EXHIBIT 10.44

 

EXECUTION COPY

 

CREDIT AGREEMENT

 

Dated as of October 14, 2005

 

among

 

KEYSTONE AUTOMOTIVE INDUSTRIES, INC.,

 

as Borrower,

 

THE LENDERS NAMED HEREIN

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Administrative Agent

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TABLE OF CONTENTS

 

          Page

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Article 1. DEFINITIONS AND ACCOUNTING TERMS

   1

1.1

   Defined Terms    1

1.2

   Use of Defined Terms    28

1.3

   Accounting Terms; Covenant Calculations    28

1.4

   Rounding    28

1.5

   Exhibits and Schedules    28

1.6

   References to “Borrower and its Subsidiaries”    28

1.7

   Miscellaneous Terms    29

Article 2. ADVANCES AND LETTERS OF CREDIT

   30

2.1

   Advances-General.    30

2.2

   Alternate Base Rate Advances    31

2.3

   LIBOR Rate Advances    31

2.4

   Conversion and Continuation of Advances    32

2.5

   Letters of Credit    33

2.6

   Foreign Exchange    37

2.7

   Termination or Reduction of the Commitments    37

2.8

   Optional Increase to the Revolving Commitments    38

2.9

   Administrative Agent’s Right to Assume Funds Available for Advances    39

2.10

   Collateral    40

2.11

   Swing Line    40

Article 3. PAYMENTS AND FEES

   43

3.1

   Principal and Interest    43

3.2

   Unused Facility Commitment Fee    44

3.3

   Other Fees    44

3.4

   Letter of Credit Fees    44

3.5

   Increased Commitment Costs    44

3.6

   LIBOR Costs and Related Matters    45

3.7

   Late Payments and Default Rate    48

3.8

   Computation of Interest and Fees    49

3.9

   Non-Banking Days    49

3.10

   Manner and Treatment of Payments    49

3.11

   Funding Sources    50

3.12

   Failure to Charge Not Subsequent Waiver    50

3.13

   Administrative Agent’s Right to Assume Payments Will be Made    50

3.14

   Fee Determination Detail    51

3.15

   Survivability    51

Article 4. REPRESENTATIONS AND WARRANTIES

   52

4.1

   Existence and Qualification; Power; Compliance With Laws    52

 

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4.2

   Authority; Compliance With Other Agreements and Instruments and Government
Regulations    52

4.3

   No Governmental Approvals Required    53

4.4

   Subsidiaries    53

4.5

   Financial Statements    54

4.6

   No Other Liabilities; No Material Adverse Changes    54

4.7

   Title to and Location of Property    54

4.8

   Intangible Assets    54

4.9

   Public Utility Holding Company Act    55

4.10

   Litigation    55

4.11

   Binding Obligations    55

4.12

   No Default    55

4.13

   ERISA    55

4.14

   Regulation U; Investment Company Act    56

4.15

   Disclosure    56

4.16

   Tax Liability    56

4.17

   Hazardous Materials    56

4.18

   Security Interests    56

4.19

   Employee Matters    57

4.20

   Fiscal Periods    57

4.21

   Solvency    57

Article 5. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING
REQUIREMENTS)

   58

5.1

   Payment of Obligations    58

5.2

   Payment of Taxes and Other Potential Liens    58

5.3

   Preservation of Existence    58

5.4

   Maintenance of Properties    58

5.5

   Maintenance of Insurance    59

5.6

   Compliance With Laws    60

5.7

   Inspection and Appraisal Rights    60

5.8

   Keeping of Records and Books of Account    60

5.9

   Compliance With Agreements    60

5.10

   Use of Proceeds    61

5.11

   Hazardous Materials Laws    61

5.12

   Financial Condition    61

5.13

   Future Subsidiaries; Additional Security Documentation    62

5.14

   Operating Accounts    62

Article 6. NEGATIVE COVENANTS

   63

6.1

   Payment of Indebtedness    63

6.2

   Capital Expenditures    63

6.3

   Other Indebtedness    63

6.4

   Merger, Consolidation, Transfer of Assets    64

6.5

   Guaranties    65

6.6

   Loans, Advances, Investments    65

6.7

   Pledge of Assets    66

 

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6.8

   Hostile Tender Offers    67

6.9

   ERISA    67

6.10

   Change in Nature of Business    67

6.11

   Change of Fiscal Periods    67

6.12

   Amendments of Subordinated Obligations Documents    67

6.13

   Sale-Leasebacks    67

6.14

   Transactions With Affiliates    67

Article 7. INFORMATION AND REPORTING REQUIREMENTS

   68

7.1

   Financial and Business Information    68

7.2

   Compliance Certificates    70

Article 8. CONDITIONS

   71

8.1

   Initial Advances    71

8.2

   Any Advance    73

Article 9. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

   75

9.1

   Events of Default    75

9.2

   Remedies Upon Event of Default    77

Article 10. THE ADMINISTRATIVE AGENT

   80

10.1

   Appointment and Authorization    80

10.2

   Administrative Agent and Affiliates    80

10.3

   Proportionate Interest in any Collateral    80

10.4

   Lenders’ Credit Decisions    80

10.5

   Action by Administrative Agent    81

10.6

   Liability of Administrative Agent    82

10.7

   Indemnification    83

10.8

   Successor Administrative Agent    83

10.9

   No Obligations of Borrower    84

Article 11. MISCELLANEOUS

   85

11.1

   Cumulative Remedies; No Waiver    85

11.2

   Amendments; Consents    85

11.3

   Costs, Expenses and Taxes    86

11.4

   Nature of Lenders’ Obligations    87

11.5

   Survival of Representations and Warranties    87

11.6

   Notices    88

11.7

   Execution of Loan Documents    88

11.8

   Binding Effect; Assignment    88

11.9

   Right of Setoff    91

11.10

   Sharing of Setoffs    91

11.11

   Indemnity by Borrower    91

11.12

   Nonliability of the Lenders    93

11.13

   No Third Parties Benefited    94

11.14

   Confidentiality    94

11.15

   Further Assurances    94

 

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11.16

   Integration    94

11.17

   Governing Law    95

11.18

   Severability of Provisions    95

11.19

   Headings    95

11.20

   Time of the Essence    95

11.21

   Foreign Lenders and Participants    95

11.22

   Hazardous Material Indemnity    96

11.23

   Purported Oral Amendments    97

11.24

   Arbitration    97

11.25

   Replacement of Lenders    100

11.26

   USA Patriot Act Notice    100

 

Exhibits

 

A

   –    Assignment and Acceptance

B

   –    Compliance Certificate

C

   –    Note

D

   –    Pricing Certificate

E

   –    Request for Borrowing

F

   –    Request for Continuation/Conversion

G

   –    Request for Letter of Credit

H

   –    Security Agreement

I

   –    Seller Subordination Agreement

J

   –    Subsidiary Guaranty

 

Schedules

 

1.1    Lender Commitments/Pro Rata Shares 2.5   

Existing Letters of Credit

4.4   

Subsidiaries

4.7A   

Existing Liens and Rights of Others

4.7B   

Location of Property; Deposit Accounts

4.8   

Intangible Assets; Restrictions on Use

4.10   

Material Litigation

4.17   

Hazardous Materials Matters

4.20   

Fiscal Periods

6.3   

Existing Indebtedness

6.5   

Guaranties

6.6   

Existing Investments

 

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CREDIT AGREEMENT

 

Dated as of October 14, 2005

 

This CREDIT AGREEMENT (as amended, supplemented or otherwise modified from time
to time, this “Agreement”) is entered into by and among KEYSTONE AUTOMOTIVE
INDUSTRIES, INC., a California corporation (“Borrower”), each lender whose name
is set forth on the signature pages of this Agreement and each lender that may
hereafter become a party to this Agreement pursuant to Section 11.8 (each a
“Lender” and collectively, “Lenders”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

Article 1.

DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Defined Terms. As used in this Agreement, the following terms shall have the
meanings set forth below:

 

“Acquisition” means any transaction, or any series of related transactions,
consummated after the Closing Date, by which Borrower and/or any of its
Subsidiaries directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any firm, partnership, joint venture, limited
liability company, corporation or division thereof, whether through purchase of
assets, merger or otherwise, (b) acquires in one transaction or as the most
recent transaction in a series of transactions control of securities of a Person
engaged in an ongoing business representing more than 50% of the ordinary voting
power for the election of directors or other governing position if the business
affairs of such Person are managed by a board of directors or other governing
body or (c) acquires control of more than 50% of the ownership interest in any
partnership, joint venture, limited liability company, business trust or other
Person that is not managed by a board of directors or other governing body.

 

“Acquisition Consulting Agreement” means any management, consulting or similar
service agreement entered into by and between Borrower or any Subsidiary, as the
buyer, and any seller of a Target in connection with a Permitted Acquisition.

 

“Administrative Agent” means Wells Fargo when acting in its capacity as the
Administrative Agent under any of the Loan Documents, or any successor
Administrative Agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address as set
forth on the signature pages of this Agreement, or such other address as the
Administrative Agent hereafter may designate by written notice to Borrower and
the Lenders.

 

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“Advance” means any advance made or to be made by any Lender to Borrower as
provided in Article 2.

 

“Affiliate” means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” (and the correlative terms,
“controlled by” and “under common control with”) shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise); provided that, in any event, any
Person that owns, directly or indirectly, 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation that has more than 100 record holders of such securities, or 10% or
more of the partnership or other ownership interests of any other Person that
has more than 100 record holders of such interests, will be deemed to be an
Affiliate of such corporation, partnership or other Person. Notwithstanding the
foregoing, for purposes of this Agreement and the other Loan Documents, none of
Wells Fargo & Company, Wells Fargo or any of their respective Subsidiaries shall
be deemed an “Affiliate” of Borrower or any Subsidiary of Borrower despite Wells
Fargo & Company’s ownership of certain equity interests in Borrower.

 

“Aggregate Effective Amount” means, as of any date of determination and with
respect to all Letters of Credit then outstanding, the sum of (a) the aggregate
effective face amounts of all such Letters of Credit not then paid by Issuing
Lender, plus (b) the aggregate amounts paid by Issuing Lender under such Letters
of Credit not then reimbursed to Issuing Lender by Borrower pursuant to
Section 2.5(d) and not the subject of one or more Advances made pursuant to
Section 2.5(e) or (f).

 

“Alternate Base Rate” means, as of any date of determination, the rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the higher of
(a) the Prime Rate in effect on such date and (b) the Federal Funds Rate in
effect on such date plus 1/2 of 1% (50 basis points).

 

“Alternate Base Rate Advance” means an Advance that bears interest in relation
to the Alternate Base Rate as provided in Section 3.1(b).

 

“Applicable Alternate Base Rate Margin” means, with respect to any Alternate
Base Rate Advance and any Swing Line Loan, the interest rate margin set forth
below (expressed in basis points per annum) opposite the Applicable Pricing
Level for that Pricing Period:

 

Applicable

Pricing

Level

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

   Margin

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

I

   0

II

   0

III

   0

IV

   25

V

   25

 

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“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin
set forth below (expressed in basis points per annum) opposite the Applicable
Pricing Level for that Pricing Period:

 

Applicable

Pricing

Level

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

   Margin

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

I

   20

II

   22.5

III

   25

IV

   32.5

V

   37.5

 

“Applicable Letter of Credit Fee Rate” means, as of any date of determination,
the then effective Applicable LIBOR Rate Margin.

 

“Applicable LIBOR Rate Margin” means, with respect to any LIBOR Rate Advance,
the interest rate margin set forth below (expressed in basis points per annum)
opposite the Applicable Pricing Level for that Pricing Period:

 

Applicable

Pricing

Level

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   Margin

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

I

   75

II

   100

III

   125

IV

   150

V

   175

 

“Applicable Pricing Level” means, for each Pricing Period, the pricing level set
forth below opposite the Leverage Ratio as of the last day of the Fiscal Quarter
most recently ended prior to the commencement of that Pricing Period:

 

Pricing Level

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Leverage Ratio

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I

  

Less than 1.00 to 1.00

II

   Greater than or equal to 1.00 to 1.00,
but less than 1.50 to 1.00

III

  

Greater than or equal to 1.50 to 1.00,
but less than 2.00 to 1.0

IV

  

Greater than or equal to 2.00 to 1.00,
but less than 2.25 to 1.0

V

  

Greater than or equal to 2.25 to 1.0

 

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provided that (i) in the event that Borrower does not deliver a Pricing
Certificate with respect to any Pricing Period prior to the commencement of such
Pricing Period, then until (but only until) such Pricing Certificate is
delivered the Applicable Pricing Level for that Pricing Period shall be Pricing
Level V, and, subject to clause (iii) of this proviso, if upon delivery of such
Pricing Certificate a change is warranted in the Applicable Pricing Level for
such Pricing Period, such change shall be effective on the first Banking Day of
the first calendar month beginning after delivery of such Pricing Certificate,
and (iii) if any Pricing Certificate is subsequently determined to be in error,
then any resulting change in the Applicable Pricing Level shall be made
retroactively to the beginning of the relevant Pricing Period. Changes in the
Applicable Pricing Level shall occur irrespective of the presence or absence of
an Event of Default, and the changes resulting from time to time in the
Applicable LIBOR Rate Margin or the Applicable Alternate Base Rate Margin shall
apply and be payable cumulatively with, not in lieu of, any Default Rate then
applicable.

 

“Approved Foreign Exchange Agreements” means one or more Foreign Exchange
Agreements between Borrower and one or more of the Lenders, in each case, on
terms mutually acceptable to Borrower, the Lender or Lenders party thereto, and
the Administrative Agent.

 

“Approved Interest Rate Protection Agreements” means one or more Interest Rate
Protection Agreements between Borrower and one or more of the Lenders, with
respect to the Indebtedness evidenced by the Notes, which Interest Rate
Protection Agreements, in each case, shall be on terms mutually acceptable to
Borrower, the Lender or Lenders party thereto, and the Administrative Agent.

 

“Assignment and Acceptance” means an assignment and acceptance agreement
substantially in the form of Exhibit A.

 

“Banking Day” means any Monday, Tuesday, Wednesday, Thursday or Friday, other
than a day on which banks are authorized or required to be closed in California,
or New York.

 

“Borrowing” means Advances of the same Type made, converted or continued on the
same date and, in the case of LIBOR Rate Advances, as to which a single LIBOR
Period is in effect.

 

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“Capital Expenditure” means any expenditure that is treated as a capital
expenditure under GAAP, including any expenditure that is required to be
capitalized in accordance with GAAP that relates to an asset subject to a
Capital Lease.

 

“Capital Lease” means, as to any Person, a lease of any Property by that Person
as lessee that is, or should be in accordance with GAAP (including Financial
Accounting Standards Board Statement No. 13, as amended or superseded from time
to time), recorded as a “capital lease” on the balance sheet of that Person
prepared in accordance with GAAP.

 

“Capital Lease Obligations” means all monetary obligations of a Person under any
Capital Lease.

 

“Cash Equivalents” means (a) Government Securities and repurchase agreements
with respect to Government Securities, in each case having a maturity of not
more than twelve (12) months from the date of acquisition; (b) other readily
marketable obligations that (i) are issued or guaranteed as to principal and
interest by the United States of America, or any agency thereof, and (ii) mature
at or prior to the later of the date twelve (12) months from the date of
acquisition or the Maturity Date; (c) short-term certificates of deposit issued
by any bank organized under the laws of the United States of America or any
state thereof or under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the “OECD”), or a
political subdivision of any such country, in each case, if such bank has a
short-term debt rating of not less than P-2 or A-2 or their equivalents by
Moody’s or S&P, respectively; (d) short-term certificates of deposit issued by,
and so-called eurodollar “call deposits” at, any financial institution organized
under the United States of America or any state thereof the laws of any OECD
country or a political subdivision of any OECD country or any foreign subsidiary
or affiliate of any such financial institution, if any investments issued by
such financial institution or such foreign subsidiary or affiliate, as
applicable, have a rating of not less than Baa3 or BBB- or their equivalents, or
P-3 or A-3 or their equivalents, as applicable, by Moody’s or S&P, respectively;
(e) commercial paper or finance company paper that is rated not less than P-2 or
A-2 or their equivalents by Moody’s or S&P, respectively; and (f) money market
funds invested primarily in investments identified in clause (a) through (e) of
this definition.

 

“Cash Interest Expense” means Interest Expense that is paid or currently payable
in cash.

 

“Cash Taxes” means, with respect to any fiscal period, the aggregate of all
income taxes, as determined in accordance with GAAP, of Borrower and its
Subsidiaries, to the extent the same are paid in cash during such period.

 

“Certificate” means a certificate signed by a Senior Officer or Responsible
Official (as applicable) of the Person providing the certificate.

 

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“Change in Control” means any of the following events: (a) the sale, lease,
transfer or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of Borrower and its Subsidiaries taken as
a whole, (b) any transaction or series of related transactions (i) in which any
Unrelated Person or two or more Unrelated Persons acting in concert acquire
beneficial ownership (within the meaning of Rule 13d-3(a)(2) under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of 50% or
more of the outstanding capital stock of Borrower entitled to vote for the
election of directors (“Voting Stock”), (ii) in which any such Unrelated Person
or Unrelated Persons acting in concert acquire beneficial ownership of 20% or
more of the Voting Stock subsequent to the Closing Date and Continuing Directors
cease for any reason to constitute 50% or more of the board of directors of
Borrower, or (c) any transaction or series of related transactions constituting
a “change in control” or similar occurrence under documentation evidencing or
governing Indebtedness of Borrower and/or any of its Subsidiaries of $5,000,000
or more, which gives the holder(s) of such Indebtedness the right to accelerate
or otherwise require payment of such Indebtedness prior to the maturity date
thereof. For purposes of the foregoing, the term “Unrelated Person” means any
Person other than (x) a Subsidiary of Borrower or (y) an employee stock
ownership plan or other employment benefit plan covering the employees of
Borrower and its Subsidiaries.

 

“Closing Date” means the time and Banking Day on which the conditions set forth
in Section 8.1 are satisfied or waived. The Administrative Agent shall notify
Borrower and the Closing Date Lenders of the date that is the Closing Date.

 

“Closing Date Lenders” means Wells Fargo, JPMorgan Chase Bank, N.A., and any
other lender party to this Agreement as of the Closing Date.

 

“Code” means the Internal Revenue Code of 1986, as amended or replaced and as in
effect from time to time.

 

“Collateral” means all of the collateral covered by the Collateral Documents.

 

“Collateral Documents” means, collectively, the Security Agreement, and, if
applicable, any other security agreement, pledge agreement, deed of trust,
mortgage, notice to or acknowledgment of a registrar or depositary institution,
control agreement or other collateral security agreement executed and delivered
by Borrower, any of its Subsidiaries or any other Person (and executed by any
third party whose signature is necessary) to secure the Obligations.

 

“Commercial Letter of Credit” means each Letter of Credit issued to support the
purchase of goods by Borrower or any of its Subsidiaries which is determined to
be a commercial letter of credit by Issuing Lender.

 

“Commercial Letter of Credit Agreement” means a commercial letter of credit
agreement to be executed by Borrower either as originally executed or as it may
from time to time be supplemented, modified, amended, extended, restated or
supplanted.

 

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“Commitment” means, with respect to each relevant Lender, the commitment, if
any, of such Lender to make Advances (expressed as the maximum aggregate amount
of the Advances to be made by such Lender hereunder), as such commitment may be
(a) reduced from time to time pursuant to Section 2.7, (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 11.8 and (c) increased pursuant to Section 2.8. The initial amount of
each Lender’s Commitment is set forth on Schedule 1.1 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Lenders’ Commitments is
$75,000,000.

 

“Compliance Certificate” means a certificate in the form of Exhibit B, properly
completed and signed by the chief financial officer of Borrower.

 

“Continuation,” “Continue” and “Continued” each refers to a continuation of
LIBOR Rate Advances from one LIBOR Period to the next LIBOR Period pursuant to
Section 2.4(c).

 

“Continuing Director” means, as of any date of determination, an individual
(a) who is a member of the board of directors of Borrower on the date hereof, or
(b) who has been nominated to be a member of such board of directors by a
majority of the other Continuing Directors then in office.

 

“Contractual Obligation” means, as to any Person, any provision of any
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its Property is bound.

 

“Conversion,” “Convert” and “Converted” each refers to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.4(a)
or 2.4(b).

 

“Credit Exposure” is defined in Section 11.8.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.

 

“Default” means any event that, with the giving of any applicable notice or
passage of time specified in Section 9.1, or both, would be an Event of Default.

 

“Default Rate” means the interest rate prescribed in Section 3.7.

 

“Designated Deposit Account” means a deposit account to be maintained by
Borrower with Wells Fargo or one of its Affiliates, as from time to time
designated by Borrower by written notification to the Administrative Agent.

 

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“Designated Eurodollar Market” means, with respect to any LIBOR Rate Advance,
the London Eurodollar Market.

 

“Disposition” means the sale, transfer or other disposition in any single
transaction or series of related transactions of any asset, or group of related
assets, of Borrower or any of its Subsidiaries other than (a) cash, Cash
Equivalents, Investments (other than permitted Investments in a Subsidiary),
inventory or other assets sold or otherwise disposed of in the ordinary course
of business of Borrower or any of its Subsidiaries, (b) equipment sold or
otherwise disposed of where substantially similar equipment in replacement
thereof has theretofore been acquired, or thereafter within 90 days is acquired,
by Borrower or any of its Subsidiaries and (c) obsolete assets no longer useful
in the business of Borrower or any of its Subsidiaries whose carrying value on
the books of Borrower or such Subsidiary is less than $1,000,000 in any Fiscal
Year.

 

“Disqualified Stock” means any capital stock, warrants, options or other rights
to acquire capital stock (but excluding any debt security which is convertible,
or exchangeable, for capital stock), which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the Maturity Date.

 

“Distribution” means, with respect to any equity interest or Security issued by
a Person, or any warrant or right to acquire any equity interest or Security of
a Person, (a) the retirement, redemption, purchase, or other acquisition for
value by such Person of any such equity interest or Security, including any
purchases of treasury stock (each, a “Share Repurchase”), (b) the declaration or
(without duplication) payment by such Person of any dividend in cash or in
Property (other than in common stock or common member interests, as the case may
be, of such Person) on or with respect to any such equity interest or Security,
and (c) any other payment by such Person constituting a distribution under
applicable Laws with respect to such equity interest or Security.

 

“Dollars” or “$” means United States of America dollars.

 

“EBITDA” means, with respect to any Rolling Period, the sum of (a) Net Income
for that period, plus (b) Interest Expense of Borrower and its Subsidiaries for
that period, plus (c) the aggregate amount of federal and state taxes on or
measured by income of Borrower and its Subsidiaries for that period (whether or
not payable during that period), plus (d) depreciation and amortization expense
of Borrower and its Subsidiaries for that period, plus (e) any non-cash,
extraordinary loss, minus (f) any non-recurring gain, minus (g) any non-cash,
recurring gain, plus (h) non-cash compensation related equity interests granted
to employees and directors, in an aggregate amount not to exceed $750,000 for
any Fiscal Year, in each case as determined in accordance with GAAP,
consistently applied, and, in the case of items (b), (c), (d), (e), (f), (g),
and (h) only to the extent reflected in the determination of Net

 

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Income for that period; provided that if Borrower or any Subsidiary has made a
Permitted Acquisition during such Rolling Period, EBITDA shall be calculated as
if the Permitted Acquisition had been made on the first day of such Rolling
Period taking into account the results of operations of the applicable Target,
provided further that, in such event, the applicable Target’s “EBITDA” for that
portion of the Rolling Period prior to the date of such Permitted Acquisition
shall be calculated in a manner consistent with the historical calculation of
EBITDA of Borrower and its Subsidiaries.

 

“Eligible Assignee” means (a) another Lender, (b) with respect to any Lender,
any Affiliate of that Lender, (c) any commercial bank having total assets of
$250,000,000 or more, (d) any (i) savings bank, savings and loan association or
similar financial institution or (ii) insurance company engaged in the business
of writing insurance which, in either case (A) has total assets of $250,000,000
or more, (B) is engaged in the business of lending money and extending credit
under credit facilities similar to those extended under this Agreement and
(C) is operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank and (e) any other financial
institution (including a mutual fund or other fund) having total assets of
$250,000,000 or more which meets the requirements set forth in subclauses (B)
and (C) of clause (d) above; provided that each Eligible Assignee must either
(x) be organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (y) be organized under the Laws of the
Cayman Islands or any country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of such a country, and
(1) act hereunder through a branch, agency or funding office located in the
United States of America and (2) be exempt from withholding of tax on interest
and deliver the documents related thereto pursuant to Section 11.21.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and any
regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.

 

“ERISA Affiliate” means, with respect to any Person, any Person (or any trade or
business, whether or not incorporated) that is under common control with that
Person within the meaning of Section 414 of the Code.

 

“Eurodollar Market” means a regular established market located outside the
United States of America by and among banks for the solicitation, offer and
acceptance of Dollar deposits in such banks.

 

“Eurodollar Obligations” means eurocurrency liabilities, as defined in
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Lender.

 

“Event of Default” shall have the meaning provided in Section 9.1.

 

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“Existing Credit Agreement” means that certain Credit Agreement dated as of
February 1, 2002 by and between Borrower and Wells Fargo, as amended to the date
hereof.

 

“Existing Letters of Credit” means all letters of credit issued under the
Existing Credit Agreement and outstanding on the Closing Date, as more
particularly described on Schedule 2.5.

 

“Facility” means the revolving credit facility provided hereunder in respect of
the aggregate Commitments.

 

“Facility Usage” means, as of any date of determination, the sum of (a) the
aggregate principal amount of funded Indebtedness then outstanding under the
Notes plus (b) the Aggregate Effective Amount under all outstanding Letters of
Credit plus (c) the then aggregate Swing Line Outstandings.

 

“Federal Funds Rate” means, as of any date of determination, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such date opposite the caption “Federal Funds
(Effective)”. If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for
U.S. Government Securities, or any successor publication, published by the
Federal Reserve Bank of New York (including any such successor, the “Composite
3:30 p.m. Quotation”) for such date under the caption “Federal Funds Effective
Rate”. If on any relevant date the appropriate rate for such date is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such date will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that date by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrative Agent. For purposes of this
Agreement, any change in the Alternate Base Rate due to a change in the Federal
Funds Rate shall be effective as of the opening of business on the effective
date of such change.

 

“Fee Letter” is defined in Section 3.3(a).

 

“Fiscal Quarter” means a fiscal quarter of Borrower and its Subsidiaries
consisting of the 13 or 14 weeks ending near the last Friday in June, September,
December, and March , as determined by Borrower.

 

“Fiscal Year” means a fiscal year of Borrower and its Subsidiaries consisting of
52 or 53 weeks ending near the last Friday in March as determined by Borrower.

 

“Fixed Charge Coverage Ratio” means, as of the last day of any Fiscal Quarter,
the ratio of (a) EBITDA for the Rolling Period ending on that date minus (i) the
aggregate amount of Cash Taxes actually paid during that Rolling Period (whether
or not incurred during that period), (ii) the aggregate amount of Maintenance
Capital Expenditures actually made by Borrower and its Subsidiaries (without

 

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duplication) during that Rolling Period, (iii) the aggregate amount of
Distributions (other than Share Repurchases) made by Borrower and its
Subsidiaries during that Rolling Period and (iv) from and after the date (if
any) on which Borrower shall have made Share Repurchases in an aggregate amount
in excess of the Share Repurchases Bucket (the “Trigger Date”), the aggregate
amount of all Share Repurchases made by Borrower during any Rolling Period
ending after the Trigger Date to the extent such Share Repurchases are not
included in the Share Repurchases Bucket to (b) the sum of (i) Cash Interest
Expense of Borrower and its Subsidiaries for the Rolling Period ending on that
date plus (ii) the aggregate amount of regularly scheduled amortization payments
(or imputed principal component payments in the case of Capital Lease
Obligations) for that Rolling Period on Indebtedness of Borrower and its
Subsidiaries.

 

“Foreign Exchange Agreement” means a written agreement between Borrower and one
or more financial institutions providing for forward foreign exchange
transactions, currency swap transactions, currency options, spot contracts, or
other similar transactions (including any options to enter into any of the
foregoing), including, by way of illustration, any International Foreign
Exchange Master Agreement.

 

“Foreign Subsidiary” means a Subsidiary of Borrower organized under the Laws of
a country other than the United States of America or under the Laws of a
territory (but not a State) of the United States of America (including Puerto
Rico, Guam and the U.S. Virgin Islands).

 

“GAAP” means, as of any date of determination, accounting principles (a) set
forth as generally accepted in then currently effective Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently effective
Statements of the Financial Accounting Standards Board or (c) that are then
approved by such other entity as may be approved by a significant segment of the
accounting profession in the United States of America. The term “consistently
applied,” as used in connection therewith, means that the accounting principles
applied are consistent in all material respects with those applied at prior
dates or for prior periods.

 

“Government Securities” means readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations guaranteed by
the full faith and credit of the United States of America and (b) obligations of
an agency or instrumentality of, or corporation owned, controlled or sponsored
by, the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.

 

“Governmental Agency” means (a) any international, foreign, federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body or (c) any court or administrative
tribunal of competent jurisdiction.

 

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“Guaranties” means the unlimited continuing guaranties executed by the
Guarantors in favor of the Administrative Agent and for the benefit of the
Lenders, in form and substance satisfactory to the Administrative Agent.

 

“Guarantors” means, collectively, each Subsidiary of Borrower that may now or
hereafter exist other than Tax Preferred Subsidiaries and Inactive Subsidiaries.

 

“Guaranty Obligation” means, as to any Person, any (a) guarantee by that Person
of Indebtedness of, or other obligation performable by, any other Person,
(b) contingent reimbursement obligations, including a Letter of Credit
reimbursement obligation, or (c) assurance given by that Person to an obligee of
any other Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any “keep-well”, “take-or-pay”, “through put” or other
arrangement of whatever nature given for the purpose of assuring or holding
harmless such obligee against loss with respect to any obligation of such other
Person; provided, however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation in respect of Indebtedness shall
be deemed to be an amount equal to the stated or determinable amount of the
related Indebtedness (unless the Guaranty Obligation is limited by its terms to
a lesser amount, in which case to the extent of such amount) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the Person in good faith. The amount of any other Guaranty
Obligation shall be deemed to be zero unless and until the amount thereof has
been (or in accordance with Financial Accounting Standards Board Statement No. 5
should be) quantified and reflected or disclosed in the financial statements (or
notes thereto) of Borrower or any applicable Subsidiary.

 

“Hazardous Materials” means oil or petrochemical products, poly-chlorinated
biphenyls, asbestos, urea formaldehyde, flammable explosives, radioactive
materials, hazardous wastes, toxic substances or related materials, including
any substances considered “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “infectious wastes”, “pollutant substances”, “solid waste” or “toxic
substances” under any Hazardous Materials Laws.

 

“Hazardous Materials Laws” means all Laws pertaining to the treatment,
transportation or disposal of Hazardous Materials on or about any Real Property
owned or leased by Borrower or any of its Subsidiaries, or any portion thereof,
including without limitation the following: the Federal Water Pollution Control
Act (33 U.S.C. § 1251, et seq.), the Federal Resource Conservation and Recovery
Act of 1976 (42 U.S.C. § 6901, et seq.), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601,
et seq.) and the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, as amended (44 U.S.C. § 1801, et seq.),
the Toxic

 

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Substances Control Act, 15 U.S.C. § 2601 et seq., the California Health and
Safety Code (Section 25100, et seq.), the California Water Code and the
California Administrative Code, in each case as such Laws are amended from time
to time.

 

“Inactive Subsidiary” means a Subsidiary of Borrower that (a) is not engaged in
any active or passive business and (b) holds total assets of $10,000 or less.

 

“Indebtedness” means, as to any Person (without duplication), (a) indebtedness
of such Person for borrowed money or for the deferred purchase price of Property
(excluding trade and other accounts payable in the ordinary course of business),
including any Guaranty Obligation for any such indebtedness, (b) indebtedness of
such Person of the nature described in clause (a) that is non-recourse to the
credit of such Person but is secured by assets of such Person, to the extent of
the fair market value of such assets as determined in good faith by such Person,
(c) Capital Lease Obligations of such Person, (d) indebtedness of such Person
arising under bankers’ acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (e) any direct or contingent
obligations of such Person under letters of credit issued for the account of
such Person and (f) any net obligations of such Person under Interest Rate
Protection Agreements or, in the case of Borrower, under any Foreign Exchange
Agreement.

 

“Intangible Assets” means assets that are considered intangible assets under
GAAP, including customer lists, goodwill, covenants not to compete, copyrights,
trade names, trademarks and patents.

 

“Interest Expense” means, with respect to any Person and for any fiscal period,
the sum of (a) all interest, fees, charges and related expenses (in each case as
such expenses are calculated according to GAAP) paid or payable (without
duplication) for that fiscal period by that Person to a lender in connection
with borrowed money (including any obligations for fees, charges and related
expenses payable to the issuer of any letter of credit) or the deferred purchase
price of assets that are considered “interest expense” under GAAP, plus (b) the
portion of rent paid or payable (without duplication) for that fiscal period by
that Person under Capital Lease Obligations that should be treated as interest
in accordance with Financial Accounting Standards Board Statement No. 13.

 

“Interest Rate Protection Agreement” means a written agreement between Borrower
and one or more financial institutions providing for “swap”, “cap”, “collar” or
other interest rate protection with respect to any Indebtedness.

 

“Investment” means, when used in connection with any Person, any investment by
or of that Person, whether by means of purchase or other acquisition of stock or
other Securities of any other Person or by means of a loan, advance creating a
debt, capital contribution, guaranty or other debt or equity participation or
interest in any other Person, including any partnership, limited liability
company and joint venture interests of such Person. The amount of any Investment
shall be the amount actually invested (minus any return of capital with respect
to such Investment which has

 

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actually been received in cash or has been converted into cash), without
adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Issuing Lender” means Wells Fargo, when acting in its capacity as Issuing
Lender under any of the Loan Documents (including such other Persons that may
act as agent for and on behalf of Wells Fargo) or any successor Issuing Lender.

 

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents.

 

“L/C Exposure” of any Lender at any time shall equal its Pro Rata Share of the
Aggregate Effective Amount at such time.

 

“Lender” means each Closing Date Lender and each lender that may hereafter
become a party to this Agreement pursuant to Section 11.8.

 

“Letter of Credit” means any of the Commercial Letters of Credit or Standby
Letters of Credit issued by the Issuing Lender under the Facility pursuant to
Section 2.5 (including the Existing Letters of Credit), either as originally
issued or as the same may be supplemented, modified, amended, extended, restated
or supplanted.

 

“Letter of Credit Agreements” means, collectively, the Standby Letter of Credit
Agreement, the Commercial Letter of Credit Agreement and any and all similar
documents to be executed and delivered by Borrower from time to time in
connection with the Issuing Lender’s issuance of Letters of Credit.

 

“Letter of Credit Expiration Date” means the day that is two (2) Banking Days
prior to the Maturity Date then in effect (or, if such day is not a Banking Day,
the next preceding Banking Day).

 

“Leverage Ratio” means, as of any date of determination, the ratio of (a) Total
Funded Debt as of that date to (b) EBITDA for the Rolling Period ending on that
date.

 

“LIBOR” means, with respect to any LIBOR Rate Advance comprising part of the
same Borrowing, a rate per annum equal to the quotient (rounded upward if
necessary to the nearest 1/16th of one percent), of (a) the rate per annum
appearing on the Bloomberg British Bankers Association LIBOR Rates Page (or any
successor publication) on the second LIBOR Banking Day prior to the first day of
the applicable LIBOR Period at or about 11:00 a.m. (London time) (or as soon
thereafter as practicable) (for delivery on the first day of such LIBOR Period)
for a term comparable to such LIBOR Period, divided by (b) one minus the Reserve
Requirement for such LIBOR Rate Advance in effect from time to time. If for any
reason rates are not available as provided in clause (a) of the preceding
sentence, the rate to be used in clause (a) shall be the rate per annum (rounded
upward if necessary to the nearest 1/16th of one percent), at which Dollar
deposits are offered to the Administrative Agent in the Designated Eurodollar
Market on the second LIBOR Banking Day prior to the commencement of such LIBOR
Period at or about 11:00 a.m. (for delivery on

 

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the first day of such LIBOR Period) for a term comparable to such LIBOR Period
and in an amount approximately equal to the amount of such LIBOR Rate Advance.

 

“LIBOR Banking Day” means any Banking Day on which dealings in Dollar deposits
are conducted by and among banks in the Designated Eurodollar Market.

 

“LIBOR Lending Office” means, as to each Lender, its office or branch so
designated by written notice to Borrower and the Administrative Agent as its
LIBOR Lending Office. If no LIBOR Lending Office is designated by a Lender, its
LIBOR Lending Office shall be its office at its address for purposes of notices
hereunder.

 

“LIBOR Period” means, as to each LIBOR Rate Advance comprising part of the same
Borrowing, the period commencing on the date specified by Borrower pursuant to
Section 2.1(c) and ending 1, 2, 3 or 6 months (or, with the written consent of
all of the Lenders, any other period) thereafter, as specified by Borrower in
the applicable Request for Borrowing or Request for Continuation/Conversion
provided that:

 

(a) The first day of any LIBOR Period shall be a LIBOR Banking Day;

 

(b) Any LIBOR Period that would otherwise end on a day that is not a LIBOR
Banking Day shall be extended to the immediately succeeding LIBOR Banking Day
unless such LIBOR Banking Day falls in another calendar month, in which case
such LIBOR Period shall end on the immediately preceding LIBOR Banking Day; and

 

(c) No LIBOR Period for any LIBOR Rate Advance shall extend beyond the Maturity
Date.

 

“LIBOR Rate Advance” means an Advance that bears interest at a rate determined
in relation to LIBOR as provided in Section 3.1(c).

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, lien or charge of any kind, whether
voluntarily incurred or arising by operation of Law or otherwise, affecting any
Property, including any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of any financing
statement (other than a precautionary financing statement with respect to a
lease that is not in the nature of a security interest) under the UCC or
comparable Law of any jurisdiction with respect to any Property.

 

“Loan Documents” means, collectively, this Agreement, the Notes, the Collateral
Documents, the Letter of Credit Agreements, the Swing Line Documents, any
Subordination Agreement, the Approved Foreign Exchange Agreements, any Request
for Borrowing, any Request for Letter of Credit (and any corresponding
application and/or reimbursement agreement with respect to any Letter of
Credit), any Compliance Certificate, any Pricing Certificate, any Approved
Interest Rate Protection

 

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Agreement, and any other agreements of any type or nature hereafter executed and
delivered by Borrower or any of its Subsidiaries to the Administrative Agent or
to any Lender in any way relating to or in furtherance of this Agreement, in
each case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.

 

“Maintenance Capital Expenditures” means, with respect to any fiscal period of
any Obligor, the Capital Expenditures of such Obligor other than Capital
Expenditures incurred in connection with the initial consummation of a Permitted
Acquisition.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation U.

 

“Material Adverse Effect” means any set of circumstances or events which (a) has
had or would reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) has
been or would reasonably be expected to be material and adverse to the business,
assets or condition (financial or otherwise), or operations of Borrower and its
Subsidiaries, taken as a whole, or (c) has materially impaired or would
reasonably be expected to materially impair the ability of Borrower and the
other Obligors, taken as a whole, to perform their collective Obligations under
the Loan Documents.

 

“Material Non-TP Foreign Subsidiary” means a Foreign Subsidiary that (a) holds
total assets with a book value of more than $1,000,000 and (b) is not a Tax
Preferred Subsidiary.

 

“Maturity Date” means the earlier of (a) October 14, 2010 and (b) the
termination or cancellation of the Facility (and all of the Commitments
pertaining thereto) pursuant to the terms of this Agreement.

 

“Maximum Facility Amount” means, as of any date of determination, the then
applicable aggregate amount of the Commitments.

 

“Monthly Payment Date” means the first Banking Day of each calendar month.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA Affiliates
contributes or is obligated to contribute.

 

“Net Income” means, with respect to any fiscal period, the net income of
Borrower and its Subsidiaries for that period, determined in accordance with
GAAP, consistently applied.

 

“New Lender” is defined in Section 2.8(d).

 

“Note” means any of the promissory notes made by Borrower to a Lender evidencing
Advances under that Lender’s Commitment, substantially in the form of

 

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Exhibit C, either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.

 

“Obligations” means all present and future obligations of every kind or nature
of Borrower or any Obligor at any time and from time to time owed to the
Lenders, the Administrative Agent and the Issuing Lender, under any one or more
of the Loan Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent (including payments
of principal, interest and fees and other charges), including obligations of
performance as well as obligations of payment, and including interest that
accrues after the commencement of any proceeding under any Debtor Relief Law by
or against any Obligor.

 

“Obligors” means, collectively, Borrower and its Subsidiaries (other than Tax
Preferred Subsidiaries and Inactive Subsidiaries) and, in each case where any of
the foregoing is a partnership, each general partner thereof.

 

“Party” means any Person other than Lenders and/or Administrative Agent, which
now or hereafter is a party to any of the Loan Documents.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereof
established under ERISA.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is
subject to Title IV of ERISA and is maintained by Borrower or to which Borrower
contributes or has an obligation to contribute.

 

“Permitted Acquisition” means an Acquisition which satisfies the following
conditions:

 

(a) the purpose of the Acquisition shall be to acquire a business in a similar
or related line of business to that of Borrower;

 

(b) the Administrative Agent shall have received from Borrower (no later than
five (5) Banking Days prior to the intended date of consummation of such
Acquisition) a written description of the terms and conditions of such
Acquisition;

 

(c) with respect to Acquisitions involving purchase prices of greater than
$20,000,000, the Target shall have had a positive EBITDA (calculated in
substantially the same manner as set forth in the definition of “EBITDA”
contained herein) during the twelve months prior to the Acquisition;

 

(d) Borrower shall provide to the Administrative Agent (no later than five
(5) Banking Days prior to the intended date of consummation of such Acquisition)
a certification from a Senior Officer of Borrower, in form and substance
reasonably satisfactory to the Administrative Agent, certifying that after
giving effect to the Acquisition, no covenant of this Agreement shall be
violated and (i) if such

 

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Acquisition occurs on or prior to September 30, 2008, that, after giving effect
to such Acquisition, the Leverage Ratio shall be less than or equal to 2.75 to
1.00, or (ii) if such Acquisition occurs after September 30, 2008, that, after
giving effect to such Acquisition, the Leverage Ratio shall be less than or
equal to 2.50 to 1.00, such Leverage Ratio to be calculated giving pro forma
effect to such Acquisition;

 

(e) concurrently with the closing of the Acquisition, the Administrative Agent
shall have received from Borrower and each applicable Subsidiary (after giving
effect to such Acquisition), (i) the documents, instruments and other matters
described in Section 5.13, and (ii) if requested by the Administrative Agent,
with respect to Acquisitions involving purchase prices greater than $20,000,000,
such legal opinions, from counsel reasonably acceptable to the Administrative
Agent, covering (A) such matters as were generally covered in the opinions
delivered to the Administrative Agent at the Closing Date and (B) such other
matters as the Administrative Agent may reasonably request as a result of any
special or unique characteristics of the Target, its jurisdiction of formation
or where it conducts its business and/or the nature of the Acquisition;

 

(f) any Seller Debt payable by Borrower and its Subsidiaries with respect to or
as a result of such Acquisition shall qualify as Permitted Seller Debt;

 

(g) all amounts payable under Acquisition Consulting Agreements entered into by
Borrower and/or its Subsidiaries in connection with such Acquisition shall be,
in each case, unsecured obligations and shall qualify as Subordinated
Obligations except that amounts payable under such Acquisition Consulting
Agreements for consulting, management or similar services, shall only need to
satisfy in all material respects clauses (b), (c) and (d) of the definition of
Subordinated Obligations (“Permitted Acquisition Consulting Agreements”); and

 

(h) the Acquisition shall comply in all material respects with all applicable
Laws.

 

“Permitted Acquisition Indebtedness” is defined in Section 6.3(d).

 

“Permitted Acquisition Consulting Agreements” is defined in clause (g) of the
definition of Permitted Acquisition.

 

“Permitted Acquisition Consulting Payments” means consulting, management and
similar service payments under Permitted Acquisition Consulting Agreements. The
amount of Permitted Acquisition Consulting Payments payable under any Permitted
Acquisition Consulting Agreement for any period of determination shall be the
highest aggregate amount (whether liquidated, contingent or both) payable under
such agreement for such period as reasonably determined by the Administrative
Agent.

 

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“Permitted Encumbrances” means:

 

(a) Inchoate Liens incident to construction on or maintenance of Property; or
Liens incident to construction on or maintenance of Property now or hereafter
filed of record for which adequate reserves have been set aside (or deposits
made pursuant to applicable Law) and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided that, by
reason of nonpayment of the obligations secured by such Liens, no such Property
is subject to an impending risk of loss or forfeiture;

 

(b) Liens for taxes and assessments on Property which are not yet delinquent; or
Liens for taxes and assessments on Property for which adequate reserves have
been set aside and are being contested in good faith by appropriate proceedings
and have not proceeded to judgment, provided that, by reason of nonpayment of
the obligations secured by such Liens, no such Property is subject to an
impending risk of loss or forfeiture;

 

(c) defects and irregularities in title to any Property which in the aggregate
do not materially impair the fair market value or use of the Property for the
purposes for which it is or may reasonably be expected to be held;

 

(d) easements, exceptions, reservations, or other agreements for the purpose of
pipelines, conduits, cables, wire communication lines, power lines and
substations, streets, trails, walkways, drainage, irrigation, water, and
sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or
other minerals, and other like purposes affecting Property which in the
aggregate do not materially burden or impair the fair market value or use of
such Property for the purposes for which it is or may reasonably be expected to
be held;

 

(e) easements, exceptions, reservations, or other agreements for the purpose of
facilitating the joint or common use of Property in or adjacent to a shopping
center or similar project affecting Property which in the aggregate do not
materially burden or impair the fair market value or use of such Property for
the purposes for which it is or may reasonably be expected to be held;

 

(f) rights reserved to or vested in any Governmental Agency to control or
regulate, or obligations or duties to any Governmental Agency with respect to,
the use of any Property;

 

(g) rights reserved to or vested in any Governmental Agency to control or
regulate, or obligations or duties to any Governmental Agency with respect to,
any right, power, franchise, grant, license, or permit;

 

(h) present or future zoning laws and ordinances or other laws and ordinances
restricting the occupancy, use, or enjoyment of Property;

 

(i) statutory Liens, other than those described in clauses (a) or (b) above,
arising in the ordinary course of business with respect to obligations which are

 

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not delinquent or are being contested in good faith, provided that, if
delinquent, adequate reserves have been set aside with respect thereto and, by
reason of nonpayment, no Property is subject to an impending risk of loss or
forfeiture;

 

(j) covenants, conditions, and restrictions affecting the use of Property which
in the aggregate do not materially impair the fair market value or use of the
Property for the purposes for which it is or may reasonably be expected to be
held;

 

(k) rights of tenants under leases and rental agreements covering Property
entered into in the ordinary course of business of the Person owning such
Property;

 

(l) Liens consisting of pledges or deposits to secure obligations under workers’
compensation laws or similar legislation, including Liens of judgments
thereunder which are not currently dischargeable;

 

(m) Liens consisting of pledges or deposits of Property to secure performance in
connection with operating leases made in the ordinary course of business,
provided the aggregate value of all such pledges and deposits (excluding the
property subject to such lease) in connection with any such lease does not at
any time exceed 10% of the annual fixed rentals payable under such lease;

 

(n) Liens consisting of deposits of Property to secure bids made with respect
to, or performance of, contracts (other than contracts creating or evidencing an
extension of credit to the depositor);

 

(o) Liens consisting of any right of offset, or statutory liens in favor of
financial institutions and their affiliates on bank deposit accounts and
securities accounts maintained in the ordinary course of business so long as
such bank deposit accounts are not established or maintained for the purpose of
providing such right of offset or Lien;

 

(p) Liens consisting of deposits of Property to secure statutory obligations of
Borrower; and

 

(q) Liens consisting of deposits of Property to secure (or in lieu of) surety,
appeal or customs bonds.

 

“Permitted Seller Debt “ means, collectively, and with respect to any applicable
Acquisition, Seller Debt, provided each of the following conditions is
satisfied:

 

(a) such Indebtedness is the sole Indebtedness incurred by Borrower and/or any
of its Subsidiaries in connection with such Acquisition (other than any
Indebtedness permitted pursuant to Section 6.3(a) or 6.3(i));

 

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(b) such Indebtedness is evidenced by a promissory note or other written
evidence of Indebtedness;

 

(c) the payee of such Indebtedness and Borrower and/or such Subsidiaries shall
have executed and delivered to the Administrative Agent a Seller Subordination
Agreement;

 

(d) the aggregate principal amount of all such Indebtedness shall not at any
time exceed $5,000,000 outstanding;

 

(e) the aggregate principal amount of all such Indebtedness due and payable
during any twelve (12) month period shall not at any time exceed $1,000,000; and

 

(f) such Indebtedness shall otherwise satisfy in all respects the provisions of
clauses (b)(ii) and (iv) of the definition of “Subordinated Obligations.”

 

“Permitted Right of Others” means a Right of Others consisting of (a) an
interest (other than a legal or equitable co-ownership interest, an option or
right to acquire a legal or equitable co-ownership interest and any interest of
a ground lessor under a ground lease), that does not materially impair the fair
market value or use of Property for the purposes for which it is or may
reasonably be expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Encumbrance or other encumbrance permitted pursuant to
Section 6.7, (c) the subordination of a lease or sublease in favor of a
financing entity and (d) a license, or similar right, of or to Intangible Assets
granted in the ordinary course of business.

 

“Person” means any individual or entity, including a trustee, corporation,
limited liability company, general partnership, limited partnership, joint stock
company, trust, estate, unincorporated organization, business association, firm,
joint venture, Governmental Agency, or other entity.

 

“Pricing Certificate” means a certificate in the form of Exhibit D, properly
completed and signed by the president or chief financial officer of Borrower.

 

“Pricing Period” means (a) the period commencing on the Closing Date and ending
on November 15, 2005 and (b), subsequent to such date, (i) the period commencing
on each November 16 and ending on the next following February 15, (ii) the
period commencing on each February 16 and ending on the next following June 15,
(iii) the period commencing on each June 16 and ending on the next following
August 15, and (iv) the period commencing on each August 16 and ending on the
next following November 15.

 

“Prime Rate” means the rate of interest most recently announced within Wells
Fargo, at its principal office in San Francisco, California, as its “prime
rate.” The “prime rate” is one of several base rates used by Wells Fargo and
serves as the basis upon which effective rates of interest are calculated for
loans and other credits making reference thereto. The “prime rate” is evidenced
by the recording thereof after its

 

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announcement in such internal publication or publications as Wells Fargo may
designate. Any change in the Prime Rate shall take effect on the day the change
is announced within Wells Fargo.

 

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

 

“Pro Rata Share” of any amount pertaining to the Commitments or Letters of
Credit means, with respect to any Lender at any time, the product of (i) a
fraction the numerator of which is such Lender’s Commitment (or, if such
Commitment shall have expired or been terminated, an amount equal to the sum of
such Lender’s Advances and L/C Exposure), and the denominator of which is the
aggregate Commitments or aggregate Advances and the then existing Aggregate
Effective Amount, as the case may be, multiplied by (ii) such amount.
Schedule 1.1 sets forth the Pro Rata Shares of the Closing Date Lenders as of
the Closing Date.

 

“Proposal Letter” means that certain letter agreement dated as of July 6, 2005
from Wells Fargo to (and accepted by) Borrower regarding Wells Fargo’s proposal
to provide a portion of the funding of the Facility to Borrower and the intended
syndication of the Facility.

 

“Quarterly Payment Date” means each March 31, June 30, September 30 and
December 31.

 

“Real Property” means, as of any date of determination, all real property then
or theretofore owned, leased or occupied by Borrower or any Subsidiary.

 

“Regulation D” means Regulation D, as at any time amended, of the Board of
Governors of the Federal Reserve System, or any other regulation in substance
substituted therefor.

 

“Regulation U” means Regulation U, as at any time amended, of the Board of
Governors of the Federal Reserve System, or any other regulation in substance
substituted therefor.

 

“Request for Borrowing” means a written request for a Borrowing substantially in
the form of Exhibit E, signed by a Responsible Official of Borrower, and
properly completed to provide all information required to be included therein.

 

“Request for Continuation/Conversion” means a written request to Continue or
Convert a Borrowing substantially in the form of Exhibit F, signed by a
Responsible Official of Borrower, and properly completed to provide all
information required to be included therein.

 

“Request for Letter of Credit” means a written request for a Letter of Credit
substantially in the form of Exhibit G, signed by a Responsible Official of
Borrower, and properly completed to provide all information required to be
included therein.

 

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“Required Lenders” means, (a) as of any date of determination if the Commitments
are then in effect, Lenders having in the aggregate at least 66 2/3% of such
aggregate Commitments, and (b) as of any date of determination if the
Commitments have then been terminated and there is then any outstanding
Indebtedness evidenced by the Notes, the Swing Line Documents and/or Letters of
Credit, Lenders owed or holding in the aggregate at least 66 2/3% of then
applicable Facility Usage, and in any event not less than two (2) Lenders unless
at such time there shall be but one Lender.

 

“Requirement of Law” means, as to any Person, the articles or certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any Law, or judgment, award, decree, writ or determination of a
Governmental Agency, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is subject.

 

“Reserve Requirement” means, with respect to any day in a LIBOR Period for a
LIBOR Loan, the aggregate of the maximum of the reserve requirement rates
(expressed as a decimal) in effect on such day for eurocurrency funding
(currently referred to as “Eurocurrency liabilities” in Regulation D of the
Federal Reserve Board) maintained by a member bank of the Federal Reserve
System. As used herein, the term “reserve requirement” shall include, without
limitation, any basic, supplemental or emergency reserve requirements imposed on
any Lender by any Governmental Agency.

 

“Responsible Official” means, as to any Person, (a) when used with reference to
a Person other than an individual, a corporate officer of such Person, general
partner of such Person, corporate officer of a corporate general partner of such
Person, corporate officer of a corporate general partner of a partnership that
is a general partner of such Person, manager or managing member (in the case of
a Person that is a limited liability company), or any other responsible official
thereof duly acting on behalf thereof, and (b) when used with reference to a
Person who is an individual, such Person. The Lenders shall be entitled to
conclusively rely upon any document or certificate that is signed or executed by
a Responsible Official of Borrower or any Subsidiary as having been authorized
by all necessary corporate, partnership, limited liability company and/or other
action on the part of Borrower or such Subsidiary.

 

“Right of Others” means, as to any Property in which a Person has an interest,
any legal or equitable right, title or other interest (other than a Lien) held
by any other Person in that Property, and any option or right held by any other
Person to acquire any such right, title or other interest in that Property,
including any option or right to acquire a Lien; provided, however, that (a) no
covenant restricting the use or disposition of Property of such Person contained
in any Contractual Obligation of such Person and (b) no provision contained in a
contract creating a right of payment or performance in favor of a Person that
conditions, limits, restricts, diminishes, transfers or terminates such right
shall be deemed to constitute a Right of Others.

 

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“Rolling Period” means any period of four consecutive Fiscal Quarters of
Borrower and its Subsidiaries.

 

“Security” means any capital stock, share, voting trust certificate, bond,
debenture, note or other evidence of Indebtedness, limited partnership interest,
member interest, or any warrant, option or other right to purchase or acquire
any of the foregoing.

 

“Security Agreement” means the security agreement to be executed and delivered
pursuant to Article 8 by Borrower and its Subsidiaries, in the form of Exhibit
H, either as originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.

 

“Seller Debt” means, collectively and with respect to any applicable
Acquisition, any deferred purchase price and/or earnout obligation payable by
Borrower and/or any of its Subsidiaries with respect to or as a result of such
Acquisition, provided, however, that any earnout obligation incurred by Borrower
in connection with the Acquisition of Erik Veng USA, Inc. (contemplated to occur
shortly after the Closing Date), shall not constitute “Seller Debt”.

 

“Seller Subordination Agreement” means a subordination agreement substantially
in the form of Exhibit I.

 

“Senior Officer” means (a) the chief executive officer, (b) the president,
(c) any executive vice president, (d) the chief financial officer or (e) the
treasurer, in each case of any Person.

 

“Share Repurchase” is defined in the definition of “Distribution”.

 

“Share Repurchases Bucket” means Share Repurchases made by Borrower from and
after the Closing Date in an aggregate amount not to exceed $10,000,000.

 

“Solvent” means, as of any date of determination, and as to any Person, that on
such date: (a) the fair valuation of the assets of such Person is greater than
the fair valuation of such Person’s probable liability in respect of existing
debts; (b) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person’s ability to pay as such debts mature; (c) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, which would leave such Person with assets
remaining which would constitute unreasonably small capital after giving effect
to the nature of the particular business or transaction (including, in the case
of Borrower, the transactions occurring on the Closing Date); and (d) such
Person is generally paying its debts as they become due. For purposes of the
foregoing (1) the “fair valuation” of any assets means the amount realizable
within a reasonable time, either through collection or sale, of such assets at
their regular market value, which is the amount obtainable by a capable and
diligent businessman from an interested buyer willing to purchase such assets
within a reasonable time under ordinary circumstances; and (2) the term “debts”
includes any legal liability whether matured or unmatured, liquidated or
unliquidated, absolute, fixed, or contingent.

 

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“Special LIBOR Circumstance” means the application or adoption after the Closing
Date of any Law or interpretation, or any change therein or thereof after the
Closing Date, or any change after the Closing Date in the interpretation or
administration thereof by any Governmental Agency, central bank or comparable
authority charged with the interpretation or administration thereof, or
compliance by any Lender or its LIBOR Lending Office with any request or
directive (whether or not having the force of Law) of any such Governmental
Agency, central bank or comparable authority.

 

“Standby Letter of Credit” means each Letter of Credit that is not a Commercial
Letter of Credit.

 

“Standby Letter of Credit Agreement” means the standby letter of credit
agreement to be executed by Borrower either as originally executed or as it may
from time to time be supplemented, modified, amended, extended, restated or
supplanted.

 

“Stockholders’ Equity” means, as of any date of determination and with respect
to any Person, the stockholders’ equity of that Person as of that date
determined in accordance with GAAP; provided that there shall be excluded from
Stockholders’ Equity any amount attributable to Disqualified Stock.

 

“Subordinated Obligations” means, as of any date of determination (without
duplication), (a) any Permitted Seller Debt and (b) any Indebtedness of any
Obligor on that date that (i) does not have any scheduled principal payment,
mandatory principal payment or sinking fund payment due prior to the date that
is one year after the Maturity Date other than payments reasonably acceptable to
the Administrative Agent and the Required Lenders, (ii) is not secured by a Lien
on any Property of Borrower or any Subsidiary, (iii) is subordinated by its
terms in right of payment to the Obligations pursuant to a Subordination
Agreement and (iv) is subject to such covenants, events of default, payment
blockage and delayed acceleration as may be set forth in the applicable
Subordination Agreement.

 

“Subordination Agreement” means either (a) a Seller Subordination Agreement or
(b) a subordination agreement reasonably acceptable to the Administrative Agent
and the Required Lenders.

 

“Subsidiary” means, as of any date of determination and with respect to any
Person, any corporation, limited liability company or partnership (whether or
not, in any case, characterized as such or as a “joint venture”), whether now
existing or hereafter organized or acquired: (a) in the case of a corporation or
limited liability company, of which a majority of the securities having ordinary
voting power for the election of directors or other governing body (other than
securities having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person and/or one or more
Subsidiaries of such Person, or (b) in the case of a

 

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partnership, of which a majority of the partnership or other ownership interests
are at the time beneficially owned by such Person and/or one or more of its
Subsidiaries. Any reference in the Loan Documents to a “Subsidiary” or
“Subsidiaries” shall, unless otherwise provided, be deemed to be a reference to
a Subsidiary (or Subsidiaries, as the case may be) of Borrower.

 

“Subsidiary Guaranty” means the continuing guaranty of the Obligations required
to be executed and delivered pursuant to Section 5.13 by the Guarantors, in the
form of Exhibit J, either as originally executed or as it may from time to time
be supplemented, modified, amended, extended or supplanted.

 

“Swing Line” means the revolving line of credit established by the Swing Line
Lender in favor of Borrower pursuant to Section 2.11.

 

“Swing Line Documents” means the promissory note and any other documents
executed by Borrower in favor of the Swing Line Lender in connection with the
Swing Line.

 

“Swing Line Lender” means Wells Fargo.

 

“Swing Line Loans” means loans made by the Swing Line Lender to Borrower
pursuant to Section 2.11.

 

“Swing Line Outstandings” means, as of any date of determination, the aggregate
principal Indebtedness of Borrower on all Swing Line Loans then outstanding.

 

“Tangible Net Worth” means, as of any date of determination (each, a “Test
Date”), the sum of (a) Stockholders’ Equity of Borrower and its Subsidiaries on
that Test Date, minus (b) the aggregate Intangible Assets of Borrower and its
Subsidiaries on that Test Date that, in accordance with GAAP, are required to be
reflected on the consolidated balance sheet of Borrower and its Subsidiaries as
“intangible assets”, minus (c) any accounts or loans or advances owing to
Borrower or any Subsidiary by an equityholder, officer, director, partner or
Affiliate of Borrower or any Subsidiary on that Test Date, plus (d) the
aggregate outstanding principal amount of all Subordinated Obligations on that
Test Date plus (e) an amount equal to the aggregate amount of Share Repurchases
made by Borrower during the period commencing on the Closing Date and ending on
that Test Date; provided however, that the amount of Share Repurchases permitted
to be included in the computation of “Tangible Net Worth” as of any Test Date
shall not exceed the Share Repurchases Bucket.

 

“Target” means the Person whose stock, assets or business shall be acquired by,
merged into or with, or consolidated with Borrower or any Subsidiary in an
Acquisition.

 

“Tax Preferred Subsidiary” means a Subsidiary of Borrower that is (a) a
corporation that is foreign (within the meaning of paragraphs (3), (4), (5) and
(9) of Section 7701(a) of the Code) and (b) is a controlled foreign corporation
(within the

 

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meaning of Section 957(a) of the Code) with respect to which Borrower (or any
corporation which in addition to Borrower is a member of an affiliated group,
within the meaning of Section 1504(a) of the Code, for which a consolidated
return is filed pursuant to Section 1501 of the Code) is a United States
shareholder within the meaning of Section 951(b) of the Code.

 

“Termination Date” means the date on which the Advances and all other
Obligations under this Agreement and the other Loan Documents are indefeasibly
paid in full, in cash in United States Dollars, and Borrower shall have no
further right to borrow any moneys or obtain other credit extensions or
financial accommodations under this Agreement or any of the other Loan
Documents.

 

“Total Funded Debt” means, as of any date of determination, without duplication,
the sum of (a) all principal Indebtedness of Borrower and its Subsidiaries for
borrowed money (including Subordinated Obligations and any other subordinated
indebtedness, debt Securities issued by Borrower and any of its Subsidiaries,
the aggregate principal Indebtedness outstanding under the Notes and the
Aggregate Effective Amount of all outstanding Letters of Credit) on that date,
plus (b) the aggregate amount of the principal portion of all Capital Lease
Obligations of Borrower and its Subsidiaries, plus (c) any Guaranty Obligations
of Borrower and its Subsidiaries with respect to the Indebtedness of others of
the types referred to in clauses (a) and (b) above.

 

“to the best knowledge of” means, when modifying a representation, warranty or
other statement of any Person, that the fact or situation described therein is
known by the Person (or, in the case of a Person other than a natural Person,
known by a Responsible Official of that Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known by the
Person (or, in the case of a Person other than a natural Person, would have been
known by a Responsible Official of that Person).

 

“Type” refers to the distinction between Advances bearing interest at the
Alternate Base Rate and Advances bearing interest at the LIBOR Rate.

 

“UCC” means the Uniform Commercial Code as the same may from time to time be
enacted and in effect in the State of California; provided that, in the event by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the Administrative Agent’s (on behalf of the Lenders) Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of California, the term “UCC” shall mean
the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.

 

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“Unmatured Surviving Obligations” means Obligations under this Agreement and the
other Loan Documents that by their terms survive the termination of this
Agreement or the other Loan Documents but are not, as of the date of
determination, due and payable.

 

“Wells Fargo” means Wells Fargo Bank, National Association.

 

1.2 Use of Defined Terms. Any defined term used in the plural shall refer to all
members of the relevant class, and any defined term used in the singular shall
refer to any one or more of the members of the relevant class.

 

1.3 Accounting Terms; Covenant Calculations. All accounting terms not
specifically defined in this Agreement shall be construed in conformity with,
and all financial data required to be submitted by this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, except as
otherwise specifically prescribed herein. In the event that GAAP changes during
the term of this Agreement such that the covenants contained in Sections 5.12
and 6.2 would then be calculated in a different manner or with different
components, (i) Borrower and the Lenders agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
Borrower’s financial condition to substantially the same criteria as were
effective prior to such change in GAAP and (ii) Borrower shall be deemed to be
in compliance with the covenants contained in the aforesaid Sections if and to
the extent that Borrower would have been in compliance therewith under GAAP as
in effect immediately prior to such change, but if such amendment is not
effective within 60 days after the date of such change, Borrower shall have the
obligation, if requested by the Administrative Agent in writing, to deliver to
the Administrative Agent together with the financial statements delivered
pursuant to Section 7.1(a) or Section 7.1(b), reconciliation statements,
reconciling the financial statements required to be delivered pursuant to those
Sections to GAAP as in effect immediately prior to such change.

 

1.4 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.

 

1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement, either
as originally existing or as the same may from time to time be supplemented,
modified or amended, are incorporated herein by this reference. A matter
disclosed on any Schedule shall be deemed disclosed on all Schedules.

 

1.6 References to “Borrower and its Subsidiaries”. Any references herein to
“Borrower and its Subsidiaries” or the like shall refer solely to Borrower
during such times, if any, as Borrower shall have no Subsidiaries.

 

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1.7 Miscellaneous Terms. The term “or” is disjunctive; the term “and” is
conjunctive. The term “shall” is mandatory; the term “may” is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term “including” is by way of example and not limitation.

 

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Article 2.

ADVANCES AND LETTERS OF CREDIT

 

2.1 Advances-General.

 

(a) Subject to the terms and conditions set forth in this Agreement, from time
to time on any Banking Day during the period from the Closing Date through the
Maturity Date, each Lender severally agrees to make Advances to Borrower under
the Facility in such amounts as Borrower may request provided that, after giving
effect to such Advances, (i) Facility Usage does not exceed the Maximum Facility
Amount and (ii) as to each Lender, such Lender’s Pro Rata Share of Facility
Usage does not exceed such Lender’s Commitment. All Advances shall be made by
the Lenders ratably according to their respective Commitments.

 

Within the limits of each Lender’s Commitment in effect from time to time and
subject to the foregoing, Borrower may borrow under this Section 2.1(a), prepay
Advances pursuant to Section 3.1 and reborrow under this Section 2.1(a).

 

(b) Subject to the next sentence, each Borrowing shall be made pursuant to a
Request for Borrowing which shall specify (i) the date of such requested
Borrowing, (ii) the Type of Advances comprising such Borrowing, (iii) the amount
of such Borrowing, and (iv) in the case of a Borrowing consisting of LIBOR Rate
Advances, the LIBOR Period therefor. Unless the Administrative Agent has
notified, in its sole and absolute discretion, Borrower to the contrary not less
than three (3) days prior to the date of any Borrowing, a Borrowing may be
requested by telephone by a Responsible Official of Borrower, in which case
Borrower shall confirm such request by promptly delivering a Request for
Borrowing (conforming to the preceding sentence) in person or by telecopier to
the Administrative Agent. The Administrative Agent shall incur no liability
whatsoever hereunder in acting upon any telephonic request for a Borrowing
purportedly made by a Responsible Official of Borrower, and Borrower hereby
agrees to indemnify the Administrative Agent from any loss, cost, expense or
liability as a result of so acting.

 

(c) Promptly following receipt of a Request for Borrowing, the Administrative
Agent shall notify each Lender by telephone, telecopier or electronic mail (and
if by telephone, promptly confirmed by telecopier or electronic mail) of the
date of the requested Borrowing, the Type of Advances comprising such Borrowing,
the LIBOR Period (if applicable), and the amount corresponding to that Lender’s
ratable share of the Borrowing. Not later than 12:00 noon, California time, on
the date specified for any Borrowing (which must be a Banking Day), each Lender
shall make its ratable share of the Borrowing in immediately available funds
available to the Administrative Agent at the Administrative Agent’s Office.
Upon, and subject to, satisfaction or waiver of the applicable conditions set
forth in Article 8, all Advances shall be credited on that date in immediately
available funds to the Designated Deposit Account.

 

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(d) Anything in subsection (c) above to the contrary notwithstanding, Borrower
may not (a) request Alternate Base Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $100,000 (and any such Borrowing
exceeding such minimum amount shall be in an integral multiple of $50,000),
provided that the foregoing minimum amount shall not apply to an Alternate Base
Rate Advance that causes the aggregate amount borrowed under the Facility to
equal the full amount available for Advances thereunder, or (b) elect LIBOR Rate
Advances for any Borrowing (i) if the aggregate amount of such Borrowing is less
than $500,000 (and any such Borrowing exceeding such minimum amount shall be in
an integral multiple of $100,000) or (ii) if the obligation of the Lenders to
make LIBOR Rate Advances shall then be suspended pursuant to Section 2.4, 3.5 or
3.6.

 

(e) The Advances made by each Lender under its Commitment shall be evidenced by
that Lender’s Note.

 

(f) A Request for Borrowing shall be irrevocable upon the Administrative Agent’s
first notification thereof.

 

(g) The Administrative Agent, on behalf of the Lenders, is hereby authorized to
make Borrowings available to Borrower upon fulfillment of the applicable
conditions set forth in Article 8, and, if applicable, Section 2.1(d). Upon
fulfillment of such applicable conditions, the proceeds of Borrowings shall
either be credited in immediately available funds to the Designated Deposit
Account or remitted directly to one or more third parties, as directed by
Borrower and approved by the Administrative Agent. The proceeds of any Borrowing
consisting of LIBOR Rate Advances shall be so credited or remitted on the first
day of the applicable LIBOR Period for such Borrowings.

 

2.2 Alternate Base Rate Advances. Each request by Borrower for a Borrowing
comprised of Alternate Base Rate Advances shall be made pursuant to a Request
for Borrowing (or telephonic or other request for Borrowing referred to in the
second sentence of Section 2.1(b), if applicable) received by the Administrative
Agent, at the Administrative Agent’s Office, not later than 11:00 a.m.
California time, on the date of the requested Borrowing, provided such date is a
Banking Day. All Advances shall constitute Alternate Base Rate Advances unless
properly designated as a LIBOR Rate Advance pursuant to Section 2.3 or 2.4.

 

2.3 LIBOR Rate Advances.

 

(a) Each request by Borrower for a Borrowing comprised of LIBOR Rate Advances
shall be made pursuant to a Request for Borrowing (or telephonic or other
request for Borrowing referred to in the second sentence of Section 2.1(b), if
applicable) received by the Administrative Agent, at the Administrative Agent’s
Office, not later than 11:00 a.m., California time, at least three (3) LIBOR
Banking Days before the first day of the applicable LIBOR Period.

 

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(b) On the date which is two (2) LIBOR Banking Days before the first day of the
applicable LIBOR Period, the Administrative Agent shall confirm its
determination of the applicable LIBOR Rate (which determination shall be
conclusive in the absence of manifest error) and promptly shall give notice of
the same to Borrower and the Lenders by telephone, telecopier or electronic mail
(and if by telephone, promptly confirmed by telecopier or electronic mail).

 

(c) Unless the Administrative Agent and the Required Lenders otherwise consent,
LIBOR Rate Advances may not be outstanding under more than five (5) separate
LIBOR Periods at any one time.

 

(d) No Borrowing comprised of LIBOR Rate Advances may be requested during the
continuation of a Default or Event of Default.

 

(e) Nothing contained herein shall require any Lender to fund any LIBOR Rate
Advance in the Designated Eurodollar Market.

 

2.4 Conversion and Continuation of Advances.

 

(a) Optional Conversion. Borrower may on any Banking Day, upon notice given to
the Administrative Agent not later than 11:00 a.m. (California time) on the
third LIBOR Banking Day prior to the date of a proposed Conversion if the
Conversion is into LIBOR Rate Advances, or one Banking Day prior to the date of
a proposed Conversion if the Conversion is into Alternate Base Rate Advances,
and subject to the provisions of Sections 3.5 and 3.6, Convert all or any
portion of the Advances of one Type outstanding under the Facility (and, in the
case of LIBOR Rate Advances, having the same LIBOR Period) into Advances of the
other Type under the Facility; provided that any Conversion of LIBOR Rate
Advances into Alternate Base Rate Advances on other than the last day of a LIBOR
Period for such LIBOR Rate Advances shall be subject to Section 3.6(e), any
Conversion of Alternate Base Rate Advances into LIBOR Rate Advances shall be in
an amount not less than $500,000 or integral multiples of $100,000 in excess
thereof and no Conversion of any Advances shall result in more than five
(5) separate LIBOR Periods being outstanding under the Facility. Each such
notice of Conversion shall be made pursuant to a Request for
Continuation/Conversion and shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the aggregate amount, Type and
category of the Advances (and, in the case of LIBOR Rate Advances, the LIBOR
Period therefor) to be Converted and (iii) if such Conversion is into LIBOR Rate
Advances, the duration of the initial LIBOR Period for such Advances. Each
request for Conversion shall be irrevocable and binding on Borrower.

 

(b) Certain Mandatory Conversions.

 

(i) On the date on which the aggregate unpaid principal amount of LIBOR Rate
Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $500,000 such Advances shall automatically Convert into
Alternate Base Rate Advances.

 

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(ii) If Borrower shall fail to select the duration of any LIBOR Period for any
outstanding LIBOR Rate Advances in accordance with the provisions contained in
Section 2.1(c) and in clause (a) or (c) of this Section 2.4, each such LIBOR
Rate Advance will automatically, on the last day of the then existing LIBOR
Period therefor, Convert into an Alternate Base Rate Advance.

 

(iii) Upon the occurrence and during the continuance of any Event of Default and
upon notice from the Administrative Agent to Borrower at the request of the
Required Lenders, (x) each LIBOR Rate Advance will automatically, on the last
day of the then existing LIBOR Period therefor, Convert into an Alternate Base
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, or to Continue, LIBOR Rate Advances shall be suspended.

 

(c) Continuations. Borrower may, on any LIBOR Banking Day, upon notice given to
the Administrative Agent not later than 11:00 a.m. (California time) on the
third LIBOR Banking Day prior to the date of the proposed Continuation and
subject to the provisions of Sections 3.5 and 3.6, Continue all or any portion
of the LIBOR Rate Advances outstanding under the Facility having the same LIBOR
Period; provided that any such Continuation shall be made only on the last day
of a LIBOR Period for such LIBOR Rate Advances, no Continuation of LIBOR Rate
Advances shall be in an amount less than $500,000 and no Continuation of any
LIBOR Rate Advances shall result in more than five (5) separate LIBOR Periods
being outstanding under the Facility. Each such notice of Continuation shall be
made pursuant to a Request for Continuation/Conversion and shall, within the
restrictions specified above, specify (i) the date of such Continuation,
(ii) the aggregate amount and category of, and the LIBOR Period for, the
Advances being Continued and (iii) the duration of the initial LIBOR Period for
the LIBOR Rate Advances subject to such Continuation. Each notice of
Continuation shall be irrevocable and binding on Borrower.

 

2.5 Letters of Credit.

 

(a) As of the Closing Date and at all relevant times thereafter, the Existing
Letters of Credit shall be Letters of Credit for all purposes under this
Agreement and the other Loan Documents. Subject to the terms and conditions
hereof, at any time and from time to time from the Closing Date through the
Letter of Credit Expiration Date, the Issuing Lender shall issue such Letters of
Credit under the Facility as Borrower may request by a Request for Letter of
Credit; provided that giving effect to all such Letters of Credit, (i) Facility
Usage does not exceed the Maximum Facility Amount, (ii) the Aggregate Effective
Amount under all outstanding Letters of Credit shall not exceed $25,000,000, and
(iii) as to each Lender, such Lender’s Pro Rata Share of the Facility Usage does
not exceed such Lender’s Commitment. Each Letter of Credit shall be in a form
reasonably acceptable to the Issuing Lender. Unless the Issuing Lender and the
Required Lenders otherwise consent, the term of any Commercial Letter of Credit
shall not exceed 180 days and the term of any Standby Letter of Credit shall not
exceed 365 days, provided that any

 

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Standby Letter of Credit may be automatically extended for one or more
successive periods not to exceed one year each unless the Issuing Lender elects
not to extend for any such additional period by giving notice to the beneficiary
of such Standby Letter of Credit. If, as of the Letter of Credit Expiration
Date, any Letter of Credit remains outstanding or any draw on any Letter of
Credit remains unreimbursed by Borrower, Borrower shall immediately Cash
Collateralize the then Aggregate Effective Amount. For purposes of the
foregoing, “Cash Collateralize” means to pledge and deposit with the
Administrative Agent, for the benefit of the Issuing Lender and the Lenders, as
collateral for all L/C Exposure, cash or deposit account balances pursuant to
documentation in form and substances satisfactory to the Administrative Agent
and the Issuing Lender (which documents are hereby consented to by the Lenders).
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing. Any such
cash collateral shall be maintained in a blocked, non-interest bearing deposit
account at Wells Fargo.

 

(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender,
with a copy to the Administrative Agent, at least three (3) Banking Days (or
such shorter period as the Issuing Lender shall agree) prior to the date upon
which the related Letter of Credit is proposed to be issued. The Administrative
Agent shall promptly notify the Issuing Lender whether such request, and the
issuance of a Letter of Credit pursuant thereto, conforms to the requirements of
this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall
promptly notify the Administrative Agent of the amount and terms thereof. Unless
the Issuing Lender has notified, in its sole and absolute discretion, Borrower
to the contrary not less than three (3) days prior to the date of any Request
for Letter of Credit, a Request for Letter of Credit may be delivered to the
Issuing Lender by facsimile by a Responsible Official of Borrower, in which case
Borrower shall confirm such request by promptly delivering a Request for Letter
of Credit (conforming to the preceding sentence) in person to the Issuing
Lender. The Issuing Lender shall incur no liability whatsoever hereunder in
acting upon any Request for Letter of Credit received by facsimile purportedly
made by a Responsible Official of Borrower, and Borrower hereby agrees to
indemnify the Issuing Lender from any loss, cost, expense or liability as a
result of so acting. A Request for Letter of Credit shall be irrevocable absent
the reasonable consent of the Issuing Lender.

 

(c) Upon issuance of a Letter of Credit, each Lender shall be deemed to have
purchased a pro rata participation in such Letter of Credit from the Issuing
Lender in proportion to that Lender’s Pro Rata Share of the Facility. Without
limiting the scope and nature of each Lender’s participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed by
Borrower for any payment required to be made by the Issuing Lender under any
Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share of
the Facility, reimburse the Issuing Lender through the Administrative Agent
promptly upon demand for the amount of such payment. The obligation of each
Lender to so reimburse the Issuing Lender shall be absolute and unconditional
and shall not be affected by the occurrence of an Event of Default or any other
occurrence or event. Any such reimbursement

 

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shall not relieve or otherwise impair the obligation of Borrower to reimburse
the Issuing Lender for the amount of any payment made by the Issuing Lender
under any Letter of Credit together with interest as hereinafter provided.

 

(d) Borrower agrees to pay to the Issuing Lender through the Administrative
Agent an amount equal to any payment made by the Issuing Lender with respect to
each Letter of Credit within one (1) Banking Day after demand made by the
Issuing Lender therefor, together with interest on such amount from the date of
any payment made by the Issuing Lender at the rate applicable to Alternate Base
Rate Advances for the period commencing on the date of any such payment and
continuing through the first Banking Day following such demand and thereafter at
the Default Rate. The principal amount of any such payment shall be used to
reimburse the Issuing Lender for the payment made by it under the Letter of
Credit. Each Lender that has reimbursed the Issuing Lender pursuant to
Section 2.5(c) for its Pro Rata Share of any payment made by the Issuing Lender
under a Letter of Credit shall thereupon acquire a pro rata participation, to
the extent of such reimbursement, in the claim of the Issuing Lender against
Borrower under this Section 2.5(d) and shall share, in accordance with that pro
rata participation, in any payment made by Borrower with respect to such claim.
Upon receipt of any such reimbursement from Borrower, the Issuing Lender shall
pay to the Administrative Agent, for the ratable benefit of those Lenders that
had reimbursed the Issuing Lender pursuant to Section 2.5(c) for their
respective Pro Rata Shares of any payment made by the Issuing Lender under a
Letter of Credit to which such reimbursement applies, the amount of such
reimbursement.

 

(e) So long as no Event of Default shall have occurred and remain in effect,
Borrower may request (in writing) that Advances be made pursuant to
Section 2.1(a) to provide funds for the payment required by Section 2.5(d),
provided that, after giving effect to any such Advance, Borrower shall be in
compliance with maximum Facility Usage as set forth in Section 2.1(a) and
provided that, for this purpose, the conditions set forth in Article 8 shall not
apply (other than the condition that no Event of Default shall then be in
effect). The proceeds of such Advances shall be paid directly to the Issuing
Lender to reimburse it for the payment made by it under the Letter of Credit.

 

(f) If Borrower fails to make the payment required by Section 2.5(d) within the
time period therein set forth, in lieu of reimbursement to the Issuing Lender
under Section 2.5(c) the Issuing Lender may (but is not required to), without
notice to or the consent of Borrower, instruct the Administrative Agent to cause
Advances to be made by the Lenders under the Facility in an aggregate amount
equal to the amount paid by the Issuing Lender with respect to that Letter of
Credit and, for this purpose, the conditions precedent set forth in Article 8
shall not apply. The proceeds of such Advances shall be paid to the Issuing
Lender to reimburse it for the payment made by it under the Letter of Credit.

 

(g) The issuance of any supplement, modification, amendment, renewal, or
extension to or of any Letter of Credit shall be treated in all respects (other
than as provided in Section 3.4) the same as the issuance of a new Letter of
Credit.

 

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(h) The obligation of Borrower to pay to the Issuing Lender the amount of any
payment made by the Issuing Lender under any Letter of Credit shall be absolute,
unconditional, and irrevocable, subject only to performance by the Issuing
Lender of its obligations to Borrower under Section 5108 of the UCC. Without
limiting the foregoing, Borrower’s obligations shall not be affected by any of
the following circumstances:

 

(i) any lack of validity or enforceability of the Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

 

(ii) any amendment or waiver of or any consent to departure from the Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto,
with the written consent of Borrower executed by a Responsible Official of
Borrower;

 

(iii) the existence of any claim, setoff, defense, or other rights that Borrower
may have at any time against the Issuing Lender, the Administrative Agent or any
Lender, any beneficiary of the Letter of Credit (or any Persons for whom any
such beneficiary may be acting) or any other Person, whether in connection with
the Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;

 

(iv) any demand, statement, or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid, or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever so
long as any such document reasonably appeared to comply with the terms of the
Letter of Credit;

 

(v) payment to the applicable beneficiary, or its successors or assigns, by the
Issuing Lender in good faith under the Letter of Credit against presentation of
a draft or any accompanying document which does not strictly comply with the
terms of the Letter of Credit;

 

(vi) the existence, character, quality, quantity, condition, packing, value or
delivery of any Property purported to be represented by documents presented in
connection with any Letter of Credit or for any difference between any such
Property and the character, quality, quantity, condition, or value of such
Property as described in such documents;

 

(vii) the time, place, manner, order or contents of shipments or deliveries of
Property as described in documents presented in connection with any Letter of
Credit or the existence, nature and extent of any insurance relative thereto;

 

(viii) the solvency or financial responsibility of any party issuing any
documents in connection with a Letter of Credit;

 

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(ix) any failure or delay in notice of shipments or arrival of any Property;

 

(x) any error in the transmission of any message relating to a Letter of Credit
not caused by the Issuing Lender, or any delay or interruption in any such
message;

 

(xi) any error, neglect or default of any correspondent of the Issuing Lender in
connection with a Letter of Credit;

 

(xii) any consequence arising from acts of God, war, terrorism, insurrection,
civil unrest, disturbances, labor disputes, emergency conditions or other causes
beyond the control of the Issuing Lender; and

 

(xiii) so long as the Issuing Lender in good faith determines that the contract
or document appears to comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or document referred to in
any document submitted to the Issuing Lender in connection with a Letter of
Credit;

 

provided that notwithstanding anything to the contrary set forth above, the
Issuing Lender shall be liable for damages caused by the willful misconduct or
gross negligence of the Issuing Lender.

 

(i) The Issuing Lender shall be entitled to the protection accorded to the
Administrative Agent pursuant to Section 10.6 (subject to the standards set
forth therein), mutatis mutandis.

 

(j) The Uniform Customs and Practice for Documentary Credits, as published in
its most current version by the International Chamber of Commerce, shall be
deemed a part of this Section and shall apply to all Letters of Credit to the
extent not inconsistent with applicable Law.

 

2.6 Foreign Exchange. Subject to the terms and conditions of this Agreement, the
Lenders, or any one or more of them, may from time to time enter into one or
more Approved Foreign Exchange Agreements with Borrower for the purchase and/or
sale by Borrower in United States Dollars of various foreign currencies;
provided that the maximum amount of all outstanding foreign exchange contracts
entered into in connection with Approved Foreign Exchange Agreements shall not
at any time exceed an aggregate of Two Million Five Hundred Thousand US Dollars
(US $2,500,000) nor shall any such foreign exchange contract be executed for a
term that extends beyond the Maturity Date.

 

2.7 Termination or Reduction of the Commitments.

 

(a) Optional. Borrower may at any time or from time to time, upon not less than
three (3) Banking Days’ prior written notice to the Administrative Agent,
terminate in whole or reduce in part the Commitments under the Facility,
provided that each partial reduction of the Commitments under any of the
Facilities shall be in

 

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an aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in
excess thereof.

 

(b) Mandatory. The Commitments shall be automatically and permanently reduced to
zero on the Maturity Date.

 

(c) Reduction Pro Rata; No Reinstatements. Each reduction of the Commitments
under the Facility shall be applied to the respective Commitments of the Lenders
according to their respective Pro Rata Shares of the Facility. Commitments once
terminated or reduced may not be reinstated.

 

2.8 Optional Increase to the Revolving Commitments.

 

(a) Provided that no Default or Event of Default then exists, on any date prior
to March 14, 2010, Borrower may request in writing that the Facility be
increased by increasing the then effective Commitments in an aggregate amount
which does not result in the aggregate principal amount of the Commitments being
greater than $100,000,000 minus the amount of any permanent reductions to the
Commitments which have then occurred prior to the date of any such request
pursuant to Section 2.7, provided that the interest rates payable in connection
with any such increased Commitments shall be the same interest rates payable in
connection with the existing Commitments. Any request under this Section shall
be submitted by Borrower to the Lenders through the Administrative Agent not
less than thirty (30) days prior to the proposed increase, specify the proposed
effective date and amount of such increase and be accompanied by a Certificate
signed by a Senior Officer of Borrower, stating that no Default or Event of
Default exists as of the date of the request or will result from the requested
increase. Borrower’s right under this Section 2.8 to increase the aggregate
Commitments shall terminate and be of no further effect if not exercised prior
to March 14, 2010. The consent of the Lenders, as such, shall not be required
for an increase in the amount of the Commitments pursuant to this Section; as
such, this Section shall supersede any provisions in Section 3.10, or 11.2 to
the contrary.

 

(b) Each Lender may approve or reject a request for an increase in the amount of
the Commitments in its sole and absolute discretion and, absent an affirmative
written response within ten (10) Banking Days after receipt of such request,
shall be deemed to have rejected the request. The rejection of such a request by
any number of Lenders shall not affect Borrower’s right to increase the
Commitments pursuant to this Section.

 

(c) In responding to a request under this Section, each Lender that is willing
to increase the amount of its Pro Rata Share of the increased Commitments shall
specify the amount of the proposed increase which it is willing to assume. Each
consenting Lender shall be entitled to participate ratably (based on its Pro
Rata Share of the Commitments before such increase) in any resulting increase in
the Commitments, subject to the right of the Administrative Agent to adjust
allocations of the increased Commitments so as to result in the amounts of the
Pro Rata Shares of the Lenders being in integral multiples of $100,000.

 

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(d) If the aggregate principal amount offered to be assumed by the consenting
Lenders is less than the amount requested, Borrower may (i) reject the proposed
increase in its entirety, (ii) accept the offered amounts or (iii) designate new
lenders who qualify as Eligible Assignees and which are reasonably acceptable to
the Administrative Agent as additional Lenders hereunder in accordance with
clause (f) of this Section (each, a “New Lender”), which New Lenders may assume
the amount of the increase in the Commitments that has not been assumed by the
consenting Lenders.

 

(e) After completion of the foregoing, the Administrative Agent shall give
written notification to the Lenders and any New Lenders of the increase to the
Commitments which shall thereupon become effective and in connection with such
notification the Administrative Agent will distribute to Borrower and the
Lenders a revised Schedule 1.1 reflecting the then applicable Pro Rata Shares of
the Lenders.

 

(f) Each New Lender shall become an additional party hereto as a Lender
concurrently with the effectiveness of the proposed increase in the Commitments
upon its execution of an instrument of joinder to this Agreement, which is in
form and substance reasonably acceptable to the Administrative Agent and which,
in any event, contains the representations, warranties, indemnities and other
protections afforded to the Administrative Agent and the other Lenders which
would be granted or made by an Eligible Assignee by means of the execution of an
Assignment and Acceptance.

 

(g) Subject to the foregoing, any increase to the Commitments requested under
this Section shall be effective as of the date proposed by Borrower and shall be
in the principal amount equal to (i) the amount which consenting Lenders are
willing to assume as increases to their respective Commitments plus (ii) the
amount offered by any New Lenders. Upon the effectiveness of any such increase,
each Borrowing outstanding shall be refinanced with new Advances reflecting the
adjusted Pro Rata Shares of the Lenders in the Facility if there is any change
thereto and Borrower shall:

 

(x) issue replacement Notes to each affected Lender and new Notes to each New
Lender (in each case, as may be requested by such Lender), and the percentage of
Pro Rata Shares of each Lender will be adjusted to give effect to the increase
in the Commitments;

 

(y) execute and deliver to the Administrative Agent such amendments to the Loan
Documents as the Administrative Agent may reasonably request relating to such
increase; and

 

(z) pay to the existing Lenders any breakage costs which are payable in
connection with the refinancing of any Borrowings in the manner contemplated by
Section 3.6.

 

2.9 Administrative Agent’s Right to Assume Funds Available for Advances. Unless
the Administrative Agent shall have been notified by any Lender no later than
10:00 a.m., California time, on the Banking Day of the proposed funding by the
Administrative Agent of any Borrowing, that such Lender does not intend to make
available

 

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to the Administrative Agent such Lender’s portion of the total amount of such
Borrowing, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on the date of the Borrowing and
the Administrative Agent may, in reliance upon such assumption, make available
to Borrower a corresponding amount. If the Administrative Agent has made funds
available to Borrower based on such assumption and such corresponding amount is
not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent promptly shall notify Borrower and Borrower shall pay such corresponding
amount to the Administrative Agent. The Administrative Agent also shall be
entitled to recover from such Lender interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the daily
Federal Funds Rate. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its commitments or to prejudice any rights which the
Administrative Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.

 

2.10 Collateral. The Obligations shall be secured by a first priority (subject
to Liens permitted by Section 6.7) perfected Lien on the Collateral pursuant to
the Collateral Documents.

 

2.11 Swing Line.

 

(a) The Swing Line Lender shall from time to time from the Closing Date through
the day prior to the Maturity Date make Swing Line Loans to Borrower in such
amounts as Borrower may request, provided that (i) after giving effect to such
Swing Line Loan, Facility Usage does not exceed the Maximum Facility Amount,
(ii) after giving effect to such Swing Line Loan, the Swing Line Outstandings do
not exceed $5,000,000 and/or (iii) without the consent of all of the Lenders, no
Swing Line Loan may be made during the continuation of a Default or Event of
Default if written notice of such Default or Event of Default shall have been
provided to the Swing Line Lender by the Administrative Agent or a Lender
sufficiently in advance of the making of such Swing Line Loan. Borrower may
borrow, repay and reborrow under this Section. Borrowings under the Swing Line
may be made (in minimum amounts to be agreed upon by Borrower and the Swing Line
Lender) upon telephonic request by a Responsible Official of Borrower made to
the Administrative Agent not later than 2:00 p.m., California time (or such
later time as the Swing Line Lender may agree), on the Banking Day of the
requested borrowing (which telephonic request shall be promptly confirmed in
writing by telecopier or electronic mail). Promptly after receipt of such a
request for borrowing, the Administrative Agent shall provide telephonic
verification to the Swing Line Lender that, after giving effect to such request,
availability for Borrowings will exist under Section 2.1(a) (and such
verification shall be promptly confirmed in writing by telecopier or electronic
mail). Each repayment of a Swing Line Loan shall be in an amount as may be
agreed between Borrower and the Swing Line Lender. Borrower

 

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shall notify the Swing Line Lender of its intention to make a repayment of a
Swing Line Loan not later than 1:00 p.m. California time (or such later time as
the Swing Line Lender may agree) on the date of repayment. If Borrower instructs
the Swing Line Lender to debit its demand deposit account at the Swing Line
Lender in the amount of any payment with respect to a Swing Line Loan, or the
Swing Line Lender otherwise receives repayment, after 3:00 p.m., California time
(or such later time as the Swing Line Lender may agree), on a Banking Day, such
payment shall be deemed received on the next Banking Day. The Swing Line Lender
shall promptly notify the Administrative Agent of the Swing Loan Outstandings
each time there is a change therein.

 

(b) Each request by Borrower for a Swing Line Loan shall be deemed to constitute
a representation and warranty by Borrower on the date of such request as to the
matters specified in Sections 8.2(a), (b), (c) and (d) and the Swing Line Lender
shall be entitled to rely upon such representation and warranty in making any
such requested Swing Line Loan.

 

(c) Swing Line Loans shall bear interest at a fluctuating rate per annum equal
to the Alternate Base Rate plus the Applicable Alternate Base Rate Margin.
Interest shall be payable on such dates, not more frequent than monthly, as may
be specified by the Swing Line Lender and in any event on the Maturity Date. The
Swing Line Lender shall be responsible for invoicing Borrower for such interest.
The interest payable on Swing Line Loans is solely for the account of the Swing
Line Lender (subject to subsection (e) below).

 

(d) Subject to subsection (e) below, the principal amount of all Swing Line
Loans shall be due and payable on the earlier of (i) the maturity date agreed to
by the Swing Line Lender and Borrower with respect to such loan (which maturity
date shall not be a date more than ten (10) consecutive days from the date of
advance thereof) or (ii) the Maturity Date.

 

(e) Upon the making of a Swing Line Loan, each Lender shall be deemed to have
purchased from the Swing Line Lender a participation therein in an amount equal
to that Lender’s Pro Rata Share of the Facility times the amount of the Swing
Line Loan. Upon demand made by the Swing Line Lender, each Lender shall,
according to its Pro Rata Share of the Facility, promptly provide to the Swing
Line Lender its purchase price therefor in an amount equal to its participation
therein. The obligation of each Lender to so provide its purchase price to the
Swing Line Lender shall be absolute and unconditional (except only demand made
by the Swing Line Lender) and shall not be affected by the occurrence of a
Default or Event of Default; provided that no Lender shall be obligated to
purchase its Pro Rata Share of (i) Swing Line Loans to the extent that, after
giving effect to such Swing Line Loan, Facility Usage exceeds the Maximum
Facility Amount, (ii) Swing Line Loans to the extent that, after giving effect
to such Swing Line Loan, Swing Line Outstandings exceed $5,000,000 and (iii) any
Swing Line Loan made (absent the consent of all of the Lenders) during the
continuation of a Default or Event of Default if written notice of such Default
or Event of Default shall have been provided to the Swing Line Lender

 

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by the Administrative Agent or a Lender sufficiently in advance of the making of
such Swing Line Loan. Each Lender that has provided to the Swing Line Lender the
purchase price due for its participation in Swing Line Loans shall thereupon
acquire a pro rata participation, to the extent of such payment, in the claim of
the Swing Line Lender against Borrower for principal and interest and shall
share, in accordance with that pro rata participation, in any principal payment
made by Borrower with respect to such claim and in any interest payment made by
Borrower (but only with respect to periods subsequent to the date such Lender
paid the Swing Line Lender its purchase price) with respect to such claim.

 

(f) In the event that any Swing Line Loan remains outstanding for ten
(10) consecutive days, then on the next Banking Day (unless Borrower has made
other arrangements acceptable to the Swing Line Lender to repay such Swing Line
Loan, in full), Borrower shall request a Borrowing pursuant to Section 2.1(a)
sufficient to repay the aggregate principal amount of such Swing Line Loan
together with any and all accrued and unpaid interest with respect thereto. In
each case, the Administrative Agent shall automatically provide the responsive
Advances made by each Lender to the Swing Line Lender (which the Swing Line
Lender shall then apply to the Swing Line Outstandings). In the event that
Borrower fails to request a Borrowing within the time specified by Section 2.2
on any such date, the Administrative Agent may, but is not required to, without
notice to or the consent of Borrower, cause Alternate Base Rate Advances to be
made by the Lenders under the Facility in amounts which are sufficient to reduce
the Swing Line Outstandings as required above. The proceeds of such Alternate
Base Rate Advances shall be paid directly to the Swing Line Lender for
application to the Swing Line Outstandings.

 

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Article 3.

PAYMENTS AND FEES

 

3.1 Principal and Interest.

 

(a) Interest shall be payable on the outstanding daily unpaid principal amount
of each Advance from the date thereof until payment in full is made and shall
accrue and be payable at the rates set forth or provided for herein before and
after Default, before and after maturity, before and after judgment, and before
and after the commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest at the Default Rate to the fullest extent permitted
by applicable Laws.

 

(b) Interest accrued on each Alternate Base Rate Advance through the end of each
calendar month shall be due and payable on the first Monthly Payment Date
following the end of such calendar month. Except as otherwise provided in
Section 3.7, the unpaid principal amount of any Alternate Base Rate Advance
shall bear interest at a fluctuating rate per annum equal to the Alternate Base
Rate plus the Applicable Alternate Base Rate Margin. Each change in the interest
rate under this Section 3.1(b) due to a change in the Alternate Base Rate shall
take effect simultaneously with the corresponding change in the Alternate Base
Rate.

 

(c) Interest accrued on each LIBOR Rate Advance which is for a term of three
months or less shall be due and payable on the last day of the related LIBOR
Period. Interest accrued on each other LIBOR Rate Advance shall be due and
payable on the date which is three months after the date such LIBOR Rate Advance
was made (and, in the event that all of the Lenders have approved a LIBOR Period
of longer than six months, every three months thereafter through the last day of
the LIBOR Period) and on the last day of the related LIBOR Period. Except as
otherwise provided in Section 3.7, the unpaid principal amount of any LIBOR Rate
Advance shall bear interest at a rate per annum equal to the LIBOR Rate for that
LIBOR Rate Advance plus the Applicable LIBOR Rate Margin.

 

(d) If not sooner paid, the principal Indebtedness evidenced by the Notes shall
be payable as follows:

 

(i) the amount, if any, by which the principal Indebtedness evidenced by the
Notes at any time exceeds the Maximum Facility Amount shall be payable
immediately; and

 

(ii) the principal Indebtedness evidenced by the Notes shall in any event be
payable on the Maturity Date for such Notes.

 

(e) The principal Indebtedness evidenced by the Notes may, at any time and from
time to time, voluntarily be paid or prepaid in whole or in part without premium
or penalty, except that with respect to any voluntary prepayment under this
subsection, (i) any partial prepayment shall be not less than $500,000 and shall
be an integral multiple of $100,000, (ii) each prepayment of principal on any
LIBOR Rate

 

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Advance shall be accompanied by payment of interest accrued to the date of
payment on the amount of principal paid, (iii) any payment or prepayment of all
or any part of any LIBOR Rate Advance on a day other than the last day of the
applicable LIBOR Period shall be subject to Section 3.6(e).

 

3.2 Unused Facility Commitment Fee. From the Closing Date through the Maturity
Date, Borrower shall pay to the Administrative Agent, for the ratable accounts
of the applicable Lenders in accordance with their respective Pro Rata Shares, a
commitment fee equal to the Applicable Commitment Fee Margin times the average
daily amount by which the Maximum Facility Amount exceeds Facility Usage. The
commitment fee shall be payable quarterly in arrears on each Quarterly Payment
Date.

 

3.3 Other Fees. Borrower shall pay to the Administrative Agent, fees in the
amounts and at the times specified in the letter agreement (the “Fee Letter”),
between Borrower and the Administrative Agent. Such fees shall be fully earned
when paid and shall be nonrefundable for any reason whatsoever.

 

3.4 Letter of Credit Fees. With respect to each Letter of Credit, Borrower shall
pay the following fees on each Monthly Payment Date:

 

(a) to the Lenders in accordance with their respective Pro Rata Shares of the
Commitments, a letter of credit fee in an amount equal to the product of the
Applicable Letter of Credit Fee Rate per annum during the calendar month
immediately preceding such Monthly Payment Date multiplied by the average
outstanding undrawn amount of all Letters of Credit during such calendar month;
and

 

(b) to the Issuing Lender for its own account, a fronting fee in an amount equal
to 0.125% (12.5 basis points) per annum multiplied by the average outstanding
undrawn amount of all Letters of Credit during such preceding calendar month.

 

In addition to the foregoing, in connection with a Letter of Credit and activity
relating thereto, Borrower also shall pay to the Issuing Lender, for the sole
account of Issuing Lender, amendment, transfer, issuance, negotiation and such
other fees as the Issuing Lender normally charges, in the amounts set forth from
time to time as the Issuing Lender’s published scheduled fees for such services.
Each of the fees payable with respect to Letters of Credit under this Section is
earned when due and is nonrefundable.

 

3.5 Increased Commitment Costs. If any Lender shall determine in good faith that
the introduction after the Closing Date of any applicable law, rule, regulation
or guideline regarding capital adequacy, or any change after the Closing Date
therein or any change after the Closing Date in the interpretation or
administration thereof by any central bank or other Governmental Agency charged
with the interpretation or administration thereof, or compliance by such Lender
(or its LIBOR Lending Office) or any corporation controlling such Lender, with
any request, guideline or directive regarding capital adequacy (whether or not
having the force of Law) of any such central bank or other authority not imposed
as a result of such Lender’s or such corporation’s failure to comply with any
other Laws, affects or

 

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would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy
and such Lender’s desired return on capital) determines in good faith that the
amount of such capital is increased, or the rate of return on capital is
reduced, as a consequence of its obligations under this Agreement, then, within
five (5) Banking Days after demand of such Lender, Borrower shall pay to such
Lender, from time to time as specified in good faith by such Lender, additional
amounts sufficient to compensate such Lender in light of such circumstances, to
the extent reasonably allocable to such obligations under this Agreement,
provided that Borrower shall not be obligated to pay any such amount which arose
prior to the date which is six months preceding the date of such demand or is
attributable to periods prior to the date which is six months preceding the date
of such demand. Each Lender’s determination of such amounts shall be conclusive
in the absence of manifest error.

 

3.6 LIBOR Costs and Related Matters.

 

(a) In the event that any Governmental Agency imposes on any Lender any reserve
or comparable requirement (including any emergency, supplemental or other
reserve) with respect to the Eurodollar Obligations of that Lender (other than
amounts that are reflected in the calculation of LIBOR), Borrower shall pay that
Lender within five (5) Banking Days after demand all amounts necessary to
compensate such Lender (determined as though such Lender’s LIBOR Lending Office
had funded 100% of its LIBOR Rate Advances in the Designated Eurodollar Market)
in respect of the imposition of such reserve requirements (provided that
Borrower shall not be obligated to pay any such amount which arose prior to the
date which is six months preceding the date of such demand or is attributable to
periods prior to the date which is six months preceding the date of such
demand). Any Lender’s determination of such amount shall be conclusive in the
absence of manifest error.

 

(b) If, after the date hereof, the existence or occurrence of any Special LIBOR
Circumstance:

 

(i) shall subject any Lender or its LIBOR Lending Office to any tax, duty or
other charge or cost with respect to any LIBOR Rate Advance, any of its Notes
evidencing LIBOR Rate Advances or its obligation to make LIBOR Rate Advances, or
shall change the basis of taxation of payments to any Lender attributable to the
principal of or interest on any LIBOR Rate Advance or any other amounts due
under this Agreement in respect of any LIBOR Rate Advance, any of its Notes
evidencing LIBOR Rate Advances or its obligation to make LIBOR Rate Advances,
excluding (A) taxes imposed on or measured in whole or in part by its overall
net income by (1) any jurisdiction (or political subdivision thereof) in which
it is organized or maintains its principal office or LIBOR Lending Office or
(2) any jurisdiction (or political subdivision thereof) in which it is “doing
business” and (B) any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with respect to which it
has failed to provide

 

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Borrower with the appropriate form or forms required by Section 11.21, to the
extent such forms are then required by applicable Laws;

 

(ii) shall impose, modify or deem applicable any reserve not applicable or
deemed applicable on the date hereof (including any reserve imposed by the Board
of Governors of the Federal Reserve System, special deposit, capital or similar
requirements against assets of, deposits with or for the account of, or credit
extended by, any Lender or its LIBOR Lending Office); or

 

(iii) shall impose on any Lender or its LIBOR Lending Office or the Designated
Eurodollar Market any other condition affecting any LIBOR Rate Advance, any of
its Notes evidencing LIBOR Rate Advances, its obligation to make LIBOR Rate
Advances or this Agreement, or shall otherwise affect any of the same;

 

and the result of any of the foregoing, as determined in good faith by such
Lender, increases the cost to such Lender or its LIBOR Lending Office of making
or maintaining any LIBOR Rate Advance or in respect of any LIBOR Rate Advance,
any of its Notes evidencing LIBOR Rate Advances or its obligation to make LIBOR
Rate Advances or reduces the amount of any sum received or receivable by such
Lender or its LIBOR Lending Office with respect to any LIBOR Rate Advance, any
of its Notes evidencing LIBOR Rate Advances or its obligation to make LIBOR Rate
Advances (assuming such Lender’s LIBOR Lending Office had funded 100% of its
LIBOR Rate Advances in the Designated Eurodollar Market), then, within five (5)
Banking Days after demand by such Lender (with a copy to the Administrative
Agent), Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction (determined as
though such Lender’s LIBOR Lending Office had funded 100% of its LIBOR Rate
Advances in the Designated Eurodollar Market); provided that Borrower shall not
be obligated to pay any such amount which arose prior to the date which is six
months preceding the date of such demand or is attributable to periods prior to
the date which is six months preceding the date of such demand. A statement of
any Lender claiming compensation under this subsection shall be conclusive in
the absence of manifest error.

 

(c) If, after the date hereof, the existence or occurrence of any Special LIBOR
Circumstance shall, in the good faith opinion of any Lender, make it unlawful or
impossible for such Lender or its LIBOR Lending Office to make, maintain or fund
its portion of any Borrowing consisting of LIBOR Rate Advances, or materially
restrict the authority of such Lender to purchase or sell, or to take deposits
of, Dollars in the Designated Eurodollar Market, or to determine or charge
interest rates based upon the LIBOR Rate, then such Lender’s obligation to make
LIBOR Rate Advances shall be suspended for the duration of such illegality or
impossibility and replaced with an obligation to make Alternate Base Rate
Advances and the Administrative Agent forthwith shall give notice thereof to the
other Lenders and Borrower. Upon receipt of such notice, the outstanding
principal amount of such

 

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Lender’s affected LIBOR Rate Advances, together with accrued interest thereon,
automatically shall be converted to Alternate Base Rate Advances on either
(i) the last day of the LIBOR Period(s) applicable to such LIBOR Rate Advances
if such Lender may lawfully continue to maintain and fund such LIBOR Rate
Advances to such day(s) or (ii) immediately if such Lender may not lawfully
continue to fund and maintain such LIBOR Rate Advances to such day(s), provided
that in such event the conversion shall not be subject to payment of a
prepayment fee under Section 3.6(e). Each Lender agrees to endeavor promptly to
notify Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will cause such Lender to notify Borrower as set forth
in the first sentence of this Section, and agrees to designate a different LIBOR
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. In the event that any Lender is unable, for the
reasons set forth above, to make, maintain or fund any LIBOR Rate Advance, such
Lender shall fund such LIBOR Rate Advance as an Alternate Base Rate Advance for
the same period of time, and such amount shall be treated in all respects as an
Alternate Base Rate Advance. In the event that any Lender’s obligation to make
LIBOR Rate Advances has been suspended under this Section, such Lender shall
promptly notify the Administrative Agent and Borrower of the cessation of the
Special LIBOR Circumstance which gave rise to such suspension.

 

(d) If, with respect to any proposed Borrowing comprised of LIBOR Rate Advances:

 

(i) the Administrative Agent reasonably determines that, by reason of
circumstances affecting the Designated Eurodollar Market generally that are
beyond the reasonable control of the Lenders, deposits in Dollars (in the
applicable amounts) are not being offered to any Lender in the Designated
Eurodollar Market for the applicable LIBOR Period; or

 

(ii) the Required Lenders advise the Administrative Agent that the LIBOR Rate as
determined by the Administrative Agent (A) does not represent the effective
pricing to such Lenders for deposits in Dollars in the Designated Eurodollar
Market in the relevant amount for the applicable LIBOR Period, or (B) will not
adequately and fairly reflect the cost to such Lenders of making the applicable
LIBOR Rate Advances;

 

then the Administrative Agent forthwith shall give notice thereof to Borrower
and the Lenders, whereupon until the Administrative Agent notifies Borrower that
the circumstances giving rise to such suspension no longer exist, the obligation
of the Lenders to make any future LIBOR Rate Advances shall be suspended.

 

(e) Upon payment or prepayment of any LIBOR Rate Advance (other than as the
result of a conversion required under Section 3.6(c)) on a day other than the
last day in the applicable LIBOR Period (whether voluntarily, involuntarily, by
reason of acceleration, or otherwise), or upon the failure of Borrower (for a
reason other than (i) the breach by a Lender of its obligation pursuant to
Section 2.1(a) or (ii)

 

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as a result of the application of Section 3.6(d)) to borrow on the date or in
the amount specified for a Borrowing comprised of LIBOR Rate Advances in any
Request for Borrowing, Borrower shall pay to the appropriate Lender within
five (5) Banking Days after demand a prepayment fee or failure to borrow fee, as
the case may be (determined as though 100% of the LIBOR Rate Advance had been
funded in the Designated Eurodollar Market) equal to the sum of:

 

(1) the amount, if any, by which (i) the additional interest would have accrued
on the amount prepaid or not borrowed at the LIBOR Rate plus the Applicable
LIBOR Rate Margin if that amount had remained or been outstanding through the
last day of the applicable LIBOR Period exceeds (ii) the interest that such
Lender could recover by placing such amount on deposit in the Designated
Eurodollar Market for a period beginning on the date of the prepayment or
failure to borrow and ending on the last day of the applicable LIBOR Period (or,
if no deposit rate quotation is available for such period, for the most
comparable period for which a deposit rate quotation may be obtained); plus

 

(2) all out-of-pocket expenses incurred by such Lender reasonably attributable
to such payment, prepayment or failure to borrow.

 

Each Lender’s determination of the amount of any prepayment fee payable under
this Section shall be conclusive in the absence of manifest error.

 

(f) Each Lender agrees to endeavor promptly to notify Borrower of any event of
which it has actual knowledge, occurring after the Closing Date, which will
entitle such Lender to compensation pursuant to clause (a) or clause (b) of this
Section, and agrees to designate a different LIBOR Lending Office if such
designation will avoid the need for or reduce the amount of such compensation
and will not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. Any request for compensation by a Lender under
this Section shall set forth the basis upon which it has been determined that
such an amount is due from Borrower, a calculation of the amount due, and a
certification that the corresponding costs have been incurred by such Lender.

 

3.7 Late Payments and Default Rate. If any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Lender is not paid when due, it shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
sum of the interest rate otherwise applicable thereto hereunder (or, if no
interest rate is otherwise applicable thereto hereunder, the Alternate Base
Rate) plus 2.00% (the “Default Rate”), to the fullest extent permitted by
applicable Laws. While any Event of Default exists or after acceleration, at the
option of the Required Lenders, Borrower shall pay interest (after as well as
before entry of judgment thereon to the extent permitted by Law) on the
principal amount of all outstanding Obligations, at the Default Rate, to the
fullest extent permitted by Law. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be compounded monthly, on the
last day of each calendar month, to the fullest extent permitted by applicable
Laws.

 

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3.8 Computation of Interest and Fees. Computation of interest and fees under
this Agreement shall be calculated on the basis of a year of 360 days (365 days
in the case of Alternate Base Rate Loans) and the actual number of days elapsed.
Interest shall accrue on each Advance for the day on which the Advance is made;
interest shall not accrue on an Advance, or any portion thereof, for the day on
which the Advance or such portion is paid. Any Advance that is repaid on the
same day on which it is made shall bear interest for one day. Notwithstanding
anything in this Agreement to the contrary, interest in excess of the maximum
amount permitted by applicable Laws shall not accrue or be payable hereunder or
under the Notes, and any amount paid as interest hereunder or under the Notes
which would otherwise be in excess of such maximum permitted amount shall
instead be treated as a payment of principal.

 

3.9 Non-Banking Days. If any payment to be made by Borrower or any other Party
under any Loan Document shall come due on a day other than a Banking Day,
payment shall, except as otherwise provided in the definition of LIBOR Period,
instead be considered due on the next succeeding Banking Day and the extension
of time shall be reflected in computing interest and fees.

 

3.10 Manner and Treatment of Payments.

 

(a) Each payment hereunder or on the Notes or under any other Loan Document
shall be made by Borrower to the Administrative Agent at the Administrative
Agent’s Office, in immediately available funds not later than 11:00 a.m.
California time, on the day of payment (which must be a Banking Day). All
payments received after such time, on any Banking Day, shall be deemed received
on the next succeeding Banking Day. The amount of all payments received by the
Administrative Agent for the account of each Lender shall be immediately paid by
the Administrative Agent to the applicable Lender in immediately available funds
and, if such payment was received by the Administrative Agent by 11:00 a.m.,
California time, on a Banking Day and not so made available to the account of a
Lender on that Banking Day, the Administrative Agent shall reimburse that Lender
for the cost to such Lender of funding the amount of such payment at the Federal
Funds Rate. All payments shall be made in lawful money of the United States of
America.

 

(b) Borrower hereby authorizes the Administrative Agent to debit the Designated
Deposit Account of Borrower to effect any payment due to the Lenders or the
Administrative Agent pursuant to this Agreement. Any resulting overdraft in the
Designated Deposit Account shall be payable by Borrower to the Administrative
Agent on the next following Banking Day.

 

(c) Each payment or prepayment on account of any Borrowing shall be applied pro
rata according to the outstanding Advances made by each Lender comprising such
Borrowing.

 

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(d) Each Lender shall use commercially reasonable efforts to keep a record (in
writing or by an electronic data entry system) of Advances made by it and
payments received by it with respect to each of its Notes and, subject to
Section 10.6(g), such record shall, as against Borrower, be presumptive evidence
of the amounts owing. Notwithstanding the foregoing sentence, the failure by any
Lender to keep such a record shall not affect Borrower’s obligation to pay the
Obligations.

 

(e) Each payment of any amount payable by Borrower or any other Party to any
Lender under this Agreement or any other Loan Document shall be made free and
clear of, and without reduction by reason of, any taxes, assessments or other
charges imposed by any Governmental Agency, central bank or comparable
authority, excluding (i) taxes imposed on or measured in whole or in part by its
overall net income and franchise taxes imposed in lieu of net income taxes by
(A) any jurisdiction (or political subdivision thereof) in which it is organized
or maintains its principal office or LIBOR Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is “doing business”
and (ii) any withholding taxes or other taxes based on gross income imposed by
the United States of America for any period with respect to which it has failed
to provide Borrower with the appropriate form or forms required by
Section 11.21, to the extent such forms are then required by applicable Laws
(all such non-excluded taxes, assessments or other charges being hereinafter
referred to as “Taxes”). To the extent that Borrower is obligated by applicable
Laws to make any deduction or withholding on account of Taxes from any amount
payable to any Lender under this Agreement, Borrower shall (1) make such
deduction or withholding and pay the same to the relevant Governmental Agency
and (2) pay such additional amount to that Lender as is necessary to result in
that Lender’s receiving a net after-Tax amount equal to the amount to which that
Lender would have been entitled under this Agreement absent such deduction or
withholding. If and when receipt of such payment results in an excess payment or
credit to that Lender on account of such Taxes, that Lender shall promptly
refund such excess to Borrower.

 

3.11 Funding Sources. Nothing in this Agreement shall be deemed to obligate any
Lender to obtain the funds for any Advance in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will obtain
the funds for any Advance in any particular place or manner.

 

3.12 Failure to Charge Not Subsequent Waiver. Any decision by the Administrative
Agent or any Lender not to require payment of any interest (including default
interest arising under Section 3.7), fee, cost or other amount payable under any
Loan Document, or to calculate any amount payable by a particular method, on any
occasion shall in no way limit or be deemed a waiver of the Administrative
Agent’s or such Lender’s right to require full payment of any interest
(including default interest arising under Section 3.7), fee, cost or other
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.

 

3.13 Administrative Agent’s Right to Assume Payments Will be Made. Unless the
Administrative Agent shall have been notified by Borrower prior to the date on

 

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which any payment to be made by Borrower hereunder is due that Borrower does not
intend to remit such payment (or otherwise cause sufficient funds to be
available in the Designated Deposit Account for debit pursuant to
Section 3.10(b)), the Administrative Agent may, in its discretion, assume that
Borrower has remitted such payment (or caused funds sufficient to make such
payment to be available) when so due and the Administrative Agent may, in its
discretion and in reliance upon such assumption, make available to each Lender
on such payment date, an amount equal to such Lender’s share of such assumed
payment. If Borrower has not in fact remitted such payment (or caused funds
sufficient to make such payment to be available) to the Administrative Agent,
each Lender shall forthwith on demand repay to the Administrative Agent the
amount of such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent at the Federal Funds Rate.

 

3.14 Fee Determination Detail. The Administrative Agent, and any Lender, shall
provide reasonable detail to Borrower regarding the manner in which the amount
of any payment to the Administrative Agent and the Lenders, or that Lender,
under Article 3 has been determined, concurrently with demand for such payment.

 

3.15 Survivability. All of Borrower’s obligations under Sections 3.4 and 3.5
shall survive for the six month period following the Termination Date, and
Borrower shall remain obligated thereunder for all claims under such Sections
made by any Lender to Borrower prior to the expiration of such period.

 

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Article 4.

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to the Administrative Agent and each of the
Lenders on each date the representations and warranties are made pursuant to
this Agreement that:

 

4.1 Existence and Qualification; Power; Compliance With Laws. Borrower is a
corporation duly formed, validly existing and in good standing under the Laws of
the State of California and is duly qualified or registered to transact business
and is in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes such qualification
or registration necessary, except where the failure so to qualify or register
and to be in good standing would not constitute a Material Adverse Effect.
Borrower, has all requisite power and authority to conduct its business, to own
and lease its Properties and to execute and deliver each Loan Document to which
it is a Party and to perform its Obligations. The chief executive office of
Borrower is located in Pomona, California. All outstanding capital stock of
Borrower, is duly authorized, validly issued, fully paid and non-assessable, and
no holder thereof has any enforceable right of rescission under any applicable
state or federal securities or other Laws. Borrower is in compliance with all
Laws and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to
comply with Laws and other legal requirements applicable to its business, obtain
authorizations, etc., file, register, qualify or obtain exemptions does not
constitute a Material Adverse Effect.

 

4.2 Authority; Compliance With Other Agreements and Instruments and Government
Regulations. The execution, delivery and performance by Borrower and the other
Obligors of the Loan Documents to which it is a Party have been duly authorized
by all necessary corporate or company action, as applicable, and do not and will
not:

 

(a) Require any consent or approval not heretofore obtained of any partner,
director, stockholder, member, security holder or creditor, as applicable, of
such Party;

 

(b) Violate or conflict with any provision of such Party’s charter, articles of
incorporation, bylaws, articles or certificate of organization, operating
agreement, or other organizational documents, as applicable;

 

(c) Result in or require the creation or imposition of any Lien (other than
pursuant to the Loan Documents) or Right of Others upon or with respect to any
Property now owned or leased or hereafter acquired by such Party;

 

(d) Violate any Requirement of Law applicable to such Party in any material
respect;

 

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(e) Result in a breach of or constitute a default under, or cause or permit the
acceleration of any obligation owed under, any material indenture or loan or
credit agreement or any other material Contractual Obligation to which such
Party is a party or by which such Party or any of its Property is bound or
affected;

 

and such Party is not in violation of, or default under, any Requirement of Law
or Contractual Obligation, or any indenture, loan or credit agreement described
in Section 4.2(e), in any respect that constitutes a Material Adverse Effect.

 

4.3 No Governmental Approvals Required. Except as previously obtained or made,
no authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is or will be
required to authorize or permit under applicable Laws the execution, delivery
and performance by Borrower or any other Obligor of the Loan Documents to which
it is a Party.

 

4.4 Subsidiaries.

 

(a) As of the date hereof, Schedule 4.4 hereto correctly sets forth the names,
form of legal entity, number of shares of capital stock or membership or other
equity interests, as applicable, issued and outstanding, number of shares of
capital stock or membership or other equity interests, as applicable, owned by
Borrower or any Subsidiary of Borrower (specifying such owner) and jurisdictions
of organization of all Subsidiaries of Borrower. As of the date hereof, except
as described in Schedule 4.4, Borrower does not own any capital stock,
membership interest, other equity interest or debt security which is
convertible, or exchangeable, for capital stock, membership interests or other
equity interests in any Person. As of the date hereof, unless otherwise
indicated in Schedule 4.4, all of the outstanding shares of capital stock, all
of the outstanding membership interests or all of the units of other equity
interest, as the case may be, of each Subsidiary are owned of record and
beneficially by Borrower in the percentages set forth in Schedule 4.4, there are
no outstanding options, warrants or other rights to purchase capital stock of
any such Subsidiary, and all such shares, membership interests or other equity
interests so owned are duly authorized, validly issued, fully paid and
non-assessable, and were issued in compliance with all applicable state and
federal securities and other Laws, and are free and clear of all Liens, except
for Permitted Encumbrances and other encumbrances permitted pursuant to
Section 6.7.

 

(b) Each Subsidiary is a corporation, partnership, limited liability company or
other legal entity duly formed, validly existing and, if such concept is legally
recognized in such Subsidiary’s jurisdiction of organization, in “good standing”
under the Laws of its jurisdiction of organization, is duly qualified to do
business as a foreign organization and, if such concept is legally recognized in
any applicable jurisdiction, is in “good standing” as such in each jurisdiction
in which the conduct of its business or the ownership or leasing of its
Properties makes such qualification necessary (except where the failure to be so
duly qualified and in good standing does not constitute a Material Adverse
Effect), and has all requisite power and authority to conduct its business and
to own and lease its Properties.

 

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(c) Each Subsidiary is in compliance with all Laws and other requirements
applicable to its business and has obtained all authorizations, consents,
approvals, orders, licenses, and permits from, and each such Subsidiary has
accomplished all filings, registrations, and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure to be in
such compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, does not constitute a Material
Adverse Effect.

 

4.5 Financial Statements. Borrower has furnished to the Lenders the consolidated
financial statements of Borrower and its Subsidiaries for the Fiscal Year ended
April 1, 2005, audited by Borrower’s independent certified public accountants.
The financial statements described above fairly present the financial condition,
results of operations and changes in financial position of Borrower and its
Subsidiaries, as of such date and for such period in conformity with GAAP
consistently applied.

 

4.6 No Other Liabilities; No Material Adverse Changes. Borrower and its
Subsidiaries do not have any material liability or material contingent liability
required to be reflected or disclosed, and not reflected or disclosed, in the
consolidated financial statements described in Section 4.5, other than
liabilities and contingent liabilities (i) arising in the ordinary course of
business since the date of such balance sheet or (ii) permitted pursuant to this
Agreement. As of the Closing Date, no circumstance or event has occurred that
constitutes a Material Adverse Effect since April 1, 2005.

 

4.7 Title to and Location of Property. Borrower and its Subsidiaries have valid
title to the material Property (other than assets which are the subject of a
Capital Lease Obligation) reflected in the consolidated financial statements
described in Section 4.5, other than items of Property or exceptions to title
which are in each case immaterial and Property subsequently sold or disposed of
in the ordinary course of business. Such Property is free and clear of all Liens
and Rights of Others, other than Liens or Rights of Others described in
Schedule 4.7A and Permitted Encumbrances, other encumbrances permitted pursuant
to Section 6.7, and Permitted Rights of Others. As of the Closing Date, all
Property of Borrower and its Subsidiaries is located at one of the locations
described in Schedule 4.7B, which schedule sets forth (a) all office, warehouse
and manufacturing and other space of Borrower and its Subsidiaries where any
Property of Borrower and its Subsidiaries is located and (b) all deposit
(whether a demand, time, savings, passbook or similar account) and investment
accounts of Borrower, identifying such account by account number, type, location
of depositary institution and applicable owner thereof.

 

4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess, the right
to use to the extent necessary in their respective businesses, all material
trademarks, trade names, copyrights, patents, patent rights, computer software,
licenses and other Intangible Assets that are used in the conduct of their
respective businesses as now operated, and no such Intangible Asset, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person. Except
as described in Schedule 4.8 with respect to Property owed by Borrower and its

 

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Subsidiaries as of the Closing Date or as hereafter disclosed by Borrower to the
Administrative Agent (in writing) with respect to Property acquired by Borrower
or any Subsidiary after the Closing Date, in the enforcement of its rights as a
secured creditor, the Administrative Agent (or any applicable Lender) will not
be required to own or otherwise possess the right to use any patent, trademark
or other intellectual property, or any license to use the same, in order to sell
any inventory of Borrower or any Subsidiary after the occurrence of an Event of
Default. Schedule 4.8 sets forth all patents, patent applications, trademarks,
trade names and trade styles used by Borrower and its Subsidiaries at any time
within the five (5) year period ending on the Closing Date.

 

4.9 Public Utility Holding Company Act. None of Borrower or any of the other
Obligors is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

4.10 Litigation. Except for (a) any matter fully covered as to subject matter
and amount (subject to applicable deductibles and retentions) by insurance for
which the insurance carrier has not asserted lack of subject matter coverage or
reserved its right to do so, (b) any matter, or series of related matters,
involving a claim against Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, (c) matters of an
administrative nature not involving a claim or charge against Borrower or any
Subsidiary of Borrower and (d) matters set forth in Schedule 4.10, there are no
actions, suits, proceedings or investigations pending as to which Borrower or
any of its Subsidiaries have been served or have received notice or, to the best
knowledge of Borrower threatened against or affecting Borrower or any of its
Subsidiaries or any Property of any of them before any Governmental Agency. None
of Borrower, its Subsidiaries, or, to the best knowledge of Borrower, any
executive officer of any such Persons has been indicted or convicted in
connection with or is engaging in any criminal conduct which constitutes a
felony, or is currently subject to any lawsuit or proceeding or, to the best of
Borrower’s knowledge, under investigation in connection with any
anti-racketeering or criminal conduct or activity which constitutes a felony.

 

4.11 Binding Obligations. Each of the Loan Documents to which Borrower and any
of the other Obligors is a Party will, when executed and delivered by such
Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.

 

4.12 No Default. No event has occurred and is continuing that is a Default or
Event of Default. None of Borrower or any of its Subsidiaries is in default on
any obligation for borrowed money, any purchase money obligation or any other
lease, commitment, contract, instrument or obligation which could reasonably be
expected to have a Material Adverse Effect.

 

4.13 ERISA. Borrower and its Subsidiaries are in compliance in all material
respects with all applicable provisions of ERISA; neither Borrower nor any of
its Subsidiaries

 

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has violated any provision of any defined employee pension benefit plan (as
defined in ERISA) maintained or contributed to by Borrower or its Subsidiaries
(each, a “Plan”); no Reportable Event as defined in ERISA has occurred and is
continuing with respect to any Plan initiated by Borrower or its Subsidiaries;
Borrower and its Subsidiaries have met their minimum funding requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as they come due in accordance with the Plan documents and
under GAAP, except, in each case, where it could not reasonably be expected to
have a Material Adverse Effect.

 

4.14 Regulation U; Investment Company Act. No part of the proceeds of any
Advance hereunder will be used to purchase or carry, or to extend credit to
others for the purpose of purchasing or carrying, any Margin Stock in violation
of Regulation U. Neither Borrower nor any of the other Obligors is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

4.15 Disclosure. No written statement made by a Senior Officer of Borrower or
any other Obligor to the Administrative Agent or any Lender pursuant to this
Agreement, or in connection with any Advance, as of the date thereof contained
any untrue statement of a material fact or omitted a material fact necessary to
make the statement made not materially misleading in light of all the
circumstances existing at the date the statement was made.

 

4.16 Tax Liability. Borrower and the other Obligors have filed all tax returns
which are required to be filed, and have paid, or made provision for the payment
of, all taxes with respect to the periods, Property or transactions covered by
said returns, or pursuant to any assessment received by Borrower or any of its
Subsidiaries, except (a) such taxes, if any, as are being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
established and maintained and (b) immaterial taxes so long as no material
Property of Borrower or any Subsidiary is at impending risk of being seized,
levied upon or forfeited.

 

4.17 Hazardous Materials. Except as described in Schedule 4.17 (a) neither
Borrower nor any of the other Obligors at any time has disposed of, discharged,
released or threatened the release of any Hazardous Materials on, from or under
the Real Property in violation of any Hazardous Materials Law that would
individually or in the aggregate constitute a Material Adverse Effect, (b) no
condition exists that violates any Hazardous Material Law affecting any Real
Property except for such violations that would not individually or in the
aggregate constitute a Material Adverse Effect, (c) no Real Property or any
portion thereof is or has been utilized by any Borrower or any Subsidiary as a
site for the manufacture of any Hazardous Materials and (d) to the extent that
any Hazardous Materials are used, generated or stored by Borrower or any
Subsidiary on any Real Property, or transported to or from such Real Property by
Borrower, or any Subsidiary, such use, generation, storage and transportation
are in compliance in all material respects with all Hazardous Materials Laws.

 

4.18 Security Interests. Upon the execution and delivery of the Security
Agreement, the Security Agreement will create a valid security interest in the
Collateral

 

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described therein securing the Obligations (subject only to Permitted
Encumbrances, Permitted Rights of Others and other matters permitted by
Section 6.7 and to such qualifications and exceptions as are contained in the
UCC with respect to the priority of security interests perfected by means other
than the filing of a financing statement or with respect to the creation of
security interests in Property to which Division 9 of the UCC does not apply)
and all actions necessary to perfect the security interests so created, other
than filing of the UCC-1 financing statements delivered to the Administrative
Agent pursuant to Section 8.1 with the appropriate Governmental Agency, have
been taken and completed. Upon the execution and delivery of any control account
agreement by the depositary institution party thereto and the Borrower or any
applicable Subsidiary, such control account agreement will create a valid
security interest in the Collateral described therein (subject only to Liens
permitted by the terms of such control account agreement and Liens permitted by
Section 6.7) securing the Obligations and all actions necessary to perfect the
security interests so created will have been taken and completed.

 

4.19 Employee Matters. There is no strike, work stoppage or labor dispute with
any union or group of employees pending or, to the best knowledge of Borrower
overtly threatened involving Borrower or any Subsidiary that would constitute a
Material Adverse Effect.

 

4.20 Fiscal Periods. Schedule 4.20 contains a designation of the Fiscal Quarter
and Fiscal Year periods of Borrower and its Subsidiaries through and including
Fiscal Year 2011.

 

4.21 Solvency. After giving effect to this Agreement and the other Loan
Documents (including after giving effect to Advances under this Agreement as of
the Closing Date), Borrower and each of its Subsidiaries shall be Solvent.

 

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Article 5.

AFFIRMATIVE COVENANTS

(OTHER THAN INFORMATION AND

REPORTING REQUIREMENTS)

 

So long as any Advance remains unpaid, or any other Obligation (other than
Unmatured Surviving Obligations) remains unpaid, or any portion of any of the
Commitments remains in force, Borrower shall, and shall cause each of the
Subsidiaries to, unless the Administrative Agent (with the written approval of
the Required Lenders) otherwise consents:

 

5.1 Payment of Obligations. Punctually pay all principal, interest, fees or
other Obligations due under any of the Loan Documents at the times and place and
in the manner specified therein, and Borrower shall, immediately upon demand by
the Administrative Agent, pay the amount by which the outstanding principal
balance of any credit subject hereto at any time exceeds any limitation on
borrowings applicable thereto.

 

5.2 Payment of Taxes and Other Potential Liens. Pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon any of them,
upon their respective Property or any part thereof and upon their respective
income or profits or any part thereof, except that Borrower and its Subsidiaries
shall not be required to pay or cause to be paid (a) any tax, assessment, charge
or levy that is not yet past due, or is being contested in good faith by
appropriate proceedings so long as the relevant entity has established and
maintains adequate reserves for the payment of the same or (b) any immaterial
tax so long as no material Property of Borrower or any Subsidiary thereof is at
impending risk of being seized, levied upon or forfeited.

 

5.3 Preservation of Existence. Preserve and maintain their respective existences
(except as permitted by Section 6.3) in the jurisdiction of their formation and
all material authorizations, rights, franchises, privileges, consents,
approvals, orders, licenses, permits, or registrations from any Governmental
Agency that are necessary for the transaction of their respective business and
qualify and remain qualified to transact business in each jurisdiction in which
such qualification is necessary in view of their respective business or the
ownership or leasing of their respective Properties except where the failure to
so qualify or remain qualified would not constitute a Material Adverse Effect.

 

5.4 Maintenance of Properties. Maintain, preserve and protect all of their
respective Properties in good order and condition, subject to wear and tear in
the ordinary course of business, and not permit any waste of their respective
Properties, except (i) that the failure to maintain, preserve and protect a
particular item of Property that is at the end of its useful life or that is not
of significant value, either intrinsically or to the operations of Borrower or
any of its Subsidiaries, shall not constitute a violation of this covenant, and
(ii) this covenant shall not be construed to prohibit any Disposition otherwise
permitted pursuant to Section 6.4.

 

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5.5 Maintenance of Insurance.

 

(a) Maintain insurance on all insurable tangible Property against fire, casualty
and such other hazards (including extended coverage and workmen’s compensation)
in such amounts, with such deductibles and with such insurers (rated “A” or
better by “A.M. Best’s Insurance Reports”) as are customarily used by companies
operating in the same industry as Borrower and its Subsidiaries and acceptable
to the Administrative Agent. Prior to the Closing Date, Borrower shall furnish
the Administrative Agent with a schedule of all such insurance prepared by their
insurance broker, and certificates of insurance with respect thereto (including
the text of the lender’s loss payable clause in favor of the Administrative
Agent required below), or such other evidence of insurance as the Administrative
Agent may reasonably require. Within five (5) Banking Days of written request
therefor, Borrower shall furnish to Administrative Agent copies of each policy
of insurance so requested. In the event Borrower fails to procure or cause to be
procured any such insurance or to timely pay or cause to be paid the premium(s)
on any such insurance, the Administrative Agent may do so for Borrower but
Borrower shall continue to be liable for the same. All casualty insurance
policies shall contain standard lender’s loss payable clauses issued in favor of
the Administrative Agent (on behalf of the Lenders) indicating that the
Administrative Agent is sole lender loss payee, under which all losses
thereunder shall be paid to the Administrative Agent (on behalf of the Lenders)
as the Administrative Agent’s interest may appear. Such policies shall expressly
provide that the requisite insurance cannot be canceled without thirty (30) days
prior written notice to the Administrative Agent and shall insure the
Administrative Agent notwithstanding the act or neglect of Borrower or any of
its Subsidiaries. Borrower hereby appoints the Administrative Agent as its
attorney-in-fact, exercisable at the Administrative Agent’s option only during
the occurrence and continuance of an Event of Default, and only to the extent
the Obligations (other than Unmatured Surviving Obligations) are outstanding, to
endorse any check which may be payable to Borrower and to file proofs of loss
with respect to any insurance claims, in order to collect the proceeds of such
insurance and any amount or amounts collected by the Administrative Agent
pursuant to the provisions of this paragraph may be applied by the
Administrative Agent to the Obligations. Borrower further covenants that all
insurance premiums due and owing under its current casualty policies have been
paid. Borrower also agrees to notify the Administrative Agent, promptly, upon
any receipt of a notice of termination, cancellation, or non-renewal from its
insurance company of any such policy.

 

(b) Maintain, and deliver to the Administrative Agent upon the Administrative
Agent’s request evidence of, public liability, products liability and business
interruption insurance in such amounts as are reasonably acceptable to the
Administrative Agent, but in any event not more than are customary for companies
in the same or similar businesses located in the same or similar area. The
Administrative Agent (on behalf of the Lenders) shall be named as additional
insured with respect to all such liability insurance. The foregoing insurance
shall be obtained from such insurers (rated “A” or better by “A.M. Best’s
Insurance Reports”) as are customarily

 

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used by companies operating in the same industry as Borrower and its
Subsidiaries or reasonably acceptable to the Administrative Agent.

 

5.6 Compliance With Laws. Comply with all Requirements of Law noncompliance with
which constitutes a Material Adverse Effect.

 

5.7 Inspection and Appraisal Rights.

 

(a) Inspection Rights. Upon reasonable notice, at any time during regular
business hours and, so long as no Event of Default shall have occurred and
remain in effect, on no more than one occasion within each Fiscal Year during
the period from the Closing Date through the Termination Date, as requested by
the Administrative Agent (but not so as to materially interfere with the
business of Borrower or any of its Subsidiaries) permit the Administrative
Agent, or any Lender, or any authorized employee, agent or representative
thereof, at Borrower’s reasonable expense, to examine and make copies and
abstracts from the records and books of account of (including any software or CD
ROM programs relating thereto) Borrower and its Subsidiaries and to discuss the
affairs, finances and accounts of Borrower and its Subsidiaries with any of
their officers, key employees or accountants and, upon request, furnish promptly
to the Administrative Agent or any Lender true copies of all financial
information made available to the board of directors or audit committee of the
board of directors of Borrower. If any of the books or records of Borrower or
any of its Subsidiaries are in the possession of a third party, Borrower
authorizes that third party to permit the Administrative Agent or any Lender or
any agents thereof to have access to perform inspections or audits and to
respond to the Administrative Agent’s or any Lender’s request for information
concerning such Properties, books and records. Notwithstanding the foregoing, no
prior notice of any such examination, visit or discussion shall be required if
an Event of Default has occurred and remains in effect.

 

(b) Appraisal Rights. Upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent, or any Lender, or any authorized employee,
agent or representative thereof, shall have the right to conduct periodic
inventory appraisals and to visit and inspect the Properties of Borrower and its
Subsidiaries, all at Borrower’s reasonable expense. No prior notice of any such
appraisal, visit or inspection shall be required.

 

5.8 Keeping of Records and Books of Account. Keep adequate records and books of
account reflecting all financial transactions in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over
Borrower and its Subsidiaries.

 

5.9 Compliance With Agreements. Promptly and fully comply with all Contractual
Obligations to which any one or more of them is a party, except for (a) any such
Contractual Obligations (i) the performance of which would cause a Default or
(ii) then being contested by any of them in good faith by appropriate
proceedings or (b) any such noncompliance that could not reasonably be expected
to result in a Material Adverse Effect.

 

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5.10 Use of Proceeds. Use the proceeds of all Advances (a) for the issuance of
Letters of Credit and (b) to provide for the working capital and general
corporate purpose needs of Borrower and its Subsidiaries (including to finance
Permitted Acquisitions).

 

5.11 Hazardous Materials Laws. Keep and maintain all Real Property and each
portion thereof in compliance in all material respects with all applicable
Hazardous Materials Laws and promptly notify the Administrative Agent in writing
(attaching a copy of any pertinent written material) of (a) any and all material
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing by a Governmental Agency pursuant
to any applicable Hazardous Materials Laws, (b) any and all material claims made
or threatened in writing by any Person against Borrower or any Subsidiary
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials and (c) discovery by any Senior Officer
of Borrower of any material occurrence or condition on any real property
adjoining or in the vicinity of such Real Property that could reasonably be
expected to cause such Real Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such Real
Property under any applicable Hazardous Materials Laws.

 

5.12 Financial Condition. Maintain the consolidated financial condition of
Borrower and its Subsidiaries as follows using GAAP and used consistently with
prior practices (except to the extent modified by the definitions herein):

 

(a) Minimum Tangible Net Worth. Tangible Net Worth as of the last day of any
Fiscal Quarter of not less than (i) $145,046,750 plus (ii) an amount equal to
75% of Net Income earned in each Fiscal Quarter ending after July 1, 2005 (with
no deduction for a net loss in any such Fiscal Quarter) plus (iii) an amount
equal to 75% of the aggregate increases in Stockholders’ Equity of Borrower and
its Subsidiaries after the Closing Date by reason of the issuance and sale of
equity interests of Borrower or any Subsidiary (including upon any conversion of
debt Securities of Borrower or any Subsidiary into such equity interests).

 

(b) Maximum Leverage Ratio. Leverage Ratio, as of the last day of each Fiscal
Quarter (commencing with the Fiscal Quarter ending nearest to September 30,
2005) not to exceed the ratio set forth below opposite such Fiscal Quarter or
the period during which such Fiscal Quarter ends:

 

Period

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

   Ratio

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

Fiscal Quarter ending nearest to September 30, 2005 through the Fiscal Quarter
ending nearest to June 30, 2008

   3.00 to 1.00

Fiscal Quarter ending nearest to September 30, 2008 and thereafter

   2.50 to 1.00

 

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(c) Minimum Fixed Charge Coverage Ratio. Fixed Charge Coverage Ratio, as of the
last day of any Fiscal Quarter (commencing with the Fiscal Quarter ending
nearest to September 30, 2005), not less than 1.50 to 1.00.

 

5.13 Future Subsidiaries; Additional Security Documentation. Within ten
(10) Banking Days after the creation or acquisition of any new Subsidiary
(a) cause each such Subsidiary (other than Tax Preferred Subsidiaries and
Inactive Subsidiaries) to execute and deliver to the Administrative Agent an
appropriate joinder to the Subsidiary Guaranty, (b) cause each such Subsidiary
(other than, subject to the provisions set forth below, Foreign Subsidiaries and
Inactive Subsidiaries) to execute and deliver to the Administrative Agent an
appropriate joinder to the Security Agreement and such other documents and
instruments as would have been required of Borrower and such Subsidiary on the
Closing Date if such Person had been a Subsidiary on the Closing Date, (c) as
promptly as reasonably possible, deliver such resolutions, authorizations,
certificates and other documents as would have been required of Borrower and
such Subsidiary on the Closing Date if such Person had been a Subsidiary on the
Closing Date (consistent with the provisions of Section 8.1(a)(4)), in form and
substance reasonably satisfactory to the Administrative Agent, and (d) pledge to
the Administrative Agent pursuant to the Security Agreement (i) except as
provided in clause (ii) below, all of the equity interest of any Subsidiary
formed or acquired after the Closing Date and (ii) 65% of the equity interest of
any Tax Preferred Subsidiary formed or acquired after the Closing Date. In
addition to the foregoing, Borrower and its Subsidiaries (other than, subject to
the provisions set forth below, Foreign Subsidiaries and Inactive Subsidiaries)
shall cause such documents and instruments as may be reasonably requested by the
Administrative Agent (or any Lender through the Administrative Agent) from time
to time to be executed and delivered and do such further acts and things as
reasonably may be required in order for the Administrative Agent, for the
benefit of the Lenders, to obtain a fully perfected first priority Lien on all
Collateral, subject to Permitted Encumbrances, Permitted Rights of Others and
other matters permitted by Section 6.7. Notwithstanding the foregoing and
anything else to the contrary contained herein or in any other Loan Document,
the Administrative Agent (acting at the direction of the Required Lenders) may
require a Material Non-TP Foreign Subsidiary to execute and deliver to the
Administrative Agent, on behalf of the Lenders, any and all of the foregoing
documents (including such additional Collateral Documents) as the Administrative
Agent may reasonably require to perfect its Liens on Collateral in the foreign
jurisdiction(s) in which such Subsidiary is organized and/or does material
business.

 

5.14 Operating Accounts. Maintain all of the primary operating accounts of
Borrower and its domestic Subsidiaries with the Administrative Agent.

 

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Article 6.

NEGATIVE COVENANTS

 

So long as any Advance remains unpaid, or any other Obligation (other than
Unmatured Surviving Obligations) remains unpaid, or any portion of any of the
Commitments remains in force, Borrower shall not, and shall not permit any of
its Subsidiaries to, unless the Administrative Agent (with the written approval
of the Required Lenders or, if required by Section 11.2, all of the Lenders)
otherwise consents:

 

6.1 Payment of Indebtedness. (a) Pay any (i) principal (including sinking fund
payments) or any other amount (other than, subject to clause (ii) below,
scheduled principal and interest payments) with respect to any Subordinated
Obligation (including any Permitted Seller Debt), or purchase or redeem (or
offer to purchase or redeem) any Subordinated Obligation, or deposit any monies,
securities or other Property with any trustee or other Person to provide
assurance that the principal or any portion thereof of any Subordinated
Obligations will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (ii) scheduled principal and interest on any
Subordinated Obligations unless, with respect to any of the amounts specified in
either clause (i) or (ii), the payment of such amount is then permitted pursuant
to the terms of any applicable Subordination Agreement pertaining to such
Subordinated Obligation, or (b) with respect to Indebtedness of Borrower or any
of its Subsidiaries other than Subordinated Obligations, prepay any principal or
interest on any such Indebtedness prior to the date when due, or make any
payment or deposit with any Person that has the effect of providing for the
satisfaction of any such Indebtedness prior to the date when due, except
(i) Indebtedness to the Administrative Agent and the Lenders under this
Agreement and the other Loan Documents, (ii) Indebtedness to other Persons the
prepayment of which is approved in advance by the Required Lenders in writing,
(iii) Indebtedness owed to Borrower or any Subsidiary of Borrower,
(iv) Indebtedness prepaid in connection with a refinancing of such Indebtedness
and (iv) Indebtedness required to be prepaid as a result of a Disposition or
other asset sale permitted under this Agreement.

 

6.2 Capital Expenditures. Make any Capital Expenditures in any Fiscal Year
ending after April 1, 2005 in excess of an aggregate of $20,000,000; provided
that the amount of permitted Capital Expenditures set forth above in respect of
any Fiscal Year shall be increased by the amount of unused permitted Capital
Expenditures for the immediately preceding Fiscal Year (excluding any Carryover
Capex Portion (as defined below) carried forward to such prior Fiscal Year). As
used herein, “Carryover Capex Portion” shall mean, with respect to any Fiscal
Year, the difference (if a positive number ) between $20,000,000 and the actual
amount of Capital Expenditures made during such Fiscal Year.

 

6.3 Other Indebtedness. Create, incur, assume or permit to exist any
Indebtedness resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except the following:

 

(a) Indebtedness arising under the Loan Documents;

 

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(b) Indebtedness existing on the Closing Date and disclosed on Schedule 6.3;

 

(c) Indebtedness owed to Borrower or any of its domestic Subsidiaries;

 

(d) Permitted Seller Debt and Indebtedness consisting of payments due under
Permitted Acquisition Consulting Agreements (collectively, “Permitted
Acquisition Indebtedness”) as may be approved in writing by the Administrative
Agent and the Required Lenders;

 

(e) Indebtedness consisting of Capital Lease Obligations, or otherwise incurred
to finance the purchase or construction of capital assets (i.e., purchase money
Indebtedness, which shall be deemed to exist if the Indebtedness is incurred at
or within 90 days before or after the purchase or construction of the capital
asset), or to refinance any such Indebtedness, provided that the aggregate
principal amount of such Indebtedness outstanding at any time does not exceed
$5,000,000 (as determined in accordance with GAAP consistently applied);

 

(f) Subordinated Obligations in such amount as may be approved in writing by the
Administrative Agent and the Required Lenders;

 

(g) Indebtedness consisting of net obligations under Interest Rate Protection
Agreements and Foreign Exchange Agreements provided that the obligations of
Borrower under any such Interest Rate Protection Agreement or Foreign Exchange
Agreement that is not an Approved Interest Rate Protection Agreement or an
Approved Foreign Exchange Agreement, as the case may be, shall be unsecured;

 

(h) loans and advances to employees in the ordinary course of the business of
Borrower and its Subsidiaries in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding;

 

(i) Indebtedness of a Person existing at the time such Person is acquired or
merged with or into or consolidated with Borrower or any of its Subsidiaries
(and not created in anticipation or contemplation thereof); provided that
(i) such Indebtedness was in existence prior to the contemplation of the
acquisition, merger or consolidation and does not extend to property not subject
to such Liens at the time of acquisition (other than improvements thereon) and
(ii) the outstanding principal amount of such Indebtedness does not, in the
aggregate exceed $5,000,000;

 

(j) Guaranty Obligations permitted pursuant to Section 6.5; and

 

(k) other unsecured Indebtedness in an aggregate principal amount outstanding at
any time not to exceed $2,000,000.

 

6.4 Merger, Consolidation, Transfer of Assets. Except in connection with a
Permitted Acquisition in accordance with Section 6.6(b) below, merge into or
consolidate with any other Person; acquire all or substantially all of the
assets of any other Person; or sell,

 

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lease, transfer or otherwise dispose of all or a substantial or material portion
of Borrower’s or any Subsidiary’s assets except:

 

(a) in the ordinary course of its business;

 

(b) any Subsidiary of Borrower may merge into or consolidate with Borrower or
any other Subsidiary of Borrower; provided that, in the case of any such merger
or consolidation, the Person formed by such merger or consolidation shall be
Borrower or a wholly-owned Subsidiary of Borrower; provided, further that, in
the case of any such merger or consolidation to which an Obligor is a party, the
Person formed by such merger or consolidation shall be or become an Obligor;
provided, further, that, in the case of any such merger or consolidation to
which Borrower is a party, the surviving entity in such merger or consolidation
shall be Borrower;

 

(c) any sale, lease, transfer or other disposition of assets to the Borrower or
an Obligor; and

 

(d) in connection with any sale or other disposition permitted under this
Agreement, any Subsidiary of Borrower may merge into or consolidate with any
other Person or permit any other Person to merge into or consolidate with it.

 

6.5 Guaranties. Guarantee or become liable in any way as surety, endorser (other
than as endorser of negotiable instruments for deposit or collection in the
ordinary course of business), accommodation endorser or otherwise for, nor
pledge or hypothecate any assets of Borrower or any of its Subsidiaries as
security for, any liabilities or obligations of any other Person, except
(a) guaranties existing as of the Closing Date identified on Schedule 6.5,
(b) any of the foregoing in favor of the Administrative Agent (on behalf of the
Lenders), (c) unsecured guaranties by Borrower or any Subsidiary of the rental
obligations of any Subsidiary to such Subsidiary’s landlord under any real
property lease so long as the annual rental obligations under all such leases at
no time exceeds $10,000,000 in the aggregate for all Subsidiaries, and
(d) guaranties by Borrower or any of its Subsidiaries for Indebtedness otherwise
permitted under this Agreement.

 

6.6 Loans, Advances, Investments. Make any loans or advances to or other
Investments in any Person, or make any Acquisitions, except:

 

(a) Investments in cash and Cash Equivalents;

 

(b) Permitted Acquisitions (provided that the limitations set forth in
clause (d) below shall apply to and in connection with any such Acquisition);

 

(c) loans, advances and other Investments existing as of the Closing Date, and
which are disclosed on Schedule 6.6;

 

(d) Investments in Subsidiaries of Borrower provided that (i) Investments by
Borrower and its wholly-owned domestic Subsidiaries in Foreign Subsidiaries and
domestic Subsidiaries that are not wholly-owned by Borrower and its Subsidiaries
do not exceed $10,000,000 in the aggregate at any time outstanding and

 

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(ii) Investments in Inactive Subsidiaries do not exceed $50,000 in the aggregate
at any time outstanding;

 

(e) Investments by Subsidiaries in Borrower;

 

(f) Investments consisting of trade payables of Borrower or any of its
Subsidiaries created in the ordinary course of business;

 

(g) Investments acquired by the Borrower or any of its Subsidiaries in exchange
for settlements and collections;

 

(h) Investments in securities or other assets not constituting cash or Cash
Equivalents and received in connection with any asset sale permitted under this
Agreement; and

 

(i) other Investments in Persons unaffiliated with Borrower and its Subsidiaries
not to exceed $1,000,000 in the aggregate at any time outstanding.

 

6.7 Pledge of Assets. Mortgage, pledge, grant or permit to exist a Lien upon all
or any portion of Borrower’s or any of its Subsidiaries’ assets now owned or
hereafter acquired, except:

 

(a) Liens under the Loan Documents;

 

(b) Liens existing as of the Closing Date and which are disclosed on
Schedule 4.7A.

 

(c) Liens on Property acquired by Borrower or any Subsidiary (i) in connection
with any Permitted Acquisition or (ii) that were in existence at the time of the
acquisition of such Property and were not created in contemplation of such
acquisition provided that each such Lien shall extend solely to the item or
items of Property so acquired and provided further that the aggregate amount of
Indebtedness of the Borrowers and their Subsidiaries secured by such Liens shall
not at any time exceed $5,000,000;

 

(d) Liens securing Indebtedness permitted by Section 6.3(e) on and limited to
the capital assets acquired, constructed or financed with the proceeds of such
Indebtedness or with the proceeds of any Indebtedness directly or indirectly
refinanced by such Indebtedness;

 

(e) Permitted Encumbrances;

 

(f) Liens securing Indebtedness permitted pursuant to Section 6.3(e); and

 

(g) Judgment Liens which are not Events of Default.

 

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6.8 Hostile Tender Offers. Make any offer to purchase or acquire, or consummate
a purchase or acquisition of, five percent (5%) or more of the voting interest
in any corporation or other business entity if the board of directors or
management of such corporation or business entity has notified Borrower or any
of its Subsidiaries that it opposes such offer or purchase and such notice has
not been withdrawn or superseded.

 

6.9 ERISA. (a) At any time, permit any Plan to: (i) engage in any non-exempt
“prohibited transaction” (as defined in Section 4975 of the Code); (ii) fail to
comply with ERISA or any other applicable Laws; (iii) incur any material
“accumulated funding deficiency” (as defined in Section 302 of ERISA); or
(iv) terminate in any manner, which, with respect to each event listed above,
could reasonably be expected to result in a Material Adverse Effect or
(b) withdraw, completely or partially, from any Multiemployer Plan if to do so
could reasonably be expected to result in a Material Adverse Effect.

 

6.10 Change in Nature of Business. Make any change in the nature of the business
of Borrower and its Subsidiaries (other than reasonable extensions of such
business), taken as a whole, as at present conducted.

 

6.11 Change of Fiscal Periods. Change its Fiscal Year or any other fiscal period
with respect to which it reports financial results hereunder or otherwise.

 

6.12 Amendments of Subordinated Obligations Documents. Amend or modify any
material term or provision of any document evidencing Subordinated Obligations
(other than any modification thereof as is permitted by the terms of the
applicable Subordination Agreement pertaining thereto).

 

6.13 Sale-Leasebacks. Enter into any arrangement with any lender or investor or
to which such lender or investor is a party providing for the leasing by
Borrower or any of its Subsidiaries of real or personal Property which has been
or is to be sold or transferred by Borrower or any Subsidiary to such lender or
investor or to any Person to whom funds have been or are to be advanced by such
lender or investor on the security of such property or rental obligation of
Borrower or any of its Subsidiaries, except for sale and leaseback transactions
involving fee interests in real Property owned by Borrower or any of its
Subsidiaries with respect to which the aggregate purchase price paid by the
purchasers in such transactions does not exceed $1,000,000 in the aggregate in
any Fiscal Year or $2,500,000 in the aggregate during the term of this
Agreement.

 

6.14 Transactions With Affiliates. Enter into any transaction of any kind with
any Affiliate of Borrower, other than (a) salary, bonus, employee stock option
and other compensation arrangements with directors or officers in the ordinary
course of business, (b) transactions on overall terms at least as favorable to
Borrower or its Subsidiaries as would be the case in an arm’s-length transaction
between unrelated parties of equal bargaining power, and (c) transactions among
Borrower and its Subsidiaries otherwise permitted pursuant to this Agreement.

 

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Article 7.

INFORMATION AND REPORTING REQUIREMENTS

 

7.1 Financial and Business Information. So long as any Advance remains unpaid,
or any other Obligation remains unpaid, or any portion of any of the Commitments
remains in force, Borrower shall, unless the Administrative Agent (with the
written approval of the Required Lenders) otherwise consents, at Borrower’s sole
expense, deliver to the Administrative Agent for distribution by it to the
Lenders, a sufficient number of copies for all of the Lenders of the following:

 

(a) As soon as practicable, and in any event within forty-five (45) days after
the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending
nearest to September 30, 2005), unaudited consolidated balance sheets of
Borrower and its Subsidiaries as at the end of such Fiscal Quarter and
consolidated statements of income, retained earnings and cash flows for such
Fiscal Quarter, together with a copy of Borrower’s filed 10-Q report. Such
financial statements shall be certified by chief financial officer of Borrower
as fairly presenting the financial condition, and results of operations of
Borrower and its Subsidiaries in accordance with GAAP (other than footnote
disclosures), consistently applied, as at such date and for such periods,
subject only to normal year-end accruals and audit adjustments.

 

(b) As soon as practicable, and in any event within ninety (90) days after the
end of each Fiscal Year (commencing with the Fiscal Year ending nearest to
March 31, 2006), consolidated financial statements of Borrower and its
Subsidiaries, audited by an independent certified public accountant reasonably
acceptable to the Administrative Agent, to include consolidated balance sheets,
statements of income, retained earnings, stockholders’ equity and cash flows for
such Fiscal Year, together with a copy of Borrower’s filed 10-K report. Such
financial statements shall be prepared in accordance with GAAP, consistently
applied, and such consolidated financial statements shall be accompanied by a
report of independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Required Lenders, which report shall
be prepared in accordance with generally accepted auditing standards as at such
date, and shall not be subject to any material qualifications or exceptions (and
for this purpose any “going concern” or “scope of audit” qualification or
exception shall be deemed material). In addition, Borrower shall deliver to the
Administrative Agent a copy of any “management letter” prepared by such
accountants in conjunction with preparation of the foregoing report.

 

(c) As soon as practicable, and in any event not later than forty-five (45) days
after the commencement of each Fiscal Year, a budget and projection of Borrower
and its Subsidiaries, the format of which shall be reasonably satisfactory to
the Administrative Agent, setting forth (i) by Fiscal Quarter for the four
quarters of that Fiscal Year and (ii) on an annual basis for each succeeding
Fiscal Year thereafter through the Maturity Date, projected balance sheets,
income statements, statements of operations and statements of cash flow, all in
reasonable detail.

 

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(d) As soon as practicable, and in any event within forty-five (45) days after
the end of each of the first three Fiscal Quarters in each Fiscal Year and
within ninety (90) days after the end of each Fiscal Year, a Pricing Certificate
setting forth a calculation of the Leverage Ratio as of the last day of such
Fiscal Quarter or Fiscal Year, and providing reasonable detail as to the
calculation thereof;

 

(e) Promptly after request by the Administrative Agent or any Lender, copies of
any detailed audit reports, management letters or recommendations submitted to
Borrower or any Subsidiary by independent accountants in connection with the
accounts or books of Borrower, or any of its Subsidiaries, or any audit of any
of them;

 

(f) Promptly after request by Lender, copies of any report or document that was
filed by Borrower or any Subsidiary with any Governmental Agency;

 

(g) Promptly upon a Senior Officer of Borrower, becoming aware, and in any event
within five (5) Banking Days after becoming aware, of the occurrence of any
(i) ”reportable event” (as such term is defined in Section 4043 of ERISA, but
excluding such events as to which the PBGC has by regulation waived the
requirement therein contained that it be notified within thirty days of the
occurrence of such event) or (ii) non-exempt “prohibited transaction” (as such
term is defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Pension Plan or any trust created thereunder which could reasonably be
expected to cause a material liability to the Borrower or its Subsidiaries,
telephonic notice specifying the nature thereof, and, no more than two
(2) Banking Days after such telephonic notice, written notice again specifying
the nature thereof and specifying what action Borrower is taking or proposes to
take with respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto;

 

(h) Promptly upon a Senior Officer of Borrower becoming aware, and in any event
within five (5) Banking Days after becoming aware, of any termination or
cancellation of any insurance policy which Borrower or any of its Subsidiaries
is required to maintain, or any uninsured or partially uninsured loss in an
amount in excess of $1,000,000 through liability or property damage, or through
fire, theft or any other cause affecting Borrower’s or any of its Subsidiaries’
Property.

 

(i) As soon as practicable, and in any event within two (2) Banking Days after a
Senior Officer of Borrower becomes aware of the existence of any condition or
event which constitutes a Default or Event of Default, telephonic notice
specifying the nature and period of existence thereof, and, no more than
two (2) Banking Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what action
Borrower is taking or proposes to take with respect thereto;

 

(j) Promptly upon a Senior Officer of Borrower becoming aware that (i) any
Person has commenced a legal proceeding with respect to a claim against

 

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Borrower or any Guarantor that is $1,000,000 or more in excess of the amount
thereof that is fully covered by insurance, (ii) any creditor under a credit
agreement involving Indebtedness of $1,000,000 or more or any lessor under a
lease involving aggregate rent of $1,000,000 or more has asserted a default
thereunder on the part of Borrower or any Guarantor or, (iii) any Person has
commenced a legal proceeding with respect to a claim against Borrower or any
Guarantor under a contract that is not a credit agreement or material lease with
respect to a claim of in excess of $1,000,000 or which otherwise may reasonably
be expected to result in a Material Adverse Effect, a written notice describing
the pertinent facts relating thereto and what action Borrower or such Guarantor
is taking or proposes to take with respect thereto; and

 

(k) Such other data and information as from time to time may be reasonably
requested in writing by the Administrative Agent or any Lender.

 

7.2 Compliance Certificates. So long as any Advance remains unpaid, or any other
Obligation (other than Unmatured Surviving Obligations) remains unpaid or
unperformed, or any portion of any of the Commitments remain outstanding,
Borrower shall, at Borrower’s sole expense, deliver to the Administrative Agent
for distribution by it to the Lenders concurrently with the financial statements
required pursuant to Sections 7.1(a) and 7.1(b), a Compliance Certificate signed
by a Senior Officer of Borrower.

 

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Article 8.

CONDITIONS

 

8.1 Initial Advances. The obligation of each Closing Date Lender to make the
initial Advance to be made by it, and the obligation of the Issuing Lender to
issue the initial Letter of Credit (as applicable), is subject to the following
conditions precedent, each of which shall be satisfied prior to the making of
the initial Advances or the issuance of the initial Letter of Credit (as
applicable) (unless all of the Closing Date Lenders, in their sole and absolute
discretion, shall agree otherwise):

 

(a) The Administrative Agent shall have received all of the following, each of
which shall be originals unless otherwise specified, each properly executed by a
Responsible Official of each party thereto, each dated as of the Closing Date
and each in form and substance reasonably satisfactory to the Administrative
Agent and its legal counsel (unless otherwise specified or, in the case of the
date of any of the following, unless the Administrative Agent otherwise agrees
or directs):

 

(1) at least one (1) executed counterpart of this Agreement, all Collateral
Documents and the Guaranties, together with arrangements satisfactory to the
Administrative Agent for additional executed counterparts, sufficient in number
for distribution to the Closing Date Lenders and Borrower;

 

(2) Notes executed by Borrower in favor of each Closing Date Lender, each in a
principal amount equal to that Lender’s Commitment;

 

(3) the Security Agreement executed by Borrower, together with such control
agreements regarding Borrower’s investment and other accounts maintained with
Wells Fargo, as Administrative Agent may require, executed by the appropriate
parties thereto;

 

(4) such documentation as the Administrative Agent may reasonably require to
establish the due organization, valid existence and good standing of Borrower,
its qualification to engage in business in each material jurisdiction in which
it is engaged in business or required to be so qualified (other than
jurisdictions in which failure to qualify or failure to be in good standing
could not reasonably be expected to result in a Material Adverse Effect), its
authority to execute, deliver and perform the Loan Documents to which it is a
Party (if any), the identity, authority and capacity of each Responsible
Official thereof authorized to act on its behalf, including certified copies of
articles of incorporation and amendments thereto, bylaws and amendments thereto,
certificates of good standing and/or qualification to engage in business, tax
clearance certificates, certificates of corporate resolutions or other
applicable authorization document, incumbency certificates, Certificates of
Responsible Officials, and the like;

 

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(5) a favorable opinion of Borrower’s counsel reasonably acceptable to the
Administrative Agent addressed to the Administrative Agent and each Lender, as
to the matters set forth concerning Borrower, the Subsidiaries and the Loan
Documents, in form and substance reasonably satisfactory to the Administrative
Agent;

 

(6) evidence of the insurance policies required by Section 5.5, together with
such endorsements as are necessary to show the Administrative Agent as sole loss
payee and an additional insured, as applicable, thereunder;

 

(7) a duly completed Compliance Certificate as of the last day of the Fiscal
Quarter of Borrower most recently ended prior to the Closing Date, signed by a
Senior Officer of Borrower and in form and substance reasonably satisfactory to
Administrative Agent;

 

(8) one or more Requests for Borrowing or Requests for Letters of Credit (and,
in connection therewith, applicable Letter of Credit Agreements);

 

(9) a Certificate signed by a Senior Officer of Borrower certifying that the
conditions specified in Sections 8.1(e) and 8.1(f) have been satisfied;

 

(10) the Agent Fee Letter duly executed by Borrower;

 

(11) such other instruments and other documents relating to perfection of a
security interest in the Collateral as may be reasonably required by the
Administrative Agent; and

 

(12) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent and/or any Closing Date Lender reasonably may require.

 

(b) The fees payable on the Closing Date pursuant to Section 3.3 shall have been
paid.

 

(c) The Administrative Agent and the Closing Date Lenders shall have completed
and been satisfied with the results of their due diligence investigation of
Borrower, including all audits, inspections and examinations as deemed necessary
in the Administrative Agent’s reasonable opinion with respect to the Collateral,
the books and records of Borrower and its Subsidiaries, the financial and
business condition and operations of Borrower and its Subsidiaries, and the
transactions contemplated hereby.

 

(d) Borrower shall have paid all reasonable fees, charges and disbursements of
the Administrative Agent (including all reasonable fees and expenses of outside
counsel and reasonable allocated costs of internal counsel) in connection

 

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with the preparation of the Loan Documents payable pursuant to Section 11.3, to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between Borrower and
the Administrative Agent).

 

(e) The representations and warranties of Borrower contained in Article 4 shall
be true and correct in all material respects.

 

(f) Borrower and any other Parties shall be in compliance with all the terms and
provisions of the Loan Documents, and giving effect to the initial Advances or
initial Letter of Credit (as applicable), no Default or Event of Default shall
have occurred and be continuing.

 

(g) No material adverse change shall have occurred in the business, assets,
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole since April 1, 2005.

 

(h) No material adverse change shall have occurred in the financial, bank loan
syndication, or capital markets.

 

(i) Borrower shall have delivered to the Administrative Agent evidence, in form
and substance reasonably satisfactory to the Administrative Agent, that the
credit facility of Borrower and its Subsidiaries under the Existing Credit
Agreement has been or will be concurrently terminated and that all Liens
securing any part of such credit facility have been or will be concurrently
reconveyed, released and/or terminated, as the case may be.

 

(j) Wells Fargo, in its capacity as syndication agent, shall have successfully
syndicated the Facility as contemplated by the terms of the Proposal Letter.

 

(k) All legal matters relating to the Loan Documents shall be reasonably
satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel to
Lender.

 

(l) The Closing Date shall have occurred on or before October 31, 2005.

 

8.2 Any Advance. The obligation of each Lender to make any Advance, and the
obligation of the Issuing Lender to issue any Letter of Credit, is subject to
the following conditions precedent (unless the Required Lenders or, in any case
where the approval of all of the Lenders is required pursuant to Section 11.2,
all of the Lenders, in their sole and absolute discretion, shall agree
otherwise):

 

(a) except (i) for representations and warranties which expressly speak as of a
particular date or are no longer true and correct as a result of a change

 

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which is permitted by this Agreement or (ii) as disclosed by Borrower and
approved in writing by the Required Lenders, the representations and warranties
contained in Article 4 (other than Sections 4.4(a), 4.6 (first sentence), and
4.10) shall be true and correct in all material respects on and as of the date
of the Advance or the Letter of Credit as though made on that date;

 

(b) No Default shall exist, or would result from such proposed Advance or from
the application of proceeds thereof;

 

(c) no circumstance or event shall have occurred that constitutes a Material
Adverse Effect since April 1, 2005;

 

(d) other than matters described in Schedule 4.10 or subsections (a), (b) or
(c) of Section 4.10 hereof, there shall not be then pending or threatened any
action, suit, proceeding or investigation against or affecting Borrower or any
other Obligor or any Property of any of them before any Governmental Agency
(i) which could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (ii) that involve this Agreement or any
of the other Loan Documents;

 

(e) the Administrative Agent shall have timely received a Request for Borrowing
(or telephonic or other request for Borrowing referred to in the second sentence
of Section 2.1(b), if applicable), or the Issuing Lender shall have received a
Request for Letter of Credit, as the case may be, in compliance with Article 2;
and

 

(f) the Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent, such other assurances, certificates,
documents or consents related to the foregoing as the Administrative Agent or
Required Lenders reasonably may require.

 

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Article 9.

EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

 

9.1 Events of Default. The existence or occurrence of any one or more of the
following events, whatever the reason therefor and under any circumstances
whatsoever, shall constitute an Event of Default:

 

(a) Borrower fails to pay within two (2) Banking Days of when due any principal,
interest, fees or other amounts payable under any of the Loan Documents; or

 

(b) Borrower fails to comply with, or cause or permit any of its Subsidiaries to
fail to comply with, any of the covenants contained in Section 5.12 or Article 6
(other than Section 6.9 and Section 6.10); or

 

(c) (i) Borrower fails to comply with Section 7.1(i) in the manner stated
therein or (ii) Borrower fails to perform any other reporting requirement set
forth in Article 7 within five (5) Banking Days after the giving of written
notice to Borrower by the Administrative Agent on behalf of the Required Lenders
of such default;

 

(d) Borrower or any other Party fails to perform or observe any other covenant
or agreement (not specified in clause (a), (b) or (c) above) contained in any
Loan Document on its part to be performed or observed and such default shall
continue unremedied for thirty (30) calendar days after the giving of written
notice to Borrower by the Administrative Agent on behalf of the Required Lenders
of such default; or

 

(e) Any representation or warranty of Borrower or any other Party made in any
Loan Document, or in any financial statement, certificate or other writing
delivered by Borrower or such other Party pursuant to any Loan Document, proves
to have been incorrect, false or misleading in any material respect when
furnished, made or reaffirmed; or

 

(f) to the extent not otherwise addressed in this Section 9.1, Borrower or any
of its Subsidiaries (i) fails to pay the principal, or any principal
installment, of any present or future Indebtedness of $2,500,000 or more, or any
guaranty of present or future Indebtedness of $2,500,000 or more, on its part to
be paid, when due (or within any stated grace period), whether at the stated
maturity, upon acceleration, by reason of required prepayment or otherwise or
(ii) fails to perform or observe any other term, covenant or agreement on its
part to be performed or observed, or suffers any event of default to occur, in
connection with any present or future Indebtedness of $2,500,000 or more, or of
any guaranty of present or future Indebtedness of $2,500,000 or more, if as a
result of such failure or sufferance any holder or holders thereof (or an agent
or trustee on its or their behalf) has the right to declare such Indebtedness
due before the date on which it otherwise would become

 

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due or the right to require Borrower or any such Subsidiary to redeem or
purchase, or offer to redeem or purchase, all or any portion of such
Indebtedness; or

 

(g) Any Loan Document, at any time after its execution and delivery and for any
reason other than the agreement or action (or omission to act) of the
Administrative Agent or satisfaction in full of all the Obligations, 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 material respect; or any
Collateral Document ceases (other than by action or inaction of the
Administrative Agent) to create a valid and effective Lien in any material
portion of the Collateral; or any Party thereto denies in writing that it has
any or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or

 

(h) The filing of a notice of judgment lien against Borrower, any Subsidiary or
any other Obligor; or the recording of any abstract of judgment against
Borrower, any Subsidiary or any other Obligor in any county in which it has an
interest in real property; or the service of a notice of levy and/or of a writ
of attachment or execution, or other like process, against the assets of
Borrower, any Subsidiary or any other Obligor; or the entry of a judgment
against Borrower, any Subsidiary or other Obligor; provided, however, that such
judgments, liens, levies, writs, executions and other process involve debts of
or claims against Borrower, any Subsidiary or any other Obligor in excess of
$1,000,000.00, individually or in the aggregate for all such judgments, liens,
levies, writs, executions and other process against Borrower, any Subsidiary or
any other Obligor combined, and for any period of twenty (20) consecutive days
after the creation thereof, shall remain unstayed, unsatisfied an undischarged
or fail to be insured against, such insurance to be reasonably satisfactory to
the Administrative Agent; or

 

(i) Borrower or any of its Subsidiaries institutes or consents to the
institution of any proceeding under a Debtor Relief Law relating to it or to all
or any material part of its Property, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its Property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the appointment
continues undischarged or unstayed for sixty (60) calendar days; or any
proceeding under a Debtor Relief Law relating to any such Person or to all or
any part of its Property is instituted without the consent of that Person and
continues undismissed or unstayed for sixty (60) calendar days; or

 

(j) A Change in Control occurs; or

 

(k) The dissolution or liquidation of Borrower or, except as permitted by
Section 6.4, of any Guarantor which is not an individual, or any of Borrower’s
partners, members, directors or stockholders, as the case may be, shall take

 

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action seeking to effect the dissolution or liquidation of Borrower or such
Guarantor; or

 

(l) The occurrence of an Event of Default (as such term is or may hereafter be
specifically defined in any other Loan Document) under any other Loan Document;
or

 

(m) Any Pension Plan maintained by Borrower is finally determined by the PBGC to
have a material “accumulated funding deficiency” as that term is defined in
Section 302 of ERISA in excess of an amount equal to 5% of the consolidated
total assets of Borrower as of the most-recently ended Fiscal Quarter for which
financial statements have been delivered under this Agreement; or

 

(n) (i) Any holder of a Subordinated Obligation asserts in writing that such
Subordinated Obligation is not subordinated to the Obligations in accordance
with its terms and Borrower does not promptly deny in writing such assertion and
contest any attempt by such holder to take action based on such assertion, or
(ii) final judgment is entered by a court of competent jurisdiction that any
Subordinated Obligation is not subordinated in accordance with its terms to the
Obligations.

 

9.2 Remedies Upon Event of Default. Without limiting any other rights or
remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law, or in equity,
or otherwise:

 

(a) Upon the occurrence, and during the continuance, of any Event of Default
other than an Event of Default described in Section 9.1(i):

 

(1) the commitments to make Advances, to issue Letters of Credit and all other
obligations of the Administrative Agent, the Issuing Lender or the Lenders and
all rights of Borrower and any other Parties under the Loan Documents shall be
suspended without notice to or demand upon Borrower, which are expressly waived
by Borrower except that all of the Lenders or the Required Lenders (as the case
may be, in accordance with Section 11.2) may waive an Event of Default or,
without waiving, determine, upon terms and conditions satisfactory to the
Lenders or Required Lenders, as the case may be, to reinstate the Commitments
and such other obligations and rights and make further Advances, which waiver or
determination shall apply equally to, and shall be binding upon, all the
Lenders;

 

(2) the Issuing Lender may demand immediate payment by Borrower of an amount
equal to the Aggregate Effective Amount of all outstanding Letters of Credit to
be held by the Administrative Agent, on behalf of the Lenders, in an
interest-bearing cash collateral account as collateral for all of the
Obligations; and

 

(3) the Required Lenders may request the Administrative Agent to, and the
Administrative Agent thereupon shall, terminate the Commitments and/or declare
all or any part of the unpaid principal of all

 

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Notes, all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents to be forthwith due and payable, whereupon the same
shall become and be forthwith due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of which are
expressly waived by Borrower.

 

(b) Upon the occurrence of any Event of Default described in Section 9.1(i):

 

(1) the commitments to make Advances, to issue Letters of Credit and all other
obligations of the Administrative Agent, the Issuing Lender or the Lenders and
all rights of Borrower and any other Parties under the Loan Documents shall
terminate without notice to or demand upon Borrower, which are expressly waived
by Borrower, except that all of the Lenders may waive the Event of Default or,
without waiving, determine, upon terms and conditions satisfactory to all the
Lenders, to reinstate the Commitments and make further Advances, which
determination shall apply equally to, and shall be binding upon, all the
Lenders;

 

(2) an amount equal to the Aggregate Effective Amount of all outstanding Letters
of Credit shall be immediately due and payable to the Issuing Lender without
notice to or demand upon Borrower, which are expressly waived by Borrower, to be
held by the Administrative Agent, on behalf of the Lenders, in an
interest-bearing cash collateral account as collateral for all of the
Obligations; and

 

(3) the unpaid principal of all Notes, all interest accrued and unpaid thereon
and all other amounts payable under the Loan Documents shall be forthwith due
and payable, without protest, presentment, notice of dishonor, demand or further
notice of any kind, all of which are expressly waived by Borrower.

 

(c) Upon the occurrence of any Event of Default, the Lenders and the
Administrative Agent, or any of them, without notice to (except as expressly
provided for in any Loan Document) or demand upon Borrower, which are expressly
waived by Borrower (except as to notices expressly provided for in any Loan
Document), may proceed (but only with the consent of the Required Lenders) to
protect, exercise and enforce their rights and remedies under the Loan Documents
against Borrower and any other Party and such other rights and remedies as are
provided by Law or equity.

 

(d) The order and manner in which the Lenders’ rights and remedies are to be
exercised shall be determined by the Required Lenders in their sole discretion,
and all payments received by the Administrative Agent and the Lenders, or any of
them, shall be applied first to the costs and expenses (including reasonable
attorneys’ fees and disbursements and the reasonably allocated costs of
attorneys employed by the Administrative Agent or by any Lender) of the
Administrative Agent

 

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and of the Lenders, and thereafter paid pro rata to the Lenders in the same
proportions that the aggregate Obligations owed to each Lender under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to all
the Lenders, without priority or preference among the Lenders. Regardless of how
each Lender may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower’s Obligations hereunder and under the Notes,
payments shall be applied first, to the costs and expenses of the Administrative
Agent and the Lenders, as set forth above, second, to the payment of accrued and
unpaid interest due under any Loan Documents to and including the date of such
application (ratably, and without duplication, according to the accrued and
unpaid interest due under each of the Loan Documents), and third, to the payment
of all other amounts (including principal and fees) then owing to the
Administrative Agent or the Lenders under the Loan Documents. No application of
payments will cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent the
exercise, or continued exercise, of rights or remedies of the Lenders hereunder
or thereunder or at Law or in equity.

 

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Article 10.

THE ADMINISTRATIVE AGENT

 

10.1 Appointment and Authorization. Subject to Section 10.8, each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Administrative Agent by the terms thereof or are reasonably
incidental, as determined by the Administrative Agent, thereto. This appointment
and authorization is intended solely for the purpose of facilitating the
servicing of the Facility and does not constitute appointment of the
Administrative Agent as trustee for any Lender or as representative of any
Lender for any other purpose and, except as specifically set forth in the Loan
Documents to the contrary, the Administrative Agent shall take such action and
exercise such powers only in an administrative and ministerial capacity.

 

10.2 Administrative Agent and Affiliates. Wells Fargo (and each successor
Administrative Agent) has the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and the term “Lender” or “Lenders” includes Wells Fargo in
its individual capacity. Wells Fargo (and each successor Administrative Agent)
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with Borrower, any Subsidiary
thereof, or any Affiliate of Borrower or any Subsidiary thereof, as if it were
not the Administrative Agent and without any duty to account therefor to the
Lenders. Wells Fargo (and each successor Administrative Agent) need not account
to any other Lender for any monies received by it for reimbursement of its costs
and expenses as Administrative Agent hereunder, or (subject to Section 11.10)
for any monies received by it in its capacity as a Lender hereunder. The
Administrative Agent shall not be deemed to hold a fiduciary relationship with
any Lender and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent.

 

10.3 Proportionate Interest in any Collateral. The Administrative Agent, on
behalf of all the Lenders, shall hold in accordance with the Loan Documents all
items of any collateral or interests therein received or held by the
Administrative Agent. Subject to the Administrative Agent’s and the Lenders’
rights to reimbursement for their costs and expenses hereunder (including
reasonable attorneys’ fees and disbursements and other professional services and
the reasonably allocated costs of attorneys employed by the Administrative Agent
or a Lender) and subject to the application of payments in accordance with
Section 9.2(d), each Lender shall have an interest in the Lenders’ interest in
such collateral or interests therein in the same proportions that the aggregate
Obligations owed such Lender under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Lenders, without priority
or preference among the Lenders.

 

10.4 Lenders’ Credit Decisions. Each Lender agrees that it has, independently
and without reliance upon the Administrative Agent, any other Lender or the
directors, officers, agents, employees or attorneys of the Administrative Agent
or of any other Lender, and instead in reliance upon information supplied to it
by or on behalf of Borrower and upon such other information as it has deemed
appropriate, made its own independent

 

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credit analysis and decision to enter into this Agreement. Each Lender also
agrees that it shall, independently and without reliance upon the Administrative
Agent, any other Lender or the directors, officers, agents, employees or
attorneys of the Administrative Agent or of any other Lender, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents.

 

10.5 Action by Administrative Agent.

 

(a) The Administrative Agent may assume that no Default has occurred and is
continuing, unless the Administrative Agent (or the Lender that is then the
Administrative Agent) has received notice from Borrower stating the nature of
the Default or has received notice from a Lender stating the nature of the
Default and that such Lender considers the Default to have occurred and to be
continuing.

 

(b) The Administrative Agent has only those obligations under the Loan Documents
as are expressly set forth therein.

 

(c) Except for any obligation expressly set forth in the Loan Documents and as
long as the Administrative Agent may assume that no Event of Default has
occurred and is continuing, the Administrative Agent may, but shall not be
required to, exercise its discretion to act or not act, except that the
Administrative Agent shall be required to act or not act upon the instructions
of the Required Lenders (or of all the Lenders, to the extent required by
Section 11.2) and those instructions shall be binding upon the Administrative
Agent and all the Lenders, provided that the Administrative Agent shall not be
required to act or not act if to do so would be contrary to any Loan Document or
to applicable Law or would result, in the reasonable judgment of the
Administrative Agent, in substantial risk of liability to the Administrative
Agent.

 

(d) If the Administrative Agent has received a notice specified in clause (a),
the Administrative Agent shall immediately give notice thereof to the Lenders
and shall act or not act upon the instructions of the Required Lenders (or of
all the Lenders, to the extent required by Section 11.2), provided that the
Administrative Agent shall not be required to act or not act if to do so would
be contrary to any Loan Document or to applicable Law or would result, in the
reasonable judgment of the Administrative Agent, in substantial risk of
liability to the Administrative Agent, and except that if the Required Lenders
(or all the Lenders, if required under Section 11.2) fail, for five (5) Banking
Days after the receipt of notice from the Administrative Agent, to instruct the
Administrative Agent, then the Administrative Agent, in its sole discretion, may
act or not act as it deems advisable for the protection of the interests of the
Lenders.

 

(e) The Administrative Agent shall have no liability to any Lender for acting,
or not acting, as instructed by the Required Lenders (or all the Lenders, if
required under Section 11.2), notwithstanding any other provision hereof.

 

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10.6 Liability of Administrative Agent. Neither the Administrative Agent nor any
of its directors, officers, agents, employees or attorneys shall be liable for
any action taken or not taken by them under or in connection with the Loan
Documents, except for their own gross negligence or willful misconduct. Without
limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:

 

(a) May treat the payee of any Note as the holder thereof until the
Administrative Agent receives notice of the assignment or transfer thereof, in
form satisfactory to the Administrative Agent, signed by the payee, and may
treat each Lender as the owner of that Lender’s interest in the Obligations for
all purposes of this Agreement until the Administrative Agent receives notice of
the assignment or transfer thereof, in form satisfactory to the Administrative
Agent, signed by that Lender;

 

(b) May consult with legal counsel (including in-house legal counsel),
accountants (including in-house accountants) and other professionals or experts
selected by it, or with legal counsel, accountants or other professionals or
experts for Borrower or any other Obligor and/or any of their Affiliates or the
Lenders, and shall not be liable for any action taken or not taken by it in good
faith in accordance with any advice of such legal counsel, accountants or other
professionals or experts;

 

(c) Shall not be responsible to any Lender for any statement, warranty or
representation made in any of the Loan Documents or in any notice, certificate,
report, request or other statement (written or oral) given or made in connection
with any of the Loan Documents;

 

(d) Except to the extent expressly set forth in the Loan Documents, shall have
no duty to ask or inquire as to the performance or observance by Borrower or any
other Obligor of any of the terms, conditions or covenants of any of the Loan
Documents or to inspect any Collateral or any Property, books or records of
Borrower or any other Obligor;

 

(e) Will not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, effectiveness, sufficiency or value of
any Loan Document, any other instrument or writing furnished pursuant thereto or
in connection therewith, or any Collateral;

 

(f) Will not incur any liability by acting or not acting in reliance upon any
Loan Document, notice, consent, certificate, statement, request or other
instrument or writing believed in good faith by it to be genuine and signed or
sent by the proper party or parties; and

 

(g) Will not incur any liability for any arithmetical error in computing any
amount paid or payable by Borrower or any other Obligor or paid or payable to or
received or receivable from any Lender under any Loan Document, including
principal, interest, commitment fees, Advances and other amounts; provided

 

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that, promptly upon discovery of such an error in computation, the
Administrative Agent, the Lenders and (to the extent applicable) Borrower and/or
any other applicable Obligor shall make such adjustments as are necessary to
correct such error and to restore the parties to the position that they would
have occupied had the error not occurred.

 

10.7 Indemnification. Each Lender shall, ratably in accordance with its Pro Rata
Share of the Facility, indemnify and hold the Administrative Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including reasonable attorneys’ fees and disbursements and allocated costs of
attorneys employed by the Administrative Agent) that may be imposed on, incurred
by or asserted against it or them in any way relating to or arising out of the
Loan Documents (other than losses incurred by reason of the failure of Borrower
to pay the Indebtedness represented by the Notes) or any action taken or not
taken by it as Administrative Agent thereunder, except such as result from its
own gross negligence or willful misconduct. Without limitation on the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for that
Lender’s Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including a
bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrower or any other Party are required by
Section 11.3 to pay that cost or expense but fails to do so upon demand. Nothing
in this Section 10.7 shall entitle the Administrative Agent or any indemnitee
referred to above to recover any amount from the Lenders if and to the extent
that such amount has theretofore been recovered from Borrower or any of the
other Obligors. To the extent that the Administrative Agent or any indemnitee
referred to above is later reimbursed such amount by Borrower or any of the
other Obligors, it shall return the amounts paid to it by the Lenders in respect
of such amount.

 

10.8 Successor Administrative Agent. The Administrative Agent may, and at the
request of the Required Lenders shall, resign as Administrative Agent upon
reasonable notice to the Lenders and Borrower effective upon acceptance of
appointment by a successor Administrative Agent. If the Administrative Agent
shall resign as Administrative Agent under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor Administrative Agent for the
Lenders, which successor Administrative Agent shall be approved by Borrower (and
such approval shall not be unreasonably withheld or delayed). If no successor
Administrative Agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and Borrower, a successor Administrative Agent from
among the Lenders. Upon the acceptance of its appointment as successor
Administrative Agent hereunder, such successor Administrative Agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent” shall mean such successor
Administrative Agent and the retiring Administrative Agent’s appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article 10, and Sections 11.3, 11.11 and 11.21, shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. Notwithstanding the

 

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foregoing, if no successor Administrative Agent has accepted appointment as
Administrative Agent by the date which is thirty (30) days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint and Borrower approves a
successor Administrative Agent as provided for above.

 

10.9 No Obligations of Borrower. Nothing contained in this Article 10 shall be
deemed to impose upon Borrower any obligation in respect of the due and punctual
performance by the Administrative Agent of its obligations to the Lenders under
any provision of this Agreement, and Borrower shall have no liability to the
Administrative Agent or any of the Lenders in respect of any failure by the
Administrative Agent or any Lender to perform any of its obligations to the
Administrative Agent or the Lenders under this Agreement. Without limiting the
generality of the foregoing, where any provision of this Agreement relating to
the payment of any amounts due and owing under the Loan Documents provides that
such payments shall be made by Borrower to the Administrative Agent for the
account of the Lenders, Borrower’s obligations to the Lenders in respect of such
payments shall be deemed to be satisfied upon the making of such payments to the
Administrative Agent in the manner provided by this Agreement. In addition,
Borrower may rely on a written statement by the Administrative Agent to the
effect that it has obtained the written consent of the Required Lenders or all
of the Lenders, as applicable under Section 11.2, in connection with a waiver,
amendment, consent, approval or other action by the Lenders hereunder, and shall
have no obligation to verify or confirm the same.

 

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Article 11.

MISCELLANEOUS

 

11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and remedies
of the Administrative Agent and the Lenders provided herein or in any Note or
other Loan Document are cumulative and not exclusive of any right, power,
privilege or remedy provided by Law or equity. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power,
privilege or remedy may be, or may be deemed to be, a waiver thereof; nor may
any single or partial exercise of any right, power, privilege or remedy preclude
any other or further exercise of the same or any other right, power, privilege
or remedy. The terms and conditions of Article 8 hereof are inserted for the
sole benefit of the Administrative Agent and the Lenders; the same may be waived
in whole or in part, with or without terms or conditions, in respect of any
Borrowing without prejudicing the Administrative Agent’s or the Lenders’ rights
to assert them in whole or in part in respect of any other Borrowing.

 

11.2 Amendments; Consents. No amendment, modification, supplement, extension,
termination 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
Borrower or any other Party therefrom, may in any event be effective unless in
writing signed by the Administrative Agent with, except as described in clause
(iii) of the proviso below, the written approval of the Required Lenders (and,
in the case of any amendment, modification or supplement of or to any Loan
Document to which Borrower or any other Obligor is a party, signed by Borrower
and each such other Obligor, and, in the case of any amendment, modification or
supplement to Article 10, signed by the Administrative Agent), and then only in
the specific instance and for the specific purpose given; and, without the
approval in writing of all the Lenders, no amendment, modification, supplement,
termination, waiver or consent may be effective:

 

(a) To amend or modify the principal of, or the amount of principal, principal
prepayments or the rate of interest payable on, any Note, or the amount of any
commitment fee payable to any Lender, or any other fee or amount (other than
default interest) payable to any Lender (in its capacity as a Lender) under the
Loan Documents or to waive an Event of Default consisting of the failure of
Borrower to pay when due principal, interest (other than default interest) or
any fee;

 

(b) To postpone any date fixed for any payment of principal of, prepayment of
principal of or any installment of interest on, any Note or any installment of
any fee, or to extend the term of the Facility;

 

(c) To amend the provisions of the definition of “Required Lenders” or “Maturity
Date”;

 

(d) To release any Guarantor from its Guaranty or to release any Collateral from
the Lien of the Collateral Documents with a book value (as determined in
accordance with GAAP) in excess of $5,000,000 except if such release of material
Collateral occurs in connection with a Disposition permitted under the Loan

 

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Documents, in which case such release shall not require the consent of any of
the Lenders; or

 

(e) To amend or waive Section 8.1 or this Section 11.2; or

 

(f) To amend any provision of this Agreement that expressly requires the consent
or approval of all the Lenders;

 

provided, however, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Lender in addition to the Lenders required
above, affect the rights or duties of the Issuing Lender under this Agreement or
any Letter of Credit Agreement relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; and
(iii) the consent of the Required Lenders shall not be required with respect to
any amendment, modification, supplement, extension, termination or waiver of any
provision of any Approved Interest Rate Protection Agreement or Approved Foreign
Exchange Agreement so long as such amendment, modification, supplement,
extension, termination or waiver would not result in a breach or other violation
of any provision of any other Loan Document.

 

Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Lenders and the Administrative Agent.

 

11.3 Costs, Expenses and Taxes. Borrower agrees to pay within five (5) Banking
Days after demand, accompanied by an invoice therefor, all reasonable expenses
of the Administrative Agent (including the reasonable fees and expenses of
counsel to the Administrative Agent (including reasonable allocated costs of
in-house counsel employed by the Administrative Agent) and of local counsel, if
any, who may be retained by counsel to the Administrative Agent) in connection
with:

 

(a) The negotiation, preparation, execution and delivery of this Agreement and
of each other Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications to this
Agreement or any other Loan Document as may from time to time hereafter be
required, whether or not the transactions contemplated hereby (or thereby) are
consummated;

 

(b) The filing, recording, re-filing or re-recording of any Loan Document or any
UCC financing statement relating thereto and all amendments, supplements,
amendments and restatements and other modifications to any thereof and any and
all other documents or instruments of further assurance required to be filed or
recorded or re-filed or re-recorded by the terms hereof or the terms of any Loan
Document;

 

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(c) The preparation and review of the form of any document or instrument
relevant to this Agreement or any other Loan Document; and

 

(d) The preparation of any information or response required with respect to any
investigative request or inquiry, approval, findings of suitability or any other
response or communication involving a Governmental Agency arising out of this
Agreement, any other Loan Document or any Obligation evidenced by the Loan
Documents or the participation in any public or investigatory hearing or
meeting.

 

Borrower further agrees to pay, and to save the Administrative Agent, the
Issuing Lender and the Lenders harmless from all liability for, any stamp and
similar taxes that may be payable in connection with the execution or delivery
of this Agreement, the credit extensions made hereunder, or the issuance of the
Notes, the Letters of Credit or any other Loan Document. Borrower also agrees to
reimburse the Administrative Agent and, after the occurrence and during the
continuance of an Event of Default, the Issuing Lender and each Lender upon
demand for all reasonable out-of-pocket expenses (including reasonable
attorneys’ fees and legal expenses of counsel and fees and expenses of
consultants to the Administrative Agent, the Issuing Lender and the Lenders
(including reasonable allocated costs of in-house counsel employed by any such
Person)) incurred by the Administrative Agent, the Issuing Lender or such
Lenders in connection with (i) the negotiation of any restructuring or
“work-out” with Borrower whether or not consummated, of any Obligations,
(ii) the enforcement or attempted enforcement of any Obligations and any matter
related thereto, (iii) any bankruptcy of Borrower (including any adversary
proceeding, contested matter or motion brought by the Administrative Agent, the
Issuing Lender, any Lender or any other Person) and (iv) the prosecution or
defense of any action in any way related to any of the Loan Documents, including
any action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, relating to Borrower or any
other Person. Any amount payable to the Administrative Agent or any Lender under
this Section 11.3 shall bear interest from the fifth Banking Day following the
date of demand, if not then paid, for payment at the Default Rate.

 

11.4 Nature of Lenders’ Obligations. The obligations of the Lenders hereunder
are several and not joint or joint and several. Nothing contained in this
Agreement or any other Loan Document and no action taken by the Administrative
Agent or the Lenders or any of them pursuant hereto or thereto may, or may be
deemed to, make the Lenders a partnership, an association, a joint venture or
other entity, either among themselves or with Borrower, any other Obligor or any
Affiliate of any Obligor. A default by any Lender will not increase the
Commitment of any other Lender or the Pro Rata Share of the Facility
attributable to any other Lender. Any Lender not in default may, if it desires,
assume (in such proportion as the nondefaulting Lenders agree) the obligations
of any Lender in default, but no Lender is obligated to do so.

 

11.5 Survival of Representations and Warranties. All representations and
warranties contained herein or in any other Loan Document, or in any certificate
or other writing delivered by or on behalf of any one or more of the Parties to
any Loan Document, will survive the making of the Advances hereunder and the
execution and delivery of the

 

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Notes, and have been or will be relied upon by Lender, notwithstanding any
investigation made by the Administrative Agent or any Lender or on their behalf.

 

11.6 Notices. Except as otherwise expressly provided in the Loan Documents, all
notices, requests, demands, directions and other communications provided for
hereunder or under any other Loan Document must be in writing and must be
mailed, telegraphed, telecopied, dispatched by commercial courier or delivered
to the appropriate party at the address set forth on the signature pages of this
Agreement or other applicable Loan Document or, as to any party to any Loan
Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Loan Document in accordance with this Section.
Except as otherwise expressly provided in any Loan Document, if any notice,
request, demand, direction or other communication required or permitted by any
Loan Document is given by mail it will be effective on the earlier of receipt or
the fourth Banking Day after deposit in the United States mail with first class
or airmail postage prepaid; if given by telegraph or cable, when delivered to
the telegraph company with charges prepaid; if given by telecopier, when sent;
if dispatched by commercial courier, on the scheduled delivery date; or if given
by personal delivery, when delivered.

 

11.7 Execution of Loan Documents. Unless the Administrative Agent otherwise
specifies with respect to any Loan Document, (a) this Agreement and any other
Loan Document may be executed in any number of counterparts and any party hereto
or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument and (b) execution of any
such counterpart may be evidenced by a telecopier transmission of the signature
of such party. The execution of this Agreement or any other Loan Document by any
party hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.

 

11.8 Binding Effect; Assignment.

 

(a) This Agreement and the other Loan Documents to which Borrower is a Party
will be binding upon and inure to the benefit of Borrower, the Administrative
Agent, each of the Lenders, and their respective successors and assigns, except
that Borrower may not assign its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of all the Lenders. Each
Lender represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be within
the control of such Lender). Any Lender may at any time pledge its Note or any
other instrument evidencing its rights as a Lender under this Agreement to a
Federal Reserve Bank, but no such pledge shall release that Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.

 

(b) From time to time following the Closing Date, each Lender may assign to one
or more Eligible Assignees all or any portion of its rights and obligations
under this Agreement (including all or any portion of its interest in any
Advance or

 

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L/C Exposure owing to such Lender, any Note held by such Lender, the Commitment
of such Lender and/or any other interest of such Lender hereunder (in respect of
such Lender, its “Credit Exposure”)); provided that, subject to subsection (f)
below, (i) such Eligible Assignee, if not then a Lender or an Affiliate of the
assigning Lender, shall be approved by the Administrative Agent and Borrower
(neither of which approvals shall be unreasonably withheld or delayed),
(ii) such assignment shall be evidenced by an Assignment and Acceptance, a copy
of which shall be furnished to the Administrative Agent as hereinbelow provided,
(iii) except in the case of an assignment (A) to an Affiliate of the assigning
Lender, (B) to another Lender or (C) of the entire remaining Credit Exposure of
the assigning Lender under this Agreement, the assignment shall not assign
Credit Exposure that is equivalent to less than $5,000,000 or, unless such
assignment is of such assigning Lender’s entire remaining Credit Exposure,
result in the assigning Lender retaining less than $5,000,000 in Credit
Exposure, and (iv) the effective date of any such assignment shall be as
specified in the Assignment and Acceptance, but not earlier than the date which
is five (5) Banking Days after the date the Administrative Agent has received
the Assignment and Acceptance. Upon the effective date of such Assignment and
Acceptance, the Eligible Assignee named therein shall be a Lender for all
purposes of this Agreement, with the Credit Exposure therein set forth and, to
the extent of such Credit Exposure, the assigning Lender shall be released from
its further obligations under this Agreement. Borrower agrees that it shall
execute and deliver (against delivery by the assigning Lender to Borrower of
such Lender’s Notes) to such assignee Lender, Notes evidencing that assignee
Lender’s Credit Exposure, and to the assigning Lender, Notes evidencing the
remaining balance of the Credit Exposure retained by the assigning Lender.

 

(c) By executing and delivering an Assignment and Acceptance, the Eligible
Assignee thereunder acknowledges and agrees that: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
rights and obligations hereunder being assigned thereby free and clear of any
adverse claim, the assigning Lender has made no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness or sufficiency of this Agreement
or any other Loan Document; (ii) the assigning Lender has made no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of the Obligations;
(iii) it has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) it
will, independently and without reliance upon the Administrative Agent or any
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) it appoints and authorizes the Administrative
Agent to take such action and to exercise such powers under this Agreement as
are delegated to the Administrative Agent by this Agreement; and (vi) it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

 

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(d) The Administrative Agent shall maintain at the Administrative Agent’s Office
a copy of each Assignment and Acceptance delivered to it and a register (the
“Register”) of the names and address of each of the Lenders and the Pro Rata
Share of the Commitments held by each Lender, giving effect to each Assignment
and Acceptance. The Register shall be available during normal business hours for
inspection by Borrower or any Lender upon reasonable prior notice to the
Administrative Agent. After receipt of a completed Assignment and Acceptance
executed by any Lender and an Eligible Assignee, and receipt of an assignment
fee of $3,500 from such Lender or Eligible Assignee, the Administrative Agent
shall, promptly following the effective date thereof, provide to Borrower and
the Lenders a revised Schedule 1.1 giving effect thereto. Borrower, the
Administrative Agent and the Lenders shall deem and treat the Persons listed as
Lenders in the Register as the holders and owners of the Pro Rata Shares of the
Facility listed therein for all purposes hereof, and no assignment or transfer
of any Lender’s rights and obligations hereunder shall be effective, in each
case unless and until an Assignment and Acceptance effecting the assignment or
transfer thereof shall have been accepted by the Administrative Agent and
recorded in the Register as provided above. Prior to such recordation, all
amounts owed with respect to the applicable Pro Rata Shares of the Facility
shall be owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Pro Rata Shares of the Facility.

 

(e) Each Lender may from time to time grant participations to one or more banks
or other financial institutions in or to all or a portion of its Credit
Exposure; provided, however, that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other financial institutions shall not be a
Lender hereunder for any purpose except, if the participation agreement so
provides, for the purposes of Sections 3.5, 3.6, 11.11 and 11.21 but only to the
extent that the cost of such benefits to Borrower does not exceed the cost which
Borrower would have incurred in respect of the Lender granting such
participation absent the participation, (iv) Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, (v) the participation interest shall be expressed as a percentage of
the granting Lender’s Pro Rata Share of the Facility as it then exists and shall
not restrict an increase in the Facility (or the aggregate Commitments
pertaining thereto), or in the granting Lender’s rights and obligations
hereunder, so long as the amount of the participation interest is not affected
thereby and (vi) the consent of the holder of such participation interest shall
not be required for amendments or waivers of provisions of the Loan Documents
other than those which (A) extend any Maturity Date or any other date upon which
any payment of money (other than default interest) is due to the Lenders,
(B) reduce the rate of interest on the Notes, any fee or any other monetary
amount (other than default interest) payable to the Lenders, (C) reduce the
amount of any installment of principal due under the Notes, or (D) release any
Guarantor from its Guaranty.

 

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(f) Borrower agrees that upon the occurrence and during the continuance of any
Event of Default, each Lender shall be entitled to assign its rights hereunder
and under the Loan Documents to any Person, in whole or in any part thereof,
notwithstanding any provisions contained herein (including those set forth in
subsection (b) above) or in any other Loan Document to the contrary, except
that, other than (i) assignments by a Lender to an Affiliate of such Lender or
to another Lender or (ii) pledges described in the last sentence of
subsection (a) above, no assignment shall be made without the approval of the
Administrative Agent.

 

11.9 Right of Setoff. If an Event of Default has occurred and is continuing, the
Administrative Agent or any Lender (but in each case only with the consent of
the Required Lenders) may exercise its rights under Article 9 of the UCC and
other applicable Laws and, to the extent permitted by applicable Laws, apply any
funds in any deposit account maintained with it by Borrower and/or any Property
of Borrower in its possession against the Obligations.

 

11.10 Sharing of Setoffs. Each Lender severally agrees that if it, through the
exercise of any right of setoff, banker’s lien or counterclaim against a
Borrower, or otherwise, receives payment of the Obligations held by it that is
ratably more than any other Lender, through any means, receives in payment of
the Obligations held by that Lender, then, subject to applicable Laws: (a) the
Lender exercising the right of setoff, banker’s lien or counterclaim or
otherwise receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from each of the other Lenders a participation in the
Obligations held by the other Lenders and shall pay to the other Lenders a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker’s lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker’s lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Lenders
share any payment obtained in respect of the Obligations ratably in accordance
with each Lender’s share of the Obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by a Borrower or any Person claiming through or succeeding
to the rights of a Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section 11.10 shall from and after the purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased pursuant to this Section 11.10 may exercise any and
all rights of setoff, banker’s lien or counterclaim with respect to the
participation as fully as if the Lender were the original owner of the
Obligation purchased.

 

11.11 Indemnity by Borrower. Borrower agrees to indemnify, save and hold
harmless the Administrative Agent and each Lender and their respective
directors, officers,

 

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agents, attorneys and employees (collectively the “Indemnitees”) from and
against: (a) any and all claims, demands, actions or causes of action (except a
claim, demand, action, or cause of action for any amount excluded from the
definition of “Taxes” in Section 3.10(e)) if the claim, demand, action or cause
of action arises out of or relates to (i) any act or omission (or alleged act or
omission) of Borrower, any other Obligor, any Affiliate of any Obligor or any
partner, officer, director, stockholder, or other equity interest holder of any
Obligor relating to the Facility, (ii) the use or contemplated use of proceeds
of any Borrowing, (iii) the relationship of Borrower and the Lenders under this
Agreement, or (iv) the Loan Documents or the Facility in any other manner or
respect; (b) any administrative or investigative proceeding by any Governmental
Agency arising out of or related to a claim, demand, action or cause of action
described in clause (a) above; and (c) any and all liabilities, losses,
reasonable costs or expenses (including reasonable attorneys’ fees and the
reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that (A) no Indemnitee shall
be entitled to indemnification for any liability, loss, cost or expense caused
by its own gross negligence or willful misconduct or for any liability, loss,
cost or expense asserted against it by another Indemnitee and (ii) none of Wells
Fargo & Company nor any of its Subsidiaries (collectively, the “Wells Fargo
Entities”) shall be entitled to indemnification for any loss, liability, cost or
expense incurred by any Wells Fargo Entity solely as a result of, or otherwise
in connection wit or arising with respect to, such Wells Fargo Entity’s equity
ownership in Borrower. If any claim, demand, action or cause of action is
asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower,
but the failure to so promptly notify Borrower shall not affect Borrower’s
obligations under this Section unless such failure materially prejudices
Borrower’s right to participate in the contest of such claim, demand, action or
cause of action, as hereinafter provided. Such Indemnitee may (and shall, if
requested by Borrower in writing) contest the validity, applicability and amount
of such claim, demand, action or cause of action and shall permit Borrower to
participate in such contest. Any Indemnitee that proposes to settle or
compromise any claim or proceeding for which Borrower may be liable for payment
of indemnity hereunder shall give Borrower written notice of the terms of such
proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower’s prior consent
(which shall not be unreasonably withheld or delayed). In connection with any
claim, demand, action or cause of action covered by this Section 11.11 against
more than one Indemnitee, all such Indemnitees shall be represented by the same
legal counsel (which may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the foregoing) selected by the
Indemnitees, provided, that if such legal counsel determines in good faith that
representing all such Indemnitees would or could result in a conflict of
interest under Laws or ethical principles applicable to such legal counsel or
that a defense or counterclaim is available to an Indemnitee that is not
available to all such Indemnitees, then to the extent reasonably necessary to
avoid such a conflict of interest or to permit unqualified assertion of such a
defense or counterclaim, each affected Indemnitee shall be entitled to separate
representation by legal counsel selected by that Indemnitee, with all such legal
counsel using reasonable efforts to avoid unnecessary duplication of effort by
counsel for all Indemnitees; and further provided that the Administrative Agent
(as an Indemnitee) shall at all times be entitled to representation by separate
legal counsel (which

 

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may be a law firm or attorneys employed by the Administrative Agent or a
combination of the foregoing). Any obligation or liability of Borrower to any
Indemnitee under this Section 11.11 shall survive the expiration or termination
of this Agreement and the repayment of all Borrowings and the payment and
performance of all other Obligations owed to the Lenders.

 

11.12 Nonliability of the Lenders. Borrower acknowledges and agrees that:

 

(a) Any inspections of any Property of Borrower or any other Obligor made by or
through the Administrative Agent or the Lenders are for purposes of
administration of the Facility only and Borrower is not entitled to rely upon
the same (whether or not such inspections are at the expense of Borrower);

 

(b) By accepting or approving anything required to be observed, performed,
fulfilled or given to the Administrative Agent or the Lenders pursuant to the
Loan Documents, neither the Administrative Agent nor the Lenders shall be deemed
to have warranted or represented the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof, and
such acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by the Administrative Agent or the
Lenders;

 

(c) The relationship between Borrower and the Administrative Agent and the
Lenders is, and shall at all times remain, solely that of borrower and lenders;
neither the Administrative Agent nor the Lenders shall under any circumstance be
construed to be partners or joint venturers of Borrower, any other Obligor or
any of their respective Affiliates; neither the Administrative Agent nor the
Lenders shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower, any other Obligor
or any of their respective Affiliates, or to owe any fiduciary duty to Borrower,
any other Obligor or any of their respective Affiliates; neither the
Administrative Agent nor the Lenders undertake or assume any responsibility or
duty to Borrower, any other Obligor or any of their respective Affiliates to
select, review, inspect, supervise, pass judgment upon or inform Borrower, any
other Obligor or any of their respective Affiliates of any matter in connection
with their Property or the operations of Borrower, any other Obligor or any of
their respective Affiliates; Borrower, the other Obligors and their respective
Affiliates shall rely entirely upon their own judgment with respect to such
matters; and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by the Administrative Agent or the Lenders
in connection with such matters is solely for the protection of the
Administrative Agent and the Lenders and neither Borrower nor any other Person
is entitled to rely thereon; and

 

(d) The Administrative Agent and the Lenders shall not be responsible or liable
to any Person for any loss, damage, liability or claim of any kind relating to
injury or death to Persons or damage to Property caused by the actions, inaction
or negligence of Borrower, any other Obligor and/or any of their respective
Affiliates and Borrower hereby indemnifies and holds the Administrative Agent
and

 

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the Lenders harmless on the terms set forth in Section 11.11 from any such loss,
damage, liability or claim.

 

11.13 No Third Parties Benefited. This Agreement is made for the purpose of
defining and setting forth certain obligations, rights and duties of Borrower,
the Administrative Agent and the Lenders in connection with the Facilities, and
is made for the sole benefit of Borrower, the Administrative Agent and the
Lenders, and the Administrative Agent’s and the Lenders’ successors and assigns.
Except as provided in Sections 11.8 and 11.11, no other Person shall have any
rights of any nature hereunder or by reason hereof.

 

11.14 Confidentiality. Each Lender agrees to hold any confidential information
that it may receive from Borrower pursuant to this Agreement in confidence,
except for disclosure: (a) to other Lenders or Affiliates of a Lender; (b) to
legal counsel and accountants for Borrower, any other Obligor or any Lender;
(c) to other professional advisors to Borrower or any other Obligor or any
Lender, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14; (d) to
regulatory officials having jurisdiction over that Lender; (e) as required by
Law or legal process, provided that each Lender agrees to notify Borrower of any
such disclosures unless prohibited by applicable Laws, or in connection with any
legal proceeding to which that Lender and Borrower or any other Obligor are
adverse parties; and (f) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or part
of that Lender’s interests hereunder or a participation interest in its Note(s),
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14. For
purposes of the foregoing, “confidential information” shall mean any information
respecting Borrower or any other Obligor reasonably considered by Borrower to be
confidential, other than (i) information previously filed with any Governmental
Agency and available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that Lender, and
(iii) information previously disclosed by Borrower or such other Obligor to any
Person not associated with Borrower or such other Obligor which does not owe a
professional duty of confidentiality to Borrower or such other Obligor or which
has not executed an appropriate confidentiality agreement with Borrower or such
other Obligor. Nothing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of the Administrative Agent or the Lenders to
Borrower or any other Obligor.

 

11.15 Further Assurances. Borrower shall, at its expense and without expense to
the Lenders or the Administrative Agent, do, execute and deliver such further
acts and documents as the Required Lenders or the Administrative Agent from time
to time reasonably require for the assuring and confirming unto the Lenders or
the Administrative Agent of the rights hereby created or facilitating the
performance of the terms of any Loan Document.

 

11.16 Integration. This Agreement, together with the other Loan Documents, the
Fee Letter and the provisions of the Proposal Letter regarding syndication of
the Facility (including the cost reimbursement provisions relating to any such
syndication), comprises the complete and integrated agreement of the parties on
the subject matter hereof and supersedes all prior agreements, written or oral,
on the subject matter hereof. In the event of any conflict

 

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between the provisions of this Agreement and those of any other Loan Document,
the provisions of this Agreement shall control and govern; provided that the
inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement. Each Loan Document was drafted with the joint participation
of the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.

 

11.17 Governing Law. EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, EACH LOAN
DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN A STATE OR FEDERAL COURT
LOCATED IN THE STATE OF CALIFORNIA. THE PARTIES EXPRESSLY SUBMIT AND CONSENT IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN ANY SUCH
COURT, AND THE PARTIES HEREBY WAIVE ANY OBJECTION THEY MAY HAVE BASED UPON LACK
OF PERSONAL JURISDICTION AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY SUCH COURT. FURTHERMORE, THE
PARTIES HEREBY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
THEY MAY HAVE TO ASSERT THE DOCTRINE OF “FORUM NON CONVENIENS” OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 11.17.

 

11.18 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable or invalid as to any party or in any
jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.

 

11.19 Headings. Article and Section headings in this Agreement and the other
Loan Documents are included for convenience of reference only and are not part
of this Agreement or the other Loan Documents for any other purpose.

 

11.20 Time of the Essence. Time is of the essence of the Loan Documents.

 

11.21 Foreign Lenders and Participants. Each Lender, and each holder of a
participation interest herein, that is incorporated or otherwise organized under
the Laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia shall deliver to Borrower (with a copy to
the Administrative Agent), on or before the Closing Date (or on or before
accepting an assignment or receiving a participation interest herein pursuant to
Section 11.8, if applicable) two duly completed copies, signed by a Responsible
Official, of Form W-8 BEN or W-8 ECI (or other equivalent successor form)
satisfactory to Borrower and the Administrative Agent that no withholding under
the federal

 

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income tax laws is required with respect to such Person. Thereafter and from
time to time, each such Person shall (a) promptly submit to Borrower (with a
copy to the Administrative Agent), such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and the Administrative Agent of any
available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by Borrower pursuant to this Agreement and
(b) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Person, and as may be reasonably necessary
(including the re-designation of its LIBOR Lending Office, if any) to avoid any
requirement of applicable Laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Person. In the event that Borrower or the
Administrative Agent become aware that a participation has been granted pursuant
to Section 11.8(e) to a financial institution that is incorporated or otherwise
organized under the Laws of a jurisdiction other than the United States of
America, any State thereof or the District of Columbia, then, upon request made
by Borrower or the Administrative Agent to the Lender that granted such
participation, such Lender shall cause such participant financial institution to
deliver the same documents and information to Borrower and the Administrative
Agent as would be required under this Section if such financial institution were
a Lender.

 

11.22 Hazardous Material Indemnity. Borrower hereby agrees to indemnify, hold
harmless and defend (by counsel reasonably satisfactory to the Administrative
Agent) the Administrative Agent and each of the Lenders and their respective
directors, officers, employees, agents, successors and assigns from and against
any and all claims, losses, damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions of any kind, and all reasonable costs and
expenses incurred in connection therewith (including but not limited to
reasonable attorneys’ fees and the reasonably allocated costs of attorneys
employed by the Administrative Agent or any Lender, and expenses to the extent
that the defense of any such action has not been assumed by Borrower), arising
directly or indirectly out of (a) the presence on, in, under or about any Real
Property of any Hazardous Materials, or any releases or discharges of any
Hazardous Materials on, under or from any Real Property and (b) any activity
carried on or undertaken on or off any Real Property by Borrower, any other
Obligor or any of their predecessors in title, whether prior to or during the
term of this Agreement, and whether by Borrower, any other Obligor or any
predecessor in title or any employees, agents, contractors or subcontractors of
Borrower, any other Obligor or any predecessor in title, or any third persons at
any time occupying or present on any Real Property, in connection with the
handling, treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Materials at any time located or present on, in, under
or about any Real Property. The foregoing indemnity shall further apply to any
residual contamination on, in, under or about any Real Property, or affecting
any natural resources, and to any contamination of any Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on, in, under or about any Real Property, the presence of which is
caused by the Administrative Agent or the Lenders. Borrower hereby acknowledges
and agrees that, notwithstanding any other

 

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provision of this Agreement or any of the other Loan Documents to the contrary,
the obligations of Borrower under this Section shall be unlimited obligations of
Borrower and shall not be secured by any Lien on any Real Property. Any
obligation or liability of Borrower to any Indemnitee under this Section 11.22
shall survive the expiration or termination of this Agreement and the repayment
of all Advances and the payment and performance of all other Obligations owed to
the Lenders.

 

11.23 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE
PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING
THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT WILL NOT RELY ON ANY
COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY
REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY
WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

11.24 Arbitration.

 

(a) Arbitration. Except as provided in Section 11.24(c), the parties hereto
agree, upon demand by any party, to submit to binding arbitration all claims,
disputes and controversies between or among them (and their respective
employees, officers, directors, attorneys, and other agents), whether in tort,
contract or otherwise arising out of or relating to in any way (i) the Loans and
related Loan Documents which are the subject of this Agreement and its
negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit under this
Agreement.

 

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location
in California selected by the American Arbitration Association (“AAA”); (ii) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA’s optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the “Rules”). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is

 

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a bank of the protections afforded to it under 12 U.S.C. § 91 or any similar
applicable state Law.

 

(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in clauses (i), (ii) and (iii) of this subsection.

 

(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators, unless the applicable parties mutually agree upon the selection of
a single arbitrator within thirty (30) days of a written request by one party to
another party to select a single arbitrator (provided that if within such 30-day
period no such mutual agreement is reached, then the three arbitrator standard
shall apply); provided, however, that, if three arbitrators are selected, all
three such arbitrators must actively participate in all hearings and
deliberations. The arbitrator(s) will be a neutral attorney licensed in the
State of California or a neutral retired judge of the state or federal judiciary
of California, in either case with a minimum of ten years experience in the
substantive Law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator(s) will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining
any claim. In any arbitration proceeding the arbitrator(s) will decide (by
documents only or with a hearing at the discretion of the arbitrator(s)) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator(s) shall resolve all
disputes in accordance with the substantive Law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator(s) shall also have the power to award recovery of all
costs and fees, to impose sanctions and to take such other action as the
arbitrator(s) deems necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure, the California Rules of Civil Procedure or
other applicable Law. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

 

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(e) Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party’s
presentation and that no alternative means for obtaining information is
available.

 

(f) Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate
arbitration proceeding and such dispute shall not be consolidated with other
disputes or included in any class proceeding.

 

(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs
and expenses (including reasonable attorneys’ fees) of the arbitration
proceeding to the prevailing party. If both parties to such dispute prevail in
part, such fees shall be allocated among the disputing parties in such amounts
as may be determined by the arbitrator based on the relative merits and amounts
of each party’s claims.

 

(h) Injunctions. The arbitrator shall have the right to issue temporary
restraining orders, preliminary injunctions and final injunctions.

 

(i) Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real Property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA’s selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

 

(j) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary

 

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course of its business or by applicable Law or regulation. If more than one
agreement for arbitration by or between the parties potentially applies to a
dispute, the arbitration provision most directly related to the Loan Documents
or the subject matter of the dispute shall control. The arbitration provisions
set forth in this Section 11.24 shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

 

11.25 Replacement of Lenders. If any Lender (i) shall be entitled to increased
compensation pursuant to Section 3.5 or Section 3.6(a) or (b), (ii) shall not be
required to fund LIBOR loans as a result of the application of Section 3.6(c);
or (iii) does not consent to a requested waiver or amendment hereof that is
consented to by the Required Lenders, then Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 11.8), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that:

 

(a) Borrower shall have paid or shall shave caused to be paid to the
Administrative Agent the assignment fee specified in Section 11.8(d),

 

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan Documents
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts); and

 

(c) such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise made within five
(5) Business Days of Borrower’s notice to such Lender of Borrower’s intent to
replace such Lender, the circumstances entitling Borrower to require such
assignment and delegation cease to apply.

 

11.26 USA Patriot Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Patriot Act.

 

[THIS SPACE INTENTIONALLY LEFT BLANK -

SIGNATURE PAGES FOLLOW]

 

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

 

KEYSTONE AUTOMOTIVE INDUSTRIES, INC., a California corporation

By

 

/s/ John A. Palumbo

   

Name: John A. Palumbo

   

Title: CFO, Vice President & Treasurer

 

Address for Borrower:

Keystone Automotive Industries, Inc.

700 E. Bonita Avenue

Pomona, California 91767

Attn: Chief Financial Officer

Telecopier: (909) 624-9136

Telephone: (909) 624-8041

With a copy to:

Keystone Automotive Industries, Inc.

700 E. Bonita Avenue

Pomona, California 91767

Attn: General Counsel

Telecopier: (909) 624-9136

Telephone: (909) 624-8041

 

S-1

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WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

By

 

/s/ Robert Louk

   

Name: Robert Louk

   

Title: Vice President

 

Address for notices to Administrative Agent for borrowings and payments:

Wells Fargo Bank, National Association

San Gabriel Valley RCBO

1000 Lakes Drive, Suite 250

West Covina, California 91790

Attn: Keystone Automotive Account Officer

Telecopier: (626) 919-2909

Telephone: (626) 919-6613

With a copy to:

Wells Fargo Bank, National Association

201 Third Street, 8th Floor

San Francisco, California 94103

Attn: Keystone Automotive Agency Officer

Telecopier: (415) 546-6353

Telephone: (415) 477-5339

 

S-2

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender

By

 

/s/ Robert Louk

   

Name: Robert Louk

   

Title: Vice President

 

Address:

Wells Fargo Bank, National Association

San Gabriel Valley RCBO

1000 Lakes Drive, Suite 250

West Covina, California 91790

Attn: Keystone Automotive Account Officer

Telecopier: (626) 919-2909

Telephone: (626) 919-6613

 

S-3

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JPMORGAN CHASE BANK, N.A.,
as a Lender

By

 

/s/ Sanjna R. Daphtary

   

Name: Sanjna R. Daphtary

   

Title: Associate

 

Address:

1999 Avenue of the Stars, 27th Floor

Los Angeles, California 90067

Attention: Sanjna Daphtary

Telecopier: (310) 860-7110

Telephone: (310) 860-7283

 

S-4

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SCHEDULE 1.1

 

LENDER COMMITMENTS AND

 

PRO RATA SHARES

 

BANK  

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

   AMOUNT

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

   %

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

 

Wells Fargo

   $ 50,000,000    66.66666667 %

JPMorgan Chase

   $ 25,000,000    33.33333333 %

TOTAL

   $ 75,000,000    100.00000000 %

 

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