured guarantees incurred in
the ordinary course of business with respect to surety and appeal bonds,
performance bonds, bid bonds, appeal bonds, completion guarantee and similar
obligations; (ii) unsecured guarantees arising with respect to customary
indemnification obligations to purchasers in connection with Permitted
Dispositions; and (iii) unsecured guarantees with respect to Indebtedness of
Borrower or one of its Subsidiaries, to the extent that the Person that is
obligated under such guaranty could have incurred such underlying Indebtedness,

(f)           the Subordinated Debt,

(g)           Acquired Indebtedness in an amount not to exceed $250,000
outstanding at any one time,

(h)           Indebtedness incurred in the ordinary course of business under
performance, surety, statutory, and appeal bonds,

(i)            Indebtedness owed to any Person providing property, casualty,
liability, or other insurance to Borrower or any of its Subsidiaries, so long as
the amount of such Indebtedness is not in excess of the amount of the unpaid
cost of, and shall be incurred only to defer the cost of, such insurance for the
year in which such Indebtedness is incurred and such Indebtedness is outstanding
only during such year,

(j)            the incurrence by Borrower or its Subsidiaries of Indebtedness
under Hedge Agreements that are incurred for the bona fide purpose of hedging
the interest rate, commodity, or foreign currency risks associated with
Borrower's and its Subsidiaries' operations and not for speculative purposes,

(k)           Indebtedness incurred in respect of credit cards, credit card
processing services, debit cards, stored value cards, purchase cards (including
so-called "procurement cards" or "P-cards"), or Cash Management Services, in
each case, incurred in the ordinary course of business,

(l)           unsecured Indebtedness of Borrower owing to current and former
employees, officers, or directors (or any spouses, ex-spouses, or estates of any
of the foregoing) incurred in connection with the repurchase or redemption by
Borrower of the Stock of Borrower that has been issued to such Persons, so long
as (i) no Default or Event of Default has occurred and is continuing or would
result from the incurrence of such Indebtedness, (ii) the aggregate amount of
all such Indebtedness outstanding at any one time does not exceed $250,000, and
(iii) such Indebtedness is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent,

 
Schedule 1.1 - Page 30

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(m)           unsecured Indebtedness of Borrower, so long as (i) no Default or
Event of Default has occurred and is continuing or would result from the
incurrence of such Indebtedness, and (ii) to the extent the aggregate amount of
all such Indebtedness outstanding at any one time does not exceed $250,000 and
(iii) such Indebtedness is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent,

(n)           Indebtedness owing to each of Massachusetts Mutual Life Insurance
Company, Pacific Fidelity Life Insurance Company, Equitable Variable Life
Insurance Company and Jackson National Life Insurance Company in an aggregate
principal amount not to exceed the aggregate cash surrender value of the Key
Person Life Insurance Policies and secured solely by Borrower's interests in the
Key Person Life Insurance Policies,

(o)           Indebtedness composing Permitted Investments, and

(p)           contingent liabilities in respect of any indemnification
obligation, adjustment of purchase price, non-compete, or similar obligation of
Borrower or the applicable Loan Party incurred in connection with the
consummation of one or more Permitted Acquisitions.

"Permitted Intercompany Advances" means loans made by (a) a Loan Party to
another Loan Party, (b) a non-Loan Party to another non-Loan Party, (c) a
non-Loan Party to a Loan Party, so long as the parties thereto are party to an
intercompany subordination agreement in form and substance satisfactory to
Agent, and (d) a Loan Party to a non-Loan Party so long as in the case of this
clause (d), (i) the amount of such loans does not exceed $250,000 outstanding at
any one time, (ii) no Event of Default has occurred and is continuing or would
result therefrom, and (iii) Borrower has Excess Availability plus Qualified Cash
of $250,000 or greater immediately after giving effect to each such loan.

"Permitted Investments" means:

(a)           Investments in cash and Cash Equivalents,

(b)           Investments in negotiable instruments deposited or to be deposited
for collection in the ordinary course of business,

(c)           advances made in connection with purchases of goods or services in
the ordinary course of business,

(d)           Investments received in settlement of amounts due to any Loan
Party or any of its Subsidiaries effected in the ordinary course of business or
owing to any Loan Party or any of its Subsidiaries as a result of Insolvency
Proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of a Loan Party or its Subsidiaries,

(e)           Investments owned by any Loan Party or any of its Subsidiaries on
the Closing Date and set forth on Schedule P-1,

(f)            guarantees permitted under the definition of Permitted
Indebtedness,

(g)           Permitted Intercompany Advances,

 
Schedule 1.1 - Page 31

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(h)           Stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,

(i)            deposits of cash made in the ordinary course of business to
secure performance of operating leases,

(j)            non-cash loans to employees, officers, and directors of Borrower
or any of its Subsidiaries for the purpose of purchasing Stock in Borrower so
long as the proceeds of such loans are used in their entirety to purchase such
stock in Borrower,

(k)            Permitted Acquisitions,,

(l)            [intentionally omitted],

(m)           Investments resulting from entering into (i) Bank Product
Agreements, or (ii) agreements relative to Indebtedness that is permitted under
clause (j) of the definition of Permitted Indebtedness,

(n)           [intentionally omitted], and

(o)           so long as no Event of Default has occurred and is continuing or
would result therefrom, any other Investments in an aggregate amount not to
exceed $500,000 during the term of the Agreement.

"Permitted Liens" means:

(a)           Liens granted to, or for the benefit of, Agent to secure the
Obligations,

(b)           Liens for unpaid taxes, assessments, or other governmental charges
or levies that either (i) are not yet delinquent, or (ii) do not have priority
over Agent's Liens and the underlying taxes, assessments, or charges or levies
are the subject of Permitted Protests,

(c)           judgment Liens arising solely as a result of the existence of
judgments, orders, or awards that do not constitute an Event of Default under
Section 8.3 of the Agreement,

(d)           Liens set forth on Schedule P-2; provided, however, that to
qualify as a Permitted Lien, any such Lien described on Schedule P-2 shall only
secure the Indebtedness that it secures on the Closing Date and any Refinancing
Indebtedness in respect thereof,

(e)           the interests of lessors under operating leases and non-exclusive
licensors under license agreements,

(f)            purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as (i) such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, and (ii) such Lien only secures
the Indebtedness that was incurred to acquire the asset purchased or acquired or
any Refinancing Indebtedness in respect thereof,

 
Schedule 1.1 - Page 32

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(g)           Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests,

(h)           Liens on amounts deposited to secure Borrower's and its
Subsidiaries obligations in connection with worker's compensation or other
unemployment insurance,

(i)            Liens on amounts deposited to secure Borrower's and its
Subsidiaries obligations in connection with the making or entering into of bids,
tenders, or leases in the ordinary course of business and not in connection with
the borrowing of money,

(j)            Liens on amounts deposited to secure Borrower's and its
Subsidiaries reimbursement obligations with respect to surety or appeal bonds
obtained in the ordinary course of business,

(k)           with respect to any Real Property, easements, rights of way, and
zoning restrictions that do not materially interfere with or impair the use or
operation thereof,

(l)            non-exclusive licenses of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of business,

(m)           Liens that are replacements of Permitted Liens to the extent that
the original Indebtedness is the subject of permitted Refinancing Indebtedness
and so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

(n)           rights of setoff or bankers' liens upon deposits of cash in favor
of banks or other depository institutions, solely to the extent incurred in
connection with the maintenance of such deposit accounts in the ordinary course
of business,

(o)           Liens granted in the ordinary course of business on the unearned
portion of insurance premiums securing the financing of insurance premiums to
the extent the financing is permitted under the definition of Permitted
Indebtedness,

(p)           Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods,

(q)           Liens securing the Subordinated Debt and subject to the
Subordination, Agreement,

(r)            Liens solely on any cash earnest money deposits made by Borrower
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement with respect to a Permitted Investment,

(s)            Liens solely on the Key Person Life Insurance Policies securing
the Indebtedness permitted under clause (n) of the definition of Permitted
Indebtedness,

(t)            Liens assumed by Borrower or any Loan Party in connection with a
Permitted Acquisition that secure Acquired Indebtedness that is either Purchase
Money

 
Schedule 1.1 - Page 33

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Indebtedness or a Capital Lease with respect to Equipment not exceeding $250,000
in the aggregate at any time outstanding, and
 
(u)           other Liens which do not secure Indebtedness for borrowed money or
letters of credit and as to which the aggregate amount of the obligations
secured thereby does not exceed $250,000.

"Permitted Preferred Stock" means and refers to any Preferred Stock issued by
Borrower (and not by one or more of its Subsidiaries) that is not Prohibited
Preferred Stock.

"Permitted Protest" means the right of Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on Borrower's or its Subsidiaries' books and
records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Borrower or its Subsidiary, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of Agent's Liens.

"Permitted Purchase Money Indebtedness" means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate
principal amount outstanding at any one time not in excess of $500,000.

"Permitted Subordinated Debt Redemption" means the redemption or prepayment of
the Subordinated Debt at a price not to exceed 101% (or in the case of a
redemption or prepayment of the Subordinated Debt in full, (a) 104% if such
prepayment occurs after the first anniversary of the Closing Date but on or
prior to the second anniversary of the Closing Date, and (b) 103% if such
prepayment occurs after the second anniversary of the Closing Date but on or
prior to the third anniversary of the Closing Date) of the principal amount
thereof plus accrued interest, provided that (i) no Default or Event of Default
has occurred and is continuing or would result therefrom, (ii) both immediately
before and immediately after giving effect to such redemption or prepayment,
Excess Availability is at least $5,000,000, (iii) on a pro forma basis
(determined as if such redemption or prepayment had been made at the beginning
of the relevant period), Borrower and its Subsidiaries would have had a Fixed
Charge Coverage Ratio for the 12 fiscal month period ended immediately prior to
the proposed date of such redemption or prepayment of at least 1.25:1.00 and
(iv) no such redemption or prepayment shall occur before March 31, 2012.

"Person" means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

"Preferred Stock" means, as applied to the Stock of any Person, the Stock of any
class or classes (however designated) that is preferred with respect to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares of Stock of
any other class of such Person.

 
Schedule 1.1 - Page 34

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"Prohibited Preferred Stock" means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any
obligation to pay dividends, other than dividends of shares of Preferred Stock
of the same class and series payable in kind or dividends of shares of common
stock) on or before a date that is less than 1 year after the Maturity Date, or,
on or before the date that is less than 1 year after the Maturity Date, is
redeemable at the option of the holder thereof for cash or assets or securities
(other than distributions in kind of shares of Preferred Stock of the same class
and series or of shares of common stock).

"Projections" means Borrower's forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Borrower's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

"Pro Rata Share" means, as of any date of determination:

(a)           with respect to a Lender's obligation to make Advances and right
to receive payments of principal, interest, fees, costs, and expenses with
respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender's Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated
or reduced to zero, the percentage obtained by dividing (y) the outstanding
principal amount of such Lender's Advances by (z) the outstanding principal
amount of all Advances,

(b)           with respect to a Lender's obligation to participate in Letters of
Credit and Reimbursement Undertakings, to reimburse the Issuing Lender, and
right to receive payments of fees with respect thereto, (i) prior to the
Revolver Commitments being terminated or reduced to zero, the percentage
obtained by dividing (y) such Lender's Revolver Commitment, by (z) the aggregate
Revolver Commitments of all Lenders, and (ii) from and after the time that the
Revolver Commitments have been terminated or reduced to zero, the percentage
obtained by dividing (y) the outstanding principal amount of such Lender's
Advances by (z) the outstanding principal amount of all Advances; provided,
however, that if all of the Advances have been repaid in full and Letters of
Credit remain outstanding, Pro Rata Share under this clause shall be determined
based upon subclause (i) of this clause as if the Revolver Commitments had not
been terminated or reduced to zero and based upon the Revolver Commitments as
they existed immediately prior to their termination or reduction to zero,

(c)           [intentionally omitted], and

(d)           with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section 15.7 of the
Agreement), (i) prior to the Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender's Revolver Commitment,
by (z) the aggregate amount of Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated
or reduced to zero, the percentage obtained by dividing (y) the outstanding
principal amount of such Lender's Advances, by (z) the outstanding principal
amount of all Advances; provided, however, that if all of the Advances have been
repaid in full and Letters of Credit remain outstanding, Pro Rata Share under
this clause shall be determined based upon subclause

 
Schedule 1.1 - Page 35

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(i) of this clause as if the Revolver Commitments had not been terminated or
reduced to zero and based upon the Revolver Commitments as they existed
immediately prior to their termination or reduction to zero.
 
"Protective Advances" has the meaning specified therefor in Section 2.3(d)(i) of
the Agreement.

"Purchase Money Indebtedness" means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
90 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof.

"Qualified Cash" means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Borrower and its Subsidiaries that is
in Deposit Accounts or in Securities Accounts, or any combination thereof, and
which such Deposit Account or Securities Account is the subject of a Control
Agreement and is maintained by a branch office of the bank or securities
intermediary located within the United States.

"Real Property" means any estates or interests in real property now owned or
hereafter acquired by Borrower or its Subsidiaries and the improvements thereto.

"Real Property Collateral" means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by Borrower or its Subsidiaries.

"Record" means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

"Refinancing Indebtedness" means refinancings, renewals, or extensions of
Indebtedness so long as:

(a)           such refinancings, renewals, or extensions do not result in an
increase in the principal amount of the Indebtedness so refinanced, renewed, or
extended, other than by the amount of premiums paid thereon and the fees and
expenses incurred in connection therewith and by the amount of unfunded
commitments with respect thereto,

(b)           such refinancings, renewals, or extensions do not result in a
shortening of the average weighted maturity (measured as of the refinancing,
renewal, or extension) of the Indebtedness so refinanced, renewed, or extended,
nor are they on terms or conditions that, taken as a whole, are or would
reasonably be expected to be materially adverse to the interests of the Lenders,

(c)           if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and

 
Schedule 1.1 - Page 36

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(d)           the Indebtedness that is refinanced, renewed, or extended is not
recourse to any Person that is liable on account of the Obligations other than
those Persons which were obligated with respect to the Indebtedness that was
refinanced, renewed, or extended.

"Register" has the meaning set forth in Section 13.1(h) of the Agreement.

"Registered Loan" has the meaning set forth in Section 13.1(h) of the Agreement.

"Reimbursement Undertaking" has the meaning specified therefor in Section
2.11(a) of the Agreement.

"Related Fund" means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

"Remedial Action" means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.

"Replacement Lender" has the meaning specified therefor in Section 2.13(b) of
the Agreement.

"Report" has the meaning specified therefor in Section 15.16 of the Agreement.

"Required Availability" means, as of any date of determination, that the sum of
(a) Excess Availability, plus (b) Qualified Cash exceeds the greater of
(i) $7,500,000 and (ii) an amount equal to 15% of the Borrowing Base, as such
date of determination.

"Required Lenders" means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (d) of the definition of Pro Rata Shares) exceed 50%;
provided, however, that at any time there are 2 or more Lenders, "Required
Lenders" must include at least 2 Lenders.

"Restricted Junior Payment" means to (a) declare or pay any dividend or make any
other payment or distribution on account of Stock issued by Borrower (including
any payment in connection with any merger or consolidation involving Borrower)
or to the direct or indirect holders of Stock issued by Borrower in their
capacity as such (other than dividends or distributions payable in Stock (other
than Prohibited Preferred Stock) issued by Borrower, or (b) purchase, redeem, or
otherwise acquire or retire for value (including in connection with any merger
or consolidation involving Borrower) any Stock issued by Borrower.

"Restructuring Charges" means non-recurring restructuring charges taken after
December 31, 2009 that are approved in writing by Agent (which approval shall
not be unreasonably withheld).

 
Schedule 1.1 - Page 37

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"Revolver Commitment" means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender under the Agreement, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement.

"Revolver Usage" means, as of any date of determination, the sum of (a) the
amount of outstanding Advances, plus (b) the amount of the Letter of Credit
Usage.

"S&P" has the meaning specified therefor in the definition of Cash Equivalents.

"Sanctioned Entity" means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.

"Sanctioned Person" means a person named on the list of Specially Designated
Nationals maintained by OFAC.

"SEC" means the United States Securities and Exchange Commission and any
successor thereto.

"Securities Account" means a securities account (as that term is defined in the
Code).

"Securities Act" means the Securities Act of 1933, as amended from time to time,
and any successor statute.

"Security Agreement" means a security agreement, dated as of even date with the
Agreement, in form and substance reasonably satisfactory to Agent, executed and
delivered by Borrower and Guarantors to Agent.

"Settlement" has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

"Settlement Date" has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

"Solvent" means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person's assets is greater than all of such Person's
debts.

"Stock" means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other "equity
security" (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).

 
Schedule 1.1 - Page 38

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"Subordinated Debt" means the Indebtedness in the original principal amount of
$5,000,000 (plus payment-in-kind interest) issued by Borrower to Subordinated
Lenders, evidenced by the Subordinated Debt Documents and subject to the
Subordination Agreement and additional Indebtedness of up to an original
aggregate principal amount of $3,000,000 (plus payment-in-kind interest) issued
by Borrower to one or more Subordinated Lenders, evidenced by the Subordinated
Debt Documents and, subject to the Subordination Agreement and at the same or
lower rate of cash and total interest, with the same maturity date as the
initial Subordinated Debt issued on the Closing Date, with no scheduled
amortization, and otherwise on the same terms and conditions, as the initial
Subordinated Debt issued on the Closing Date.

"Subordinated Debt Documents" means that certain Secured Senior Subordinated
Note and Warrant Purchase Agreement dated as of the Closing Date between
Subordinated Lenders and Borrower and all other agreements, instruments and
documents relating thereto.

"Subordinated Lenders" means Tontine Capital Overseas Master Fund II, L.P., and
Northcreek Mezzanine Fund I, L.P.

"Subordinated Lender Warrants" means the warrants to purchase Stock of Borrower
issued pursuant to that certain Warrant Agreement dated as of March 31, 2011
among Borrower and Subordinated Lenders.

"Subordination Agreement" means the Subordination and Intercreditor Agreement
dated as of the Closing Date among Agent, Subordinated Lenders and the Loan
Parties.

"Subsidiary" of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

"Swing Lender" means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent agrees, in such Lender's sole discretion, to
become the Swing Lender under Section 2.3(b) of the Agreement.

"Swing Loan" has the meaning specified therefor in Section 2.3(b) of the
Agreement.

"Taxes" means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect to
such payments and all interest, penalties or similar liabilities with respect
thereto; provided, however, that Taxes shall exclude (i) any tax imposed on the
net income or net profits of any Lender or any Participant (including any branch
profits taxes), in each case imposed by the jurisdiction (or by any political
subdivision or taxing authority thereof) in which such Lender or such
Participant is organized or the jurisdiction (or by any political subdivision or
taxing authority thereof) in which such Lender's or such Participant's principal
office is located in each case as a result of a present or former connection
between such Lender or such Participant and the jurisdiction or taxing

 
Schedule 1.1 - Page 39

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authority imposing the tax (other than any such connection arising solely from
such Lender or such Participant having executed, delivered or performed its
obligations or received payment under, or enforced its rights or remedies under
the Agreement or any other Loan Document); (ii) taxes resulting from a Lender's
or a Participant's failure to comply with the requirements of Section 16(c) or
(d) of the Agreement, and (iii) any United States federal withholding taxes that
would be imposed on amounts payable to a Foreign Lender based upon the
applicable withholding rate in effect at the time such Foreign Lender becomes a
party to the Agreement (or designates a new lending office), except that Taxes
shall include (A) any amount that such Foreign Lender (or its assignor, if any)
was previously entitled to receive pursuant to Section 16(a) of the Agreement,
if any, with respect to such withholding tax at the time such Foreign Lender
becomes a party to the Agreement (or designates a new lending office), and
(B) additional United States federal withholding taxes that may be imposed after
the time such Foreign Lender becomes a party to the Agreement (or designates a
new lending office), as a result of a change in law, rule, regulation, order or
other decision with respect to any of the foregoing by any Governmental
Authority.
 
"Tax Lender" has the meaning specified therefor in Section 14.2(a) of the
Agreement.

"Total Commitment" means, with respect to each Lender, its Total Commitment,
and, with respect to all Lenders, their Total Commitments, in each case as such
Dollar amounts are set forth beside such Lender's name under the applicable
heading on Schedule C-1 attached hereto or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender under
the Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of the Agreement.

"TTM EBITDA" means, as of any date of determination, EBITDA of Borrower
determined on a consolidated basis in accordance with GAAP, for the 12 month
period most recently ended.

"Underlying Issuer" means Wells Fargo or one of its Affiliates.

"Underlying Letter of Credit" means a Letter of Credit that has been issued by
an Underlying Issuer.

"United States" means the United States of America.

"Voidable Transfer" has the meaning specified therefor in Section 17.8 of the
Agreement.

"Wells Fargo" means Wells Fargo Bank, National Association, a national banking
association.

"WFCF" means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company.
 
 
Schedule 1.1 - Page 40

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