Exhibit 10.11

LOGO [g18639image001.jpg]    Credit Agreement

This agreement dated as of May 1, 2008 is between JPMorgan Chase Bank, N.A.
(together with its successors and assigns, the “Bank”), whose address is 707
Travis, 7th Floor, Houston, TX 77002, and O.I. Corporation (individually, the
“Borrower” and if more than one, collectively, the “Borrowers”), whose address
is 151 Graham Road, College Station, TX 77842.

 

1. Credit Facilities.

 

  1.1 Scope. This agreement governs Facility A, and, unless otherwise agreed to
in writing by the Bank and the Borrower or prohibited by any Legal Requirement
(as hereafter defined), governs the Credit Facilities as defined below. Advances
under any Credit Facilities shall be subject to the procedures established from
time to time by the Bank. Any procedures agreed to by the Bank with respect to
obtaining advances, including automatic loan sweeps, shall not vary the terms or
conditions of this agreement or the other Related Documents regarding the Credit
Facilities.

 

  1.2 Facility A (Line of Credit). The Bank has approved a credit facility to
the Borrower in the principal sum not to exceed $6,000,000.00 in the aggregate
at any one time outstanding (“Facility A”). Facility A shall be used only for
the purpose of (a) acquisition financing (“Acquisition Advances”), and
(b) working capital for Borrower’s regular business operations. Borrower shall
provide advice to Bank of the purpose of each advance made under Facility A in
form and substance reasonably satisfactory to Bank, and in the form of Exhibit A
if Bank shall request.

A. Required Paydown and Reduction in Facility A after Acquisition Advances. If
(i) Borrower shall have requested and received Acquisition Advances with an
aggregate amount of $1,000,000.00 or more, and (ii) the Line of Credit Note
shall have had an aggregate principal balance continuously exceeding
$3,000,000.00 for more than 90 days (the 90th day being a “Reduction Trigger
Date”), then on the 180th day after both such conditions first shall have
occurred (a “Required Reduction Date”), the maximum face amount of Facility A
shall be reduced by an amount equal to the total principal balance outstanding
on the Required Reduction Date. To the extent the outstanding principal balance
of the Line of Credit Note shall exceed maximum face amount of Facility A as so
reduced on the Required Reduction Date, Borrower shall make a repayment of
principal on the Required Reduction Date so as to comply with the reduction in
face amount of Facility A. After the occurrence of any Required Reduction Date,
if the conditions described in the first sentence shall again occur, there will
be another Reduction Trigger Date and Required Reduction Date and the foregoing
provisions concerning them shall be applicable.

B. Borrowing Base. The aggregate principal amount of advances outstanding at any
one time under Facility A (the “Aggregate Outstanding Amount”) shall not exceed
the Borrowing Base or the maximum principal amount then available under Facility
A, whichever is less (the “Maximum Available Amount”). If at any time the
Aggregate Outstanding Amount exceeds the Maximum Available Amount, the Borrower
shall immediately pay the Bank an amount equal to such excess. “Borrowing Base”
means the aggregate of:

1. 85% of the book value of all Eligible Accounts; plus

2. 40% of the lower of cost (determined using the first-in, first-out method of
inventory accounting) or wholesale market value, as determined by the Bank, of
all Eligible Inventory

 

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C. Covenant to Provide Additional Security. In the event that total combined
outstanding balance of all Notes under Facility A shall in the aggregate
continuously exceed $4,000,000.00 for more than 90 days, Borrower shall promptly
upon notice by Bank provide to Bank a first priority perfected security interest
in all of its Equipment (as defined in the Uniform Commercial Code) excluding
any Equipment subject to lien disclosed to Bank prior to the date of this
agreement, on terms and conditions and otherwise acceptable to Bank in form and
substance.

 

2. Definitions and Interpretations.

 

  2.1 Definitions. As used in this agreement, the following terms have the
following respective meanings:

A. “Account” means a trade account, account receivable, other receivable, or
other right to payment for goods sold or leased or services rendered.

B. “Account Debtor” means the Person obligated on an Account.

C. “Affiliate” means any Person which, directly or indirectly Controls or is
Controlled by or under common Control with, another Person, and any director or
officer thereof. The Bank is under no circumstances to be deemed an Affiliate of
the Borrower or any of its Subsidiaries.

D. “Authorizing Documents” means certificates of authority to transact business,
certificates of good standing, borrowing resolutions, appointments, officer’s
certificates, certificates of incumbency, and other documents which empower and
authorize or evidence the power and authority of all Persons (other than the
Bank) executing any Related Document or their representatives to execute and
deliver the Related Documents and perform the Person’s obligations thereunder.

E. “Collateral” means all Property, now or in the future subject to any Lien in
favor of the Bank, securing or intending to secure, any of the Liabilities.

F. “Control” as used with respect to any Person, means the power to direct or
cause the direction of, the management and policies of that Person, directly or
indirectly, whether through the ownership of Equity Interests, by contract, or
otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

G. “Credit Facilities” means all extensions of credit from the Bank to the
Borrower, whether now existing or hereafter arising, including but not limited
to those described in Section 1, if any, and those extended contemporaneously
with this agreement.

H. “Distributions” means all dividends and other distributions made to any
Equity Owners, other than salary, bonuses, and other compensation for services
expended in the current accounting period.

I. “Eligible Accounts” means, at any time, all of the Borrower’s Accounts in
which the Bank has a first priority continuing perfected Lien and which are
earned and invoiced within thirty (30) days of being earned and which contain
selling terms and conditions satisfactory to the Bank, are payable on ordinary
trade terms, and are not evidenced by a promissory note, other instrument or
chattel paper. The net amount of any Eligible Account against which the Borrower
may borrow shall exclude all returns, discounts, credits, and offsets of any
nature. Unless otherwise agreed to by the Bank in writing, Eligible Accounts do
not include Accounts: (1) which are not owned by the Borrower

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free and clear of all Liens, constructive trust, statutory priorities not in
favor of the Bank, and claims of Persons other than the Bank; (2) with respect
to which the Account Debtor is an Affiliate of the Borrower or otherwise
affiliated with or related to the Borrower, including without limitation, any
employee, officer, director, Equity Owner or agent of the Borrower; (3) with
respect to which goods are placed on consignment, guaranteed sale,
bill-and-hold, sale-and-return, sale on approval, cash-on-delivery or other
terms by reason of which the payment by the Account Debtor may be conditional;
(4) with respect to which the Account Debtor is not a resident of the United
States, except to the extent such Accounts are otherwise Eligible Accounts and
are supported by insurance, bonds or other assurances satisfactory to the Bank;
(5) subject to the U.S. Office of Foreign Asset Control Special Designated
Nationals and Blocked Person’s List, or with respect to which the Account Debtor
is otherwise a Person with whom the Borrower or the Bank is prohibited from
doing business by any applicable Legal Requirement; (6) which are not payable in
U.S. Dollars; (7) with respect to which the Borrower is or may become liable to
the Account Debtor for goods sold or services rendered by the Account Debtor to
the Borrower; (8) which are subject to dispute, counterclaim, deduction,
withholding, defense, or setoff; (9) with respect to which the goods have not
been shipped or delivered, or the services have not been rendered, to the
Account Debtor, or which otherwise constitute pre-billed Accounts; (10) which
constitute retainage, or are bonded Accounts; (11) with respect to which the
Bank determines the creditworthiness, financial or business condition of the
Account Debtor to be unsatisfactory; (12) of any Account Debtor who is the
subject of any state or federal bankruptcy, insolvency, or debtor-in-relief
acts, or who has had appointed a trustee, custodian, or receiver for the assets
of such Account Debtor, or who has made an assignment for the benefit of
creditors or has become insolvent or fails generally to pay its debts (including
its payrolls) as such debts become due; (13) [deleted and reserved]; (14) which
have not been paid in full within ninety (90) days from due date; (15) due from
any one Account Debtor to the extent such Accounts constitute more than 20% of
all Eligible Accounts; and (16) otherwise determined to be ineligible by the
Bank. In no event will the balance of any Account of any single Account Debtor
be eligible whenever the portion of the Accounts of such Account Debtor which
have not been paid within ninety (90) days from due date is in excess of 20% of
the total amount outstanding on all Accounts of such Account Debtor.

J. “Eligible Inventory” means, at any time, all of the Borrower’s Inventory in
which the Bank has a first priority continuing perfected Lien except Inventory
which is: (1) not owned by it free and clear of all Liens except in favor of the
Bank, and claims of Persons other than the Bank; (2) slow moving, obsolete,
unsalable, damaged, defective, perishable, or unfit for further processing;
(3) work in process; (4) subject to consignment or otherwise in the possession
of another Person, unless otherwise agreed to by the Bank in writing; (5) in
transit or located outside of the United States; (6) identified to be purchased
under a contract under which it has received, or is entitled to receive, an
advance payment; (7) determined by the Bank to be ineligible due to licensing,
intellectual property, or any Legal Requirements that would make it difficult to
sell, lease or use such Inventory; (8) comprised of samples, returns, rejected
items, re-work items, non-standard items, odd-lots, or repossessed goods,
provided however, that analytical systems obtained as trade-in for upgrades and
held for sale shall be eligible up to a gross limit of $500,000 book value;
(9) produced in violation of applicable Legal Requirements, including the Fair
Labor Standards Act and the regulations and orders of the Department of Labor;
or (10) otherwise determined ineligible by the Bank; provided, however, that
transportation and storage charges shall be excluded from amounts otherwise
included in Eligible Inventory.

K. “Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

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L. “Equity Owner” means a shareholder, partner, member, holder of a beneficial
interest in a trust or other owner of any Equity Interests.

M. “GAAP” means generally accepted accounting principles in effect from time to
time in the United States of America, consistently applied.

N. “Inventory” means raw materials, work in process, finished goods,
merchandise, parts and supplies, of every kind and goods held for sale or lease
or furnished under contracts of service and all documents of title, warehouse
receipts, bills of lading, and all other documents of every type covering all or
any part of the foregoing.

O. “Intangible Assets” means the aggregate amount of: (1) all assets classified
as intangible assets under GAAP, including, without limitation, goodwill,
trademarks, patents, copyrights, organization expenses, franchises, licenses,
trade names, brand names, mailing lists, catalogs, excess of cost over book
value of assets acquired, and bond discount and underwriting expenses; and
(2) loans or advances to, investments in, or receivables from (i) any Affiliate,
officer, director, employee, Equity Owner or agent of the Borrower or (ii) any
Person if such loan, advance, investment or receivable is outside the Borrower’s
ordinary course of business.

P. “Legal Requirement” means any law, ordinance, decree, requirement, order,
judgment, rule, regulation (or interpretation of any of the foregoing) of any
foreign governmental authority, the United States of America, any state thereof,
any political subdivision of any of the foregoing or any agency, department,
commission, board, bureau, court or other tribunal having jurisdiction over the
Bank, any Pledgor or any Obligor or any of its Subsidiaries or their respective
Properties or any agreement by which any of them is bound.

Q. “Liabilities” means all indebtedness, liabilities and obligations of every
kind and character of the Borrower to the Bank, whether the obligations,
indebtedness and liabilities are individual, joint and several, contingent or
otherwise, now or hereafter existing, including, without limitation, all
liabilities, interest, costs and fees, arising under or from any note, open
account, overdraft, credit card, lease, Rate Management Transaction, letter of
credit application, endorsement, surety agreement, guaranty, acceptance, foreign
exchange contract or depository service contract, whether payable to the Bank or
to a third party and subsequently acquired by the Bank, any monetary obligations
(including interest) incurred or accrued during the pendency of any bankruptcy,
insolvency, receivership or other similar proceedings, regardless of whether
allowed or allowable in such proceeding, and all renewals, extensions,
modifications, consolidations, rearrangements, restatements, replacements or
substitutions of any of the foregoing.

R. “Lien” means any mortgage, deed of trust, pledge, charge, encumbrance,
security interest, collateral assignment or other lien or restriction of any
kind.

S. “Notes” means all promissory notes, instruments and/or contracts now or
hereafter evidencing the Credit Facilities.

T. “Obligor” means any Borrower, guarantor, surety, co-signer, endorser, general
partner or other Person who may now or in the future be obligated to pay any of
the Liabilities.

U. “Organizational Documents” means, with respect to any Person, certificates of
existence or formation, documents establishing or governing the Person or
evidencing or certifying that the Person is duly organized and validly existing
in accordance with all applicable Legal Requirements, including all amendments,
restatements, supplements or modifications to such certificates and documents as
of the date of the Related Document referring to the Organizational Document and
any and all future modifications thereto approved by the Bank.

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V. “Permitted Investments” means (1) readily marketable direct obligations of
the United States of America or any agency thereof with maturities of one year
or less from the date of acquisition; (2) fully insured (if issued by a bank
other than the Bank) certificates of deposit with maturities of one year or less
from the date of acquisition issued by any commercial bank operating in the
United States of America having capital and surplus in excess of
$500,000,000.00; (3) commercial paper of a domestic issuer if at the time of
purchase such paper is rated in one of the two highest rating categories of
Standard and Poor’s Corporation or Moody’s Investors Service; and (4) Borrower’s
holdings of preferred stock existing as of the date of this agreement.

W. “Person” means any individual, corporation, partnership, limited liability
company, joint venture, joint stock association, association, bank, business
trust, trust, unincorporated organization, any foreign governmental authority,
the United States of America, any state of the United States and any political
subdivision of any of the foregoing or any other form of entity.

X. “Pledgor” means any Person providing Collateral.

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

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

AA. “Related Documents” means this agreement, the Notes, applications for
letters of credit, all loan agreements, credit agreements, reimbursement
agreements, security agreements, mortgages, deeds of trust, pledge agreements,
assignments, guaranties, and any other instrument or document executed in
connection with this agreement or with any of the Liabilities.

BB. “Subsidiary” means, as to any particular Person (the “parent”), a Person the
accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of the date of determination, as well as any other
Person of which fifty percent (50%) or more of the Equity Interests is at the
time of determination directly or indirectly owned, Controlled or held, by the
parent or by any Person or Persons Controlled by the parent, either alone or
together with the parent.

CC. “Tangible Net Worth” means total assets less the sum of Intangible Assets
and total liabilities.

 

  2.2

Interpretations. Whenever possible, each provision of the Related Documents
shall be interpreted in such manner as to be effective and valid under
applicable Legal Requirements. If any provision of this agreement cannot be
enforced, the remaining portions of this agreement shall continue in effect. In
the event of any conflict or inconsistency between this agreement and the
provisions of any other Related

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Documents, the provisions of this agreement shall control. Use of the term
“including” does not imply any limitation on (but may expand) the antecedent
reference. Any reference to a particular document includes all modifications,
supplements, replacements, renewals or extensions of that document, but this
rule of construction does not authorize amendment of any document without the
Bank’s consent. Section headings are for convenience of reference only and do
not affect the interpretation of this agreement. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP. Whenever the Bank’s determination, consent,
approval or satisfaction is required under this agreement or the other Related
Documents or whenever the Bank may at its option take or refrain from taking any
action under this agreement or the other Related Documents, the decision as to
whether or not the Bank makes the determination, consents, approves, is
satisfied or takes or refrains from taking any action, shall be in the sole and
exclusive discretion of the Bank, and the Bank’s decision shall be final and
conclusive.

 

3. Conditions Precedent to Extensions of Credit.

 

  3.1 Conditions Precedent to Initial Extension of Credit under each of the
Credit Facilities. Before the first extension of credit governed by this
agreement and any initial advance under any of the Credit Facilities, whether by
disbursement of a loan, issuance of a letter of credit, or otherwise, the
Borrower shall deliver to the Bank, in form and substance satisfactory to the
Bank:

A. Loan Documents. The Notes, and as applicable, the letter of credit
applications, reimbursement agreements, the security agreements, the pledge
agreements, financing statements, mortgages or deeds of trust, the guaranties,
the subordination agreements, and any other documents which the Bank may
reasonably require to give effect to the transactions described in this
agreement or the other Related Documents;

B. Organizational and Authorizing Documents. The Organizational Documents and
Authorizing Documents of the Borrower and any other Persons (other than the
Bank) executing the Related Documents in form and substance satisfactory to the
Bank that at a minimum: (i) document the due organization, valid existence and
good standing of the Borrower and every other Person (other than the Bank) that
is a party to this agreement or any other Related Document; (ii) evidence that
each Person (other than the Bank) which is a party to this agreement or any
other Related Document has the power and authority to enter into the
transactions described therein; and (iii) evidence that the Person signing on
behalf of each Person that is a party to the Related Documents (other than the
Bank) is duly authorized to do so; and

C. Liens. The termination, assignment or subordination, as determined by the
Bank, of all Liens on the Collateral in favor of any secured party (other than
the Bank).

 

  3.2 Conditions Precedent to Each Extension of Credit. Before any extension of
credit governed by this agreement, whether by disbursement of a loan, issuance
of a letter of credit or otherwise, the following conditions must be satisfied:

A. Representations. The representations of the Borrower and any other parties,
other than the Bank, in the Related Documents are true on and as of the date of
the request for and funding of the extension of credit;

B. No Event of Default. No default, event of default or event that would
constitute a default or event of default but for the giving of notice, the lapse
of time or both, has occurred in any provision of this agreement, the Notes or
any other Related Documents and is continuing or would result from the extension
of credit;

C. Additional Approvals, Opinions, and Documents. The Bank has received any
other approvals, opinions and documents as it may reasonably request; and

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D. No Prohibition or Onerous Conditions. The making of the extension of credit
is not prohibited by and does not subject the Bank, any Obligor, or any
Subsidiary of the Borrower to any penalty or onerous condition under, any Legal
Requirement.

 

4. Affirmative Covenants. The Borrower agrees to do, and cause each of its
Subsidiaries to do, each of the following:

 

  4.1 Insurance. Maintain insurance with financially sound and reputable
insurers, with such insurance and insurers to be satisfactory to the Bank,
covering its Property and business against those casualties and contingencies
and in the types and amounts as are in accordance with sound business and
industry practices, and furnish to the Bank, upon request of the Bank, reports
on each existing insurance policy showing such information as the Bank may
reasonably request.

 

  4.2 Existence. Maintain its existence and business operations as presently in
effect in accordance with all applicable Legal Requirements, pay its debts and
obligations when due under normal terms, and pay on or before their due date,
all taxes, assessments, fees and other governmental monetary obligations, except
as they may be contested in good faith if they have been properly reflected on
its books and, at the Bank’s request, adequate funds or security has been
pledged or reserved to insure payment.

 

  4.3 Financial Records. Maintain proper books and records of account, in
accordance with GAAP, and consistent with financial statements previously
submitted to the Bank.

 

  4.4 Inspection. Permit the Bank, its agents and designees to: (a) inspect and
photograph its Property, to examine and copy files, books and records, and to
discuss its business, operations, prospects, assets, affairs and financial
condition with the Borrower’s or its Subsidiaries’ officers and accountants, at
times and intervals as the Bank reasonably determines; (b) perform audits or
other inspections of the Collateral, including the records and documents related
to the Collateral; and (c) confirm with any Person any obligations and
liabilities of the Person to the Borrower or its Subsidiaries. The Borrower
will, and will cause its Subsidiaries to cooperate with any inspection or audit.
The Borrower will pay the Bank the reasonable costs and expenses of any audit or
inspection of the Collateral (including fees and expenses charged internally by
the Bank for asset reviews) promptly after receiving the invoice.

 

  4.5 Financial Reports. Furnish to the Bank whatever information, statements,
books and records the Bank may from time to time reasonably request, including
at a minimum:

A. Within forty-five (45) days after each quarterly period, the consolidated
financial statements of the Borrower and its Subsidiaries prepared and presented
in accordance with GAAP, including a balance sheet as of the end of that period,
and income statement for that period, and, if requested at any time by the Bank,
statements of cash flow and retained earnings for that period, all certified as
correct by one of its authorized agents.

B. Within one hundred and twenty (120) days after and as of the end of each of
its fiscal years, the consolidated financial statements of the Borrower and its
Subsidiaries prepared and presented in accordance with GAAP, including a balance
sheet and statements of income, cash flow and retained earnings, such financial
statements to be audited by an independent certified public accountant of
recognized standing satisfactory to the Bank.

C. Within thirty (30) days after and as of the end of each calendar month in
which there was an outstanding principal balance under Facility A on the last
day of such calendar month, and if none of the following lists have been
provided or are otherwise due as of

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the end of the immediately preceding calendar month, with any request for an
advance under the Credit Facilities, a list of Accounts, aged from date of
invoice and certified as correct by one of its authorized agents.

D. A borrowing base certificate, in form and detail satisfactory to the Bank,
along with such supporting documentation as the Bank may request, at the
following times: (A) within thirty (30) days after and as of the end of each
calendar month in which there was an outstanding principal balance under
Facility A on the last day of such calendar month, and (B) if no borrowing base
certificate has been provided or is otherwise due as of the end of the
immediately preceding calendar month, with any request for an advance under the
Credit Facilities.

 

  4.6 Notices of Claims, Litigation, Defaults, etc. Promptly inform the Bank in
writing of: (1)all existing and all threatened litigation, claims,
investigations, administrative proceedings and similar actions or changes in
Legal Requirements affecting it which could materially affect its business,
assets, affairs, prospects or financial condition; (2) the occurrence of any
event which gives rise to the Bank’s option to terminate the Credit Facilities;
(3) the institution of steps by it to withdraw from, or the institution of any
steps to terminate, any employee benefit plan as to which it may have liability;
(4) any reportable event or any prohibited transaction in connection with any
employee benefit plan; (5) any additions to or changes in the locations of its
businesses; and (6) any alleged breach by the Bank of any provision of this
agreement or of any other Related Document.

 

  4.7 Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between it and any other Person.

 

  4.8 Title to Assets and Property. Maintain good and marketable title to all of
its Properties, and defend them against all claims and demands of all Persons at
any time claiming any interest in them.

 

  4.9 Additional Assurances. Promptly make, execute and deliver any and all
agreements, documents, instruments and other records that the Bank may request
to evidence any of the Credit Facilities, cure any defect in the execution and
delivery of any of the Related Documents, perfect any Lien, comply with any
Legal Requirement applicable to the Bank or the Credit Facilities or describe
more fully particular aspects of the agreements set forth or intended to be set
forth in any of the Related Documents.

 

  4.10 Employee Benefit Plans. Maintain each employee benefit plan as to which
it may have any liability, in compliance with all Legal Requirements.

 

  4.11 Banking Relationship. Establish and maintain its primary banking
depository and disbursement relationship with the Bank.

 

  4.12 Compliance Certificates. Provide the Bank, within forty-five (45) days
after the end of each fiscal quarter, with a certificate executed by its chief
financial officer, or other officer or an individual satisfactory to the Bank,
certifying that, as of the date of the certificate, no default exists under any
provision of this agreement or the other Related Documents.

 

  4.13 Organizational Documents. Provide the Bank, within 10 days in each case,
notice of any action or proposal adopted by its board of directors to alter,
amend or modify any of its Organizational Documents.

 

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5. Negative Covenants.

 

  5.1 Unless otherwise noted, the financial requirements set forth in this
section will be computed in accordance with GAAP applied on a basis consistent
with financial statements previously submitted by the Borrower to the Bank.

 

  5.2 Without the written consent of the Bank, the Borrower will not and no
Subsidiary of the Borrower will:

A. Dividends. Declare or pay any dividend other than in compliance with its
dividend policy as existing on the date of this agreement, or change its
dividend policy of $0.20/share total declared and paid annually, at $0.05 paid
quarterly.

B. Distributions. Redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of its Equity Interests, or return any contribution to an Equity
Owner; provided however that repurchases of shares in a total aggregate amount
not to exceed $500,000 in any period of 12 consecutive months shall be permitted
under this subsection so long as no other default results from such repurchases.

C. Debt. Incur, contract for, assume, or permit to remain outstanding,
indebtedness for borrowed money, installment obligations, or obligations under
capital leases or operating leases, other than (1) unsecured trade debt incurred
in the ordinary course of business, (2) indebtedness owing to the Bank,
(3) indebtedness reflected in its latest financial statement furnished to the
Bank prior to execution of this agreement and that is not to be paid with
proceeds of borrowings under the Credit Facilities, (4) indebtedness outstanding
as of the date hereof that has been disclosed to the Bank in writing and that is
not to be paid with proceeds of borrowings under the Credit Facilities; and
(5) obligations under capital leases or operating leases not to exceed $100,000
in aggregate amount owing at any one time.

D. Guaranties. Guarantee or otherwise become or remain secondarily liable on the
undertaking of another, except for endorsement of drafts for deposit and
collection in the ordinary course of business.

E. Liens. Create or permit to exist any Lien on any of its Property except:
existing Liens known to and approved by the Bank; Liens to the Bank; Liens
incurred in the ordinary course of business securing current nondelinquent
liabilities for taxes, worker’s compensation, unemployment insurance, social
security and pension liabilities.

F. Limitation on Negative Pledge Clauses. Enter into any agreement with any
Person other than the Bank which prohibits or limits its ability to create or
permit to exist any Lien on any of its Property, whether now owned or hereafter
acquired.

G. Continuity of Operations. (1) Engage in any business activities substantially
different from those in which it is presently engaged; (2) cease operations,
liquidate, merge, transfer, acquire or consolidate with any other Person, change
its name, dissolve, or sell any assets out of the ordinary course of business;
(3) enter into any arrangement with any Person providing for the leasing by it
of Property which has been sold or transferred by it to such Person; or
(4) change its business organization, the jurisdiction under which its business
organization is formed or organized, or its chief executive office, or any
places of its businesses; provided however, notwithstanding the foregoing,
Borrower shall be permitted to acquire other firm(s) or business(es) (by asset
acquisition and debt assumption or merger where Borrower is the surviving
entity) so long as the acquired firm or business in each case is in a line of
business substantially similar to Borrower’s, as determined by Bank in its sole
good faith discretion, and the total aggregate consideration for all
acquisitions made under this proviso shall together be not

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more than $6,000,000 (cash or market value of other consideration of all kinds
(including Borrower’s stock and debt assumed) as determined by Bank in its sole
good faith discretion).

H. Subsidiaries. Form, create or acquire any Subsidiary, provided however, that
Borrower shall be entitled to receive Bank’s consent in the case of any
Subsidiary subject to the condition that prior to formation, creation or
acquisition the Subsidiary shall be bound to guaranty all Liabilities and pledge
all of its assets as security for the Liabilities, in form and substance on
Bank’s usual terms and conditions and otherwise reasonably acceptable to Bank.

I. Conflicting Agreements. Enter into any agreement containing any provision
which would be violated or breached by the performance of its obligations under
this agreement or any of the other Related Documents.

J. Limitation on Loans, Advances to and Investments in Others and Receivables
from Others. Purchase, hold or acquire any Equity Interest or evidence of
indebtedness of, make or permit to exist any loans or advances to, permit to
exist any receivable from, or make or permit to exist any investment or acquire
any interest whatsoever in, any Person, except: (1) extensions of trade credit
to customers in the ordinary course of business on ordinary terms; (2) Permitted
Investments; and (3) loans, advances, investments and receivables existing as of
the date of this agreement that have been disclosed to and approved by the Bank
in writing and that are not to be paid with proceeds of borrowings under the
Credit Facilities.

K. Tangible Net Worth. Permit at any time, its Tangible Net Worth to be less
than $18,000,000.00 plus an amount equal to 75% of annual net income (if
positive) added cumulatively each fiscal year beginning the first fiscal year
end occurring after the date of this agreement.

L. Liquidity. Permit at any time its total market value, as determined by Bank,
of unencumbered cash and other unencumbered Permitted Investments to be less
than $2,000,000.00.

M. EBITDA. Permit its net income plus interest expense, plus depreciation
expense, plus amortization expense, plus income tax expense, plus non-cash
non-recurring expense, plus non-cash expenses related to FASB 123 “Accounting
for Stock-Based Compensation”, minus non-cash non-recurring income, minus
interest income and minus extraordinary gains, all computed for each Test
Period, to be less than the Target Amount. As used in this subsection, the term
“Test Period” means each rolling period of four consecutive fiscal quarters. The
Target Amount shall be the following amounts for the Test Periods ending as
follows:

$1,250,000.00 for Test Periods with ending dates through and including
September 30, 2008,

$1,500,000.00 for Test Periods ending October 30, 2008 through and including
September 30, 2009,

$1,750,000.00 for Test Periods ending October 30, 2009 through and including
September 30, 2010,

$2,000,000.00 for all Test Periods thereafter;

provided, however, that for any Test Period ending on a date when the aggregate
outstanding amount of Acquisition Advances is more than $3,000,000.00, then the
Target Amount shall be $2,000,000.00 EBITDA on a pro forma basis inclusive of
acquisition(s).

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N. Government Regulation. (1) Be or become subject at any time to any Legal
Requirement or list of any government agency (including, without limitation, the
U.S. Office of Foreign Asset Control list) that prohibits or limits the Bank
from making any advance or extension of credit to it or from otherwise
conducting business with it, or (2) fail to provide documentary and other
evidence of its identity as may be requested by the Bank at any time to enable
the Bank to verify its identity or to comply with any applicable Legal
Requirement, including, without limitation, Section 326 of the USA Patriot Act
of 2001, 31 U.S.C. Section 5318.

O. Use of Proceeds. Use, or permit any proceeds of the Credit Facilities to be
used, directly or indirectly, for: (1) any personal, family or household
purpose; or (2) the purpose of “purchasing or carrying any margin stock” within
the meaning of Federal Reserve Board Regulation U. At the Bank’s request, it
will furnish a completed Federal Reserve Board Form U-1.

 

  5.3 Financial Statement Calculations. The financial covenant(s) set forth in
the Section entitled “Negative Covenants” or in any subsection thereof shall,
except as may be otherwise expressly provided with respect to any particular
financial covenant, be calculated on the basis of the Borrower’s financial
statements prepared on a consolidated basis with its Subsidiaries in accordance
with GAAP. Except as may be otherwise expressly provided with respect to any
particular financial covenant, if any financial covenant states that it is to be
tested with respect to any particular period of time (which may be referred to
therein as a “Test Period”) ending on any test date (e.g., a fiscal month end,
fiscal quarter end, or fiscal year end), then compliance with that covenant
shall be required commencing with the period of time ending on the first test
date that occurs after the date of this agreement (or, if applicable, of the
amendment to this agreement which added or amended such financial covenant).

 

6. Representations.

 

  6.1

Representations and Warranties by the Borrower. To induce the Bank to enter into
this agreement and to extend credit or other financial accommodations under the
Credit Facilities, the Borrower represents and warrants as of the date of this
agreement and as of the date of each request for credit under the Credit
Facilities that each of the following statements is and shall remain true and
correct throughout the term of this agreement and until all Credit Facilities
and all Liabilities under the Notes and other Related Documents are paid in
full: (a) its principal residence or chief executive office is at the address
shown above, (b) its name as it appears in this agreement is its exact name as
it appears in its Organizational Documents, (c) the execution and delivery of
this agreement and the other Related Documents to which it is a party, and the
performance of the obligations they impose, do not violate any Legal
Requirement, conflict with any agreement by which it is bound, or require the
consent or approval of any other Person, (d) this agreement and the other
Related Documents have been duly authorized, executed and delivered by all
parties (other than the Bank) and are valid and binding agreements of those
Persons, enforceable according to their terms, except as may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors’
rights generally and by general principles of equity, (e) all balance sheets,
profit and loss statements, and other financial statements and other information
furnished to the Bank in connection with the Liabilities are accurate and fairly
reflect the financial condition of the Persons to which they apply on their
effective dates, including contingent liabilities of every type, which financial
condition has not changed materially and adversely since those dates, (f) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for

--------------------------------------------------------------------------------

 

unpaid taxes) is pending or threatened against it, and no other event has
occurred which may in any one case or in the aggregate materially adversely
affect it or any of its Subsidiaries’ financial condition, properties, business,
affairs or operations, other than litigation, claims, or other events, if any,
that have been disclosed to and acknowledged by the Bank in writing, (g) all of
its tax returns and reports that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have been paid
in full, except those presently being contested by it in good faith and for
which adequate reserves have been provided, (h) it is not an “investment
company” or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended, (i) it is not a
“holding company”, or a “subsidiary company” of a “holding company” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended, (j) there are no defenses or counterclaims, offsets or adverse
claims, demands or actions of any kind, personal or otherwise, that it could
assert with respect to this agreement or the Credit Facilities, (k) it owns, or
is licensed to use, all trademarks, trade names, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted, (l) the execution and delivery of this agreement and the Notes and
the performance of the obligations they impose, if the Borrower is other than a
natural Person (i) are within its powers, (ii) have been duly authorized by all
necessary action of its governing body, and (iii) do not contravene the terms of
its Organizational Documents or other agreement or document governing its
affairs; and (m) with respect to the Borrowing Base, (i) each asset represented
by it to be eligible for Borrowing Base purposes of this agreement conforms to
the eligibility definitions set forth in this agreement (ii) all asset values
delivered to the Bank will be true and correct, subject to immaterial variance;
and be determined on a consistent accounting basis; (iii) except as agreed to
the contrary by the Bank in writing, each asset is now and at all times
hereafter will be in its physical possession and shall not be held by others on
consignment, sale or approval, or sale or return; (iv) except as reflected in
schedules delivered to the Bank, each asset is now and at all times hereafter
will be of good and merchantable quality, free from defects; and (v) each asset
is not now and will not at any time hereafter be stored with a bailee,
warehouseman, or similar Person without the Bank’s prior written consent, and in
such event, it will concurrently at the time of bailment cause any such bailee,
warehouseman, or similar Person to issue and deliver to the Bank, warehouseman
receipts in the Bank’s name evidencing the storage of the assets.

 

7. Default/Remedies.

 

  7.1 Events of Default/Acceleration. If any of the following events occurs, the
Notes shall become due immediately, without notice, at the Bank’s option, and
the Borrower hereby waives notice of intent to accelerate the maturity of the
Notes and notice of acceleration of the Notes upon the occurrence of any of the
following events:

A. Any Obligor fails to pay when due any of the Liabilities or any amount
payable with respect to any of the Liabilities, or any other debt to any Person
with a total principal amount of greater than $25,000 or amount payable
thereunder, or under any Note, any other Related Document, or any agreement or
instrument evidencing other debt to any Person.

B. Any Obligor or any Pledgor: (i) fails to observe or perform or otherwise
violates any other term, covenant, condition or agreement of any of the Related
Documents; (ii) makes any materially incorrect or misleading representation,
warranty, or certificate to the Bank; (iii) makes any materially incorrect or
misleading representation in any financial statement or other information
delivered to the Bank; or (iv) defaults under the terms of any agreement or
instrument relating to any debt for borrowed money (other than the debt
evidenced by the Related Documents) and the effect of such default will allow
the creditor to declare the debt due before its stated maturity.

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C. In the event (i) there is a default under the terms of any Related Document,
(ii) any Obligor terminates or revokes or purports to terminate or revoke its
guaranty or any Obligor’s guaranty becomes unenforceable in whole or in part,
(iii) any Obligor fails to perform promptly under its guaranty, or (iv) any
Obligor fails to comply with, or perform under any agreement, now or hereafter
in effect, between the Obligor and the Bank, or any Affiliate of the Bank or
their respective successors and assigns.

D. There is any loss, theft, damage, or destruction of any Collateral with an
aggregate value exceeding $10,000.00, not covered by insurance.

E. Any event occurs that would permit the Pension Benefit Guaranty Corporation
to terminate any employee benefit plan of any Obligor or any Subsidiary of any
Obligor.

F. Any Obligor or any of its Subsidiaries or any Pledgor: (i) becomes insolvent
or unable to pay its debts as they become due; (ii) makes an assignment for the
benefit of creditors; (iii) consents to the appointment of a custodian,
receiver, or trustee for itself or for a substantial part of its Property;
(iv) commences any proceeding under any bankruptcy, reorganization, liquidation,
insolvency or similar laws; (v) conceals or removes any of its Property, with
intent to hinder, delay or defraud any of its creditors; (vi) makes or permits a
transfer of any of its Property, which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or (vii) makes a transfer of any of its
Property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid.

G. A custodian, receiver, or trustee is appointed for any Obligor or any of its
Subsidiaries or any Pledgor or for a substantial part of their respective
Property.

H. Any Obligor or any of its Subsidiaries, without the Bank’s written consent:
(i) liquidates or is dissolved; (ii) merges or consolidates with any other
Person other than as expressly permitted in this agreement; (iii) leases, sells
or otherwise conveys a material part of its assets or business outside the
ordinary course of its business; (iv) leases, purchases, or otherwise acquires a
material part of the assets of any other Person, except in the ordinary course
of its business; or (v) agrees to do any of the foregoing; provided, however,
that any Subsidiary of an Obligor may merge or consolidate with any other
Subsidiary of that Obligor, or with the Obligor, so long as the Obligor is the
survivor.

I. Proceedings are commenced under any bankruptcy, reorganization, liquidation,
or similar laws against any Obligor or any of its Subsidiaries or any Pledgor
and remain undismissed for thirty (30) days after commencement; or any Obligor
or any of its Subsidiaries or any Pledgor consents to the commencement of those
proceedings.

J. Any judgment is entered against any Obligor or any of its Subsidiaries, or
any attachment, seizure, sequestration, levy, or garnishment is issued against
any Property of any Obligor or any of its Subsidiaries or of any Pledgor or any
Collateral, involving an aggregate amount or value in any case exceeding
$500,000.

K. Any material adverse change occurs in: (i) the reputation, Property,
financial condition, business, assets, affairs, prospects, liabilities, or
operations of any Obligor or any of its Subsidiaries; (ii) any Obligor’s or
Pledgor’s ability to perform its obligations under the Related Documents; or
(iii) the Collateral.

L. There shall occur any change in ownership such that any Person or group of
Persons acting in concert (including without limitation any “group” of Persons
deemed to be

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formed for the purpose of acquiring, holding, voting or disposing of Borrower’s
voting securities for purposes of the requirement under Section 13(d) of the
Securities Exchange Act of 1934, and the rules and regulations thereunder, to
file a statement on Schedule 13D with the Securities and Exchange Commission as
a “person” within the meaning of Section 13(d)(3) of that Act) shall own or
control more than 35% of equity ownership voting power.

 

  7.2 Remedies; Cure Periods. Subject to the cure periods provided for
hereinafter, at any time after the occurrence of a default, the Bank may do one
or more of the following: (a) cease permitting the Borrower to incur any
Liabilities; (b) terminate any commitment of the Bank evidenced by any of the
Notes; (c) declare any of the Notes to be immediately due and payable, without
notice of acceleration, intention to accelerate, presentment and demand or
protest or notice of any kind, all of which are hereby expressly waived;
(d) exercise all rights of setoff that the Bank may have contractually, by law,
in equity or otherwise; and (e) exercise any and all other rights pursuant to
any of the Related Documents, at law, in equity or otherwise.

A. Cure Periods. Notwithstanding anything to the contrary contained in this
agreement or any of the other Related Documents, the Bank shall not exercise its
option to accelerate the maturity of the Notes upon the occurrence of (i) a
default in payment of money included in the Liabilities, unless the default has
not been fully cured within five (5) days after its occurrence, or (ii) a
default in timely delivery of any report of financial information provided for
in Section 4.5 , unless the default has not been fully cured within ten
(10) days after its occurrence. Notwithstanding the existence of any cure
period, the Bank shall have no obligation to extend credit governed by this
agreement, whether by advance, disbursement of a loan, issuance of a letter of
credit or otherwise after the occurrence of any default or event which with the
giving of notice or the passage of time or both could become a default or during
any cure period. The inclusion of any cure period in this agreement shall have
no bearing on the due dates for payments under any of the Related Documents,
whether for purposes of calculating late payment charges or otherwise.

B. Remedies Generally. The rights of the Bank under this agreement and the other
Related Documents are in addition to other rights (including without limitation,
other rights of setoff) the Bank may have contractually, by law, in equity or
otherwise, all of which are cumulative and hereby retained by the Bank. Each
Obligor agrees to stand still with regard to the Bank’s enforcement of its
rights, including taking no action to delay, impede or otherwise interfere with
the Bank’s rights to realize on any Collateral.

C. Bank’s Right of Setoff. The Borrower grants to the Bank a security interest
in the Deposits, and the Bank is authorized to setoff and apply, all Deposits,
Securities and Other Property, and Bank Debt against any and all Liabilities.
This right of setoff may be exercised at any time from time to time after the
occurrence of any default, without prior notice to or demand on the Borrower and
regardless of whether any Liabilities are contingent, unmatured or unliquidated.
In this paragraph: (a) the term “Deposits” means any and all accounts and
deposits of the Borrower (whether general, special, time, demand, provisional or
final) at any time held by the Bank (including all Deposits held jointly with
another, but excluding any IRA or Keogh Deposits, or any trust Deposits in which
a security interest would be prohibited by any Legal Requirement); (b) the term
“Securities and Other Property” means any and all securities and other personal
Property of the Borrower in the custody, possession or control of the Bank,
JPMorgan Chase & Co. or their respective Subsidiaries and Affiliates (other than
Property held by the Bank in a fiduciary capacity); and (c) the term “Bank Debt”
means all indebtedness at any time owing by the Bank, to or for the credit or
account of the Borrower and any claim of the Borrower (whether individual, joint
and several or otherwise) against the Bank now or hereafter existing.

 

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8. Miscellaneous.

 

  8.1 Notice. Any notices and demands under or related to this agreement shall
be in writing and delivered to the intended party at its address stated in this
agreement, and if to the Bank, at its main office if no other address of the
Bank is specified in this agreement, by one of the following means: (a) by hand;
(b) by a nationally recognized overnight courier service; or (c) by certified
mail, postage prepaid, with return receipt requested. Notice shall be deemed
given: (a) upon receipt if delivered by hand; (b) on the Delivery Day after the
day of deposit with a nationally recognized courier service; or (c) on the third
Delivery Day after the notice is deposited in the mail. “Delivery Day” means a
day other than a Saturday, a Sunday or any other day on which national banking
associations are authorized to be closed. Any party may change its address for
purposes of the receipt of notices and demands by giving notice of the change in
the manner provided in this provision.

 

  8.2 No Waiver. No delay on the part of the Bank in the exercise of any right
or remedy waives that right or remedy. No single or partial exercise by the Bank
of any right or remedy precludes any other future exercise of it or the exercise
of any other right or remedy. The making of an advance during the existence of
any default or subsequent to the occurrence of a default or when all conditions
precedent have not been met shall not constitute a waiver of the default or
condition precedent. No waiver or indulgence by the Bank of any default is
effective unless it is in writing and signed by the Bank, nor shall a waiver on
one occasion bar or waive that right on any future occasion.

 

  8.3 Integration. This agreement, the Notes, and the other Related Documents
embody the entire agreement and understanding between the Borrower and the Bank
and supersede all prior agreements and understandings relating to their subject
matter. If any one or more of the obligations of the Borrower under this
agreement or the Notes is invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining obligations of the
Borrower shall not in any way be affected or impaired, and the invalidity,
illegality or unenforceability in one jurisdiction shall not affect the
validity, legality or enforceability of the obligations of the Borrower under
this agreement, the Notes and the other Related Documents in any other
jurisdiction.

 

  8.4 Joint and Several Liability. Each party executing this agreement as the
Borrower is individually, jointly and severally liable under this agreement.

 

  8.5 Governing Law and Venue. This agreement shall be governed by and construed
in accordance with the laws of the State of Texas (without giving effect to its
laws of conflicts). The Borrower agrees that any legal action or proceeding with
respect to any of its obligations under this agreement may be brought by the
Bank in any state or federal court located in the State of Texas, as the Bank in
its sole discretion may elect. By the execution and delivery of this agreement,
the Borrower submits to and accepts, for itself and in respect of its property,
generally and unconditionally, the non-exclusive jurisdiction of those courts.
The Borrower waives any claim that the State of Texas is not a convenient forum
or the proper venue for any such suit, action or proceeding.

 

  8.6 Survival of Representations and Warranties. The Borrower understands and
agrees that in extending the Credit Facilities, the Bank is relying on all
representations, warranties, and covenants made by the Borrower in this
agreement or in any certificate or other instrument delivered by the Borrower to
the Bank under this agreement or in any of the other Related Documents. The
Borrower further agrees that regardless of any investigation made by the Bank,
all such representations, warranties and covenants will survive the making of
the Credit Facilities and delivery to the Bank of this agreement, shall be
continuing in nature, and shall remain in full force and effect until such time
as the Liabilities shall be paid in full.

 

--------------------------------------------------------------------------------

  8.7 Non-Liability of the Bank. The relationship between the Borrower on one
hand and the Bank on the other hand shall be solely that of borrower and lender.
The Bank shall have no fiduciary responsibilities to the Borrower. The Bank
undertakes no responsibility to the Borrower to review or inform the Borrower of
any matter in connection with any phase of the Borrower’s business or
operations.

 

  8.8 Indemnification of the Bank. The Borrower agrees to indemnify, defend and
hold the Bank, its parent companies, Subsidiaries, Affiliates, their respective
successors and assigns and each of their respective shareholders, directors,
officers, employees and agents (collectively, the “Indemnified Persons”)
harmless from any and against any and all loss, liability, obligation, damage,
penalty, judgment, claim, deficiency, expense, interest, penalties, attorneys’
fees (including the fees and expenses of any attorneys engaged by the
Indemnified Person) and amounts paid in settlement (“Claims”) to which any
Indemnified Person may become subject arising out of or relating to the Credit
Facilities, the Liabilities under this agreement or any other Related Documents
or the Collateral, including any Claims resulting from any Indemnified Person’s
own negligence, except to the limited extent that the Claims are proximately
caused by the Indemnified Person’s gross negligence or willful misconduct. The
indemnification provided for in this paragraph shall survive the termination of
this agreement and shall not be affected by the presence, absence or amount of
or the payment or nonpayment of any claim under, any insurance.

 

  8.9 Counterparts. This agreement may be executed in multiple counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts, taken together, shall constitute one and the same agreement.

 

  8.10 Advice of Counsel. The Borrower acknowledges that it has been advised by
counsel, or had the opportunity to be advised by counsel, in the negotiation,
execution and delivery of this agreement and any other Related Documents.

 

  8.11 Expenses. To the extent not prohibited by applicable Legal Requirements
and whether or not the transactions contemplated by this agreement are
consummated, the Borrower agrees to pay or reimburse the Bank on demand all
reasonable costs and expenses of every kind incurred (or charged by internal
allocation) in connection with the negotiation, preparation, execution, filing,
recording, modification, supplementing and waiver of this agreement and/or any
Related Document(s), the making, servicing and collection of the Credit
Facilities and the realization on any Collateral and any other amounts owed
under the Related Documents, including without limitation reasonable attorneys’
fees (including counsel for the Bank that are employees of the Bank or its
Affiliates) and court costs. These costs and expenses include without limitation
any costs or expenses incurred by the Bank in any bankruptcy, reorganization,
insolvency or other similar proceeding involving any Obligor, Pledgor, or
Property of any Obligor, Pledgor, or Collateral. The obligations of the Borrower
under this section shall survive the termination of this agreement. Provided
however, notwithstanding the foregoing, the initial preparation of this
agreement and the Related Documents presented in connection therewith, each in
Bank’s standard form, shall be without charge to Borrower.

 

  8.12

Reinstatement. The Borrower agrees that to the extent any payment or transfer is
received by the Bank in connection with the Liabilities, and all or any part of
the payment or transfer is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid or transferred by the Bank
or paid or transferred over to a trustee, receiver or any other entity, whether
under any proceeding or otherwise (any of those payments or transfers is
hereinafter referred to as a “Preferential Payment”), then this agreement and
the Notes shall continue to be effective or shall be reinstated, as the case may
be, even if all those Liabilities have been paid in full and whether or not the
Bank is

--------------------------------------------------------------------------------

 

in possession of the Notes and whether any of the Notes has been marked, paid,
released or cancelled, or returned to the Borrower and, to the extent of the
payment, repayment or other transfer by the Bank, the Liabilities or part
intended to be satisfied by the Preferential Payment shall be revived and
continued in full force and effect as if the Preferential Payment had not been
made. The obligations of the Borrower under this section shall survive the
termination of this agreement.

 

  8.13 Assignments. The Borrower agrees that the Bank may provide any
information or knowledge the Bank may have about the Borrower or about any
matter relating to the Notes or the other Related Documents to JPMorgan Chase &
Co., or any of its Subsidiaries or Affiliates or their successors, or to any one
or more purchasers or potential purchasers of the Notes or the Related
Documents. The Borrower agrees that the Bank may at any time sell, assign or
transfer one or more interests or participations in all or any part of its
rights and obligations in the Notes to one or more purchasers whether or not
related to the Bank.

 

  8.14 Waivers. Each Obligor waives (a) any right to receive notice of the
following matters before the Bank enforces any of its rights: (i) any demand,
diligence, presentment, dishonor and protest, or (ii) any action that the Bank
takes regarding any Person, any Collateral, or any of the Liabilities, that it
might be entitled to by law or under any other agreement; (b) any right to
require the Bank to proceed against the Borrower, any other Obligor or any
Collateral, or pursue any remedy in the Bank’s power to pursue; (c) any defense
based on any claim that any Obligor’s obligations exceed or are more burdensome
than those of the Borrower; (d) the benefit of any statute of limitations
affecting liability of any Obligor or the enforcement hereof; (e) any defense
arising by reason of any disability or other defense of the Borrower or by
reason of the cessation from any cause whatsoever (other than payment in full)
of the obligation of the Borrower for the Liabilities; and (f) any defense based
on or arising out of any defense that the Borrower may have to the payment or
performance of the Liabilities or any portion thereof. Each Obligor consents to
any extension or postponement of time of its payment without limit as to the
number or period, to any substitution, exchange or release of all or any part of
any Collateral, to the addition of any other party, and to the release or
discharge of, or suspension of any rights and remedies against, any Obligor. The
Bank may waive or delay enforcing any of its rights without losing them. Any
waiver affects only the specific terms and time period stated in the waiver. No
modification or waiver of any provision of the Notes is effective unless it is
in writing and signed by the Person against whom it is being enforced. To the
extent not prohibited by any Legal Requirement, each Obligor waives (a) all of
its rights under Rule 31, Texas Rules of Civil Procedure, chapter 34 of the
Texas Business and Commerce Code, and Section 17.001 of the Texas Civil Practice
and Remedies Code; (b) to the extent it is subject to the Texas Revised
Partnership Act (“TRPA”) or Section 152.306 of the Texas Business Organizations
Code (“BOC”), compliance by the Bank with Section 3.05(d) of TRPA and
Section 152.306(b) of BOC; and (c) if the Liabilities are secured by an interest
in real Property, all of its rights under Sections 51.003, 51.004, and 51.005 of
the Texas Property Code (as amended from time to time).

 

  8.15

Confidentiality. Bank agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to Bank’s and
its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement or any Related
Document, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any Related Document,
or the enforcement of rights

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hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or any Related Document, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower; or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the Bank on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, “Information” means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Bank on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such person has exercised the same degree of
care to maintain the confidentiality of such Information as such person would
accord to its own confidential information. If any portion of the Confidential
Information is required to be disclosed by Bank pursuant to judicial action,
governmental regulations, or other legal requirements other than to a regulatory
agency with supervisory authority over the Bank or any of its affiliates, then
to the extent permitted by law, the Bank will promptly (and if reasonably
possible before any such disclosure is required) inform Borrower of the
existence, terms, and circumstances surrounding such request. Bank will
reasonably cooperate with Borrower in Borrower’s efforts to protect the
Confidential Information as Borrower may request, and Bank shall be entitled to
advance payment and/or advance assurance of reimbursement of any costs and
expenses (including costs of counsel) to Bank associated with such cooperation.
If, in the absence of a protective order, Bank is compelled as a matter of law
to disclose any Confidential Information, it may disclose only that portion of
the Confidential Information as Bank reasonably believes is required by law to
be disclosed and will use reasonable efforts to obtain confidential treatment
for the information.

 

9. USA PATRIOT ACT NOTIFICATION. The following notification is provided to the
Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each Person that opens an account, including any
deposit account, treasury management account, loan, other extension of credit,
or other financial services product. What this means for the Borrower: When the
Borrower opens an account, if it is an individual the Bank will ask for its
name, taxpayer identification number, residential address, date of birth, and
other information that will allow the Bank to identify it, and, if it is not an
individual the Bank will ask for its name, taxpayer identification number,
business address, and other information that will allow the Bank to identify it.
The Bank may also ask, if the Borrower is an individual, to see its driver’s
license or other identifying documents, and if it is not an individual, to see
its Organizational Documents or other identifying documents.

 

10. WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM
THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.

 

11. JURY WAIVER. THE BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN
THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE
FINANCING DESCRIBED HEREIN.

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THIS AGREEMENT AND THE OTHER WRITTEN RELATED DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Address(es) for Notices:

 

151 Graham Road

College Station, TX 77842

 

Attn: Laura Samuelson

  

Borrower:

 

O.I. Corporation

  

By: /s/ J. Bruce Lancaster, CEO

 

Printed Name/Title

 

Date Signed: April 30, 2008

Address for Notices:

 

707 Travis, 7th Floor

Houston, TX 77002

 

Attn:

  

Bank:

 

JPMorgan Chase Bank, N.A.

 

By: /s/ Tommie Grant

 

Printed Name/ Title

 

Date Signed: May 1, 2008

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EXHIBIT A

REQUEST FOR LOAN Letterhead of Borrower

JPMorgan Chase Bank, N.A.

PO Box 2558

Houston TX

Re: Request for advance under Credit Agreement, Facility A

Attention: Mike Pickerd

Dear                         :

This letter confirms our oral or telephonic request of                         ,
20         , for an advance under Facility A and the Line of Credit Note in
accordance with that certain Credit Agreement (as amended, restated and
supplemented from time to time, the “Agreement”) dated as of
                        , 200     between you and us. Any term defined in the
Agreement and used in this letter has the same meaning as in the Agreement
and/or Line of Credit Note, as the case may be.

The proposed advance is to be in the amount of $                 and is to be
made on                         , 20        .

The advance will be:

 

  ¨ an Acquisition Advance

 

  ¨ an advance for working capital for regular business operations

The proceeds of the proposed advance should be (check one:)

 

  ¨ deposited into account number              with the Bank.

 

  ¨ [other disbursement instruction}                         .

The proposed Loan shall be:

 

  ¨ a Prime Rate Advance.

 

  ¨ a LIBOR Rate Advance with an Interest Period of                         
months.

The undersigned hereby certifies that:

 

  (1) The representations and warranties made by the Borrower in the Agreement
and the other Related Documents are true and correct on and as of this date as
though made on this date.

  (2) The proposed advance complies with all applicable provisions of the
Agreement.

  (3) No Event of Default has occurred and is continuing.

  (4) [if required by the Agreement] A Borrowing Base Report is attached.

 

Sincerely,

BORROWER

By:     Name:     Title: