Exhibit 10.1

LOAN AGREEMENT

among

CASCADE CORPORATION

as Borrower

and

BANK OF AMERICA, N.A.

as Swing Line Lender, L/C Issuer

and a Lender

and

UNION BANK OF CALIFORNIA, N.A.

as a

Lender

and

BANK OF AMERICA, N.A.

as Agent

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February     , 2003

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1. DEFINITIONS

 

1

 

 

 

Section 1.1 Certain Defined Terms

 

1

Section 1.2 General Principles Applicable to Definitions

 

13

Section 1.3 Accounting Terms

 

13

 

ARTICLE 2. THE LOANS

 

13

 

 

 

Section 2.1 The Revolving Loans and Commitment Increase Option

 

13

Section 2.2 Swing Line Loans

 

14

Section 2.3 Manner of Borrowing

 

14

(a)

Requests for Revolving Loans

 

14

(b)

Requests for Swing Line Loans

 

15

Section 2.4 Disbursement of Loans

 

15

(a)

Disbursement of Loans

 

15

(b)

Disbursement of Swing Line Loans

 

15

Section 2.5 Swing Line Refunded Loans; Participations

 

16

(a)

Refunded Swing Line Loans

 

16

(b)

Swing Line Participations

 

16

(c)

Payments Received by Swing Line Lender

 

16

(d)

Lender Obligations Unconditional

 

17

Section 2.6 Repayment of Principal

 

17

Section 2.7 Agent’s Right to Fund

 

17

Section 2.8 Interest on Loans

 

18

(a)

General Provisions

 

18

(b)

Selection of Alternative Rates

 

18

(c)

Applicable Days for Computation of Interest

 

19

(d)

Unavailable Offshore Rate

 

19

(e)

Compensation for Increased Costs

 

20

Section 2.9 Notes; Recordation of Loans

 

21

(a)

Notes

 

21

(b)

Recordation of Loans

 

21

Section 2.10 Manner of Payments

 

21

(a)

Form and Place of Payment

 

21

(b)

Authorization to Charge Borrower Account

 

21

(c)

Non-Business Days

 

22

Section 2.11 Prepayments

 

22

Section 2.12 Application of Payments

 

22

(a)

Payments Before Default

 

22

(b)

Payments After Default

 

22

Section 2.13 Fees

 

23

(a)

Commitment Fee

 

23

(b)

Upfront Fee

 

23

 

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(c)

Arrangement Fee

 

23

(d)

Annual Agency Fees

 

23

Section 2.14 Sharing of Payments, Etc

 

23

 

 

 

ARTICLE 3. CONDITIONS TO LOANS

 

24

 

 

 

Section 3.1 Conditions to Initial Loan

 

24

(a)

Loan Documents

 

24

(b)

Borrower Authority

 

24

(c)

Guarantor Authority

 

24

(d)

Certificate

 

24

(e)

No Material Adverse Change

 

24

(f)

Payment of Fees and Expenses

 

24

(g)

Consents

 

25

Section 3.2 Conditions to All Loans

 

25

(a)

Prior Conditions

 

25

(b)

Notice of Borrowing

 

25

(c)

No Defaults, Etc

 

25

(d)

Guaranties

 

25

(e)

Other Information

 

25

 

 

 

 

ARTICLE 4. LETTERS OF CREDIT

 

25

 

 

 

Section 4.1 Letters of Credit

 

25

Section 4.2 Manner of Requesting Letters of Credit

 

25

(a)

Letter of Credit Requests

 

25

(b)

Standby Letter of Credit Fees

 

26

(c)

Other Letter of Credit Fees

 

26

(d)

Letter of Credit Application Forms

 

26

(e)

Issuance of Letter of Credit

 

26

Section 4.3 Compensation For Increased Costs

 

27

Section 4.4 Applicability of ISP98 and UCP

 

27

Section 4.5 Payment by Borrower

 

27

Section 4.6 Funding of Participations; Repayment of Participations

 

28

 

 

 

ARTICLE 5. REPRESENTATIONS AND WARRANTIES

 

29

 

 

 

Section 5.1 Corporate Existence and Power

 

30

Section 5.2 Borrower Authorization

 

30

Section 5.3 Guarantor Authorization

 

30

Section 5.4 Government Approvals, Etc

 

30

Section 5.5 Binding Obligations, Etc

 

30

Section 5.6 Litigation

 

30

Section 5.7 Financial Condition

 

31

Section 5.8 Solvency

 

31

Section 5.9 Title and Liens

 

31

Section 5.10 Intellectual Property

 

31

Section 5.11 Environmental Laws, Etc

 

32

Section 5.12 Taxes

 

32

 

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Section 5.13 Other Agreements

 

32

Section 5.14 Labor and Employee Relations Matters

 

32

Section 5.15 Federal Reserve Regulations

 

32

Section 5.16 ERISA

 

32

Section 5.17 Subsidiaries

 

33

Section 5.18 Not Investment Company, Etc

 

33

Section 5.19 Representations as a Whole

 

33

 

 

 

ARTICLE 6. AFFIRMATIVE COVENANTS

 

34

 

 

 

Section 6.1 Use of Proceeds from Loans

 

34

Section 6.2 Payment

 

34

Section 6.3 Preservation of Corporate Existence, Etc

 

34

Section 6.4 Visitation Rights

 

34

Section 6.5 Keeping of Books and Records

 

34

Section 6.6 Maintenance of Property, Etc

 

34

Section 6.7 Compliance With Laws, Etc

 

35

Section 6.8 Other Obligations

 

35

Section 6.9 Insurance

 

35

Section 6.10 Financial Information

 

35

(a)

Annual Financial Statements

 

35

(b)

Quarterly Financial Statements

 

35

(c)

Compliance Certificates

 

36

(d)

Annual Budget

 

36

(e)

Other

 

36

Section 6.11 New Subsidiaries

 

36

Section 6.12 Notification

 

36

Section 6.13 Financial Covenants.

 

37

(a)

Consolidated Net Worth

 

37

(b)

Consolidated Interest Coverage Ratio

 

37

(c)

Consolidated Leverage Ratio

 

37

Section 6.14 Additional Payments; Additional Acts

 

37

 

 

 

ARTICLE 7. NEGATIVE COVENANTS

 

38

 

 

 

Section 7.1 Transactions With Affiliates

 

38

Section 7.2 Liquidation, Merger, Sale of Assets

 

38

Section 7.3 Indebtedness

 

39

Section 7.4 Guaranties, Etc

 

39

Section 7.5 Liens

 

39

Section 7.6 Investments

 

39

Section 7.7 Operations

 

39

Section 7.8 Securities

 

40

Section 7.9 ERISA Compliance

 

40

Section 7.10 Accounting Change

 

40

 

 

 

ARTICLE 8. EVENTS OF DEFAULT

 

40

 

 

 

Section 8.1 Events of Default

 

40

 

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(a)

Payment Default

 

40

(b)

Breach of Warranty

 

40

(c)

Breach of Certain Covenants

 

40

(d)

Breach of Other Covenants

 

40

(e)

Material Adverse Change

 

40

(f)

Cross-default

 

41

(g)

Voluntary Bankruptcy, Etc

 

41

(h)

Involuntary Bankruptcy, Etc

 

41

(i)

Insolvency, Etc

 

41

(j)

Judgment

 

42

(k)

Involuntary Liens

 

42

(l)

ERISA

 

42

(m)

Change in Control

 

42

(n)

Condemnation

 

42

(o)

Governmental Approvals

 

42

(p)

Other Government Action

 

42

(q)

Guarantor Default; Invalidity of Guaranty

 

43

(r)

Invalidity of Loan Documents

 

43

Section 8.2 Consequences of Default

 

43

 

 

 

ARTICLE 9. THE AGENT

 

43

 

 

 

Section 9.1 Authorization and Action

 

43

Section 9.2 Duties and Obligations

 

44

Section 9.3 Dealings Between Agent and Borrower

 

45

Section 9.4 Notice of Default

 

45

Section 9.5 Lender Credit Decision

 

45

Section 9.6 Indemnification

 

46

Section 9.7 Successor Agent

 

46

 

 

 

ARTICLE 10. MISCELLANEOUS

 

47

 

 

 

Section 10.1 Amendments; Consents

 

47

Section 10.2 No Waiver; Remedies Cumulative

 

47

Section 10.3 Governing Law

 

47

Section 10.4 Mandatory Arbitration

 

48

Section 10.5 Waiver of Jury Trial

 

48

Section 10.6 Consent to Jurisdiction

 

49

Section 10.7 Notices

 

49

Section 10.8 Assignments and Participations

 

49

Section 10.9 Borrower’s Indemnity

 

50

Section 10.10 Set-Off

 

51

Section 10.11 Severability

 

51

Section 10.12 Survival

 

51

Section 10.13 Executed in Counterparts

 

51

Section 10.14 Conditions Not Fulfilled

 

51

Section 10.15 Entire Agreement; Amendment, Etc

 

51

Section 10.16 Construction

 

52

Section 10.17 Oral Agreements Not Enforceable

 

52

 

iv

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Schedules

 

 

 

 

 

Schedule 1

 

-

 

Litigation

Schedule 2

 

-

 

Liens

Schedule 3

 

-

 

Intellectual Property Claims

Schedule 4

 

-

 

Environmental Matters

Schedule 5

 

-

 

Subsidiaries

 

 

 

 

 

Exhibits

 

 

 

 

 

Exhibit A

 

-

 

Note

Exhibit B

 

-

 

Continuing Guaranty

Exhibit C

 

-

 

Compliance Certificate

Exhibit D

 

-

 

Notice of Borrowing

 

v

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LOAN AGREEMENT

THIS LOAN AGREEMENT (the “Agreement”) is made as of the      day of February,
2003, by and among CASCADE CORPORATION, an Oregon corporation (the “Borrower”),
BANK OF AMERICA, N.A., a national banking association (“Bank of America”), UNION
BANK OF CALIFORNIA, N.A., a national banking association (“Union Bank” and
together with Bank of America, each a “Lender”, and together, the “Lenders”),
and BANK OF AMERICA, N.A., a national banking association, as agent for Lenders
(in such capacity, the “Agent”) and swing line lender (in such capacity, the
“Swing Line Lender”).

ARTICLE 1.
DEFINITIONS

Section 1.1 Certain Defined Terms.  As used in this Agreement, the following
terms have the following meanings:

“Affiliate” means any Person who, directly or indirectly, controls or is
controlled by or is under common control with such Person.

“Agent” means Bank of America, N.A. and any successor thereto or successor agent
selected pursuant to
Section 9.7.

“Aggregate Commitments” has the meaning given in Section 2.1.

“Agreement” means this Loan Agreement as it may be amended, restated,
supplemented or otherwise modified from time to time.

“Applicable Interest Period” means, with respect to any Offshore Rate Loan based
on LIBOR, the period commencing on the first day the Borrower elects to have
such Offshore rate apply to such Loan and ending: one (1), two (2), three (3),
or six (6) months thereafter, as specified in the Interest Rate Notice given in
respect of any Loan; or, with respect to any Offshore Rate Loan based on IBOR,
the period commencing on the first day the Borrower elects to have such Offshore
Rate apply to such Loan and ending not less than seven (7) days, nor more than
one hundred and eighty (180) days thereafter, as specified in the applicable
Interest Rate Notice; or as otherwise determined pursuant to Section 2.8(b);
provided, however, that no Applicable Interest Period may be selected for a Loan
if it extends beyond the Maturity Date.

“Applicable Interest Rate” means the following percentages per annum, based upon
the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Agent pursuant to Section 6.10(c):

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Applicable Interest Rate

 

Pricing
Level

 

Consolidated
Leverage Ratio

 

Commitment
Fee
(Basis Points)

 

Standby
L/C Fee
and
Offshore
Rate +
(Basis
Points)

 

Base Rate
+
(Basis
Points)

 

1

 

>1.75:1.00

 

30.0

 

125.0

 

0

 

2

 

<1.75:1.00 but > 1.25:1.00

 

25.0

 

100.0

 

0

 

3

 

<1.25:1.00

 

22.5

 

80.0

 

0

 

 

Any increase or decrease in the Applicable Interest Rate resulting from a change
in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.10(c); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 1 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered.  The Applicable
Rate in effect from the Closing Date through receipt of the fiscal year-end
financial statements for January 31, 2003, and the accompanying Compliance
Certificate, shall be determined based upon Pricing Level 2.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

“Bank of America” means Bank of America, N.A., a national banking association,
and any Successor.

“Base Rate” means for any day a fluctuating rate per annum equal to the rate of
interest in effect for such day as the Prime Rate.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” means Cascade Corporation, an Oregon corporation, and any Successor.

“Borrower Account” means checking account number [Insert #] maintained by the
Borrower with Bank of America (or such other ordinary checking account
maintained by the Borrower with Bank of America at its Commercial Accounts
Service Center, Seattle,

2

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Washington, from time to time designated by the Borrower in a written notice to
the Agent and Bank of America.

“Business Day” means any day other than Saturday, Sunday or other day on which
banks are authorized or obligated to close in Seattle, Washington, except that
in the context of the selection of a Loan accruing interest at the Offshore Rate
or the calculation of the Offshore Rate for any Applicable Interest Period, in
which event “Business Day” means any day other than Saturday or Sunday on which
dealings in foreign currencies and exchange between banks may be carried on in
London, England and Seattle, Washington.

“Capital Leases” means for any Person, all obligations of such Person under
leases which shall have been, or in accordance with GAAP, should be recorded as
capital leases.

“Cash Equivalents” means: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one year from the date issued and,
at the time of acquisition, having a rate of at least A-1 from Standard & Poor’s
Rating Services or at least P-1 from Moody’s Investors Service, Inc.;
(iii) certificates of deposit or bankers’ acceptances maturing within one year
from the date of issuance thereof issued by, or overnight reverse repurchase
agreements from any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than One Hundred Million Dollars
($100,000,000); (iv) time deposits maturing no more than thirty (30) days from
the date of creation thereof and demand deposits with commercial banks having
membership in the Federal Deposit Insurance Corporation in amounts not exceeding
the lesser of One Hundred Thousand Dollars ($100,000) or the maximum amount of
insurance applicable to the aggregate amount of the Borrower’s deposits at such
institution; (v) deposits or investments in mutual or similar funds offered or
sponsored by brokerage or other companies having membership in the Securities
Investor Protector Corporation investing only in obligations described in
clauses (i) through (iv) above; and (vi) other marketable securities purchased
from a licensed broker/dealer.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commitment” means, with respect to each Lender, its obligation to make
Revolving Loans pursuant to Section 2.1 and with respect to the Swing Line
Lender, its obligation to make Swing Line Loans pursuant to Section 2.2.

“Commitment Amount” has the meaning given to it in Section 2.1.

“Commitment Period” has the meaning given in Section 2.1.

“Compliance Certificate” has the meaning given to it in Section 6.10(c) and
Exhibit D.

“Consolidated Adjusted EBITDA” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus  the following to the extent deducted in calculating such
Consolidated Net Income:

3

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(a) Consolidated Interest Charges for such period, (b) the provision for
federal, state, local and foreign income taxes payable by the Borrower and its
Subsidiaries for such period and (c) the amount of depreciation and amortization
expense, including goodwill impairment, derivative mark-to-market transactions
and other similar non-cash items, deducted in determining such Consolidated Net
Income. “Consolidated EBITDA” shall exclude all environmental  charges
recognized in the fiscal year ending January 31, 2003.

“Consolidated Funded Indebtedness” means, means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d)
all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above of Persons
other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which the Borrower or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary.

“Consolidated Interest Charges” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses of the Borrower and
its Subsidiaries in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent expense of the Borrower and its Subsidiaries with respect to
such period under capital leases that is treated as interest in accordance with
GAAP.

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA for the period of the four prior fiscal
quarters ending on such date to (b) Consolidated Interest Charges for such
period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
Adjusted EBITDA for the period of the four fiscal quarters most recently ended
for which the Borrower has delivered financial statements pursuant to Section
6.10(a) or (b).

“Consolidated Net Income” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.

4

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“Consolidated Net Worth” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity of
the Borrower and its Subsidiaries on that date, excluding cumulative adjustments
for foreign currency translation.

“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b) or 414(c) of the Code.

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

“Default Rate” has the meaning given in Section 2.8(a).

“Environmental Laws” means all federal, state and local statutes, regulations,
ordinances, and requirements, now or hereafter in effect, pertaining to
environmental protection, contamination or cleanup, including without limitation
(i) the Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C.
§ 6901, et seq.), (ii) the Federal Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. § 9601, et seq.), (iii) the Federal
Hazardous Materials Transportation Control Act (49 U.S.C. § 1801, et seq.),
(iv) the Federal Clean Air Act (42 U.S.C. § 7401, et seq.), (v) the Federal
Water Pollution Control Act, Federal Clean Water Act (33 U.S.C. § 1251, et
seq.), (vi) the Federal Insecticide, Fungicide, and Rodenticide Act, Federal
Pesticide Act (7 U.S.C. § 136, et seq.), (vii) the Federal Toxic Substances
Control Act (15 U.S.C. § 2601, et seq.) and (viii) the Federal Safe Drinking
Water Act (42 U.S.C. § 300f, et seq.), all as now or hereafter amended.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“Event of Default” has the meaning given in Section 8.1.

“Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of December 18, 1997 between Borrower, Bank of America, and
the other lenders party thereto, as amended from time to time.

“Existing Letter of Credit” means Bank of America Standby Letter of Credit
#3051606 dated October 2, 2002 in favor of Bank of China, Hengshui Branch for
$900,000 and expires November 30, 2004.

“Fee Letter” has the meaning given in Section 2.13(c).

“GAAP” has the meaning given in Section 1.3.

“Government Approval” means an approval, permit, license, authorization,
certificate, or consent of any Governmental Authority.

“Governmental Authority” means the government of the United States or any State
or any foreign country or any political subdivision of any thereof or any
branch,

5

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

department, agency, instrumentality, court, tribunal or regulatory authority
which constitutes a part or exercises any sovereign power of any of the
foregoing.

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person.  The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.  The term “Guarantee” as a verb has a corresponding meaning.

“Guarantor” means Sandy Boulevard Development Corporation, an Oregon
corporation, and any other Subsidiary that from time to time executes and
delivers a counterpart of the Guaranty, and “Guarantor” means any of them.

“Guaranty” means the Continuing Guaranty of even date herewith executed by Sandy
Boulevard Development Corporation and by any additional Guarantors from time to
time in accordance with this Agreement in substantially the form of Exhibit C
attached hereto, as it may be amended, restated, supplemented or otherwise
modified from time to time.

“Indebtedness” means, for any Person, without duplication:  (i) all indebtedness
for borrowed money; (ii) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than indebtedness or
liability for borrowed money deferred for a period of more than six months from
the date of incurrence or trade payables entered into in the ordinary course of
business on ordinary terms); (iii) all non-contingent reimbursement or payment
obligations with respect to letters of credit, bankers acceptances, surety bonds
and similar instruments; (iv) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (v) the
net obligations of such Person under an interest rate swap agreement or similar
rate swap master agreement in an amount equal to (i) if such swap agreement has
been closed out, the termination value thereof, or (ii) if such swap agreement
has not been closed out, the mark-to-market value thereof determined on the
basis of readily available quotations provided by any recognized dealer in such
swap agreement; (vi) all indebtedness created or arising under any conditional
sale or other title retention agreement

6

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(excluding any operating lease), or incurred as financing, in either case with
respect to property acquired by such Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (vii) all obligations with respect to
Capital Leases or Synthetic Leases; (viii) all indebtedness referred to in
clauses (i) through (vi) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (viii) all liabilities in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii) above for which such Person is directly or
contingently liable as obligor, guarantor, or otherwise, or in respect of which
such Person otherwise assures a creditor against loss.  For purposes of this
Agreement, the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture formed as a partnership where
such Person is a general partner or is otherwise liable for the Indebtedness of
such partnership or joint venture, unless such Indebtedness is expressly made
non-recourse to such Person and except for customary exceptions acceptable to
Majority Lenders.

“Intellectual Property” means, as to any Person, all of the following: (i) all
trademarks, service marks, designs, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers owned or used by such Person in its
business or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and pending applications in the United States
Patent and Trademark Office, any State of the United States or any similar
offices in any other country or any political subdivision thereof, and all
extensions or renewals thereof; (ii) all letters patent of the United States or
any other country or any political subdivision thereof, all registrations and
recordings thereof, and all applications for letters patent of the United States
or the equivalent thereof in any other country owned by such Persons, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or the equivalent thereof in any similar offices in any
other country, and all reissues, continuations, divisions, continuations-inpart,
renewals or extensions thereof, and the inventions disclosed or claimed therein,
including the right to make, use and/or sell the inventions disclosed or claimed
therein; (iii) all computer programs, computer data bases, other computer
software, trade secrets, trade secret rights, ideas, drawings, designs,
schematics, algorithms, writings, techniques, processes and formulas owned or
used by such Person in its business; and (iv) all copyright rights of such
Person in any work subject to the copyright laws of the United States, any state
thereof or any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, whether as
author, assignee, transferee or otherwise, and all registrations and
applications for registration of any such copyright in the United States, any
state thereof or any other country or any political subdivision thereof,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office or in any
similar offices in any other country.

“Interest Rate Notice” has the meaning given in Section 2.8(b).

“Investments” has the meaning given in Section 7.6.

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“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with it pro rata share.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Loan.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

“Lenders” means Bank of America, N.A., a national banking association, and Union
Bank of California, N.A., a national banking association, and any Successors
thereto or permitted assigns thereof, and the term “Lenders” shall include the
Swing Line Lender unless the context otherwise requires; provided that the term
“Lenders,” when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.

“Letters of Credit” means any letter of credit issued by L/C Issuer pursuant to
the terms of Article 4 hereof and any Existing Letters of Credit.

“Letter of Credit Risk Participation” means with respect to each Lender, a risk
participation purchased by such Lender pursuant to Article 4 hereof with respect
to a Letter of Credit (including risk participations deemed purchased from Agent
by Bank of America in its capacity as Lender).

“Letter of Credit Usage” means, as of any date of determination, the sum of (i)
the aggregate face amount of all outstanding unmatured Letters of Credit plus
(ii) the aggregate amount of all payments made by Agent under Letters of Credit
and not yet reimbursed by Borrower pursuant to Section 4.5.

“Lien” means, for any Person, any security interest, pledge, mortgage, charge,
assignment, hypothecation, encumbrance, attachment, garnishment, execution or
other voluntary or involuntary lien upon or affecting the revenues of such
Person or any real or personal property in which such Person has or hereafter
acquires any interest.

“Loan Documents” means, collectively, this Agreement, the Notes, the Guaranty
and all other documents executed by the Borrower or any Guarantor and delivered
to the Agent or the Lenders (or any one of them) in connection with the
transactions contemplated by this Agreement as the same may be amended,
restated, supplemented or otherwise modified from time to time.

“Loans” means, collectively, the Revolving Loans and the Swing Line Loans.

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“Majority Lenders” means at any time Lenders having an aggregate Percentage
Interest equivalent to the lesser of (i) any two Lenders voting together, or
(ii) more than fifty percent (50%).

“Maturity Date” means December 18, 2005

“Notes” has the meaning given in Section 2.9(a).

“Notice of Borrowing” means a request for a Loan from the Borrower delivered or
deemed delivered to the Agent in the manner, at the time and containing the
information required or described under Section 2.3 and Exhibit D.

“Officer’s Certificate” means a certificate executed and delivered on behalf of
the Borrower by a Responsible Officer.

“Offshore Rate” means for any Interest Period with respect to any Offshore Rate
Loan, a rate per annum determined by Administrative Agent pursuant to the
following formula:

Offshore Rate

=

LIBOR or IBOR

 

 

 

1.00 - Eurodollar Reserve Percentage

 

 

Where,

“LIBOR” means, for such Interest Period:

(a)           the rate per annum (carried out to the fifth decimal place) equal
to the rate determined by Administrative Agent to be the offered rate that
appears on the page of the Telerate Screen that displays an average British
Bankers Association Interest Settlement Rate (such page currently being page
number 3750) for deposits in dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

(b)           in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease to
be available, the rate per annum (carried to the fifth decimal place) equal to
the rate determined by Administrative Agent to be the offered rate on such other
page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or

(c)           in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by Administrative Agent
as the rate of interest at which dollar deposits (for delivery on the first day
of such Interest Period) in same day funds in the approximate amount of the
applicable Offshore Rate Loan and with a term equivalent to such Interest Period
would be offered by its London Branch to major banks in the offshore dollar
market at their

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request at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.

“IBOR” means, the rate of interest per annum determined by the Administrative
Agent as the rate at which dollar deposits in the approximate amount of Bank of
America’s Offshore Rate Loan for such Interest Period would be offered by Bank
of America’s Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as
may be designated for such purpose of Bank of America), to major banks in the
offshore dollar interbank market at their request at approximately 11:00 a.m.
(New York City time) on the same Business Day as the commencement of such
Interest Period.

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Offshore Rate for each outstanding Offshore Rate Loan shall
be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.

“Offshore Rate Loan” means a Loan bearing interest based on the Offshore Rate.

“Organization Documents” means, (i) with respect to any corporation, the
articles of incorporation and the bylaws; (ii) with respect to any limited
liability company, the articles of formation and operating agreement; and
(iii) with respect to any partnership, the partnership agreement and any
agreement or notice with respect thereto, in each case as amended from time to
time.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

“Pension Plan” means an “employee pension benefit plan” (as such term is defined
in ERISA) from time to time maintained by the Borrower or a member of a
Controlled Group.

“Percentage Interest” has the meaning given in Section 2.1.

“Permitted Acquisition” means any acquisition, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, or more than fifty
percent (50%) of the equity securities entitled to vote for members of the board
of directors or equivalent governing body of, or a business line or a division
of, any Person; provided that:  (i) all Persons, assets, business lines or
divisions acquired shall be in the type of business permitted to be engaged in
by the Borrower and its Subsidiaries pursuant to Section 7.7; (ii) no Default or
Event of Default shall then exist or would exist after giving effect to such
acquisition; and (iii) if so requested, the

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Borrower shall demonstrate to the reasonable satisfaction of the Lenders that,
after giving effect to such acquisition, the Borrower will be in pro forma
compliance with all of the terms and provisions of the financial covenants set
forth in Section 6.13.

“Permitted Liens” means:  (i) Liens securing Taxes which are not delinquent or
which remain payable without penalty (excluding any Liens imposed pursuant to
any of the provisions of ERISA) or the validity or amount of which is being
contested in good faith by appropriate proceedings, which shall have the effect
of staying execution if execution is threatened or possible; (ii) Liens imposed
by law incurred in good faith in the ordinary course of business which are not
delinquent or which remain payable without penalty or the validity or amount of
which is being contested in good faith by appropriate proceedings, which shall
have the effect of staying execution if execution is threatened or possible;
(iii) Liens arising in connection with worker’s compensation, unemployment
insurance and social security benefits which are not delinquent or which remain
payable without penalty or the validity or amount of which is being contested in
good faith by appropriate proceedings, which shall have the effect of staying
execution if execution is threatened or possible; (iv) customary rights of set
off, revocation, refund or chargeback under deposit agreements or under the UCC
in favor of banks where the Borrower maintains deposits in the ordinary course
of business; and (v) new Liens secured by newly purchased tangible property
(whether real or personal) in an aggregate amount no greater than $5,000,000
outstanding at any time.

“Person” means any natural person, corporation, unincorporated organization,
trust, joint stock company, joint venture, association, company, limited
liability company, partnership or government, or any agency or political
subdivision of any government.

“Plan” means, at any time, an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by the Borrower or any member of a
Controlled Group for employees of the Borrower or any member of a Controlled
Group or (ii) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which the Borrower or any member of a Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
(5) plan years made contributions.

“Prime Rate” means, on any day, the rate of interest publicly announced from
time to time by Bank of America as its “Prime Rate.”  The Prime Rate is set
based on various factors, including Bank of America’s costs and desired return,
general economic conditions, and other factors, and is used as a reference point
for pricing some loans.  Bank of America may price loans to its customers at,
above, or below the Prime Rate.  Any change in the Prime Rate shall take effect
at the opening of business on the day specified in the public announcement of a
change in the Prime Rate.

“Refunded Swing Line Loans” has the meaning given to it in Section 2.5(a).

“Refunding Date” has the meaning given to it in Section 2.5(b).

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“Responsible Officer” means any of the President, the Vice President, or the
Chief Financial Officer of the Borrower.

“Revolving Loans” has the meaning given to it in Section 2.1.

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.

“Subsidiary” means Sandy Boulevard Development Corporation and each other
business entity directly or indirectly controlled by the Borrower.  For the
purposes of this definition, “controlled by” shall mean the possession, directly
or indirectly of the power to direct or cause the direction of the management or
policies of such Subsidiary, whether through the ownership of partnership or
limited liability company interest, voting securities, by contract, or
otherwise.  Unless otherwise specified, all references herein to a “Subsidiary”
shall refer to a Subsidiary of the Borrower.

“Successor” means, for any corporation, banking association or other legal
entity, any successor by merger or consolidation, or by acquisition of
substantially all of the assets of the predecessor, or by conversion to another
type of legal entity, or by continuation after and the occurrence of an event
that would otherwise result in termination under applicable law but for such
continuation.

“Swing Line Loans” has the meaning given to it in Section 2.2.

“Swing Line Lender” means Bank of America, N.A., a national banking association,
and any Successors thereto or permitted assigns thereof.

“Swing Line Participation Amount” has the meaning given to it in Section 2.5(b).

“Synthetic Lease” means (i) a so-called synthetic, off-balance sheet or tax
retention lease, or (ii) an agreement for the use or possession of property
creating obligations which do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be characterized
as the Indebtedness of such Person (without regard to accounting treatment).

“Synthetic Lease Obligations” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Tax” means, for any Person, any tax, assessment, duty, levy, impost or other
charge imposed by any Governmental Authority on such Person or on any property,
revenue, income, or franchise of such Person and any interest or penalty with
respect to any of the foregoing.

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“Unfunded Vested Liabilities” means, with respect to any Plan at any time, the
amount (if any) by which (a) the present value of all vested non-forfeitable
benefits under such Plan exceeds (b) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of the Borrower or any member of a Controlled Group to the
PBGC or the Plan under Title IV of ERISA.

Section 1.2 General Principles Applicable to Definitions.  Definitions given
herein shall be equally applicable to both singular and plural forms of the
terms therein defined and references herein to “he” or “it” shall be applicable
to Persons whether masculine, feminine or neuter.  References herein to any
document including, but without limitation, this Agreement shall be deemed a
reference to such document as it now exists, and as, from time to time
hereafter, the same may be amended.  References herein to any section,
subsection, Schedule or Exhibit shall, unless otherwise indicated, be deemed a
reference to sections and subsections within and schedules and Exhibits to this
Agreement.

Section 1.3 Accounting Terms.  Except as otherwise provided herein, accounting
terms not specifically defined shall be construed, and all accounting procedures
shall be performed, in accordance with generally accepted United States
accounting principles consistently applied from and after the date hereof
(“GAAP”) and as in effect on the date of application.

ARTICLE 2.
THE LOANS

Section 2.1 The Revolving Loans and Commitment Increase Option.

(a)           Subject to the terms and conditions of this Agreement, each Lender
hereby severally agrees during the period from the date hereof until the
Maturity Date (the “Commitment Period”) to make loans duly requested hereunder
(the “Revolving Loans”) to the Borrower in amounts equal to the percentage
interest set forth opposite such Lender’s name below (such Lender’s “Percentage
Interest”) of the aggregate amount requested by the Borrower in a Notice of
Borrowing given under this Agreement; provided that, after giving effect to any
such requested borrowing (i) the aggregate outstanding principal balance of all
Loans from such Lender will not exceed at any one time outstanding the sum set
forth opposite its name below (such Lender’s “Commitment Amount”); and (ii) the
aggregate principal amount of all outstanding Loans and all Letter of Credit
Usage will not exceed the Commitment Amount of all Lenders (the “Aggregate
Commitments”).

 

Percentage

 

Commitment

 

Lender

 

Interest

 

Amount

 

Bank of America

 

52.00

%

$

13,000,000

 

Union Bank

 

48.00

%

$

12,000,000

 

Total

 

100.00

%

$

25,000,000

 

 

The Revolving Loans described in this Section 2.1 constitute a revolving credit
and within the amount and time specified, the Borrower may pay, prepay and
reborrow.

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(b)           The Borrower may, at its option, on a single occasion seek to
increase the Aggregate Commitments by up to an aggregate amount of $20,000,000
(resulting in maximum Aggregate Commitments of $45,000,000) upon written notice
to the Agent, which notice shall specify the amount of any such increase and
shall be delivered at a time when no Default or Event of Default has occurred
and is continuing.  The Agent, subject to the consent of Borrower, which shall
not be unreasonably withheld, may allocate the increase (which may be declined
by any Lender in its sole discretion) in the Aggregate Commitments on either a
ratable basis to the Lenders or on a non pro-rata basis to one or more Lenders
and/or to other banks or entities reasonably acceptable to the Agent and the
Borrower.  No increase in the Aggregate Commitments shall become effective until
the existing or new Lenders extending such incremental Commitment Amount and the
Borrower shall have delivered to the Agent a document in form reasonably
satisfactory to the Agent pursuant to which any such existing Lender states the
amount of its Commitment increase, any such new Lender states its Commitment
Amount and agrees to assume and accept the obligations and rights of Lender
hereunder and the Borrower accepts such incremental Commitments.  The Lenders
(new or existing) shall accept an assignment from the existing Lenders, and the
existing Lenders shall make an assignment to the new or existing Lender
accepting a new or increased Commitment, of an interest (or participation
interest, as applicable) in all Loans and other credit exposure in respect of
the Aggregate Commitments such that, after giving effect thereto, all Loans and
all such other credit exposure are held ratably by the Lenders in proportion to
their respective Commitments, as may be revised to accommodate the increase in
the Aggregate Commitments.  Assignments pursuant to the preceding sentence shall
be made in exchange for the principal amount assigned plus accrued and unpaid
interest and commitment and other fees. The Borrower shall make any payments
under Section 2.8(e) resulting from such assignments, and shall pay the Lenders
certain fees, such as an arrangement fee, to be determined by the Lenders at
such time as the increase in Aggregate Commitments is implemented.

Section 2.2            Swing Line Loans.  Subject to the terms and conditions of
this Agreement, Swing Line Lender hereby agrees to make a portion of the
Commitment Amount available to the Borrower from time to time during the
Commitment Period by making swing line loans (“Swing Line Loans”) to the
Borrower; provided that, after giving effect to any such requested borrowing
(i) the aggregate outstanding principal balance of all Swing Line Loans will not
exceed at any one time outstanding the amount of Five Million Dollars
($5,000,000) (notwithstanding that the Swing Line Loans outstanding at any time,
when aggregated with the Swing Line Lender’s other outstanding Revolving Loans
hereunder may exceed such amount); and (ii) the aggregate principal amount of
all outstanding Loans will not exceed the Commitment Amount of all Lenders.  The
Swing Line Loans described in this Section 2.2 constitute a revolving credit and
within the amount and time specified, the Borrower may pay, prepay and
reborrow.  Swing Line Loans shall be Base Rate Loans only.

Section 2.3            Manner of Borrowing.

(a)           Requests for Revolving Loans.  For each requested Loan, the
Borrower shall give the Agent a Notice of Borrowing specifying the date of a
requested borrowing (which must be a Business Day) and the amount thereof.  If
Borrower elects to have interest accrue on a Loan at an Offshore Rate based on
LIBOR by giving an Interest Rate Notice described in Section 2.8(b) in respect
of such borrowing, the Notice of Borrowing shall be given no later than 11:00

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a.m. three (3) Business Days prior to the date of the requested borrowing.  If
the Offshore Rate is based on IBOR, the Notice of Borrowing may be given on the
same day no later than 11:00 a.m.  Requests for borrowing, or confirmations
thereof, received after the designated hour will be deemed received on the next
succeeding Business Day. Each Notice of Borrowing shall be in writing and shall
be given not later than 11:00 a.m. (Seattle time) on the date the Borrower
wishes a Loan to be made.  Each such notice shall be irrevocable and shall be
deemed to constitute a representation and warranty by the Borrower that as of
the date of such notice the statements set forth in Article 5 hereof are true
and correct and that no Default or Event of Default has occurred and is
continuing or will occur as a result of making the requested Loan.  Each Loan
requested by the Borrower under this Section 2.3(a) shall be in an amount not
less than Five Hundred Thousand Dollars ($500,000).

(b)           Requests for Swing Line Loans.  For each requested Swing Line
Loan, the Borrower shall give the Agent a Notice of Borrowing specifying the
date of a requested borrowing (which must be a Business Day) and the amount
thereof.  Each Notice of Borrowing shall be in writing and shall be given not
later than 1:00 p.m. (Seattle time) on the date the Borrower wishes a Swing Line
Loan to be made.  Each such notice shall be irrevocable and shall be deemed to
constitute a representation and warranty by the Borrower that as of the date of
such notice the statements set forth in Article 5 hereof are true and correct
and that no Default or Event of Default has occurred and is continuing or will
occur as a result of making the requested Loan.  Each Swing Line Loan requested
by the Borrower under this Section 2.3(b) shall be in an amount not less than
One Hundred Thousand Dollars ($100,000).

Section 2.4            Disbursement of Loans

(a)           Disbursement of Loans.  The Agent, on receipt of a Notice of
Borrowing for a Loan, shall promptly notify each Lender by telex, facsimile
transmission or electronic mail of the date of the requested borrowing and the
amount thereof.  Each Lender shall before 1:00 p.m. (Seattle time), on the date
of the requested borrowing, pay in U.S. Dollars the lesser of (i) such Lender’s
Percentage Interest of the aggregate principal amount of the requested borrowing
identified in the Notice of Borrowing or (ii) the maximum amount such Lender is
committed to advance pursuant to the terms of Section 2.1 in immediately
available funds to the Agent at its Credit Service Center, Concord, California. 
Upon fulfillment to the Agent’s satisfaction of the applicable conditions set
forth in this Section 2.4(a) and in Article 3 hereof, and after receipt by the
Agent of such funds, the Agent will promptly make such immediately available
funds available to the Borrower by depositing them to the Borrower Account. 
Notwithstanding the foregoing, the first proceeds of the initial Loan will be
applied by the Agent to repay Indebtedness of the Borrower arising under the
Existing Credit Agreement and any remainder will be made available to the
Borrower by depositing them to the checking account described in the preceding
sentence.

(b)           Disbursement of Swing Line Loans.  The Agent, on receipt of a
Notice of Borrowing for a Swing Line Loan, shall promptly notify the Swing Line
Lender by telex, facsimile transmission or electronic mail of the date of the
requested borrowing and the amount thereof.  Swing Line Lender shall before 2:00
p.m. (Seattle time), on the date of the requested borrowing, pay in U.S. Dollars
the lesser of (i) the requested borrowing identified in the Notice of Borrowing
or (ii) the maximum amount the Swing Line Lender is committed to advance

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pursuant to the terms of Section 2.2 in immediately available funds to the Agent
at its Credit Service Center, Concord, California.  Upon fulfillment to the
Agent’s satisfaction of the applicable conditions set forth in set forth in this
Section 2.4(b) and in Article 3 hereof, and after receipt by the Agent of such
funds, the Agent will promptly make such immediately available funds available
to the Borrower by depositing them to the Borrower Account.

Section 2.5            Swing Line Refunded Loans; Participations.

(a)           Refunded Swing Line Loans.  The Swing Line Lender may, at any time
and from time to time in its sole and absolute discretion, deliver to Agent
(with a copy to the Borrower), not later than 11:00 a.m. (Seattle time) on the
date the Swing Line Lender wishes the same to be made, request each Lender to
make, and each Lender hereby severally agrees to make, a Revolving Loan, in an
amount equal to such Lender’s Percentage Interest of the aggregate amount of the
Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date of
such notice, to repay the Swing Line Lender.  The Agent, on receipt of such
request (which shall be deemed to be a Notice of Borrowing given by the
Borrower), shall promptly notify each Lender by telex, facsimile transmission or
electronic mail of the date of the requested borrowing and the amount thereof. 
Each Lender shall before 1:00 p.m. (Seattle time), on the date of the requested
borrowing, pay in U.S. Dollars the aggregate principal amount of the requested
Revolving Loan in immediately available funds to the Agent at its Credit Service
Center, Concord, California.  After receipt by the Agent of such funds, the
Agent will promptly make such immediately available funds available to the Swing
Line Lender for application by the Swing Line Lender to the Swing Line Loans. 
The Borrower hereby authorizes the Swing Line Lender to deduct from any or all
of the accounts of the Borrower maintained with Bank of America the amount, if
any, by which the amount of the Refunded Swing Line Loans exceeds the amount of
funds received from the Lenders under this subsection.

(b)           Swing Line Participations.  If prior to the time a Revolving Loan
would have otherwise been made pursuant to Section 2.5(a), any of the Events of
Default described in Section 8.1(g) or Section 8.1(h) shall have occurred and be
continuing or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, Revolving Loans may not be made as contemplated by Section
2.5(a), each Lender shall, on the date such Revolving Loan was to have been made
pursuant to the request referred to in Section 2.5(a) (the “Refunding Date”),
purchase for cash an undivided risk participation in the then outstanding Swing
Line Loans by paying to the Swing Line Lender an amount (the “Swing Line
Participation Amount”) equal to such Lender’s Percentage Interest of the
aggregate amount of the Swing Line Loans then outstanding which were to have
been repaid with such Revolving Loans.

(c)           Payments Received by Swing Line Lender.  Whenever, at any time
after the Swing Line Lender has received from any Lender such Lender’s Swing
Line Participation Amount, the Swing Line Lender receives any payment on account
of the Swing Line Loans, the Swing Line Lender will distribute to such Lender
its Swing Line Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender’s pro rata portion of such payment
if such payment is not sufficient to pay the principal of and interest on all
Swing Line Loans then due); provided, however, that in the event that such
payment received by the Swing Line Lender is

16

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required to be returned, such Revolving Lender will return to the Swing Line
Lender any portion thereof previously distributed to it by the Swing Line
Lender.

(d)           Lender Obligations Unconditional.  Each Lender’s obligation to
make the Revolving Loans referred to in Section 2.5(a) and to purchase risk
participations pursuant to Section 2.5(b) shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation:
(i) any setoff, counterclaim, recoupment, defense or other right which such
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuation
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Article 3 hereof; (iii) any adverse change in the
business, operations, properties or financial condition of the Borrower or any
Subsidiary; (iv) any failure by the Borrower, the Guarantor or any other Lender
to perform or observe any covenant, obligation or term of this Agreement or any
other Loan Document to which it is a party; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

Section 2.6            Repayment of Principal.

(a)           The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of all Revolving Loans outstanding on such date.

(b)           The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) the date five (5) Business Days after such Swing Line Loan is made
and (ii) the Maturity Date.

(c)           All obligations associated with the Letters of Credit shall be
repaid in accordance with Article 4 herein.

Section 2.7            Agent’s Right to Fund.  Unless the Agent shall have
received notice from a Lender (i) in the case of a requested Revolving Loan,
prior to 12:00 noon (Seattle time) on the date of the requested borrowing that
such Lender will not make available to the Agent such Lender’s Percentage
Interest of the requested borrowing or (ii) in the case of a requested Swing
Line Loan, prior to 2:00 p.m. (Seattle time) on the date of the requested
borrowing that the Swing Line Lender will not make available to the Agent the
amount of the requested borrowing, then in each case the Agent may assume that
such Lender has made such funds available to the Agent on the date such Loan is
to be made in accordance with Section 2.4 and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount.  If and to the extent that such Lender shall not have so made such
corresponding amount available to the Agent and if the Agent shall have advanced
such amount to the Borrower, such Lender agrees to pay to the Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent at the Federal Funds Rate.  Simultaneous with the
making of such demand on such Lender, the Agent shall give notice of such demand
to the Borrower.  If such Lender shall pay to the Agent such corresponding
amount, the amount so paid shall constitute such Lender’s Revolving Loans or
Swing Line Loans, as applicable, included in such requested borrowing for
purposes of this Agreement.  If such Lender does not pay such amount promptly
upon the Agent’s demand therefor, the Borrower agrees to pay to the Agent

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forthwith on demand such corresponding amount, together with interest thereon
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent (i) in the case of a requested
Revolving Loan, at the Applicable Interest Rate or (ii) in the case of a
requested Swing Line Loan, at the Prime Rate.  Any such repayment by the
Borrower shall be without prejudice to any rights it may have against the Lender
that has failed to make available its funds for any requested borrowing.

Section 2.8            Interest on Loans.

(a)           General Provisions.  The Borrower agrees to pay to the Agent for
the account of Lenders interest on the unpaid principal amount of each Loan from
the date of such Loan until such Loan shall be due and payable at a per annum
rate equal to the Applicable Interest Rate in effect from time to time with
respect to such Loan (or respective portions thereof); provided, however, that
after the occurrence and during the continuation of an Event of Default,
interest shall accrue at a per annum rate equal to two percent (2%) above the
Applicable Interest Rate in effect from time to time with respect to such Loan
(changing as such Prime Rate changes) (the “Default Rate”).  Accrued but unpaid
interest on each Offshore Rate Loan shall be paid in arrears on the last day of
the Applicable Interest Period, and, for each Offshore Rate Loan having an
Applicable Interest Period longer than three months at the end of each three (3)
month period during such Applicable Interest Period.  Accrued but unpaid
interest on each Base Rate Loan shall be paid in arrears on the first Business
Day of each calendar month and at the Maturity Date.  Accrued interest on each
Loan shall be payable on demand after the occurrence of an Event of Default.

(b)           Selection of Alternative Rates.

(i)            The Borrower may, subject to the requirements of this Section
2.8(b), on three (3) Business Days’ prior notice, elect to have interest accrue
on any Loan (or any portion thereof) at the Offshore Rate based on LIBOR for an
Applicable Interest Period, or on the same day with no notice for an Offshore
Rate Loan based on IBOR.  Such notice (herein, an “Interest Rate Notice”) shall
be deemed delivered when received by the Agent except that an Interest Rate
Notice received by the Agent after 11:00 a.m. (Seattle time) on any Business
Day, shall be deemed to have been delivered or received on the immediately
succeeding Business Day.  All Interest Rate Notices shall be in writing.  Each
such Interest Rate Notice shall identify, subject to the conditions of this
Section 2.8(b), the Loan or portions thereof to accrue interest at the Offshore
Rate and the Applicable Interest Period which the Borrower selects.  Each such
Interest Rate Notice shall be irrevocable and shall constitute a representation
and warranty by the Borrower that (1) as of the date of such Interest Rate
Notice, the representations and warranties set forth in Article 5 hereof are
true and correct in all material respects (subject to any waivers of the terms
thereof then in effect in accordance with the terms of this Agreement) as of the
date of such Interest Rate Notice unless such representation and warranty is
made as of a specific date, and (2) no Default or Event of Default has occurred
and is continuing.  Upon receipt of such Interest Rate Notice, the Agent shall
promptly notify each Lender by telex, facsimile transmission, electronic mail or
cable of the date of the information set forth in the Interest Rate Notice.

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(ii)           The Borrower’s right to select the Offshore Rate to apply to a
Loan (or any portion thereof) shall be subject to the following conditions: 
(1) the aggregate of all Loans of the same type or portions thereof to accrue
interest at a particular Offshore Rate for the same Applicable Interest Period
shall be an integral multiple of Fifty Thousand Dollars ($50,000) and not less
than Five Hundred Thousand Dollars ($500,000); (2) the Offshore Rate may not be
selected for any Loan or portion thereof which is already accruing interest at
the Offshore Rate unless such selection is only to become effective at the
maturity of the Applicable Interest Period then in effect; (3) Lender shall not
have given notice pursuant to Section 2.8(d) that the selected Offshore Rate is
not available; and (4) no Default or Event of Default shall have occurred and be
continuing.

(iii)          In the absence of an effective request and acceptance thereof for
the application of an Offshore Rate, the Loans (or remaining portions thereof)
shall accrue interest at the Prime Rate.  Any Interest Rate Notice which
specifies an Offshore Rate but fails to identify an Applicable Interest Period
shall be deemed to be a request for the designated Offshore Rate for an
Applicable Interest Period of one month.

(iv)          The Interest Rate Notice may be given with and contained in any
Notice of Borrowing.

(v)           If the Borrower delivers an Interest Rate Notice with any Notice
of Borrowing for a Loan and the Borrower thereafter declines to take such Loan
or a condition precedent to the making of such Loan is not satisfied or waived,
the Borrower shall indemnify each Lender for all losses and any costs which such
Lender may sustain as a consequence thereof including, without limitation, the
costs of re-employment of funds at rates lower than the cost to such Lender of
such funds.  A certificate from Lender setting forth the amount due to it
pursuant to this subparagraph (v) and the basis for, and the calculation of,
such amount shall be, absent a showing by the Borrower of manifest or
demonstrable error, conclusive evidence of the amount due to it hereunder. 
Payment of the amount owed shall be due within fifteen (15) days after the
Borrower’s receipt of such certificate.

(c)           Applicable Days for Computation of Interest.  Computations of
interest on Base Rate Loans shall be made on the basis of a year of 365/366
days, for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable.  All other
computations of interest and all computations of fees shall be made on the basis
of a year of 360 days, for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable.

(d)           Unavailable Offshore Rate.  If any Lender determines that for any
reason, fair and adequate means do not exist for establishing a particular
Offshore Rate or that an Offshore Rate will not adequately and fairly reflect
the cost to such Lender of making or maintaining the principal amount of a
particular Offshore Rate Loan or that accruing interest on any Offshore Rate
Loan has become unlawful or is contrary to any internal policies (of general
application), such Lender may give notice of that fact to the Agent and the
Borrower and such determination shall be conclusive and binding absent manifest
error.  After such notice has been given and until such Lender notifies the
Borrower and the Agent that the circumstances giving rise to such notice no
longer exist, the interest rate or rates so identified in such notice shall no

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longer be available.  Any subsequent request by the Borrower to have interest
accrue at such an Offshore Rate shall be deemed to be a request for interest to
accrue at the Prime Rate.  If the circumstances giving rise to the notice
described herein no longer exist, the Lender who had previously given notice of
the unavailability of rate(s) shall notify the Agent and the Borrower in writing
of that fact, and the Borrower shall then once again become entitled to request
that such Offshore Rates apply to the Loans in accordance with Section 2.8(b).

(e)           Compensation for Increased Costs.  In the event that after the
date hereof any change occurs in any applicable law, regulation, treaty or
directive or interpretation thereof by any authority charged with the
administration or interpretation thereof, or any condition is imposed by any
authority after the date hereof or any change occurs in any condition imposed by
any authority on or prior to the date hereof which:

(1)           subjects any Lender to any Tax (other than any Tax measured by
such Lender’s net or gross income), or changes the basis of taxation of any
payments to any Lender on account of principal of or interest on any Offshore
Rate Loan, the Notes (to the extent such Note evidence a Offshore Rate Loan) or
fees in respect of such Lender’s obligation to make or continue any Offshore
Rate Loan or other amounts payable with respect to its Offshore Rate Loans
(other than a change in the rate of tax based solely on the overall net or gross
income of the Lender); or

(2)           imposes, modifies or determines applicable any reserve, deposit or
similar requirements against any assets held by, deposits with or for the
account of, or loans or commitments by, any office of any Lender in connection
with its Offshore Rate Loans to the extent the amount of which is in excess of,
or was not applicable at the time of computation of, the amounts provided for in
the definition of such Offshore Rate; or

(3)           affects the amount of capital required or expected to be
maintained by banks generally or corporations controlling banks and any Lender
determines that the amount by which it or any corporation controlling it is
required or expected to maintain or increase its capital is increased by, or
based upon, the existence of this Agreement or of any Lender’s Loans or
Commitments hereunder;

(4)           imposes upon any Lender any other condition with respect to its
Offshore Rate Loans or its obligation to make or continue Offshore Rate Loans;

which, as a result thereof, (i) increases the cost to any Lender of making or
maintaining its Loans or its Commitments hereunder, or (ii) reduces the net
amount of any payment received by any Lender in respect of its Offshore Rate
Loans (whether of principal, interest, commitment fees or otherwise), or
(iii) requires any Lender to make any payment on or calculated by reference to
the gross amount of any sum received by it in respect of its Offshore Rate
Loans, in each case by an amount which any such Lender in its sole judgment
deems material, then and in any such case the Borrower shall pay to the Agent
for the account of such Lender on demand such amount or amounts as will
compensate such Lender for any increased cost, deduction or payment actually
incurred or made by such Lender.  The demand for payment by such Lender shall be
delivered to the Borrower and the Agent and shall state the subjection or change
which occurred or the reserve or deposit requirements or other conditions which
have been imposed

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upon such Lender or the request, direction or requirement with which it has
complied, together with the date thereof, the amount of such cost, reduction or
payment and the manner in which such amount has been calculated.  The statement
of any Lender as to the additional amounts payable pursuant to this Section
2.8(e) shall be binding on the Borrower in the absence of manifest error.

The protection of this Section 2.8(e) shall be available to each Lender
regardless of any possible contention of invalidity or inapplicability of the
relevant law, regulation, treaty, directive, condition or interpretation
thereof.  In the event that the Borrower pays any Lender the amount necessary to
compensate such Lender for any charge, deduction or payment incurred or made by
such Lender as provided in this Section 2.8(e), and such charge, deduction or
payment or any part thereof is subsequently returned to such Lender as a result
of the final determination of the invalidity or inapplicability of the relevant
law, regulation, treaty, directive or condition, then such Lender shall remit to
the Borrower the amount paid by the Borrower which has actually been returned to
such Lender (together with any interest actually paid to such Lender on such
returned amount), less such Lender’s costs and expenses incurred in connection
with such governmental regulation or any challenge made by such Lender with
respect to its validity or applicability.

Section 2.9            Notes; Recordation of Loans.

(a)           Notes.  The Loans shall be evidenced by promissory notes of the
Borrower substantially in the form of Exhibit A attached hereto, with
appropriate insertions, payable to the order of Lenders, dated as of the date
hereof, and for each Lender in the face amount of such Lender’s Commitment (each
a “Note” and collectively the “Notes”).

(b)           Recordation of Loans.  Each Lender is hereby authorized to record
the date and amount of the Loans it makes, the Base Rate or the Offshore Rate,
as applicable, and the date and amount of each payment of principal and interest
thereon on a schedule annexed to or kept in respect of any Note.  Any such
recordation by Lender shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that the failure to make any
such recordation or any error in any such recordation shall not affect the
obligations of the Borrower hereunder or under any Note.

Section 2.10         Manner of Payments.

(a)           Form and Place of Payment.  All payments and prepayments of
principal and interest on any Loan and all other amounts payable hereunder by
the Borrower to the Agent or any Lender shall be made by paying the same in
United States Dollars and in immediately available funds to the Agent at its
Credit Service Center, Concord, California, not later than 11:00 a.m. (Seattle
time) on the date on which such payment or prepayment shall become due.  If such
payment is received after 11:00 a.m. (Seattle time), then it will be deemed
received on the next Business Day.  All payments to be made by the Borrower
shall be made without setoff, recoupment or counterclaim.

(b)           Authorization to Charge Borrower Account.  On each date when the
payment of any principal, interest or commitment fees are due hereunder or under
any Note, the

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Borrower agrees to maintain on deposit in the Borrower Account an amount
sufficient to pay such principal, interest or commitment fees in full.  The
Borrower hereby authorizes the Agent (i) to deduct automatically all principal,
interest or loan fees when due hereunder or under the Notes from the Borrower
Account, and (ii) if and to the extent any payment under this Agreement or any
other Loan Document is not made when due, to deduct automatically any such
amount from any or all of the accounts of the Borrower maintained with Bank of
America.  The Agent agrees to provide timely notice to the Borrower of any
automatic deduction made pursuant to this Section 2.10(b).

(c)           Non-Business Days.  Whenever any payment hereunder or under any
other Loan Document shall be stated to be due or whenever the last day of any
Applicable Interest Period would otherwise occur on a day other than a Business
Day, such payment shall be made and the last day of such Applicable Interest
Period shall occur on the next succeeding Business Day and such extension of
time shall in such case be included in the computation and payment of interest
or commitment fees, as the case may be, unless, in the case of an Applicable
Interest Period with respect to a Offshore Rate Loan, such extension would cause
such payment to be made or the last date of such Applicable Interest Period to
occur in the next following calendar month, in which case such payment shall be
made and the last day of such Applicable Interest Period shall occur on the next
preceding Business Day.

Section 2.11         Prepayments.  Base Rate Loans may be repaid at any time
without penalty or premium.  If a Offshore Rate Loan is paid prior to the end of
the Applicable Interest Period, the Borrower shall compensate each Lender, upon
written request by such Lender (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Offshore Rate Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or re-employment of
such funds) which such Lender may sustain as a result of such payment.  Such
amounts shall be payable in all circumstances where a Offshore Rate Loan is paid
prior to the end of the Applicable Interest Period, regardless of whether such
payment is voluntary, mandatory, the result of the Agent’s or any Lender’s
collection efforts.

Section 2.12         Application of Payments.

(a)           Payments Before Default.  Payments made by the Borrower in respect
of amounts owing by it hereunder or under any other Loan Document shall be
applied in the manner directed by the Borrower and, in the absence of any such
direction, such payments shall be applied first, against fees, expenses and
indemnities due hereunder or under any other Loan Document; second, against any
interest due on any Loan; third, against any Loan principal then due; and
fourth, against any Loan principal not then due.

(b)           Payments After Default.  Any payments received by the Agent or any
Lender by any means and from any source after the occurrence and during the
continuation of an Event of Default shall be applied first, to fees, expenses
and indemnities then due hereunder and under any other Loan Document; second, to
interest due then due under the Loan Documents; third, to repay the outstanding
principal amount of any outstanding Loans; and fourth, to be held (and applied
in the preceding order of priority) as cash collateral to secure the performance
of all

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obligations of the Borrower owing to the Agent and the Lenders (or any of them)
under the Loan Documents.

Section 2.13         Fees.

(a)           Commitment Fee.  The Borrower shall pay to the Agent for the
account of each Lender in accordance with its Percentage Interest, a commitment
fee equal to the Applicable Interest Rate times the actual daily amount by which
the Aggregate Commitments exceed the sum of (i) the outstanding amount of all
Revolving Loans and (ii) all Letters of Credit Usage.  The commitment fee shall
accrue at all times during the Commitment Period, including at any time during
which one or more of the conditions in Article 3 is not met, and shall be due
and payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the
date of this Agreement, and on the Maturity Date.  The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Interest Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Interest Rate separately for each period during
such quarter that such Applicable Interest Rate was in effect.

(b)           Upfront Fee.  Borrower shall pay to Bank of America, as Agent for
the Lenders, an upfront fee in the amount of Sixty-two Thousand Five Hundred
Dollars ($62,500), or 25 basis points as applied to the Aggregate Commitments,
which shall be shared equally by the Lenders. This fee shall be due and payable
at closing, and shall be fully earned and non-refundable when paid.

(c)           Arrangement Fee.  Borrower shall pay to Bank of America, for its
own account, an arrangement fee as set forth in the fee letter agreement dated
as of the date of this Agreement (the “Fee Letter”). The arrangement fee shall
be due and payable at closing, and shall be fully earned and non-refundable when
paid.

(d)           Annual Agency Fees.  So long as any Lender shall have any
Commitment hereunder and until payment in full of each Loan, the Borrower agrees
to pay to the Agent for its own account, an annual administrative fee as
provided in the Fee Letter.  The annual agency fee shall be payable in advance
on the date of this Agreement on each anniversary date of this Agreement and
shall be deemed fully earned when due and non-refundable when paid.

Section 2.14         Sharing of Payments, Etc.  Each borrowing of Loans from the
Lenders under Section 2.1 will be made pro rata in accordance with each Lender’s
Percentage Interest.  Each payment and prepayment of the Loans and each payment
of interest on the Loans will be made pro rata to each Lender in accordance with
its Percentage Interest.  If any Lender shall obtain any payment in respect of
the Borrower’s obligations under this Agreement or the Notes (whether voluntary
or involuntary, through the exercise of any right of setoff or otherwise) in
excess of the share which it would have been entitled to receive had such
payment been made to the Agent for the account of the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Loans made
by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, but if any of such excess payment is
afterward recovered from such purchasing Lender, the purchase shall be rescinded
and the purchase price restored, without interest, to the extent of such
recovery.  The

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Borrower authorizes the purchase of such participations and agrees that any
Lender so purchasing a participation from another Lender may exercise all its
rights to payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

ARTICLE 3.
CONDITIONS TO LOANS

Section 3.1            Conditions to Initial Loan.  In addition to the
conditions set forth in Section 3.2, the obligation of each Lender to make any
Loan, the obligation of the Agent to disburse any Loan proceeds, the obligation
of the L/C Issuer to issue Letters of Credit, and the obligation of Swing Line
Lender to make any Swing Line Loans are subject to fulfillment of the following
conditions precedent prior to the initial Loan:

(a)           Loan Documents.  The Loan Documents shall have each been duly
executed and delivered by the respective parties thereto, and shall be
satisfactory to the Agent and the Lenders in form and substance.

(b)           Borrower Authority.  The Agent shall have received, in form and
substance satisfactory to the Lenders, a certified copy of the Organizational
Documents of the Borrower and certified copies of resolutions adopted by the
board of directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, together with evidence
that the Borrower is in good standing in the states of Oregon and evidence of
the authority and specimen signatures of the natural persons who have signed
this Agreement and who will sign the other Loan Documents on behalf of the
Borrower and such other evidence of corporate authority as the Agent or any
Lender shall reasonably require.

(c)           Guarantor Authority.  The Agent shall have received, in form and
substance satisfactory to the Lenders, a certified copy of the Organizational
Documents of each Guarantor and certified copies of resolutions adopted by the
board of directors or equivalent governing body of such Guarantor authorizing
the execution, delivery and performance of the Loan Documents to which it is a
party and evidence of the authority and specimen signatures of the natural
persons who have signed or will sign the Loan Documents to which such Guarantor
is a party on behalf of such Guarantor and such other evidence of corporate
authority as the Agent or any Lender shall reasonably require.

(d)           Certificate.  The Agent shall have received an Officer’s
Certificate from the Borrower as to the accuracy of the Borrower’s
representations and warranties set forth in Article 5 hereof and as to the
absence of any Default or Event of Default.

(e)           No Material Adverse Change.  No event shall have occurred since
the date of the Current Balance Sheet that could reasonably be expected to have
a material adverse change in, or a material adverse effect upon, the business,
operations, properties or financial condition of the Borrower or the Borrower
and its Subsidiaries taken as a whole.

(f)            Payment of Fees and Expenses.  The Agent shall have received
(i) for the account of the Lenders the fees set forth in Section 2.13 and
(ii) for its own account, reimbursement for all reasonable expenses, including
legal fees, actually incurred by the Agent

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in connection with the preparation of this Agreement, the other Loan Documents
and the closing of the transactions contemplated hereby and thereby.

(g)           Consents.  The Agent shall have received evidence reasonably
satisfactory to the Lenders that the Borrower has obtained all consents, permits
and Government Approvals from all Persons (including, without limitation,
Governmental Authorities) which are parties to or the issuer of any material
contract, lease, license or other Government Approval necessary or advisable to
permit the Agent and the Lenders following any Event of Default, to enjoy the
practical realization of the rights and remedies provided in this Agreement and
the other Loan Documents.

Section 3.2            Conditions to All Loans.  The obligation of each Lender
to make any Loan, and the obligation of the Agent to disburse any Loan proceeds
are subject to fulfillment of the following conditions precedent:

(a)           Prior Conditions.  All of the conditions set forth in Section 3.1
shall have been satisfied.

(b)           Notice of Borrowing.  The Agent shall have received the Notice of
Borrowing in respect of each Loan.

(c)           No Defaults, Etc.  At the date of the Loan, no Default or Event of
Default shall have occurred and be continuing or will have occurred as the
result of the making of the Loan; and the representations and warranties of the
Borrower in Article 5 hereof shall be true on and as of such date with the same
force and effect as if made on and as of such date.

(d)           Guaranties.  Neither the Agent nor any Lender shall have received
from the Borrower or any Guarantor any notice terminating or purporting to
terminate any Guarantor’s obligations under the Guaranty to which it is a party
or claiming that any such Guaranty is not or will in the future not be fully
enforceable against each Guarantor in accordance with their terms.

(e)           Other Information.  The Agent and each Lender shall have received
such other statements, opinions, certificates, documents and information as it
may reasonably request in order to satisfy itself that the conditions set forth
in this Section 3.2 have been fulfilled.

ARTICLE 4.
LETTERS OF CREDIT

Section 4.1            Letters of Credit.  Borrower may request that the L/C
Issuer issue letters of credit for Borrower’s account in accordance with the
terms and conditions of this Article 4.

Section 4.2            Manner of Requesting Letters of Credit.

(a)           Letter of Credit Requests.  From time to time during the
Commitment Period, Borrower may request that the L/C Issuer issue standby
letters of credit for Borrower’s account or extend or renew any existing Letters
of Credit.  Such request will be made by delivering a written request for the
issuance, extension or renewal of such a letter of credit to the

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L/C Issuer, not later than 12:00 noon (Seattle time) on the date a new letter of
credit is to be issued or an existing letters of credit is scheduled to expire. 
Each such request shall be deemed to constitute a representation and warranty by
Borrower that as of the date of such request the statements set forth in
Article 5 hereof are true and correct and that no Default or Event of Default
has occurred and is continuing or will occur as a result of issuing, extending
or renewing the letter of credit.  Each such request shall (1) specify the face
amount of the requested Letter of Credit, (2) the proposed date of expiration,
(3) the name of the intended beneficiary thereof, and (4) whether such Letter of
Credit is a new standby letter of credit or an extension or renewal thereof. 
Each standby Letter of Credit requested hereunder shall be in a face amount such
that after issuance of such letter of credit (i) the principal amount of all
Revolving Loans outstanding plus the Letter of Credit Usage will not exceed the
Aggregate Commitments; and (ii) the Letter of Credit Usage will not exceed Five
Million Dollars ($5,000,000).  In addition to the foregoing, unless otherwise
approved by Lenders, each Letter of Credit requested hereunder, shall have an
expiration date not later than one year after the Maturity Date, or one year
after the date of issuance of such Letter of Credit. However, any Letter of
Credit that remains outstanding after the Maturity Date shall be secured by cash
or deposit account balances in form and substance satisfactory to the Agent. 
The Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower; provided that the L/C Issuer shall not be obligated to
make any L/C Credit Extension with respect to any Letter of Credit, and no
Lender shall be obligated to participate in any Letter of Credit if, as of the
date of such L/C Credit Extension, the limitations set forth above are exceeded.

(b)           Standby Letter of Credit Fees.  Borrower agrees to pay to the L/C
Issuer for the account of Lenders in proportion to their Percentage Interests, a
standby letter of credit fee on the face amount of each standby Letter of Credit
from the date such Letter of Credit is issued until such Letter of Credit shall
be terminated at a per annum rate equal to the Applicable Interest Rate. 
Standby letter of credit fees shall be payable in arrears on the first Business
Day of each calendar quarter and on demand after the occurrence of an Event of
Default.  Computations of standby letter of credit fees shall be made on the
basis of a year of three hundred sixty (360) days for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fees are payable.

(c)           Other Letter of Credit Fees.  Borrower agrees to pay to the L/C
Issuer for its own account issuance, amendment, negotiation and other standby
letter of credit fees calculated and payable in accordance with the L/C Issuer’s
normal and customary practices.

(d)           Letter of Credit Application Forms.  Borrower shall execute an
application in the standard form used by the L/C Issuer (each, a “Letter of
Credit Application”) in respect of each Letter of Credit issued, amended,
extended or renewed hereunder.  To the extent any Letter of Credit Application
conflicts with this Agreement, the terms of this Agreement shall control.  Any
Letter of Credit Applications now in effect with respect to the Existing Letters
of Credit shall remain in full force and effect except that, if such existing
Letter of Credit is extended or renewed, the L/C Issuer may, at its option,
require Borrower to execute a new Letter of Credit Application.

(e)           Issuance of Letter of Credit.  Subject to the satisfaction of the
conditions precedent set forth in Article 5 hereof and Borrower’s compliance
with the terms of this Section 4.2,

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the L/C Issuer shall issue and deliver its letter of credit to Borrower or to
the designated beneficiary at such address as Borrower may specify.  New Letters
of Credit and extensions or renewals of existing Letters of Credit shall be in a
form acceptable to the L/C Issuer.

Section 4.3 Compensation For Increased Costs.  The Borrower agrees to indemnify
the L/C Issuer and Lenders on demand for any and all additional costs, expenses,
or damages incurred by the L/C Issuer or such Lender, directly or indirectly,
arising out of the issuance of any Letter of Credit or the purchase of any
Letter of Credit Risk Participation, including, without limitation, any costs of
maintaining reserves in respect thereof and any premium rates imposed by the
Federal Deposit Insurance Corporation in connection therewith.  A certificate as
to such additional amounts submitted to Borrower by the L/C Issuer or such
Lender shall be final, conclusive, and binding, absent manifest error.

If at any time after the date hereof the introduction of or any change in
applicable law, rule, or regulation or in the interpretation or the
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by the L/C Issuer or any
Lender with any requests directed by any such Governmental Authority (whether or
not having the force of law) shall, with respect to any Letter of Credit or
Letter of Credit Risk Participation subject the L/C Issuer or such Lender to any
Tax or impose, modify, or deem applicable any reserve, special deposit, or
similar requirements against assets of, deposits with or for the account of,
credit extended by the L/C Issuer or such Lender or shall impose on the L/C
Issuer or such Lender any other conditions affecting the Letters of Credit or
Letter of Credit Risk Participations and the result of any of the foregoing is
to increase the cost to the L/C Issuer or such Lender of issuing a Letter of
Credit or holding a Letter of Credit Risk Participation or to reduce the amount
of any sum received or receivable by the L/C Issuer or such Lender hereunder
with respect to the Letters of Credit or Letter of Credit Risk Participations,
then, upon demand by the L/C Issuer or such Lender, Borrower shall pay to the
L/C Issuer or such Lender such additional amount or amounts as will compensate
the L/C Issuer or such Lender for such increased cost or reduction.  A
certificate submitted to Borrower by the L/C Issuer or such Lender setting forth
the basis for the determination of such additional amount or amounts shall be
final, conclusive, and binding, absent manifest error.

Section 4.4 Applicability of ISP98 and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and Borrower when a Letter of Credit is issued, (a) the rules
of the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (b) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.

Section 4.5 Payment by Borrower.  The Borrower agrees to fully reimburse the L/C
Issuer for all amounts paid by the L/C Issuer under any Letter of Credit
together with interest thereon at the Prime Rate from the date the L/C Issuer
makes such payment (the “Honor Date”) until the date the L/C Issuer notifies
Borrower that such payment was made.  Such reimbursement shall be made to the
L/C Issuer in immediately available funds at its Credit

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Service Center, Concord, California, not later than 12:00 noon (Seattle time) on
the date Borrower is first notified by the L/C Issuer that the L/C Issuer has
made payment under the Letter of Credit; provided, that, if the L/C Issuer so
elects pursuant to the terms of Section 8.2, following the occurrence of an
Event of Default, the face amount of each Letter of Credit shall become
immediately due and payable.  If Borrower shall default in its obligations to
reimburse the L/C Issuer or make any other payment required hereunder, interest
shall accrue on the unpaid amount thereof at the Default Rate from the date such
amount becomes due and payable until payment in full by Borrower.  Interest on
such unpaid amounts shall be calculated on the basis of a year of 360 days and
shall be payable on demand.

Section 4.6 Funding of Participations; Repayment of Participations.

(a)           If the Borrower fails to reimburse the L/C Issuer in accordance
with Section 4.5 above, Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and
the amount of such Lender’s pro rata share thereof. Any notice given by the L/C
Issuer or the Agent pursuant to this Section 4.6 may be given by telephone.

(b)           Each Lender (including the Lender acting as L/C Issuer) shall upon
any notice pursuant to Section 4.6(a) make funds available to the Agent for the
account of the L/C Issuer at the Agent’s Office in an amount equal to its pro
rata share of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by the Agent, whereupon, subject to the provisions
of Section 4.6(c), each Lender that so makes funds available shall be deemed to
have made a Base Rate Loan to the Borrower in such amount. The Agent shall remit
the funds so received to the L/C Issuer.

(c)           With respect to any Unreimbursed Amount that is not fully
refinanced by a borrowing of Base Rate Loans, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender’s payment to the Agent for the account
of the L/C Issuer pursuant to Section 4.6(b) shall be deemed payment in respect
of its participation in such Loan and shall constitute an L/C Advance from such
Lender in satisfaction of its participation obligation under this Section 4.6.

(d)           Until each Lender funds its Loan or L/C Advance pursuant to this
Section 4.6 to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s pro rata share of such amount shall
be solely for the account of the L/C Issuer.

(e)           Each Lender’s obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 4.6, shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the L/C
Issuer, the Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, or (iii) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make

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Loans pursuant to this Section 4.6 is subject to the conditions set forth in
Section 3.2 (other than delivery by the Borrower of a Notice of Borrowing). No
such making of an L/C Advance shall relieve or otherwise impair the obligation
of the Borrower to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as provided
herein.

(f)            If any Lender fails to make available to the Agent for the
account of the LC Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 4.6 by the time specified in Section
4.6(b) the L/C Issuer shall be entitled to recover from such Lender (acting
through the Agent), on demand, such amount with interest thereon for the period
from the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the Prime
Rate from time to time in effect. A certificate of the L/C Issuer submitted to
any Lender (through the Agent) with respect to any amounts owing under this
subsection (f) shall be conclusive absent manifest error.

(g)           (i)            At any time after the L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such Lender’s L/C
Advance in respect of such payment in accordance with Section 4.6(a) through
(f), if the Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of cash collateral applied
thereto by the Agent), the Agent will distribute to such Lender its pro rata
share thereof (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender’s L/C Advance was
outstanding) in the same funds as those received by the Agent.

(ii)           If any payment received by the Agent for the account of the L/C
Issuer pursuant to Section 4.6(a) is required to be returned (including pursuant
to any settlement entered into by the L/C Issuer in its discretion), each Lender
shall pay to the Agent for the account of the L/C Issuer its pro rata share
thereof on demand of the Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per annum
equal to the Prime Rate from time to time in effect.

ARTICLE 5.
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders and the Agent as follows:

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Section 5.1 Corporate Existence and Power.  The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Oregon.  The Borrower is duly qualified to do business in California,
Georgia, Illinois, Michigan, North Carolina, Ohio, Oregon, Pennsylvania, South
Carolina, Texas, and each other jurisdiction where the failure to so qualify
would be likely to have a material adverse effect on the business, operations,
properties or financial condition of the Borrower.  The Borrower has full
corporate power, authority and legal right to carry on its business as presently
conducted, to own and operate its properties and assets, and to execute, deliver
and perform this Agreement and the other Loan Documents.

Section 5.2 Borrower Authorization.  The execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents and any borrowing
hereunder, have been duly authorized by all necessary corporate action of the
Borrower, do not require any shareholder approval or the approval or consent of
any trustee or the holders of any Indebtedness of the Borrower, except such as
have been obtained (certified copies thereof having been delivered to the
Agent), do not contravene any law, regulation, rule or order binding on it or
its Organizational Documents and do not contravene the provisions of or
constitute a default under any material indenture, mortgage, contract or other
agreement or instrument to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

Section 5.3 Guarantor Authorization.  The execution, delivery and performance by
each Guarantor of the Guaranty to which it is a party, has been duly authorized
by all necessary corporate, company or partnership action of such Guarantor, do
not require any shareholder approval or the approval or consent of any trustee
or the holders of any Indebtedness of such Guarantor, except such as have been
obtained (certified copies thereof having been delivered to the Agent), do not
contravene any law, regulation, rule or order binding on it or its
Organizational Documents and do not contravene the provisions of or constitute a
default under any material indenture, mortgage, contract or other agreement or
instrument to which such Guarantor is a party or by which such Guarantor or any
of its properties may be bound or affected.

Section 5.4 Government Approvals, Etc.  No Government Approval or filing or
registration with any Governmental Authority is required for the making and
performance by the Borrower of the Loan Documents or in connection with any of
the transactions contemplated hereby or thereby, except such as have been
heretofore obtained and are in full force and effect (certified copies thereof
having been delivered to the Agent).

Section 5.5 Binding Obligations, Etc.  This Agreement has been duly executed and
delivered by the Borrower and constitutes, and the other Loan Documents when
duly executed and delivered will constitute, the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, similar laws affecting creditors’ rights generally
or general principles of equity.

Section 5.6 Litigation.  Except as specifically disclosed in Schedule 1 attached
hereto, there are no actions, proceedings, investigations, or claims against or
affecting the Borrower now pending before any court, arbitrator, or Governmental
Authority (nor to the best of the

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Borrower’s knowledge has any thereof been threatened nor does any basis exist
therefor) which if determined adversely to the Borrower would (a) have a
material adverse effect on the financial condition or operations of the
Borrower, (b)  impair or defeat the lien of the Agent or any Lender on any of
the Collateral or any rights of the Borrower therein, or (c) result in a
judgment or order against the Borrower (in excess of insurance coverage) for
more than Two Million Five Hundred Thousand Dollars ($2,500,000).

Section 5.7 Financial Condition.  The consolidated balance sheet of the Borrower
as at October 31, 2002 (the “Current Balance Sheet”), and the related statements
of income and retained earnings of the Borrower for the fiscal year then ended,
copies of which have been furnished to Lenders, fairly present the consolidated
financial condition of the Borrower as at such date, all determined in
accordance with GAAP.  The Borrower did not have on such date any material
contingent liabilities for Taxes, unusual forward or long-term commitments or
material unrealized or anticipated losses from any unfavorable commitments,
except as referred to or reflected or provided for in such balance sheet and in
the related notes.  Since the date of the Current Balance Sheet there has been
no material adverse change in the financial condition, operations, or business
of the Borrower.

Section 5.8 Solvency.  The Borrower and each Guarantor is Solvent and each shall
be Solvent immediately after the consummation of the transactions contemplated
by this Agreement.  As used herein, a Person is “Solvent” on a particular date,
if, on such date both (i) (a) the then fair saleable value of the property of
such Person on a going concern basis is (1) greater than the total amount of
liabilities (including contingent liabilities) of such Person as they mature in
the ordinary course and (2) not less than the amount that will be required to
pay the probable liabilities on such Person’s then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (b) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (c) such Person does not intend to incur, or believe) nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (ii) such Person is “solvent” within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances.  For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability in the ordinary course.

Section 5.9 Title and Liens.  The Borrower has good and marketable title to each
of the properties and assets reflected in the Current Balance Sheet, except such
as have been since sold or otherwise disposed of in the ordinary course of
business.  No assets or revenues of the Borrower are subject to any Lien except
as required or permitted by this Agreement or specifically disclosed in
Schedule 2 attached hereto.

Section 5.10 Intellectual Property.  The Borrower owns or possesses all
Intellectual Property and all licenses, franchises, permits and rights with
respect to any Intellectual Property necessary to own and operate its respective
properties and to carry on its business as presently conducted and presently
planned to be conducted.  Except as specifically disclosed in Schedule 3
attached hereto, no claim or litigation regarding any Intellectual Property or
any license,

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franchise, permit or other rights with respect thereto is pending (nor to the
best of the Borrower’s knowledge threatened) which if determined adversely to
the Borrower would have a material adverse effect on the business, operations or
financial condition of the Borrower.

Section 5.11 Environmental Laws, Etc.  Except as specifically disclosed in
Schedule 4 attached hereto, all properties of the Borrower and its Subsidiaries
and its and their use thereof comply in all material respects with applicable
zoning and use restrictions and with applicable laws and regulations relating to
health, safety and the environment, including, without limitation, all
Environmental Laws, in all jurisdictions in which the Borrower and its
Subsidiaries are doing business.

Section 5.12 Taxes.  The Borrower has filed all tax returns and reports required
of it, has paid all Taxes which are due and payable and before they have become
delinquent, except for Taxes (a) whose amount is not individually or in the
aggregate a Material Amount, or (b) whose amount, applicability or validity is
currently being contested in good faith by appropriate proceedings where
reserves or other appropriate provisions required by GAAP shall have established
therefor.  The charges, accruals and reserves on the books of the Borrower in
respect of Taxes for all fiscal periods to date are accurate.  There are no
questions or disputes between the Borrower and any Governmental Authority with
respect to any Taxes.  As used in this Section 5.12, “Material Amount” shall
mean an amount of One Hundred Thousand Dollars ($100,000) or more or an amount
otherwise material to the business, operations or financial condition of the
Borrower.

Section 5.13 Other Agreements.  The Borrower is not in breach of or default in
any material respect under any material agreement to which it is a party or
which is binding on it or any of its assets.

Section 5.14 Labor and Employee Relations Matters.  The Borrower is not and does
not expect to be the subject of any union organizing activity or material labor
dispute, and the Borrower has not violated any applicable federal or state law
or regulation relating to labor or labor practices, except such organizing
activity, labor disputes and violations, which individually or in aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, properties or financial condition of the Borrower.

Section 5.15 Federal Reserve Regulations.  The Borrower is not 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 (within the
meaning of Federal Reserve Regulation U), and no part of the proceeds of any
Loan 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 other purpose that violates the applicable provisions of any Federal Reserve
Regulation.  The Borrower will furnish to the Agent or any Lender on request a
statement conforming with the requirements of Regulation U.

Section 5.16 ERISA.

(a)           The present value of all benefits vested under all Pension Plans
did not, as of the most recent valuation date of such Pension Plans, exceed the
value of the assets of the

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Pension Plans allocable to such vested benefits by an amount which would
represent a potential material liability of the Borrower or affect materially
the ability of the Borrower to perform the Loan Documents.

(b)           No Plan or trust created thereunder, or any trustee or
administrator thereof, has engaged in a “prohibited transaction” (as such term
is defined in Section 406 of ERISA or  Section 4975 of the Code) which could
subject such Plan or any other Plan, any trust created thereunder, or any
trustee or administrator thereof, or any party dealing with any Plan or any such
trust to the tax or penalty on prohibited transactions imposed by Section 502 of
ERISA or Section 4975 of the Code.

(c)           No Pension Plan or trust has been terminated, except in accordance
with the Code, ERISA, and the regulations of the Internal Revenue Service and
the PBGC as applicable to solvent plans in which benefits of participants are
fully protected.  No “reportable event” as defined in Section 4043 of ERISA has
occurred for which notice has not been waived or for which alternative notice
procedures are permitted.

(d)           No Pension Plan or trust created thereunder has incurred any
“accumulated funding deficiency” (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA.

(e)           The required allocations and contributions to Pension Plans will
not violate Section 415 of the Code.

(f)            The Borrower has no withdrawal liability to any trust created
pursuant to a multi-employer pension or benefit plan nor would it be subject to
any such withdrawal liability in excess of One Hundred Thousand Dollars
($100,000) if it withdrew from any such plan or if its participation therein
were otherwise terminated.

Section 5.17 Subsidiaries.  Except as specifically disclosed in Schedule 5
attached hereto, the Borrower owns no Subsidiaries.  Schedule 5 attached hereto
accurately sets forth the jurisdictions of incorporation or organization of each
Subsidiary, and (a) in the case of a Subsidiary that is a corporation, the
authorized capitalization of each Subsidiary, the number of shares of each class
of capital stock issued and outstanding of each Subsidiary and the number and
percentage of outstanding shares of each such class of capital stock owned by
the Borrower or by any Subsidiary, or (b) in the case of a Subsidiary that is a
limited liability company or partnership, the number of partnership or
membership units of each Subsidiary and the number and percentage of partnership
or membership units owned by the Borrower or by any Subsidiary.

Section 5.18 Not Investment Company, Etc.  The Borrower is not now, and after
the application by the Borrower of the proceeds of any Loan will not be, subject
to regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or any federal or state statute or regulation
limiting its ability to incur Indebtedness.

Section 5.19 Representations as a Whole.  This Agreement, the other Loan
Documents, the financial statements referred to in Section 5.7, and all other
instruments, documents, certificates and statements furnished to the Agent or
any Lender by or on behalf of the Borrower,

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taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading.  The Borrower has disclosed to the Lenders in writing any and all
facts which have a material adverse effect on the business, operations,
properties, financial condition or prospects of the Borrower or any Guarantor or
the ability of the Borrower or any Guarantor to perform its obligations under
the Loan Documents.  Without limiting the foregoing, each of the representations
and warranties made by the Borrower herein and in the other Loan Documents is
true and correct on and as of the date when made, on and as of the date hereof,
and on and as of each date this representation is deemed made hereunder with the
same force and effect as if made on and as of such dates.

ARTICLE 6.
AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder and until payment in
full of each Loan and performance of all other obligations of the Borrower under
this Agreement and the other Loan Documents, the Borrower agrees to do all of
the following unless the Agent (with the consent of Majority Lenders) shall
otherwise consent in writing.

Section 6.1 Use of Proceeds from Loans.  The Borrower will use the proceeds of
the Loans to finance general corporate requirements incurred in the ordinary
course of the Borrower’s businesses.

Section 6.2 Payment.  The Borrower will pay the principal of and interest on the
Loans in accordance with the terms of this Agreement and the Notes and will pay
when due all other amounts payable by the Borrower hereunder and under any other
Loan Document

Section 6.3 Preservation of Corporate Existence, Etc.  The Borrower will, and
will cause each Subsidiary to, preserve and maintain their existence, rights,
franchises and privileges in the jurisdictions of their organization (subject to
any transaction permissible under Section 7.2 below) and will, and will cause
each Subsidiary to, qualify and remain qualified as foreign corporations or
entities in each jurisdiction where qualification is necessary or advisable in
view of their business and operations or the ownership of their properties.

Section 6.4 Visitation Rights.  The Borrower will permit the Agent or any Lender
at any reasonable time, and from time to time, to examine and make copies of and
abstracts from the records and books of account of and to visit the properties
of the Borrower and to discuss the affairs, finances and accounts of the
Borrower with any of its officers or directors.

Section 6.5 Keeping of Books and Records.  The Borrower will, and will cause
each Subsidiary to, keep adequate records and books of account in which complete
entries will be made, in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.

Section 6.6 Maintenance of Property, Etc.  The Borrower will, and will cause
each Subsidiary to, maintain and preserve all of its material properties in good
working order and condition, ordinary wear and tear excepted, and will from time
to time make all needed repairs, renewals, or replacements so that the
efficiency of such properties shall be fully maintained and

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preserved.  The Borrower will not take or fail to take any action, nor permit
any action to be taken by others that are subject to the Borrower’s control
which would affect the validity and enforcement of its Intellectual Property, or
impair the value of such Intellectual Property.

Section 6.7 Compliance With Laws, Etc.  The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all laws, regulations,
rules, and orders of Governmental Authorities applicable to the Borrower or to
its operations or property, except any thereof whose validity is being contested
in good faith by appropriate proceedings upon stay of execution of the
enforcement thereof and with provision having been made to the satisfaction of
Majority Lenders for the payment of any fines, charges, penalties or other costs
in respect thereof in the event the contest is determined adversely to the
Borrower.

Section 6.8 Other Obligations.  The Borrower will, and will cause each
Subsidiary to, pay and discharge before the same shall become delinquent all
Indebtedness, Taxes, and other obligations for which the Borrower is liable or
to which its income or property is subject and all claims for labor and
materials or supplies which, if unpaid, might become by law a lien upon assets
of the Borrower, except any thereof whose validity, applicability or amount is
being contested in good faith by the Borrower in appropriate proceedings with
provision having been made to the satisfaction of Majority Lenders for the
payment thereof in the event the contest is determined adversely to the
Borrower.

Section 6.9 Insurance.  The Borrower will, and will cause each Subsidiary to,
keep in force upon all of its properties and operations policies of insurance
carried with responsible companies in such amounts and covering all such risks
as shall be customary in the industry, including casualty and business
interruption insurance and as shall be reasonably satisfactory to Majority
Lenders.  From time to time, on request, the Borrower will furnish to the
Lenders certificates of insurance or, at any Lender’s request, duplicate
policies evidencing such coverage.

Section 6.10 Financial Information.  The Borrower will deliver to the Agent with
sufficient copies for the Agent and each Lender:

(a)           Annual Financial Statements.  As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the Borrower,
the consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of revenue and
expenses, shareholder’s equity and consolidated statement of cash flow for such
year, accompanied by (i) the audit report thereon by Borrower’s current
certified public accountants (or if a new auditor is chosen, by independent
certified public accountants selected by the Borrower and approved by the
Majority Lenders (which approval shall not be unreasonably withheld)) which
report shall be prepared in accordance with GAAP and shall not be qualified by
reason of restricted or limited examination of any material portion of the
records of the Borrower or its Subsidiaries and shall contain no disclaimer of
opinion and (ii) an Officer’s Certificate of the Borrower certifying that as of
the close of such year no Event of Default or Default had occurred and was
continuing;

(b)           Quarterly Financial Statements.  As soon as available and in any
event within forty-five (45) days after the end of each of the first three (3)
fiscal quarters of the Borrower, the consolidated CPA-reviewed balance sheet of
the Borrower and its Subsidiaries as

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of the end of such fiscal quarter and the related consolidated statements of
revenue and expenses, shareholder’s equity and consolidated statement of cash
flow for such fiscal quarter; accompanied by an Officer’s Certificate certifying
that such unaudited financial statements have been prepared in conformity with
GAAP (subject to year-end audit adjustments and the absence of footnote
disclosures), in all material respects, present fairly the financial position
and the results of operations of the Borrower and its Subsidiaries as at the end
of and for such fiscal quarter;

(c)           Compliance Certificates.  Concurrently with the delivery of the
financial statements referred to in Section 6.10(a) and (b), a Compliance
Certificate in substantially the form of Exhibit C attached hereto (i) stating
that as of the close of such fiscal year or fiscal quarter, as applicable, no
Default or Event of Default had occurred and was continuing, and
(ii) demonstrating with calculations in reasonable detail the Borrower’s
compliance as at that date with the provisions of Section 6.13;

(d)           Annual Budget.  Within thirty (30) days of Borrower’s fiscal
year-end, Borrower’s annual budget for the subsequent fiscal year.

(e)           Other.  All other statements, reports and other information as the
Agent or any Lender may reasonably request concerning the Collateral or the
financial condition and business affairs of the Borrower or any of its
Subsidiaries.

Section 6.11 New Subsidiaries.  Promptly after the creation, acquisition or
existence of any new Subsidiary (each, a “New Subsidiary”), the Borrower will
cause such New Subsidiary to execute and deliver to the Agent (a) a counterpart
to the Guaranty, (b) such evidence of the corporate, company or partnership,
existence and authority of such New Subsidiary as the Agent or any Lender may
reasonably require.

Section 6.12 Notification.  Promptly after learning thereof, the Borrower shall
notify the Agent and the Lenders of (a) any action, proceeding, investigation or
claim against or affecting the Borrower instituted before any court, arbitrator
or Governmental Authority or, to the Borrower’s knowledge threatened to be
instituted, which if determined adversely to the Borrower would be likely to
have a material adverse effect on the business, operations, properties,
financial condition or prospects of the Borrower or any Subsidiary, or to impair
or defeat the lien of the Agent or any Lender on any Collateral or the
Borrower’s or any Subsidiary’s rights therein, or to result in a judgment or
order against the Borrower or any Subsidiary (in excess of insurance coverage)
for more than Two Million Five Hundred Thousand Dollars ($2,500,000); (b) any
contingent liability exceeding Two Million Five Hundred Thousand Dollars
($2,500,000); (c) any substantial dispute between the Borrower or any Subsidiary
and any Governmental Authority; (d) any labor controversy which has resulted in
or, to the Borrower’s knowledge, threatens to result in a strike which would
materially affect the business operations of the Borrower; (e) if the Borrower
or any member of a Controlled Group gives or is required to give notice to the
PBGC of any “reportable event” (as defined in subsections (b)(1), (2), (5) or
(6) of Section 4043 of ERISA) with respect to any Plan (or the Internal Revenue
Service gives notice to the PBGC of any “reportable event” as defined in
subsection (c)(2) of Section 4043 of ERISA and the Borrower obtains knowledge
thereof) which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that

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the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (f) the occurrence of any Event of Default
or Default; and (g) the occurrence of an event which results in a material
adverse change the business, operations, properties, financial condition or
prospects of the Borrower or the Borrower and its Subsidiaries taken as a
whole.  In the case of the occurrence of an Event of Default or Default or the
occurrence of an event which results in a material adverse change in the
Borrower’s consolidated financial condition or operations, the Borrower will
deliver to the Agent and each Lender an Officer’s Certificate specifying the
nature thereof, the period of existence thereof, if applicable, and what action
the Borrower proposes to take with respect thereto.

Section 6.13 Financial Covenants.

(a)           Consolidated Net Worth.  Permit Consolidated Net Worth at any time
to be less than the sum of (a) $125,000,000, (b) an amount equal to 50% of the
Consolidated Net Income earned in each full fiscal quarter ending after October
31, 2002 (with no deduction for a net loss in any such fiscal quarter) and (c)
an amount equal to 100% of the aggregate increases in Shareholders’ Equity of
the Borrower and its Subsidiaries after the date hereof by reason of the
issuance and sale of capital stock or other equity interests of the Borrower  or
any Subsidiary (other than issuances to the Borrower or a wholly-owned
Subsidiary), including upon any conversion of debt securities of the Borrower
into such capital stock or other equity interests.

(b)           Consolidated Interest Coverage Ratio.  Permit the Consolidated
Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to
be less than 4.0:1.0.

(c)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage
Ratio at any time during any period of four fiscal quarters of the Borrower set
forth below to be greater than the ratio set forth below opposite such period:

Four Fiscal Quarters Ending

 

Maximum
Consolidated
Leverage Ratio

 

Closing Date through January 30, 2004

 

2.25:1.00

 

 

 

 

 

January 31, 2004 and each fiscal
quarter thereafter

 

2.00:1.00

 

 

Section 6.14 Additional Payments; Additional Acts.  From time to time and upon
demand by the Agent, (a) pay or reimburse the Agent and the Lenders for all
Taxes (other than Taxes based solely on the overall net or gross income of the
Agent or such Lender) imposed on this Agreement and any other Loan Document,
(b) pay or reimburse the Agent and the Lenders for all expenses including
reasonable out-of-pocket legal fees (including allocated charges of internal
legal counsel) incurred in connection with (i) the negotiation, preparation and
execution of this Agreement, the Notes, the Guaranty, the Security Documents and
the other Loan

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Documents, and any amendment, waiver, consent or other modification of the
provisions hereof and thereof and the consummation and administration of the
transactions contemplated hereby and thereby and (ii) the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement, the
Notes, the Guaranty, the Security Documents and each other Loan Document
(including all such costs and expenses incurred during any “workout” or
restructuring in respect of the Loans and during any legal proceeding, including
any proceeding under any applicable bankruptcy, insolvency or other similar law
affecting the rights of creditors generally of the United States of America or
any State thereof, (c) obtain and promptly furnish to the Agent evidence of all
such Government Approvals as may be required to enable the Borrower or any
Guarantor to comply with its obligations under the Loan Documents; and
(d) execute and deliver all such instruments and to perform all such other acts
as the Agent or any Lender may reasonably request to carry out the transactions
contemplated by this Agreement and the other Loan Documents and to maintain the
continuous perfection and priority of the Agent’s Lien on all Collateral.  If
the Borrower shall default in its obligations to reimburse Lender, interest
shall accrue on the unpaid amount thereof at the Default Rate from the date the
Agent makes demand therefor until repaid in full by the Borrower.  The
obligations of the Borrower under this Section 6.14 shall survive the payment of
the Loans and the termination of this Agreement.

ARTICLE 7.
NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or there shall be any
outstanding Loans and until payment in full of each Loan and performance of all
other obligations of the Borrower under this Agreement and the other Loan
Documents, the Borrower agrees that it will not do any of the following unless
the Agent (with the consent of Majority Lenders) shall otherwise consent in
writing.

Section 7.1 Transactions With Affiliates.  The Borrower shall not, and shall
cause each Subsidiary to not enter into any transaction with any Affiliate of
the Borrower, except upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate of the Borrower or such Subsidiary.

Section 7.2 Liquidation, Merger, Sale of Assets .  The Borrower shall not, and
shall cause each Subsidiary to not, liquidate, dissolve or enter into any merger
or consolidation with or into, or convey, transfer, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets to or in favor of, any Person, except: (a) any
Subsidiary may liquidate, dissolve, merge, consolidate with or into, or transfer
any of its assets to the Borrower or any wholly-owned Subsidiary; provided that
Borrower or such wholly-owned Subsidiary shall be the continuing or surviving
corporation or organization; (b) the Borrower may merge or consolidate with any
Person as part of an Permitted Acquisition; provided that Borrower or such
wholly-owned Subsidiary shall be the continuing or surviving corporation or
organization; and (c) the Borrower or any Subsidiary may convey, transfer, lease
or otherwise dispose of obsolete assets or assets no longer used or useful in
the business of the Borrower and its Subsidiaries.

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Section 7.3 Indebtedness.  The Borrower shall not, and shall cause each
Subsidiary to not, create, incur or become liable for any Indebtedness except:
(a) the Loans; (b) existing Indebtedness reflected on the balance sheets
referred to in Section 5.7; (c) current accounts payable or accrued expenses
incurred by the Borrower in the ordinary course of business; (d) Indebtedness
permitted under Section 7.4; (e) intercompany Indebtedness owing by the Borrower
or any Subsidiary to the Borrower or any other Subsidiary permitted under
Section 7.6; (f) Indebtedness secured by newly purchased tangible property
(whether real or personal) in an aggregate amount no greater than $5,000,000
outstanding at any time; and (g) additional unsecured Indebtedness not to exceed
twenty percent (20%) of the Borrower’s Consolidated Net Worth, provided that
Borrower remains in compliance with all covenants set forth herein.

Section 7.4 Guaranties, Etc.  The Borrower shall not, and shall cause each
Subsidiary to not assume, guaranty, endorse or otherwise become directly or
contingently liable for, nor obligated to purchase, pay or provide funds for
payment of, any obligation or Indebtedness of any other Person, except: 
(a) guaranties of any Indebtedness permitted under Section 7.3; (b) by
endorsement of negotiable instruments for deposit or collection or by similar
transactions in the ordinary course of business; (c) with respect to customary
indemnification obligations incurred in connection with title insurance
agreements; (d) with respect to performance, surety, bid, appeal or similar
bonds incurred in the ordinary course of business; and (e) obligations existing
as of the date of this Agreement, reflected in the balance sheet referred to in
Section 5.7 and in amounts not greater than the amounts referred to therein.

Section 7.5 Liens.  The Borrower shall not, and shall cause each Subsidiary to
not create, assume or suffer to exist any Lien on any of its assets except:
(a) Liens in favor of the Agent arising pursuant to the Security Documents or as
otherwise permitted or required under this Agreement; (b) Liens securing
Indebtedness permitted under Section 7.3; (c) Permitted Liens; and (d) Liens
specifically disclosed in Schedule 2 attached hereto.

Section 7.6 Investments.  The Borrower shall not, and shall cause each
Subsidiary to not, make any loan or advance to any Person or purchase or
otherwise acquire the capital stock or obligations of, or any equity or other
interest in, any Person, or all or substantially all of the assets of any
Business Unit or any Person (collectively, “Investments”) or enter into any
agreement to do any of the foregoing, except: (a) Investments held in the form
of Cash Equivalents; (b) Investments made in the form of (i) short-term loans
made by the Borrower in the ordinary course of its business; (c) Investments
existing as of the date of this Agreement, reflected in the balance sheet
referred to in Section 5.7 and in amounts not greater than the amounts referred
to therein; (d) Investments made by any Subsidiary to the Borrower;
(e) Investments made by the Borrower to or in any wholly-owned Subsidiary;
(f) Investments made by any Subsidiary to the Borrower or to any wholly-owned
Subsidiary; (g) Investments made as part of a Permitted Acquisition; and
(h) other Investments directly related to the business of the Borrower not to
exceed Five Million Dollars ($5,000,000) in the aggregate at any one time
outstanding.

Section 7.7 Operations.  The Borrower shall not engage in any activity which is
substantially different from or unrelated to the present business activities of
the Borrower nor discontinue any portion of the Borrower’s present business
activities which constitutes a substantial portion thereof.

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Section 7.8 Securities.  The Borrower shall not issue, sell, or otherwise
distribute any stock, bond, note, debenture or other security of the Borrower,
except (i) notes or other debt instruments evidencing Indebtedness permitted by
this Agreement, and (ii) securities issued pursuant to the conversion of
outstanding convertible securities that are outstanding as of the date of this
Agreement.

Section 7.9 ERISA Compliance.  Neither the Borrower nor any member of the
Controlled Group nor any Plan of any of them will (a) engage in any “prohibited
transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code; (b) incur any “accumulated funding deficiency” (as such term is
defined in Section 302 of ERISA) whether or not waived; (c) terminate any
Pension Plan in a manner which could result in the imposition of a Lien on any
property of the Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA; or (d) violate state or federal securities laws
applicable to any Plan.

Section 7.10 Accounting Change.  The Borrower shall maintain a fiscal year
ending on January 31 and shall not make any significant change in accounting
policies or reporting practices other than changes required by GAAP or otherwise
required by law.

ARTICLE 8.
EVENTS OF DEFAULT

Section 8.1 Events of Default.  The occurrence of any of the following events
shall constitute an “Event of Default” hereunder.

(a)           Payment Default.  The Borrower fails to pay (i) the principal
amount of the Loans on the Maturity Date, or (ii) within five (5) Business Days
after the same becomes due, any interest on any Loan, or (iii) within five (5)
Business Days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

(b)           Breach of Warranty.  Any representation or warranty made or deemed
made by the Borrower under or in connection with any Loan Document shall prove
to have been incorrect in any material respect when made or deemed made; or

(c)           Breach of Certain Covenants.  The Borrower shall have failed to
comply with Sections 6.3, 6.9 and 6.12(e) or any provision of Article 7 of this
Agreement;

(d)           Breach of Other Covenants.  The Borrower shall fail to perform or
observe any other covenant, obligation or term of this Agreement, including
those set forth in Section 6.13, or any other Loan Document to which it is a
party and such failure shall continue unremedied for a period of thirty (30)
days after the earlier of (i) the date upon which written notice thereof shall
have been given to the Borrower by the Agent or any Lender or (ii) the date upon
which a Responsible Officer of the Borrower knew or reasonably should have known
of such failure; or

(e)           Material Adverse Change.  An event shall occur which results in a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, condition of the Borrower and its Subsidiaries taken as a
whole; or

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(f)            Cross-default.  The Borrower or any of its Subsidiaries shall
fail (i) to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) any Indebtedness or any interest or premium
thereon and such failure shall continue without waiver after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) to perform any term or covenant on its part to be
performed under any agreement or instrument relating to any such Indebtedness
and required to be performed and such failure shall continue without waiver
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such failure to perform is to accelerate or to
permit the acceleration of the maturity of such Indebtedness, or (iii) any such
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by regularly scheduled required prepayment) prior to the stated
maturity thereof; or

(g)           Voluntary Bankruptcy, Etc.  The Borrower or any of its
Subsidiaries shall: (i) file a petition seeking relief for itself under Title 11
of the United States Code, as now constituted or hereafter amended, or file an
answer consenting to, admitting the material allegations of or otherwise not
controverting, or fail timely to controvert a petition filed against it seeking
relief under Title 11 of the United State Code, as now constituted or hereafter
amended; or (ii) file such petition or answer with respect to relief under the
provisions of any other now existing or future applicable bankruptcy,
insolvency, or other similar law of the United States of America or any State
thereof or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or

(h)           Involuntary Bankruptcy, Etc.  An order for relief shall be entered
against the Borrower or any of its Subsidiaries under Title 11 of the United
States Code, as now constituted or hereafter amended, which order is not stayed;
or upon the entry of an order, judgment or decree by operation of law or by a
court having jurisdiction in the premises which is not stayed adjudging it a
bankrupt or insolvent under, or ordering relief against it under, or approving
as properly filed a petition seeking relief against it under the provisions of
any other now existing or future applicable bankruptcy, insolvency or other
similar law of the United States of America or any State thereof or of any other
country or jurisdiction providing for the reorganization, winding-up or
liquidation of corporations or any arrangement, composition, extension or
adjustment with creditors; or appointing a receiver, liquidator, assignee,
sequestrator, trustee or custodian of the Borrower or any of its Subsidiaries or
of any substantial part of any of its or their property, or ordering the
reorganization, winding-up or liquidation of any of their affairs; or upon the
expiration of sixty (60) days after the filing of any involuntary petition
against the Borrower or any of its Subsidiaries seeking any of the relief
specified in Section 8.1(g) or this Section 8.1(h) without the petition being
dismissed prior to that time (Lenders shall have no obligation to extend Loans
to Borrower during this sixty (60) day period); or

(i)            Insolvency, Etc.  The Borrower or any of its Subsidiaries shall
(i) make a general assignment for the benefit of its creditors or (ii) consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, or custodian of all or a substantial part of the property of the
Borrower or any of its Subsidiaries, as the case may be, or (iii) admit its
insolvency or inability to pay its debts generally as they become due, or
(iv) fail generally to pay its debts as they become due, or (v) take any action
(or suffer any action to be taken by its

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directors or shareholders) looking to the dissolution or liquidation of the
Borrower or any of its Subsidiaries, as the case may be; or

(j)            Judgment.  A final judgment or order for the payment of money in
excess of Five Million Dollars ($5,000,000) not covered by insurance is entered
against Borrower or any of its Subsidiaries, and such judgment or order shall
continue without being discharged, vacated, bonded or execution thereon stayed
pending appeal for a period of thirty (30) consecutive days; or

(k)           Involuntary Liens.  Any involuntary Lien in the sum of One Hundred
Thousand Dollars ($100,000) or more shall attach to any asset or property of the
Borrower which (i) is not discharged within sixty (60) days after such
attachment or within thirty (30) days after notice from the Agent or any Lender,
whichever first occurs, or (ii) constitutes an involuntary Lien for taxes not
yet due.

(l)            ERISA.  The Borrower or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of One Hundred
Thousand Dollars ($100,000) which it shall have become liable to pay to the PBGC
or to a Plan under Section 515 of ERISA or Title IV of ERISA; or notice of
intent to terminate a Plan or Plans (other than a multi-employer plan, as
defined in Section 4001(3) of ERISA), having aggregate Unfunded Vested
Liabilities in excess of One Hundred Thousand Dollars ($100,000) shall be filed
under Title IV of ERISA by the Borrower, any member of the Controlled Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate any such Plan or
Plans; or

(m)          Change in Control.  There occurs an event or series of events by
which any Person or group of Persons (within the meaning of the Securities
Exchange Act 1934), becomes the legal or beneficial owner, directly or
indirectly, of more than fifty percent (50%) of the equity securities of the
Borrower entitled to vote for members of the board of directors of the Borrower;
or

(n)           Condemnation.  Such portion of the properties of the Borrower or
of the Collateral as in the opinion of Majority Lenders constitutes a
substantial portion thereof shall be condemned, seized or appropriated; or

(o)           Governmental Approvals.  Any Government Approval or registration
or filing with any Governmental Authority now or hereafter required in
connection with the performance by the Borrower of its obligations set forth in
the Loan Documents shall be revoked, withdrawn or withheld or shall fail to
remain in full force and effect unless in the reasonable opinion of Majority
Lenders such revocation, withdrawal or withholding would not be likely to have a
material adverse affect on the ability of the Borrower to perform its
obligations under the Loan Documents; or

(p)           Other Government Action.  Any act of any Governmental Authority
shall, in the reasonable opinion of Lenders, deprive the Borrower of any
substantial right, privilege, or franchise or substantially restrict the
exercise thereof which deprivation would, in the reasonable opinion of Majority
Lenders, be likely to have a material adverse effect on the

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financial condition or operations of the Borrower and such act is not revoked or
rescinded within sixty (60) days after it becomes effective or within thirty
(30) days after notice from the Agent or any Lender, whichever first occurs.

(q)           Guarantor Default; Invalidity of Guaranty.  Any Guarantor shall
fail to perform or observe any other covenant, obligation or term of any
Guaranty or any other Loan Document to which it is a party and such failure
shall continue unremedied after the applicable grace period, if any, specified
in such Guaranty or Loan Document, or any defined “Event of Default” as defined
in such Guaranty or Loan Document shall have occurred and is continuing; or any
Guaranty shall for any reason be revoked or invalidated, or otherwise cease to
be in full force and effect (except as expressly permitted hereunder), or any
Guarantor or any other Person shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder; or

(r)           Invalidity of Loan Documents.  Any other Loan Document or any
provision thereof, at any time after its execution and delivery and for any
reason other than the agreement of all Lenders or payment in full of each Loan
and performance of all other obligations of the Borrower under this Agreement
and the other Loan Documents, ceases to be in full force and effect, or is
declared by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect; or the Borrower or any Guarantor denies that it
has any or further liability or obligation under any other Loan Document, or
purports to revoke, terminate or rescind any Loan Document.

Section 8.2 Consequences of Default.  If any of the Events of Default described
in Section 8.1(g) or Section 8.1(h) shall occur, each Lender’s Commitment shall
immediately terminate and, if any Loans shall have been made, the principal of
and interest on the Loans, and all other sums payable by the Borrower under the
Loan Documents shall become immediately due and payable all without protest,
presentment, notice or demand, all of which the Borrower expressly waives.  If
any other Event of Default shall occur and be continuing, then in any such case
and at any time thereafter so long as any such Event of Default shall be
continuing, the Agent shall at the request, or may with the consent, of Majority
Lenders immediately terminate each Lender’s Commitment and, if any Loans shall
have been made, the Agent shall at the request, or may with the consent, of
Majority Lenders declare the principal of and interest on the Loans, and all
other sums payable by the Borrower under this Agreement and the other Loan
Documents to be immediately due and payable, whereupon the same shall become
immediately due and payable all without protest, presentment, notice, or demand,
all of which the Borrower expressly waives.  Regardless of whether the
Borrower’s obligations to repay the Loans have been accelerated pursuant to the
preceding sentences, the Agent may realize on any or all of the Collateral by
exercising any remedies provided in the Security Documents.  The rights and
remedies set forth in this Section 8.2 shall be in addition to any and all
rights and remedies set forth in the other Loan Documents.

ARTICLE 9.
THE AGENT

Section 9.1 Authorization and Action.  Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this

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Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto.  The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement.  The duties
of the Agent shall be mechanical and administrative in nature; the Agent shall
not have by reason of this Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or the other Loan Documents except as
expressly set forth herein.  As to any matters not expressly provided for by
this Agreement, including enforcement or collection of the Loans, the Agent
shall not be required to exercise any discretion or take any action except upon
the instructions of Majority Lenders, and such instructions shall be binding
upon all Lenders and any holders of any Note; provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to the Loan Documents or applicable law.  In the absence of
instructions from the Majority Lenders, the Agent shall have authority (but no
obligation), in its sole discretion, to take or not to take any action, unless
this Agreement specifically requires the consent of all Lenders or the consent
of Majority Lenders and any such action or failure to act shall be binding on
all Lenders and on all holders of the Notes.  Each Lender and each holder of any
Note shall execute and deliver such additional instruments, including powers of
attorney in favor of the Agent, as may be necessary or desirable to enable the
Agent to exercise its powers hereunder.

Section 9.2 Duties and Obligations.

(a)           Neither the Agent nor any of its directors, officers, employees,
agents, counsel or attorneys-in-fact shall be liable for any action taken or
omitted to be taken by it or any of them under or in connection with this
Agreement or any other Loan Document and the transactions contemplated hereby
and thereby, except for its or their own gross negligence or willful
misconduct.  Without limiting the generality of the foregoing, the Agent (i) may
treat each Lender as the party entitled to receive payments hereunder until the
Agent receives written notice of the assignment of such Lender’s interest herein
signed by such Lender and made in accordance with the terms hereof and a written
agreement of the assignee that it is bound hereby as it would have been had it
been an original party hereto, in each case in form satisfactory to the Agent;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement, the other Loan Documents or in any instrument or document furnished
pursuant hereto or thereto; (iv) shall not have any duty to ascertain or to
inquire as to the performance of any of the terms, covenants, or conditions of
the Loan Documents, or of any instrument or document furnished pursuant thereto,
on the part of the Borrower or as to the use of the proceeds of any Loan or as
to the existence or possible existence of any Default or Event of Default;
(v) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, effectiveness, or value of this
Agreement, of any other Loan Document, or of any instrument or document
furnished pursuant hereto; (vi) may execute any of its duties by or through its
employees, other independent agents or attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agent or
attorney-in-fact that it selects with reasonable care; and (vii) shall incur no
liability under or in respect to this Agreement by acting upon any

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oral or written notice, consent, certificate or other instrument or writing
(which may be by telex, facsimile transmission, e-mail or cable) believed by it
to be genuine and signed or sent by the proper party or parties or by acting
upon any representation or warranty of the Borrower made or deemed to be made
under this Agreement or in any other Loan Document.

(b)           The Agent will account to each Lender for its pro rata interest in
payments of principal of and interest on the Loans which are received by the
Agent from the Borrower or for the account of the Borrower and will promptly
remit to Lenders entitled thereto all such payments.  The Agent will transmit to
each Lender copies of all documents received from the Borrower pursuant to the
requirements of this Agreement other than documents which by the terms of this
Agreement the Borrower is obligated to deliver directly to Lenders.

(e)           Each Lender and each assignee of a Lender organized outside of the
United States shall furnish to the Agent in a timely fashion such documentation
(including, but not by way of limitation, IRS Forms Nos. 1001 and W-8ECI) as may
be required by applicable law or regulation to establish such Lender’s status
for tax withholding purposes.

Section 9.3 Dealings Between Agent and Borrower.  With respect to its
Commitment, the Loans made by it, the Agent shall have the same obligations,
rights and powers under this Agreement and the other Loan Documents as any other
Lender and may exercise the same as though it were not the Agent hereunder, and
the term “Lender” shall unless otherwise expressly indicated include the Agent
in its individual capacity.  The Agent may accept deposits from, lend money to,
act and generally engage in any kind of business with the Borrower and any
Person which may do business with the Borrower, all as if the Agent were not the
Agent hereunder and without any duty to obtain the consent of or account
therefor to any other Lender.  Lenders acknowledge that, pursuant to such
activities, the Agent may receive information regarding the Borrower (including
information that may be subject to confidentiality obligations in favor of the
Borrower) and acknowledge that the Agent shall be under no obligation to provide
such information to any Lender.

Section 9.4 Notice of Default.  The 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 and fees required to
be paid to the Agent for the account of Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default.”  The Agent will notify Lenders of its receipt
of any such notice.  The Agent shall take such action with respect to such
Default or Event of Default as may be directed by Majority Lenders in accordance
with Section 8.2; provided, however, that unless and until the Agent has
received any such direction, the 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 or in the best interest of Lenders.

Section 9.5 Lender Credit Decision.  Each Lender acknowledges that neither the
Agent nor any of its directors, officers, employees, agents, counsel or
attorneys-in-fact has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any consent to and acceptance of any
assignment or review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any

45

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Lender as to any matter, including whether the Agent has disclosed material
information in its possession.  Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent and based on such 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 the Borrower and its Subsidiaries, and
all applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder.  Each Lender also represents that it
will, independently and without reliance upon the Agent 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 make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries.  Except for notices,
reports and other documents expressly required to be furnished to Lenders by the
Agent herein, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Agent.

Section 9.6 Indemnification.  Each Lender agrees to indemnify the Agent (to the
extent not reimbursed by the Borrower) ratably according to its Percentage
Interest from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by the Agent under this
Agreement or any other Loan Document, except any such as result from the Agent’s
gross negligence or willful misconduct.  Without limiting the foregoing, each
Lender agrees to reimburse the Agent promptly on demand in proportion to its
Percentage Interest for any out-of-pocket expenses, including legal fees,
incurred by the Agent in connection with the administration or enforcement of or
the preservation of any rights under this Agreement or any other Loan Document
(to the extent that the Agent is not reimbursed for such expenses by the
Borrower).

Section 9.7 Successor Agent.  The Agent may give written notice of resignation
at any time to Lenders and the Borrower, and may be removed at any time with
cause by Majority Lenders. If Bank of America resigns as Agent, such resignation
shall also be deemed to constitute a resignation of Bank of America as the Swing
Line Lender and L/C Issuer.  Upon any such notice of resignation or removal,
Majority Lenders shall have the right to appoint a successor Agent.  If no
successor Agent shall have been so appointed by Majority Lenders and shall have
accepted such appointment within thirty (30) days after the Agent’s giving of
notice of resignation or Majority Lender’s removal of the Agent, then the Agent
may, after consulting with the Lenders and the Borrower, appoint a successor
Agent from among the Lenders.  Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring the Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement.  If no successor agent has accepted
appointment as Agent by the date which is thirty (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

46

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the duties of the agent hereunder until such time, if any, as Majority Lenders
appoint a successor agent as provided above.  Notwithstanding any retiring
Agent’s resignation or removal hereunder as the Agent, the provisions of this
Article 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

ARTICLE 10.
MISCELLANEOUS

Section 10.1 Amendments; Consents.  No amendment, modification, supplement or
waiver of any provision of this Agreement or any other Loan Document, no
approval or consent thereunder, and no consent to any departure by the Borrower
or any Guarantor therefrom shall be effective unless in writing signed by
Majority Lenders and the Borrower or the respective Guarantors a party thereto
and acknowledged by the Agent, and then any such waiver or consent shall be
effective 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 the Agent and all Lenders, do any of the
following:  (a) increase or extend any Commitment of any Lender; (b) 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 to Lenders (or any of
them) hereunder or under any other Loan Document; (c) reduce the principal of,
or the rate of interest specified herein on any Loan, or any fees or other
amounts payable hereunder or under any other Loan Document; (d) change or modify
the definition of “Majority Lenders”; (e) amend this Section 10.1, or any
provision herein providing for consent or other action by all Lenders; or
(f) discharge any Guarantor, or release all or a material portion of the
Collateral except as otherwise may be provided for herein or where the consent
of Majority Lenders only is specifically provided for herein or therein;
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to Majority Lenders or all Lenders, as the
case may be, amend Article 9 hereof or otherwise affect the rights or duties of
the Agent under this Agreement or any other Loan Document.

Section 10.2 No Waiver; Remedies Cumulative.  No failure by the Agent or any
Lender to exercise, and no delay in exercising, any right, power or remedy under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power, or remedy.  The exercise of
any right, power, or remedy shall in no event constitute a cure or waiver of any
Event of Default or prejudice the rights of the Agent or any Lender in the
exercise of any right hereunder or thereunder.  The rights and remedies provided
herein and therein are cumulative and not exclusive of any right or remedy
provided by law.

Section 10.3 Governing Law.  This Agreement and the other Loan Documents shall
be governed by and construed in accordance with the laws of the State of Oregon
(excluding its conflict of laws rules) except in the case of the Security
Documents, where the location of Collateral requires that the creation,
validity, perfection, or enforcement of the security interests provided for
herein be governed by the laws of the jurisdiction where such Collateral is
located.

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Section 10.4 Mandatory Arbitration.

(a)           This Section 10.4 concerns the resolution of any controversies or
claims among or between the Borrower, Lenders and the Agent, whether arising in
contract, tort or by statute, including but not limited to controversies or
claims that arise out of or relate to this Agreement and the other Loan
Documents (collectively a “Claim”).  At the request of the Borrower, any Lender
or the Agent, any Claim shall be resolved by arbitration in accordance with the
Federal Arbitration Act (Title 9, U. S. Code) (the “Act”).  The Act will apply
even though this Agreement provides that it is governed by the law of the state
of Oregon.

(b)           Arbitration proceedings will be determined in accordance with the
Act, the rules and procedures for the arbitration of financial services disputes
of JAMS/Endispute, LLC, a Delaware limited liability company or any successor
thereof (“JAMS”), and the terms of this Section 10.4.  In the event of any
inconsistency, the terms of this Section 10.4 shall control.  The arbitration
shall be administered by JAMS and conducted in Portland, Oregon.  All Claims
shall be determined by one arbitrator; provided, however, that if Claims exceed
Two Million Dollars ($2,000,000), upon the request of any party, the Claims
shall be decided by three arbitrators.  All arbitration hearings shall commence
within ninety (90) days of the demand for arbitration and close within ninety
(90) days of commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing; provided, however, that the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days.  The arbitrator(s) shall
provide a concise written statement of reasons for the award.  The arbitration
award may be submitted to any court having jurisdiction to be confirmed and
enforced.  The arbitrator(s) will have the authority to decide whether any Claim
is barred by the statute of limitations and, if so, to dismiss the arbitration
on that basis.  For purposes of the application of the statute of limitations,
the service on JAMS under applicable JAMS rules of a notice of Claim is the
equivalent of the filing of a lawsuit.  Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s).  The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this Agreement.

(c)           This Section 10.4 does not limit the right of the Borrower, any
Lender or the Agent to: (i) exercise self-help remedies, such as but not limited
to, setoff; (ii) initiate judicial or nonjudicial foreclosure against any real
or personal property collateral; (iii) exercise any judicial or power of sale
rights, or (iv) act in a court of law to obtain an interim remedy, such as but
not limited to, injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies.  The filing of a court action
is not intended to constitute a waiver of the right of the Borrower, any Lender
or the Agent, including the suing party, thereafter to require submittal of the
Claim to arbitration.

Section 10.5 Waiver of Jury Trial.  THE PARTIES HERETO WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND AGREE
THAT (A) ANY SUCH ACTION OR PROCEEDING SHALL NOT BE TRIED BEFORE A JURY AND
(B) ANY PARTY HERETO MAY FILE AN ORIGINAL

48

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COUNTERPART OR COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY.

Section 10.6 Consent to Jurisdiction.  Each party hereto irrevocably submits to
the nonexclusive jurisdiction of any state or federal court sitting in Portland,
Multnomah County, Oregon, in any action or proceeding brought to enforce or
otherwise arising out of or relating to this Agreement or any other Loan
Document, hereby waives any objection to venue in any such court and any claim
that such forum is an inconvenient forum and agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law. 
Nothing in this Section 10.6 shall impair the right of any party to bring any
action or proceeding hereunder in the courts of any other jurisdiction.

Section 10.7 Notices.  All notices and other communications provided for in any
Loan Document shall be in writing (unless otherwise specified) and shall be
mailed (with first class postage prepaid) or sent or delivered to each party by
facsimile or courier service at the address or facsimile number set forth under
its name on the signature page hereof, or at such other address as shall be
designated by such party in a written notice to the other parties.  Except as
otherwise specified all notices sent by mail, if duly given, shall be effective
three (3) Business Days after deposit into the mails, all notices sent by a
nationally recognized courier service, if duly given, shall be effective one
Business Day after delivery to such courier service, and all other notices and
communications if duly given or made shall be effective upon receipt. 
Electronic mail may be used by the Agent to distribute routine communications,
such as notices of borrowings as provided in Section 2.2 and to distribute
financial statements and other information as provided in Section 6.10, and may
not be used for any other purpose.  Neither the Agent or any Lender shall incur
any liability to the Borrower for actions taken in reliance on any telephonic
notice referred to in this Agreement which the Agent or such Lender believes in
good faith to have been given by a duly authorized officer or other Person
authorized to borrow or give such telephonic notice hereunder on behalf of the
Borrower.

Section 10.8 Assignments and Participations.

(a)           This Agreement shall be binding upon and inure to the benefit of
the parties and their respective Successors and assigns; provided that the
Borrower may not assign or otherwise transfer all or any part of its rights or
obligations under this Agreement or any other Loan Document without the prior
written consent of the Agent and all Lenders, and any such assignment or
transfer purported to be made without such consent shall be ineffective.

(b)           Any Lender may at any time sell to any of Lender’s Affiliates or
commercial banks organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least Five Hundred
Million Dollars ($500,000,000) (each, an “Eligible Assignee”) participation
interests in its Loans and Commitment.  Such sales may be made without the
consent of the Agent, any other Lender or the Borrower; provided, however, that
the selling Lender retains the right to vote as a Lender hereunder in respect of
the interest sold without being bound to obtain the consent of its participant
or to exercise its rights in accordance with instructions received from its
participant (except that the participant’s consent

49

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can be required for proposed changes to “money terms” including, without
limitation, matters involving decrease in fees, interest rate spreads or
principal, increase in commitments if the participant’s commitment is increased,
or extension of the final maturity date).  Any Lender may pledge or assign all
or any part of its interest under the Loan Documents for security purposes to
any Federal Reserve Bank.

(c)           Any Lender may assign or otherwise transfer to any Eligible
Assignee all or any part of its interest under the Loan Documents pursuant to an
assignment and assumption agreement in form and substance reasonably
satisfactory to the Agent with the prior written consent of the Agent and, if no
Event of Default shall have occurred and be continuing, the Borrower, (such
consents not to be unreasonably withheld or delayed) but without the consent of
the other Lenders, to any other Eligible Assignee; provided, however, that in
either case no such assignment (as distinguished from the sale of a
participation) other than an assignment of a Lender’s entire interest under the
Loan Documents (i) shall be made in an amount less than Two Million Five Hundred
Thousand Dollars ($2,500,000) nor (ii) shall be made if after giving effect to
such assignment the aggregate amount of the Loans and unused Commitment of the
assigning Lender would be less than Five Million Dollars ($5,000,000); provided,
further, that in connection with any assignment (as distinguished from the sale
of a participation) the assigning Lender shall pay to the Agent a fee of Three
Thousand Five Hundred Dollars ($3,500) for each proposed assignee that is not
then a Lender or an affiliate thereof.  The assignee of any permitted sale or
assignment (including assignments for security and sales of participations)
shall have the same rights and benefits against the Borrower under the Loan
Documents (excepting however, in the case of sales of participations, the right
to grant or withhold consents or otherwise vote in respect thereof) including
the right of setoff, and in the case of any outright assignment (as
distinguished from an assignment for security or the sale of a participation)
the same obligations in respect thereof, as if such assignee were an original
Lender.

(d)           Except to the extent otherwise required by the context of this
Agreement, the word “Lender” where used in this Agreement and the other Loan
Documents shall mean and include any holder of a Note originally issued to a
Lender hereunder, and each such holder shall be bound by and have the benefits
of this Agreement the same as if such holder had been a signatory hereto.  Upon
the consummation of any outright assignment pursuant to this Section 10.8, the
assigning Lender, the Agent and the Borrower shall make appropriate arrangements
so that, if required, a new Note is issued to the assignee.  Any outright
assignment of a Lender’s interest under this Agreement to another Lender made in
conformance with the terms of this Section 10.8 shall result in a corresponding
adjustment to the selling and purchasing Lenders’ Commitments and Percentage
Interest.

Section 10.9 Borrower’s Indemnity.  Whether or not the transactions contemplated
hereby shall be consummated, the Borrower shall pay, indemnify and hold the
Agent and each Lender and its officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an “Indemnified Person”) harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable attorney’s fees, which may include, without duplication, the
allocated charges of internal legal counsel) of any kind or nature whatsoever
with respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) arising out of or related to this
Agreement or any other Loan Document or any

50

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actual or proposed use of proceeds of the Loans made or issued hereunder,
whether or not any Indemnified Person is a party thereto (all of the foregoing,
collectively the “Indemnified Liabilities”); provided, that the Borrower shall
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities arising from the willful misconduct or gross negligence
of such Indemnified Person.  All amounts owing under this Section 10.9 shall be
paid promptly upon demand.  At the election of any Indemnified Person, the
Borrower shall defend such Indemnified Person in respect of any Indemnified
Liabilities using legal counsel reasonably satisfactory to such Indemnified
Person at the sole cost and expense of the Borrower.

Section 10.10 Set-Off.  In addition to any rights and remedies of the Agent and
Lenders provided by law, if an Event of Default has occurred and is continuing,
the Agent and each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, the Agent or such
Lender to or for the credit or the account of the Borrower against any and all
obligations owing to the Agent or such Lender, now or hereafter existing,
irrespective of whether or not Agent or such Lender shall have made demand under
this Agreement or any other Loan Document and although such obligations may be
contingent or unmatured.

Section 10.11 Severability.  Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.

Section 10.12 Survival.  The representations, warranties and indemnities of the
Borrower in favor of the Agent and Lenders shall survive indefinitely and,
without limiting the foregoing, shall survive the execution and delivery of the
Loan Documents, the making of any Loans, the expiration of the Commitment and
the repayment of all amounts due under the Loan Documents.

Section 10.13 Executed in Counterparts.  This Agreement and the other Loan
Documents may be executed in any number of counterparts and by different parties
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.

Section 10.14 Conditions Not Fulfilled.  If the Commitment is not borrowed owing
to nonfulfillment of any condition precedent specified in Article 3 hereof, no
party hereto shall be responsible to any other party for any damage or loss by
reason thereof, except that the Borrower shall be in any event liable to pay the
fees, Taxes, and expenses for which it is obligated hereunder.

Section 10.15 Entire Agreement; Amendment, Etc..  This Agreement and the other
Loan Documents comprise the entire agreement of the parties and may not be
amended or modified except by written agreement of the Borrower and the Agent
acting with the consent of

51

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Majority Lenders (or where necessary all Lenders) in accordance with the terms
and conditions of Section 10.1.  No provision of this Agreement may be waived
except in writing and then only in the specific instance and for the specific
purpose for which given.

Section 10.16 Construction.  In the event of any conflict between the terms,
conditions and provisions of this Agreement and those of any other Loan
Document, the terms, conditions and provisions of this Agreement shall control.

Section 10.17 Oral Agreements Not Enforceable.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDERS
AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE
NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION, AND BE SIGNED BY
LENDERS TO BE ENFORCEABLE.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers or agents thereunto duly authorized as of the date
first above written.

BORROWER:

 

CASCADE CORPORATION, an Oregon
corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Address:

 

 

 

 

 

Attn:

 

 

 

 

 

Facsimile:

 

 

 

LENDER, SWING LINE

 

 

LENDER and L/C ISSUER:

 

BANK OF AMERICA, N.A., a national banking

 

 

association

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

Attn:

 

 

 

 

 

Facsimile:

52

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LENDER:

 

UNION BANK OF CALIFORNIA, N.A., a national

 

 

banking association

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Address:

 

 

Attn:

 

 

 

 

 

Facsimile:

 

 

 

 

 

 

Agent:

 

BANK OF AMERICA, N.A., a national banking

 

 

association

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Address:

 

 

 

WA1-501-37-20

800 Fifth Avenue, Floor 37

Seattle, WA  98104

 

 

 

Attn:

Dora A. Brown

 

 

 

 

Vice President

 

 

Facsimile: (206) 358-0971

 

53

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SCHEDULE 1

Litigation

1

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

SCHEDULE 2

Liens

1

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

SCHEDULE 3

Intellectual Property Claims

1

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

SCHEDULE 4

Environmental Matters

1

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

SCHEDULE 5

Subsidiaries

1.                    Sandy Boulevard Development Corporation, an Oregon
corporation.

2.                    Cascade Kenhar, Inc., an Oregon corporation

1

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

EXHIBIT A

[Form of Note]

1

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

EXHIBIT B

[Form of Continuing Guaranty]

1

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

EXHIBIT C

QUARTERLY COMPLIANCE CERTIFICATE

THE UNDERSIGNED, being the                                 of CASCADE
CORPORATION, an Oregon corporation, (the “Borrower”) does hereby certify to BANK
OF AMERICA, N.A., UNION BANK OF CALIFORNIA, N.A. (the “Lenders”) and BANK OF
AMERICA, N.A., as agent for Lenders (in such capacity, the “Agent”) under the
Loan Agreement (as hereinafter defined), as follows:

1.             This Certificate is given pursuant to Section 6.10(c) of that
certain Loan Agreement dated as of December         , 2002 by and among the
Borrower, the Lenders and the Agent (as the same may be amended, modified or
extended from time to time the “Loan Agreement”).  Capitalized terms not
otherwise defined in this Certificate shall have the meanings set forth in the
Loan Agreement.

2.             The financial statements for the Fiscal Quarter ended
                  , 20     delivered with this Certificate pursuant to the
requirements of Section 6.10(c) of the Loan Agreement have been prepared in
accordance with GAAP and present fairly the consolidated financial position and
the results of operations of Borrower and its Subsidiaries as of the end of and
for such fiscal period.

3.             There has not existed during the fiscal quarter ended
                  , 20     and there does not now exist any Default or Event of
Default under the Loan Agreement.

4.             The computations and descriptions set forth in Schedule 1 hereto
demonstrate (i) compliance with the financial covenants in Section 6.13 of the
Loan Agreement, and (ii) the amount by which the Borrowing Base exceeds or is
less than the aggregate principal amount of all outstanding Loans.

5.             Capitalized terms used herein and not otherwise defined shall
have the meanings defined in the Loan Agreement.

DATED this         day of                         20     .

CASCADE CORPORATION, an Oregon
corporation

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

1

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

For the Fiscal Quarter ended                                         (“Statement
Date”)

SCHEDULE 1

to Quarterly Compliance Certificate

Insert

1

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