Exhibit 10.1

 

 

CREDIT AGREEMENT

 

dated as of

 

February 29, 2012

 

Between

 

MESA LABORATORIES, INC.

as the Borrower

 

and

 

JPMORGAN CHASE BANK, N.A.,

as the Lender

 

 

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TABLE OF CONTENTS

 

 

Page

 

 

Article I Definitions

1

SECTION 1.01. Defined Terms

1

SECTION 1.02. Classification of Loans

15

SECTION 1.03. Terms Generally

15

SECTION 1.04. Accounting Terms; GAAP

15

Article II The Credits

15

SECTION 2.01. Revolving Commitment

15

SECTION 2.02. Revolving Loans

16

SECTION 2.03. Intentionally Omitted

16

SECTION 2.04. Requests for Revolving Loans

16

SECTION 2.05. Letters of Credit

16

SECTION 2.06. Funding of Revolving Loans

18

SECTION 2.07. Interest Elections

18

SECTION 2.08. Termination of Revolving Commitment

19

SECTION 2.09. Authorization for Direct Payments

19

SECTION 2.10. Repayment of Loans; Evidence of Debt

20

SECTION 2.11. Prepayment of Loans

20

SECTION 2.12. Fees

20

SECTION 2.13. Interest

21

SECTION 2.14. Alternate Rate of Interest

21

SECTION 2.15. Increased Costs

22

SECTION 2.16. Break Funding Payments

22

SECTION 2.17. Taxes

23

SECTION 2.18. Payments Generally

24

SECTION 2.19. Mitigation Obligations

24

Article III Representations and Warranties

24

SECTION 3.01. Organization; Powers

24

SECTION 3.02. Authorization; Enforceability

25

SECTION 3.03. Governmental Approvals; No Conflicts

25

SECTION 3.04. Financial Condition; No Material Adverse Change

25

SECTION 3.05. Properties

25

SECTION 3.06. Litigation and Environmental Matters

26

SECTION 3.07. Compliance with Laws and Agreements

26

SECTION 3.08. Investment Company Status

26

SECTION 3.09. Taxes

26

SECTION 3.10. ERISA

26

SECTION 3.11. Disclosure

27

SECTION 3.12. Solvency

27

Article IV Conditions

27

SECTION 4.01. Effective Date

27

SECTION 4.02. Each Credit Event

28

Article V Affirmative Covenants

28

SECTION 5.01. Financial Statements; Ratings Change and Other Information

28

SECTION 5.02. Notices of Material Events

29

SECTION 5.03. Existence; Conduct of Business

30

 

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SECTION 5.04. Payment of Obligations

30

SECTION 5.05. Maintenance of Properties; Insurance

30

SECTION 5.06. Books and Records; Inspection Rights

30

SECTION 5.07. Compliance with Laws

30

SECTION 5.08. Environmental Liabilities

31

SECTION 5.09. Use of Proceeds

31

SECTION 5.10. Operating Accounts

31

SECTION 5.11. Financial Covenants

31

SECTION 5.12. Post-Closing Covenants

32

Article VI Negative Covenants

32

SECTION 6.01. Indebtedness

32

SECTION 6.02. Liens

32

SECTION 6.03. Fundamental Changes

32

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions

33

SECTION 6.05. Swap Agreements

33

SECTION 6.06. Restricted Payments

33

SECTION 6.07. Transactions with Affiliates

33

SECTION 6.08. Restrictive Agreements

33

SECTION 6.09. Government Regulation

34

SECTION 6.10. Real Estate Negative Pledge

34

SECTION 6.11. No Assets in Subsidiaries

34

Article VII Events of Default

34

Article VIII Miscellaneous

36

SECTION 8.01. Notices

36

SECTION 8.02. Waivers; Amendments

36

SECTION 8.03. Expenses; Indemnity; Damage Waiver

37

SECTION 8.04. Successors and Assigns

38

SECTION 8.05. Survival

38

SECTION 8.06. Counterparts; Integration; Effectiveness

39

SECTION 8.07. Severability

39

SECTION 8.08. Right of Setoff

39

SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process

39

SECTION 8.10. WAIVER OF JURY TRIAL

40

SECTION 8.11. Headings

40

SECTION 8.12. Confidentiality

40

SECTION 8.13. Interest Rate Limitation

41

SECTION 8.14. Patriot Act

41

 

SCHEDULES:

 

Schedule 3.05 — Real Estate

Schedule 3.06 — Disclosed Matters

Schedule 6.01 — Existing Indebtedness

Schedule 6.02 — Existing Liens

 

EXHIBITS:

 

Exhibits A — Form of Opinions of Borrower’s Counsel

Exhibit B — Compliance Certificate Form

 

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CREDIT AGREEMENT dated as of February 29, 2012 by and between MESA
LABORATORIES, INC., a Colorado corporation (the “Borrower”) and JPMORGAN CHASE
BANK, N.A. (the “Lender”).

 

The parties hereto agree as follows:

 

ARTICLE I
DEFINITIONS

 

SECTION 1.01. Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Loan, for any
Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such
period multiplied by (b) the Statutory Reserve Rate.  Any change in the Adjusted
LIBO Rate due to a change in the LIBO Rate shall be effective from and including
the effective date of such change in the LIBO Rate.

 

“Adjusted One Month LIBO Rate” means an interest rate per annum equal to the sum
of (i) 2.50% per annum plus (ii) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day); provided that, for the avoidance of doubt, the Adjusted
LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen
LIBOR01 Page (or on any successor or substitute page) at approximately
11:00 a.m. London time on such day.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Revolving Maturity Date and the date of
termination of the Revolving Commitment.

 

“Banking Services” includes any bank account, credit card, ACH, overdraft, cash
management, or other banking services provided by Lender to Borrower.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” means Mesa Laboratories, Inc., a Colorado corporation.

 

“Borrowing Request” means a request by Borrower for a Revolving Loan in
accordance with Section 2.04.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Denver are authorized or required by law to remain
closed; provided that, when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” means, with respect to any Person, all expenditures (by
the expenditure of cash or the incurrence of Indebtedness) by such Person during
any measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of more than one
year and that are required to be capitalized under GAAP, but specifically
excluding

 

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(i) Capital Lease Obligations and (ii) expenditures made from proceeds received
upon the disposition of replaced assets or from insurance or condemnation
proceeds received by such Person during any measuring period (to the extent such
expenditures are permitted in this Agreement).

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall, on any day, not be less than the Adjusted One Month LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day).  Any change in the CB Floating Rate due to
a change in the Prime Rate or the Adjusted One Month LIBO Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Adjusted One Month LIBO Rate, respectively.

 

“CB” when used in reference to any Loan or Loans, refers to whether such Loan,
or the Loans comprising such Loan, is bearing interest at a rate determined by
reference to the CB Rate.

 

“CB Margin means, when the ratio of Funded Debt to EBITDA (measured on a
trailing four quarter basis) with respect to Borrower and its Subsidiaries on a
consolidated basis, is:

 

(a) less than 1.0 to 1.0, negative one and one-quarter percent (-1.25%);

(b) greater than or equal to 1.0 to 1.0, but less than 1.5 to 1.0, negative one
percent (-1.0%);

(c) greater than or equal to 1.5 to 1.0, but less than 2.0 to 1.0, negative
three-quarters of one percent (-0.75%); and

(d) greater than or equal to 2.0 to 1.0, negative one-half of one percent
(-0.5%)

 

Notwithstanding anything to the contrary in the foregoing, through and including
the last day of the first Fiscal Quarter following the Effective Date, the CB
Margin will be negative one and one-quarter percent (-1.25%).

 

“CB Rate” means, with respect to a CB Loan, the sum of the CB Floating Rate plus
the CB Margin.

 

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of Borrower;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of Borrower by Persons who were neither (i) nominated by the board
of directors of Borrower nor (ii) appointed by directors so nominated.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by Lender (or, for purposes of
Section 2.16(b), by any lending office of Lender or by Lender’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.

 

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

 

“Collateral” means the property covered by the Security Agreement and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Lender, to secure the
Obligations.

 

“Collateral Documents” means the Security Agreement and all similar agreements
entered into guaranteeing payment of, or granting a Lien upon property as
security for payment of, the Obligations.

 

“Compliance Certificate” is attached hereto as Exhibit B.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. 
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Denver” shall mean Denver, Colorado.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

 

“Dollars” or “$” refers to lawful money of the United States of America.

 

“EBITDA” means, with respect to Borrower and its Subsidiaries on a consolidated
basis, for any fiscal period, without duplication, an amount equal to
(a) consolidated Net Income of such Person for such period, determined in
accordance with GAAP, plus, (b) to the extent deducted from (added to) Net
Income: (i) non-cash charges for share based payments, plus (ii) income tax
expense, plus (iii) Interest Expense, plus (iv) depreciation and amortization,
plus (v) non-recurring, extraordinary loss and minus (vi) non-recurring,
extraordinary gain, in each case, for such period.

 

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

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“Equipment” is all “equipment” as defined in the UCC with such additions to such
term as may hereafter be made, and includes without limitation all machinery,
fixtures, goods, vehicles (including motor vehicles and trailers), and any
interest in any of the foregoing.

 

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

 

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

 

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

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar” when used in reference to any Loan, refers to whether such Loan is
bearing interest at the Eurodollar Rate.

 

“Eurodollar Rate” means, with respect to a Eurodollar Loan, for the relevant
Interest Period, the sum of the Adjusted LIBO Rate plus the LIBOR Margin.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Taxes” means, with respect to Lender, or any other recipient of any
payment to be made by or on account of any obligation of Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of Lender, in which its applicable lending office is located and (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which Borrower is located.

 

“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.

 

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“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by Lender from three Federal funds brokers of recognized standing
selected by it.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of Borrower.

 

“Fiscal Quarter” means any of the quarterly accounting periods of Borrower,
ending on the last day of March, June, September and December of each year.

 

“Fiscal Year” means any of the annual accounting periods of Borrower ending on
March 31 of each year.

 

“Fixed Charge Coverage Ratio” means, on any date of determination, with respect
to Borrower and its Subsidiaries on a consolidated basis, the ratio of
(a) EBITDA less cash Taxes paid for the four Fiscal Quarters ending on or
immediately prior to such date to (b) the sum of (i) Interest Expense for such
period, plus (ii) scheduled principal payments on all Indebtedness by Borrower
or any Subsidiary for such period, plus (iii) Unfinanced Capital Expenditures
for such period, plus (iv) actual stock redemption payments paid during such
period, plus (v) dividends permitted to be paid for such period.

 

“Funded Debt” means, with respect to any Person, without duplication, (i) all
Indebtedness of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all purchase money
Indebtedness (including for purposes hereof, indebtedness and obligations
described in clauses (d) and (e) of the definition of “Indebtedness”) of such
Person, including without limitation the principal portion of all Capital Lease
Obligations, (iv) all Guarantees of such Person with respect to Funded
Indebtedness of another Person, (v) the maximum available amount of all standby
letters of credit or acceptances issued or created for the account of such
Person, (vi) all Funded Debt of another Person secured by a Lien on any property
of such Person, whether or not such Funded Indebtedness has been assumed,
provided that for purposes hereof the amount of such Funded Debt shall be
limited to the greater of (A) the amount of such Funded Debt as to which there
is recourse to such Person and (B) the fair market value of the property which
is subject to the Lien, (vii) the outstanding attributed principal amount under
any Securitization Transaction, and (viii) the principal balance outstanding
under any synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP.  The
Funded Debt of any Person shall include the Funded Debt of any partnership or
joint venture in which such Person is a general partner or joint venturer, but
only to the extent to which there is recourse to such Person for the payment of
such Funded Debt.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. For purposes
hereof the Indebtedness of Borrower shall include all of the Obligations.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

 

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“Interest Election Request” means a request by Borrower to (a) convert,
continue, or make Interest Period elections for each Revolving Loan in
accordance with Section 2.07(a) or (b) make Interest Period elections for each
Term Loan in accordance with Section 2.07(b).

 

“Interest Expense” means for any fiscal period, as calculated on a consolidated
basis for Borrower and its Subsidiaries, interest expense (whether cash or
non-cash) determined in accordance with GAAP for the relevant period ending on
such date, including, in any event, interest expense with respect to any Loan
and other Indebtedness, including, without limitation or duplication, all
commissions, discounts, or related amortization and other fees and charges with
respect to letters of credit and bankers’ acceptance financing and the net costs
associated with interest rate swap, cap, and similar arrangements, and the
interest portion of any deferred payment obligation (including leases of all
types).

 

“Interest Payment Date” means (a) with respect to CB Loans, the last day of each
calendar month and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such
Interest Period.

 

“Interest Period” means, with respect to any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months thereafter, as
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Date would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and, thereafter shall be the effective date of
the most recent conversion or continuation of such Loan.

 

“LC Disbursement” means a payment made by Lender pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of
Borrower at such time.

 

“Lender” means JPMorgan Chase Bank, N.A., together with its successors and
assigns.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“Letter of Credit Fee” means, a fee, payable on the issue date of each Letter of
Credit and on each anniversary date that such Letter of Credit is still
outstanding, equal to the outstanding face amount of such Letter of Credit
multiplied by, when the ratio of Funded Debt to EBITDA (measured on a trailing
four quarter basis) with respect to Borrower and its Subsidiaries on a
consolidated basis is:

 

(a) less than 1.0 to 1.0, one and one-quarter percent (1.25%);

(b) greater than or equal to 1.0 to 1.0, but less than 1.5 to 1.0, one and
one-half percent (1.5%);

(c) greater than or equal to 1.5 to 1.0, but less than 2.0 to 1.0, one and
three-quarters percent (1.75%); and

(d) greater than or equal to 2.0 to 1.0, two percent (2.0%).

 

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Notwithstanding anything to the contrary in the foregoing, through and including
the last day of the first Fiscal Quarter following the Effective Date, the
Letter of Credit Fee will be one and one-quarter percent (1.25%).

 

“LIBOR Margin” means, when the ratio of Funded Debt to EBITDA (measured on a
trailing four quarter basis) with respect to Borrower and its Subsidiaries on a
consolidated basis, is:

 

(a) less than 1.0 to 1.0, one and one-quarter percent (1.25%);

(b) greater than or equal to 1.0 to 1.0, but less than 1.5 to 1.0, one and
one-half percent (1.5%);

(c) greater than or equal to 1.5 to 1.0, but less than 2.0 to 1.0, one and
three-quarters percent (1.75%); and

(d) greater than or equal to 2.0 to 1.0, two percent (2.0%).

 

Notwithstanding anything to the contrary in the foregoing, through and including
the last day of the first Fiscal Quarter following the Effective Date, the LIBOR
Margin will be one and one-quarter percent (1.25%).

 

“LIBO Rate” means, with respect to any Eurodollar Loan for any Interest Period,
the interest rate determined by the Bank by reference to the Page to be the rate
at approximately 11:00 a.m. London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Loan for such Interest Period shall be the rate at which dollar
deposits in the approximate amount of principal outstanding on such date and for
a maturity comparable to such Interest Period are offered by the principal
London office of Lender in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means the Agreement, the Collateral Documents, and all other
agreements, notes instruments, documents and executed and delivered to, or in
favor of, Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements and all other
written matter whether heretofore, now or hereafter executed by or on behalf of
Borrower, or any employee of Borrower, and delivered to Lender in connection
with the Agreement or the transactions contemplated thereby.  Any reference in
the Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

 

“Loans” means the loans made by Lender to Borrower pursuant to this Agreement.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of Borrower
and its Subsidiaries taken as a whole, (b) the ability of Borrower to perform
any of its obligations under this Agreement or any other

 

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Loan Document or (c) the rights of or benefits available to Lender under this
Agreement or any other Loan Document.

 

“Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Swap Agreements, of any one or more of
Borrower and its Subsidiaries in an aggregate principal amount exceeding Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00).  For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that
Borrower or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Income” means, as calculated on a consolidated basis for Borrower and its
Subsidiaries for any period as at any date of determination, the net profit (or
loss) of Borrower and its Subsidiaries for such period taken as a single
accounting period.

 

“Obligations” means all loans, advances, debts, liabilities and obligations, for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by Borrower to Lender and all covenants
and duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement, letter of credit agreement or
other instrument, arising under the Agreement, any of the other Loan Documents,
or otherwise.  This term includes all principal, interest (including all
interest that accrues after the commencement of any case or proceeding by or
against Borrower in bankruptcy, whether or not allowed in such case or
proceeding), amounts outstanding for Rate Management Transactions, Banking
Services, cash management services, other bank products offered by Lender or its
Affiliates to Borrower, fees, expenses, attorneys’ fees and any other sum
chargeable to Borrower under the Agreement, any of the other Loan Documents, or
otherwise.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

 

“Page” means Reuters Screen LIBOR01, formerly known as Page 3750 of the
Moneyline Telerate Service (together with any successor or substitute, the
“Service”) or any successor or substitute page of the Service providing rate
quotations comparable to those currently provided on such page of the Service,
as determined by Lender from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market.

 

“Participant” is defined in Section 8.04(b).

 

“Patriot Act” means the USA Patriot Act of 2001, 31 U.S.C Section 5318, as
amended.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Acquisitions” include (i) acquisitions by Borrower or any Subsidiary
of substantially all the stock or property of any person or (ii) acquisitions by
Borrower or any Subsidiary

 

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which result in substantially all of the stock or property of a Person being
owned by Borrower or such Subsidiary following the closing of such transaction,
in each case where:

 

(a)  The applicable Borrower has provided Lender with no less than thirty (30)
days notice prior to the closing of such transaction, including without
limitation, the name of the Person that Borrower or any Subsidiary, as the case
may be, is acquiring, the total consideration for the transaction (broken out
into line items for cash and other property), the form of the transaction (asset
purchase, stock purchase or otherwise) and any other information reasonably
requested by Lender;

 

(b)  Borrower has provided Lender with lien and judgment searches conducted by
Borrower on the Person being acquired prior to the closing of the transaction
(which shall include, without limitation, lien searches on any other names
(prior names, d/b/a’s or otherwise) of such Person used within the past five
(5) years;

 

(c) The cash portion of the purchase price for such transaction is no more than
Ten Million Dollars ($10,000,000.00) (including any contingent obligations and
earn-out payments);

 

(d)  The cash portion of the purchase price for all such transactions occurring
in any consecutive twelve month period, with respect to Borrower and its
Subsidiaries, is not more than Sixteen Million Dollars ($16,000,000.00) in the
aggregate (including any contingent obligations and earn-out payments);

 

(e) An Event of Default has not occurred and is not continuing or could not
reasonably be expected to result from such transaction;

 

(f) The assets of the target company in such acquisition are free and clear of
all Liens that would not otherwise constitute Permitted Encumbrances hereunder
at the time of the closing of such transaction;

 

(g)  If requested by Lender, the applicable Borrower delivers to Lender, within
thirty (30) days of the closing of any such transaction, any documents required
by Lender in order for Lender to obtain a first priority security interest in
the assets acquired by Borrower (including, without limitation, assets owned by
any U.S. Subsidiary with respect to which Borrower or any existing Subsidiary
has acquired all or a portion of such entity’s stock); and

 

(h)  Borrower has provided to Lender at least 10 days prior to the closing of
any such transaction, a certificate demonstrating that the ratio of pro-forma
Funded Debt (reflecting the anticipated Funded Debt after the acquisition) to
EBITDA, as calculated on a consolidated basis for Borrower and its Subsidiaries
on a trailing four quarter basis (excluding EBITDA of the acquisition target for
such periods), is not more than 2.0 to 1.0.

 

“Permitted Encumbrances” means:

 

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;

 

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

 

(c) pledges and deposits made in the ordinary course of business in compliance
with

 

10

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workers’ compensation, unemployment insurance and other social security laws or
regulations;

 

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

 

(e)  purchase money Liens (i) on equipment acquired or held by Borrower or its
Subsidiaries incurred for financing the acquisition of the equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;

 

(f)  judgment liens in respect of judgments that do not constitute an Event of
Default under clause (l) of Article VII; and

 

(g) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of Borrower or any Subsidiary;

 

provided that the term “Permitted Encumbrances” shall not include (i) any Lien
securing Indebtedness, unless otherwise permitted hereunder or (ii) Liens under
subsections (a) through (g) above securing Indebtedness exceeding $500,000 in
the aggregate for all such Liens.

 

“Permitted Investments” means:

 

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

 

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;

 

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000; and

 

(f)  Investments consisting of travel advances, employee relocation loans, loans
to employees in connection with the exercise of stock incentives, and other
employee or independent contractor loans and advances in the ordinary course of
business, not exceeding $1,500,000 in the aggregate at any one time outstanding;
and

 

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(g)  Permitted Acquisitions.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Lender as its prime rate. Each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.  THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE LENDER’S LOWEST
RATE.

 

“Rate Management Transaction” means (i) any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between Borrower
and JPMorgan Chase Bank, N.A. and/or its Affiliates which is a rate swap, swap
option, basis swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap, floor, collar, currency
swap, cross-currency rate swap, currency option, credit protection transaction,
credit swap, credit default swap, credit default option, total return swap,
credit spread, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions), or (ii) any type of transaction that is similar to any
transaction referred to in clause (i) above that is currently, or in the future
becomes, recurrently entered into in the financial markets and which is a
forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt
securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to
be made, or any combination of the foregoing transactions.

 

“Regulation D” means Regulation D of the Board as from time to time in effect
and any successor thereto or other regulation or official interpretation of said
Board relating to reserve requirements applicable to member banks of the Federal
Reserve System.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in Borrower
or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in Borrower or any option, warrant or other right to
acquire any such Equity Interests in Borrower.

 

“Revolving Loan” means a Loan made pursuant to Section 2.02.

 

“Revolving Commitment” means the commitment of Lender to make Revolving Loans,
as such commitment may be reduced or increased from time to time pursuant to
assignments by Lender

 

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pursuant to Section 8.04.  The initial amount of the Revolving Commitment is
Twenty Million and No/100 Dollars ($20,000,000.00).

 

“Revolving Credit Exposure” means the sum of the outstanding principal amount of
Lender’s Revolving Loans and its LC Exposure at such time.

 

“Revolving Maturity Date” means the date that is three years following the
Effective Date.

 

“SEC” means the United States Securities and Exchange Commission.

 

“S&P” means Standard & Poor’s.

 

“Securitization Transaction” means any financing transaction or series of
financing transactions that have been or may be entered into by Borrower or any
Subsidiaries pursuant to which such Person may sell, convey or otherwise
transfer to (i) a Subsidiary or affiliate, or (ii) any other Person, or may
grant a security interest in, any receivables or interests therein secured by
merchandise or services financed thereby (whether such receivables are then
existing or arising in the future) of such Person, and any assets related
thereto, including without limitation, all security interests in merchandise or
services financed thereby, the proceeds of such receivables, and other assets
which are customarily sold or in respect of which security interests are
customarily granted in connection with securitization transactions involving
such assets.

 

“Security Agreement” means the Security Agreement entered into as of the
Effective Date by Borrower in favor of Lender, as amended from time to time.

 

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute
an unreasonably small capital.  The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which Lender is subject, with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to Lender under
such Regulation D or any comparable regulation.  The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of Borrower.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of Borrower or the
Subsidiaries shall be a Swap Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Transactions” means the execution, delivery and performance by Borrower of this
Agreement, the borrowing of Loans and the use of the proceeds thereof.

 

“Type”, when used in reference to any Loan, refers to whether the rate of
interest on such Loan, is determined by reference to the Eurodollar Rate or the
CB Rate.

 

“UCC” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Colorado; provided, that to the extent
that the UCC is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, the Administrative Agent’s or any Lender’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Colorado, the term “UCC” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.

 

“Unfinanced Capital Expenditures” means Capital Expenditures paid in cash (other
than cash that constitutes proceeds of Indebtedness); however, to the extent
that proceeds of any Revolving Loan or Letter of Credit are used to fund Capital
Expenditures, such Capital Expenditures will be considered Unfinanced Capital
Expenditures.

 

“Unused Line Fee” is a fee on the non-use of available funds in an amount equal
to the Applicable Percentage multiplied by the difference between (x) the
Revolving Commitment and (y) the average of Lender’s daily closing Revolving
Credit Exposure during the period for which such fee is due. The Unused Line Fee
shall be computed on the basis of a year of 360 days and shall be payable on a
quarterly basis based on the actual number of days elapsed (including the first
day but excluding the last

 

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day).  For purposes hereof, the Applicable Percentage means, when the ratio of
Funded Debt to EBITDA, as calculated on a consolidated basis for Borrower and
its Subsidiaries on a trailing four quarter basis, is:

 

(a) less than 1.0 to 1.0, 0.15%;

(b) greater than or equal to 1.0 to 1.0, but less than 1.5 to 1.0, 0.20%;

(c) greater than or equal to 1.5 to 1.0, but less than 2.0 to 1.0, 0.25%; and

(d) greater than or equal to 2.0 to 1.0, 0.30%.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02. Classification of Loans.  For purposes of this Agreement, Loans
may be classified and referred to by Type (e.g., a “Eurodollar Loan”).

 

SECTION 1.03. Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

 

SECTION 1.04. Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if Borrower
notifies Lender that Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if Lender
notifies Borrower that Lender requests an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

ARTICLE II
THE CREDITS

 

SECTION 2.01. Revolving Commitment.  Subject to the terms and conditions set
forth herein, Lender agrees to make Revolving Loans to Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in Lender’s Revolving Credit Exposure exceeding the Revolving
Commitment.  Within the foregoing limits and subject to the terms and conditions
set forth herein, Borrower may borrow, prepay and reborrow Revolving Loans.

 

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SECTION 2.02. Revolving Loans.  (a)  Subject to Section 2.14, each Revolving
Loan shall be comprised entirely of CB Loans or Eurodollar Loans as Borrower may
request in accordance herewith.  Lender, at its option, may make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of Borrower to repay such Loan in accordance with the terms of this
Agreement.  Revolving Loans of more than one Type may be outstanding at the same
time; provided that there shall not at any time be more than a total of five
(5) Eurodollar Loans outstanding.  Each Eurodollar Loan shall be for a minimum
of $500,000, or such greater amount pursuant to the terms hereof, in increments
of $100,000.

 

(b)  Notwithstanding any other provision of this Agreement, Borrower shall not
be entitled to request any Revolving Loan if the Interest Period requested with
respect thereto would end after the Revolving Maturity Date.

 

SECTION 2.03. Intentionally Omitted.

 

SECTION 2.04. Requests for Revolving Loans.  To request a Revolving Loan,
Borrower shall notify Lender of such request by telephone (a) in the case of a
Eurodollar Loan, not later than 12:00 p.m., Denver time, three Business Days
before the date of the proposed Revolving Loan or (b) in the case of a CB Loan,
not later than 12:00 p.m., Denver time, on the Business Day of such proposed
Loan; provided that any such notice of a CB Loan to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.05(e) may be given not later
than 10:00 a.m., Denver time, on the date of the proposed Loan.  Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to Lender of a written Borrowing Request
in a form approved by Lender and signed by the applicable Borrower.  Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

 

(i)  the aggregate amount of the requested Revolving Loan;

 

(ii)  the date of such Revolving Loan, which shall be a Business Day;

 

(iii)  whether such Revolving Loan is to be a CB Loan or a Eurodollar Loan;

 

(iv)  in the case of a Eurodollar Loan, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

 

(v)  the location and number of Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

 

If no election as to the Type of Revolving Loan is specified, then any requested
Revolving Loan shall be a CB Loan.  If no Interest Period is specified with
respect to any requested Eurodollar Loan, then Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

SECTION 2.05. Letters of Credit.  (a) General.  Subject to the terms and
conditions set forth herein, Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to Lender, at any
time and from time to time during the Availability Period.  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by Borrower to, or entered into by Borrower with, Lender relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
A Letter of Credit shall be issued, amended, renewed or extended only if (and
upon issuance, amendment, renewal or extension of each Letter of Credit Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure

 

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shall not exceed $1,000,000 and (ii) the total Revolving Credit Exposures shall
not exceed the total Revolving Commitment.

 

(b)  Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by Lender) to Lender (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit.  If requested by Lender, Borrower
also shall submit a letter of credit application on Lender’s standard form in
connection with any request for a Letter of Credit.  A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the applicable Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension Lender’s Revolving Credit Exposure shall not
exceed the Revolving Commitment.

 

(c)  Expiration Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the last day of the Availability Period.

 

(d)  Reimbursement.  If Lender shall make any LC Disbursement in respect of a
Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to
Lender an amount equal to such LC Disbursement not later than 10:00 a.m., Denver
time, on the date that such LC Disbursement is made, if Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., Denver time, on
such date, or, if such notice has not been received by Borrower prior to such
time on such date, then not later than 12:00 p.m., Denver time, on (i) the
Business Day that Borrower receive such notice, if such notice is received prior
to 10:00 a.m., Denver time, on the day of receipt, or (ii) the Business Day
immediately following the day that Borrower receive such notice, if such notice
is not received prior to such time on the day of receipt; provided that Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with a CB Loan in an
equivalent amount and, to the extent so financed, Borrower’s obligation to make
such payment shall be discharged and replaced by the resulting CB Loan.

 

(e)  Obligations Absolute.  Borrower’s obligation to reimburse LC Disbursements
as provided in paragraph (d) of this Section shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by Lender under a Letter of Credit against presentation
of a draft or other document that does not comply with the terms of such Letter
of Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, Borrower’s obligations hereunder.  Neither Lender, nor any of
its Related Parties, shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery

 

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of any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any error
in interpretation of technical terms or any consequence arising from causes
beyond the control of Lender; provided that the foregoing shall not be construed
to excuse Lender from liability to Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by Borrower to the extent permitted by applicable law) suffered by
Borrower that are caused by Lender’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof.  The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of Lender (as finally
determined by a court of competent jurisdiction), Lender shall be deemed to have
exercised care in each such determination.  In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, Lender may, in its sole discretion, either
accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

 

(f)  Disbursement Procedures.  Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit.  Lender shall promptly notify Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether Lender has made
or will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve Borrower of its obligation to
reimburse Lender with respect to any such LC Disbursement.

 

(g)  Interim Interest.  If Lender shall make any LC Disbursement, then, unless
Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that Borrower reimburses such LC Disbursement, at the rate per annum
then applicable to Overnight Revolving Loans; provided that, if Borrower fails
to reimburse such LC Disbursement when due pursuant to paragraph (d) of this
Section, then Section 2.12(d) shall apply.  Interest accrued pursuant to this
paragraph shall be for the account of Lender.

 

SECTION 2.06. Funding of Revolving Loans.  Lender will make Revolving Loans and
available to Borrower by crediting the amount of such Revolving Loan to an
account of Borrower maintained with Lender in Denver and designated by Borrower
in the applicable Borrowing Request.

 

SECTION 2.07. Interest Elections.  (a) Borrower may elect to convert each Loan
to a different Type or to continue each Loan, and, in the case of a Eurodollar
Loan, may elect Interest Periods therefore, all as provided in this paragraph. 
Borrower may elect different options with respect to different portions of the
affected Loan.

 

(b)  To make an election pursuant to this Section, Borrower shall notify Lender
of such election by telephone by the time that a Borrowing Request would be
required under Section 2.04 if Borrower were requesting a Revolving Loan of the
Type resulting from such election to be made on the effective date of such
election.  Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to Lender of a
written Interest Election Request in a form approved by Lender and signed by
Borrower.

 

(c)  Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.04:

 

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(i)  the Loan to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Loan (in which case the
information to be specified pursuant to clauses (C) and (D) below shall be
specified for each resulting Loan);

 

(ii)  the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

 

(iii)  whether the resulting Loan is to be a CB Loan or a Eurodollar Loan; and

 

(iv)  if the resulting Loan is a Eurodollar Loan, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period.”

 

If any such Interest Election Request requests a Eurodollar Loan but does not
specify an Interest Period, then Borrower shall be deemed to have selected an
Interest Period of one month’s duration.

 

(d)  If Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Loan prior to the end of the Interest Period applicable
thereto, then, unless such Loan is repaid as provided herein, at the end of such
Interest Period such Loan shall be converted to a CB Loan.

 

Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and Lender so notifies Borrower, then, so long as an
Event of Default is continuing (A) no outstanding Revolving Loan may be
converted to or continued as a Eurodollar Loan and (B) unless repaid, each
Eurodollar Loan shall be converted to a CB Loan at the end of the Interest
Period applicable thereto.

 

SECTION 2.08. Termination of Revolving Commitment.  (a)  Unless previously
terminated, the Revolving Commitment shall terminate on the Revolving Maturity
Date.

 

(b)  Borrower may at any time terminate the Revolving Commitment; provided that
Borrower shall not terminate the Revolving Commitment if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.11, Lender’s
Revolving Credit Exposure would exceed the Revolving Commitment.

 

(c)  Borrower shall notify Lender of any election to terminate the Revolving
Commitment under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination, specifying such election and
the effective date thereof.  Each notice delivered by Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitment delivered by Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by Borrower (by notice to Lender on or prior to the
specified effective date) if such condition is not satisfied.  Any termination
of the Revolving Commitment shall be permanent.

 

SECTION 2.09. Authorization for Direct Payments.  To effectuate any payments due
under the Loan Documents, Borrower hereby authorizes Lender to initiate deposit
entries to Borrower’s primary operating account with Lender, and to debit the
same to such account.  This authorization to initiate debit entries shall remain
in full force and effect until Lender has received written notification from the
applicable Borrower of its termination in such time and in such manner to afford
Lender a reasonable opportunity to act on it.  Borrower represents that Borrower
is and will be the owner of all funds in such

 

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account. Borrower acknowledges: (1) that such debit entries may cause an
overdraft of such account which may result in Lender’s refusal to honor items
drawn on such account until adequate deposits are made to such account; (2) that
Lender is under no duty or obligation to initiate any debit entry for any
purpose; and (3) that if a debit is not made because the above-referenced
account does not have a sufficient available balance, or otherwise, the payment
may be late or past due.

 

SECTION 2.10. Repayment of Loans; Evidence of Debt.  (a) Borrower hereby
unconditionally promise to pay to Lender the then unpaid principal amount of
each Revolving Loan on the Revolving Maturity Date.

 

(b)           Lender shall maintain an account in which it shall record (i) the
amount of each Revolving Loan and Type thereof and (ii) the amount of any
principal or interest due and payable or to become due and payable from Borrower
to Lender for all Loans hereunder .

 

(c)  The entries made in the account maintained pursuant to paragraph (b) of
this Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of Lender to maintain
such account or any error therein shall not in any manner affect the obligation
of Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(d)  Lender may require that any Loans made by it be evidenced by a promissory
note.  In such event, Borrower shall prepare, execute and deliver to Lender a
promissory note payable to the order of Lender (or, if requested by Lender, to
Lender and its respective registered assigns) and in a form approved by Lender. 
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 8.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

 

SECTION 2.11. Prepayment of Loans.  (a) Borrower shall have the right at any
time and from time to time to prepay any Revolving Loan in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section 2.11.

 

(b)  Borrower shall notify Lender by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan, not
later than 12:00 p.m., Denver time, three Business Days before the date of
prepayment, or (ii) in the case of prepayment of a CB Loan, not later than
12:00 p.m., Denver time, on the Business Day of such prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Loan or portion thereof to be prepaid; provided that,
if a notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitment as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08.  Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.

 

SECTION 2.12. Fees.  (a) Borrower agree to pay to Lender, in addition to all
other amounts payable hereunder, any fees payable in the amounts and at the
times separately agreed upon between Borrower and Lender, in writing.

 

(b)  Borrower agrees to pay to Lender, an Unused Line Fee during the period from
and including the Effective Date and ending on the date on which the Revolving
Commitment terminates.  The Unused Line Fee shall be payable in arrears on the
last day of each Fiscal Quarter of each year and on the and on the date on which
the Revolving Commitment terminates, commencing on the first such date to occur
after the date hereof.

 

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(c)  Borrower agrees to pay to Lender, the Letter of Credit Fee, as and when due
and payable, as well as Lender’s standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Any fees payable to Lender pursuant to this paragraph
(other than the Letter of Credit Fee) shall be payable within 10 days after
demand.  All participation fees and letter of credit fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

 

(d)  Any principal or interest which is not paid within 10 days after its due
date (whether as stated, by acceleration or otherwise) shall be subject to a
late payment charge of five percent (5.0%) of the total payment due, in addition
to the payment of interest, up to the maximum amount of One Thousand Five
Hundred and No/100 Dollars ($1,500.00) per late charge. Borrower agrees to pay
and stipulates that five percent (5.0%) of the total payment due is a reasonable
amount for a late payment charge.  Borrower shall pay the late payment charge
upon demand by Lender or, if billed, within the time specified.

 

(e)  All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to Lender for distribution, in the case of facility fees and
participation fees, to Lenders.  Fees paid shall not be refundable under any
circumstances.

 

SECTION 2.13. Interest.  (a)  Each CB Loan shall bear interest at the CB Rate.

 

(b)  Each Eurodollar Loan shall bear interest at the Eurodollar Rate for the
Interest Period in effect for such Loan.

 

(c)  Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, three percent (3.0%) plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, three
percent (3.0%) plus the rate applicable to CB Loans as provided in paragraph
(a) of this Section.

 

(d)  Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.

 

(e)  All interest hereunder shall be computed on the basis of a year of 360
days.  The applicable CB Rate or Eurodollar Rate shall be determined by Lender,
and such determination shall be conclusive absent manifest error.

 

SECTION 2.14. Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Loan:

 

(a) Lender determines (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate for such Interest Period; or

 

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(b) the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to Lender of making or maintaining its Loans (or its
Loan) for such Interest Period;

 

then Lender shall give notice thereof to Borrower by telephone or telecopy as
promptly as practicable thereafter and, until Lender notifies Borrower that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Loan, or
continuation of any Loan, as a Eurodollar Loan shall be ineffective, and (ii) if
any Borrowing Request requests a Eurodollar Loan, such Loan shall be made as a
CB Loan.

 

SECTION 2.15. Increased Costs.  (a)  If any Change in Law shall:

 

(i)  impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or

 

(ii) impose on Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by Lender or any Letter of
Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to Lender
of making or maintaining any Eurodollar Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to Lender of issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by Lender hereunder (whether of principal, interest or otherwise),
then Borrower will pay to Lender such additional amount or amounts as will
compensate Lender for such additional costs incurred or reduction suffered.

 

(b)  If Lender determines that any Change in Law regarding capital requirements
has or would have the effect of reducing the rate of return on Lender’s capital
or on the capital of Lender’s holding company, if any, as a consequence of this
Agreement or the Loans made by Lender to a level below that which Lender or
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration Lender’s policies and the policies of Lender’s holding
company with respect to capital adequacy), then from time to time Borrower will
pay to Lender such additional amount or amounts as will compensate Lender or
Lender’s for any such reduction suffered.

 

(c)  A certificate of Lender setting forth the amount or amounts necessary to
compensate Lender or its holding company, as specified in paragraph (a) or
(b) of this Section, shall be delivered to Borrower and shall be conclusive
absent manifest error.  Borrower shall pay Lender the amount shown as due on any
such certificate within 10 days after receipt thereof.

 

(d)  Failure or delay on the part of Lender to demand compensation pursuant to
this Section shall not constitute a waiver of Lender’s right to demand such
compensation; provided that Borrower shall not be required to compensate Lender
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that Lender notifies Borrower of the Change in
Law giving rise to such increased costs or reductions and of Lender’s intention
to claim compensation therefor; provided further that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

SECTION 2.16. Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, or (c) the failure to borrow, convert,
continue or prepay any Eurodollar

 

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Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.07(a)(ii), (b)(ii) or
(c)(ii) and is revoked in accordance therewith), then, in any such event,
Borrower shall compensate Lender for the loss, cost and expense attributable to
such event.  In the case of a Eurodollar Loan, such loss, cost or expense to
Lender shall be deemed to include an amount determined by Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of the Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks
in the eurodollar market.  A certificate of Lender setting forth any amount or
amounts that Lender is entitled to receive pursuant to this Section shall be
delivered to Borrower and shall be conclusive absent manifest error.  Borrower
shall pay Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.

 

SECTION 2.17. Taxes.  (a)  Any and all payments by or on account of any
obligation of Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) Borrower shall make
such deductions and (iii) Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 

(b)  In addition, Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c)  Borrower shall indemnify Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
Lender on or with respect to any payment by or on account of any obligation of
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to Borrower
by Lender shall be conclusive absent manifest error.

 

(d)  As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by Borrower to a Governmental Authority, Borrower shall deliver to Lender
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to Lender.

 

(e) If Lender determines, in its sole discretion, that it has received a refund
of any Taxes or Other Taxes as to which it has been indemnified by Borrower or
with respect to which Borrower have paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to Borrower (but only to the extent
of indemnity payments made, or additional amounts paid, by Borrower under this
Section 2.17 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that Borrower, upon the request of Lender, agree to
repay the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Lender in the event
Lender is required to repay such refund to such

 

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Governmental Authority. This Section shall not be construed to require Lender to
make available its tax returns (or any other information relating to its taxes
which it deems confidential) to Borrower or any other Person.

 

SECTION 2.18. Payments Generally.  (a) Borrower shall make each payment required
to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 10:00 am, Denver time, on the date when due, in immediately
available funds, without set-off or counterclaim.  Any amounts received after
such time on any date may, in the discretion of Lender, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to Lender at its offices at
1125 17th Street, 3rd Floor, Denver, Colorado 80202, except that payments
pursuant to Section 8.03 shall be made directly to the Persons entitled
thereto.  Lender shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.  To effectuate any payment due under the
Loan Documents, Borrower hereby authorizes Lender to initiate debit entries to
any deposit account of Borrower maintained with Lender and to debit the same to
such account. This authorization to initiate debit entries shall remain in full
force and effect until Lender has received notification of its termination in
such time and in such matter as to afford Lender a reasonable opportunity to act
on it. Borrower acknowledge (1) that such debit entries may cause an overdraft
of any such account which may result in Lender’s refusal to honor items drawn on
any such account until adequate deposits are made to such account, (2) that
Lender is not under any duty or obligation to initiate any debit entry for any
purpose, and (3) that if a debit is not made because any such account does not
have a sufficient available balance, or otherwise, the payment may be late or
past due.

 

(b)  If at any time insufficient funds are received by and available to Lender
to pay fully all amounts of principal, unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied (i) first, towards
payment of interest and fees then due hereunder and (ii) second, towards payment
of principal and unreimbursed LC Disbursements then due hereunder.

 

SECTION 2.19. Mitigation Obligations.  If Lender requests compensation under
Section 2.15, or if Borrower are required to pay any additional amount to Lender
or any Governmental Authority for the account of Lender pursuant to Section 2.17
then Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in
the future and (ii) would not subject Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to Lender.  Borrower hereby agrees to
pay all reasonable costs and expenses incurred by Lender in connection with any
such designation or assignment.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrant, jointly and severally to Lender that:

 

SECTION 3.01. Organization; Powers.  Each of Borrower and each of its respective
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a

 

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Material Adverse Effect, is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required.

 

SECTION 3.02. Authorization; Enforceability.  The Transactions are within
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action.  This Agreement has been duly
executed and delivered by Borrower and constitutes a legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.03. Governmental Approvals; No Conflicts.  The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of Borrower
or any of its respective Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon Borrower or any of its Subsidiaries
or its assets, or give rise to a right thereunder to require any payment to be
made by Borrower or any of its respective Subsidiaries, and (d) will not result
in the creation or imposition of any Lien on any asset of Borrower or any of its
respective Subsidiaries.

 

SECTION 3.04. Financial Condition; No Material Adverse Change.  (a) Borrower has
heretofore furnished to Lender, Borrower’s consolidated balance sheet and
statements of income, stockholders equity and cash flows as of and for the
Fiscal Years ended March 31, 2010 and March 31, 2011, reported on by an
independent public accounting firm.  Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of Borrower and its consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP.

 

(b)  Since March 31, 2011, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
Borrower and its Subsidiaries, taken as a whole.

 

SECTION 3.05. Properties.  (a)  As of the Effective Date, the real estate (“Real
Estate”) listed on Schedule 3.05 hereto constitutes all of the real property
owned, leased, subleased, or used by Borrower.  Borrower will own, as of the
Effective Date, good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Schedule 3.05, and copies of all such leases or a
summary of terms thereof reasonably satisfactory to Lender have been delivered
to Lender.  Schedule 3.05 further describes any Real Estate with respect to
which Borrower is a lessor, sublessor or assignor as of the Effective Date. 
Borrower and each of its respective Subsidiaries also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets.  As of the Effective Date, none of the properties and assets of Borrower
or any of its respective Subsidiaries are subject to any Liens other than
Permitted Encumbrances, and there are no facts, circumstances or conditions
known to Borrower or any of its respective Subsidiaries that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances.  Borrower and each of its respective Subsidiaries has received all
deeds, assignments, waivers, consents, nondisturbance and attornment or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect Borrower’s and its Subsidaries’ respective right, title and interest in
and to all such Real Estate and other properties and assets.  Schedule 3.05 also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate.  As of the Effective Date, no
portion of Borrower’s Real Estate has suffered any material damage by fire or
other casualty loss that has

 

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not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied.  As of the Effective Date, all
material permits required to have been issued or appropriate to enable the Real
Estate to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect.

 

(b)  Borrower and each of its respective Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by Borrower and such
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect..

 

SECTION 3.06. Litigation and Environmental Matters.  (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of Borrower, threatened against or
affecting Borrower or any of its respective Subsidiaries (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or
(ii) that involve this Agreement or the Transactions.

 

(b)  Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

 

(c)  Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

 

SECTION 3.07. Compliance with Laws and Agreements.  Borrower and each of its
respective Subsidiaries is in compliance with all laws, regulations and orders
of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.08. Investment Company Status.  Neither Borrower nor any of its
respective Subsidiaries is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940.

 

SECTION 3.09. Taxes.  Borrower and each of its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10. ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.  The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements

 

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reflecting such amounts, exceed by more than $50,000 the fair market value of
the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $50,000 the fair market value of the assets of all such underfunded Plans.

 

SECTION 3.11. Disclosure.  Borrower has disclosed to Lender all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.  No reports, financial statements, certificates or other
information furnished by or on behalf of Borrower to Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, Borrower represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.

 

SECTION 3.12. Solvency.  Both before and after giving effect to (a) the Loans
and other Obligations to be made or incurred on the Effective Date or such other
date as Loans and other Obligations requested hereunder are made or incurred,
(b) the disbursement of the proceeds of such Loans pursuant to the instructions
of Borrower and (c) the payment and accrual of all transaction costs in
connection with the foregoing, Borrower is and will be Solvent.

 

ARTICLE IV
CONDITIONS

 

SECTION 4.01. Effective Date.  The obligations of Lender to make Loans hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 8.02):

 

(a)  Lender (or its counsel) shall have received from Borrower, duly executed
original signatures to the Loan Documents to which it is a party.

 

(b)  Lender shall have received a favorable written opinion (addressed to Lender
and dated the Effective Date) of outside counsel for Borrower, substantially in
the forms of Exhibit A, and covering such other matters relating to Borrower,
the Loan Documents, or the Transactions as Lender shall reasonably request.

 

(b)  Lender shall have received such documents and certificates as Lender or its
counsel may reasonably request relating to the organization, existence and good
standing of Borrower, the authorization of the Transactions and any other legal
matters relating to Borrower, the Loan Documents, or the Transactions, all in
form and substance satisfactory to Lender and its counsel.

 

(d)  Lender shall have received evidence satisfactory to Lender that Lender has
a valid and perfected first priority security interest in the Collateral,
including (i) such documents duly executed by Borrower (including financing
statements under the UCC and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Lender may request in
order to perfect its security interests in the Collateral and (ii) copies of UCC
search reports listing all effective financing statements that name Borrower as
debtor, together with copies of such financing statements, none of which shall
cover the Collateral and Permitted Encumbrances.

 

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(e)  Lender shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.

 

(f)  Lender shall have received certificates, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of Borrower
containing such other statements with respect to the solvency of Borrower and
matters related thereto as Lender shall request.

 

(g)  Lender shall have received all fees and other amounts due and payable on or
prior to the Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by
Borrower hereunder.

 

Lender shall notify Borrower of the Effective Date, and such notice shall be
conclusive and binding.  Notwithstanding the foregoing, the obligations of
Lender to make Loans hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 8.02) at or
prior to 1:00 p.m., Denver time, on February 29, 2012 (and, in the event such
conditions are not so satisfied or waived, the Revolving Commitment shall
terminate at such time).

 

SECTION 4.02. Each Credit Event.  The obligation of Lender to make a Loan on the
occasion of any Loan, including without limitation, the obligation of Lender to
make the Term Loan on the Funding Date, and to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:

 

(a)  The representations and warranties of Borrower set forth in this Agreement
shall be true and correct on and as of the date of such Loan or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable.

 

(b)  At the time of and immediately after giving effect to such Loan or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

 

Each Loan and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Borrower
on the date thereof as to the matters specified in paragraphs (a) and (b) of
this Section.

 

ARTICLE V
AFFIRMATIVE COVENANTS

 

Until the Revolving Commitment has expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been
indefeasibly paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, Borrower
covenants and agrees with Lender that:

 

SECTION 5.01. Financial Statements; Ratings Change and Other Information. 
Borrower will furnish to Lender:

 

(a) within 90 days after the end of each Fiscal Year, the audited consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows for Borrower, as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous Fiscal Year, all
reported on by independent public accountants of recognized national

 

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standing, which shall include, without limitation, Ehrhardt Keefe Steiner &
Hottman PC (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;

 

(b) within 45 days after the end of each of its first, second and third Fiscal
Quarter and within 90 days after the end of its fourth Fiscal Quarter,
Borrower’s consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such quarter and
the then elapsed portion of the Fiscal Year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous Fiscal Year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

 

(c) concurrently with any delivery of financial statements under clause
(b) above, a completed Compliance Certificate executed by a Financial Officer of
Borrower;

 

(d) concurrently with any delivery of financial statements under clause
(a) above, (i) a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines) and (ii) the management letter from such accountants delivered to
Borrower in connection with their annual audit;

 

(e)  contemporaneously with the distribution thereof to Borrower’s stockholders
or partners or the filing thereof with the SEC, as the case may be, copies of
all statements, reports, notices and filings distributed by Borrower to its
stockholders or filed with the SEC (including reports on Forms 10-K, 10-Q and
8-K) or any Governmental Authority succeeding to any or all of the functions of
the SEC or with any national securities exchange;

 

(f)  no event later than ninety (90) days following fiscal year end, provide
Lender with an annual operating budget for the next fiscal year, which shall
include, at a minimum, a balance sheet, income statement and cash flow statement
presented in monthly or quarterly formats. In addition, Borrower shall provide
Lender any material revisions to such operating budget within a reasonable time
following the date such revisions are made.

 

(g)  promptly after Borrower or any Subsidiary becomes aware of the commencement
thereof, notice of any investigation, action, suit or proceeding before any
Governmental Authority involving the condemnation or taking under the power of
eminent domain of any material portion of its property or the revocation or
suspension of any material permit, license, certificate of need or other
governmental requirement applicable to any of its properties or assets;

 

(h)  promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as Lender may
reasonably request.

 

SECTION 5.02. Notices of Material Events.  Borrower will furnish to Lender
prompt written notice of the following:

 

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(a) the occurrence of any Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting Borrower or any
Affiliate thereof that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;

 

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of Borrower and its Subsidiaries in an aggregate amount exceeding
$250,000; and

 

(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

SECTION 5.03. Existence; Conduct of Business.  Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

 

SECTION 5.04. Payment of Obligations.  Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including Tax liabilities, that, if not
paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) Borrower or such
Subsidiary, as the case may be, has set aside on their books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 5.05. Maintenance of Properties; Insurance.  Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.

 

SECTION 5.06. Books and Records; Inspection Rights.  Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities.  Borrower will, and will cause each
of its Subsidiaries to, permit any representatives designated by Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.

 

SECTION 5.07. Compliance with Laws.  Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

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SECTION 5.08. Environmental Liabilities.  Borrower shall and shall cause each
Person within their control to: (i) conduct its operations and keep and maintain
its real property in compliance with all Environmental Laws other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (ii) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of its real property or to otherwise comply with Environmental
Laws pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or release of any Hazardous Material on, at, in, under, above,
to, from or about any of its real property in all material respects;
(iii) notify Lender promptly after Borrower becomes aware of any violation of
Environmental Laws or any release of Hazardous Materials on, at, in, under,
above, to, from or about any of its real property that is reasonably likely to
result in Environmental Liabilities in excess of $250,000; and (iv) promptly
forward to Lender a copy of any order, notice, request for information or any
communication or report received by Borrower in connection with any such
violation or release of Hazardous Materials or any other matter relating to any
Environmental Laws that could reasonably be expected to result in Environmental
Liabilities in excess of $250,000 in each case whether or not any Governmental
Authority has taken or threatened any action in connection with any such
violation, release of Hazardous Materials or other matter.  If Lender at any
time has a reasonable basis to believe that there may be a violation of any
Environmental Laws by Borrower or any Environmental Liability arising
thereunder, or a release of Hazardous Materials on, at, in, under, above, to,
from or about any of its real property, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then Borrower shall, upon Lender’s
written request (A) cause the performance of such environmental audits including
subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower’s expense, as Lender may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Lender and shall be in form and
substance reasonably acceptable to Lender, and (B) permit Lender or its
representatives to have access to all of its real property for the purpose of
conducting such environmental audits and testing as Lender deems appropriate,
including subsurface sampling of soil and groundwater.  Borrower shall reimburse
Lender for the costs of such audits and tests and the same will constitute a
part of the Obligations.

 

SECTION 5.09. Use of Proceeds.  The proceeds of the Revolving Loans will be used
solely for working capital and general corporate purposes, including the
refinance of all senior bank debt and certain other debt, and to support
acquisition financing and capital expenditures. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations T, U
and X.

 

SECTION 5.10. Operating Accounts.  Borrower shall maintain, beginning no later
than March 31, 2012, its primary and its Subsidiaries’ primary banking
depository and disbursement relationship with Lender.

 

SECTION 5.11. Financial Covenants.  Borrower shall not breach or fail to comply
with any of the following financial covenants, each of which shall be calculated
in accordance with GAAP, consistently applied:

 

(a)  Fixed Charge Coverage Ratio.  Borrower will maintain, as of the last day of
each Fiscal Quarter, calculated on a trailing four quarter basis as of the month
then-ending, a Fixed Charge Coverage Ratio of not less than 1.5 to 1.0.

 

(b) Funded Debt to EBITDA Ratio.   Borrower will maintain, as of the last day of
each Fiscal Quarter, calculated on a trailing four quarter basis as of the
Fiscal Quarter then-ending, a ratio of Funded Debt to EBITDA, of not more than
2.5 to 1.0.

 

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SECTION 5.12. Post-Closing Covenants.  Borrower shall, no later than 60 days
following the Effective Date, cause UCC Financing Statement #20112009949,
listing the Internal Revenue Service as “secured party” and filed with the
Colorado Secretary of State, to be terminated.

 

ARTICLE VI
NEGATIVE COVENANTS

 

Until the Revolving Commitment has expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been
indefeasibly paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, Borrower
covenants and agrees with Lender that, unless Borrower has obtained the prior
written consent of Lender:

 

SECTION 6.01. Indebtedness.  Borrower will not, nor will permit any Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except:

 

(a) Indebtedness created hereunder;

 

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

 

(c)  Contingent obligations or earn-out payments that are included in the
amounts set forth in subsections (c) and (d) of the definition of “Permitted
Acquisitions”; and

 

(d) Indebtedness secured by Permitted Encumbrances.

 

SECTION 6.02. Liens.  Borrower will not, nor will permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, including, without limitation, its Real
Estate, or assign or sell any income or revenues (including accounts receivable)
or rights in respect of any thereof, except:

 

(a) Permitted Encumbrances; and

 

(b) any Lien on any property or asset of Borrower or any Subsidiary existing on
the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of Borrower or such Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof.

 

SECTION 6.03. Fundamental Changes.  (a) Borrower will not, nor will permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets, or all or substantially all of the stock of
any of its Subsidiaries (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into Borrower in a transaction in which Borrower is
the surviving corporation, (ii) any Person may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary
may sell, transfer, lease or otherwise dispose of its assets to Borrower or to
another Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the
applicable Borrower

 

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determines in good faith that such liquidation or dissolution is in the best
interests of Borrower and is not materially disadvantageous to Lender; provided
that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 6.04.

 

(b)  Borrower will not, nor will permit any of its Subsidiaries to, engage to
any material extent in any business other than businesses of the type conducted
by Borrower and its Subsidiaries on the date of execution of this Agreement and
businesses reasonably related thereto.

 

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. 
Borrower will not, nor will permit any of its Subsidiaries to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly
owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:

 

(a) Permitted Investments; and

 

(b) investments by Borrower existing on the date hereof in the capital stock of
its Subsidiaries.

 

SECTION 6.05. Swap Agreements.  Borrower will not, nor will permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of Borrower or
any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of Borrower or any
Subsidiary.

 

SECTION 6.06. Restricted Payments.  Borrower will not, nor will permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) Borrower may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its common stock, (b) Subsidiaries may declare and pay dividends
ratably with respect to their Equity Interests, and (c) so long as no Event of
Default has occurred or is continuing and Borrower can demonstrate pro-forma
compliance with the financial covenants set forth in Section 5.11,
(i) repurchases by Borrower of its Equity Interests; provided however, that cash
paid by Borrower in connection with such repurchases may not to exceed $500,000
in the aggregate in any consecutive twelve month period and (ii) Borrower may
declare and pay cash dividends with respect to its Equity Interests.

 

SECTION 6.07. Transactions with Affiliates.  Borrower will not, nor will permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) in the ordinary course of business at prices and on terms and
conditions not less favorable to Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties and (b)  any
Restricted Payment permitted by Section 6.06.

 

SECTION 6.08. Restrictive Agreements.  Borrower will not, nor will permit any of
its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of Borrower or any

 

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Subsidiary to create, incur or permit to exist any Lien upon any of its property
or assets other than Permitted Encumbrances, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to Borrower or any other
Subsidiary or to Guarantee Indebtedness of Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iii) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (iv) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

 

SECTION 6.09. Government Regulation.  Borrower will not (1) be or become subject
at any time to any law, regulation, or list of any government agency (including,
without limitation, the U.S. Office of Foreign Asset Control list) that
prohibits or limits Lender from making any advance or extension of credit to
Borrower or from otherwise conducting business with Borrower, or (2) fail to
provide documentary and other evidence of Borrower’s identity as may be
requested by Lender at any time to enable Lender to verify Borrower’s identity
or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the Patriot Act.

 

SECTION 6.10. Real Estate Negative Pledge.  Borrower will not enter into any
agreement, document, instrument or other arrangement (except with or in favor of
Lender) with any Person which directly or indirectly prohibits or has the effect
of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower’s or any
Subsidiary’s Real Estate.

 

SECTION 6.11. No Assets in Subsidiaries.   Borrower will ensure that neither SGM
Biotech, Inc. and Raven Biological Laboratories, Inc. own any assets which, in
the aggregate, have a fair market value in excess of $50,000 at any one time.

 

ARTICLE VII
EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a) Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

 

(b) Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable
under this Agreement, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three Business Days;

 

(c) any representation or warranty made or deemed made by or on behalf of
Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect when made or deemed made;

 

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(d) Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.03 (with respect to Borrower’s
existence), 5.08 or 5.09 or in Article VI;

 

(e) Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from Lender to Borrower (which notice
will be given at the request of Lender);

 

(f) Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

 

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (h) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

 

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of Borrower, any Subsidiary, or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for Borrower, any Subsidiary, or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;

 

(i) Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

 

(j) Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;

 

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $250,000 shall be rendered against Borrower, any Subsidiary, or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of Borrower or any Subsidiary to enforce any such judgment;

 

(l) an ERISA Event shall have occurred that, in the opinion of Lender, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;

 

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(m) the occurrence or existence of any default, event of default or other
similar condition or event (however described) with respect to any other Loan
Document or any other written agreement between Borrower and, or for the benefit
of, Lender; or

 

(n) a Change in Control shall occur;

 

then, and in every such event (other than an event with respect to Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, Lender may, by notice to Borrower, take
either or both of the following actions, at the same or different
times:  (i) terminate the Revolving Commitment, and thereupon the Revolving
Commitment shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Borrower; and in case of any event with
respect to Borrower described in clause (i) or (j) of this Article, the
Revolving Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Borrower.

 

ARTICLE VIII
MISCELLANEOUS

 

SECTION 8.01. Notices.  (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

 

(i) if to Borrower, 12100 West Sixth Avenue, Lakewood, CO 80228, Attention of
Mr. Steven Peterson, Chief Financial Officer (Telecopy No. 303-987-8989); and

 

(ii) if to Lender, to JPMorgan Chase Bank, N.A., 1125 17th Street, 3rd Floor,
Denver, Colorado 80202, Attention of Steve Driscoll, Senior Vice President,
Commercial Banking (Telecopy No. 303-244-3351).

 

(b)  Lender or Borrower may, in their discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

(c)  Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto.  All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

 

SECTION 8.02. Waivers; Amendments.  (a)  No failure or delay by Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of Lender hereunder are cumulative and
are not exclusive of any rights or remedies that they would otherwise have.  No
waiver of any provision of this Agreement or consent to any departure by

 

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Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether Lender may have had notice or knowledge of such
Default at the time.

 

(b)  Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by Borrower and Lender.

 

SECTION 8.03. Expenses; Indemnity; Damage Waiver.  (a)  Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by Lender and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for Lender,
in connection with the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof (whether or not
the transactions contemplated hereby or thereby shall be consummated); (ii) all
reasonable out-of-pocket expenses incurred by Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by Lender,
including the fees, charges and disbursements of any counsel for Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.

 

(b)  Borrower shall indemnify Lender and each Related Party of Lender (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Borrower or any
Subsidiary, or any Environmental Liability related in any way to Borrower or any
Subsidiary, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c)  To the extent permitted by applicable law, Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

 

(d)  All amounts due under this Section shall be payable not later than three
days after written demand therefor.

 

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SECTION 8.04. Successors and Assigns.

 

(a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of Lender that issues any Letter of
Credit), except that Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of Lender (and
any attempted assignment or transfer by Borrower without such consent shall be
null and void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
Lender that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)  (i) Lender may, without the consent of Borrower, sell participations to one
or more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Revolving Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) Borrower shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to 8.02(b) that affects such Participant. 
Subject to paragraph (b)(ii) of this Section, Borrower agrees that each
Participant shall be entitled to the benefits of 2.15, 2.16, and 2.17 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of 8.08 as though it were a
Lender.

 

(ii)  A Participant shall not be entitled to receive any greater payment under
2.15 or 2.17 than Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower’s prior written consent.

 

(c)   Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 8.05. Survival.  All covenants, agreements, representations and
warranties made by Borrower herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Revolving Commitment has not expired or
terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 8.03 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the

 

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Loans, the expiration or termination of the Revolving Commitment or the
termination of this Agreement or any provision hereof.

 

SECTION 8.06. Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and any
separate letter agreements with respect to fees payable to Lender constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by Lender and
when Lender shall have received counterparts hereof which, when taken together,
bear the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

SECTION 8.07. Severability.  Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 8.08. Right of Setoff.  If an Event of Default shall have occurred and
be continuing, Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by Lender or
Affiliate to or for the credit or the account of Borrower against any of and all
the obligations of Borrower now or hereafter existing under this Agreement held
by Lender, irrespective of whether or not Lender shall have made any demand
under this Agreement and although such obligations may be unmatured.  The rights
of each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which Lender may have.

 

SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process.  (a) 
This Agreement shall be construed in accordance with and governed by the law of
the State of Colorado.

 

(b)  Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the State and Federal courts in
Denver County, Colorado, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such Colorado State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement shall affect any
right that Lender may otherwise have to bring any action or proceeding relating
to this Agreement against Borrower or its properties in the courts of any
jurisdiction.

 

(c)  Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any court referred to in paragraph
(b) of this Section.  Each of the parties hereto hereby irrevocably waives, to
the fullest extent

 

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permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 8.01.  Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

(e)  BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW,
ANY RIGHT BORROWER MAY HAVE TO CLAIM OR RECOVER FROM LENDER IN ANY LEGAL ACTION
OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

 

SECTION 8.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 8.11. Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 8.12. Confidentiality.  Lender agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of, or any prospective assignee of,
any of its rights or obligations under this Agreement or (ii)  any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to Borrower and its obligations, (g) with the consent of Borrower or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to Lender on a
nonconfidential basis from a source other than Borrower.  For the purposes of
this Section, “Information” means all information received from Borrower
relating to Borrower or its respective businesses, other than any such
information that is available to Lender on a nonconfidential basis prior to
disclosure by Borrower; provided that, in the case of information received from
Borrower after the date hereof, such information is clearly identified at the
time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

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SECTION 8.13. Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by Lender in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to Lender in
respect of other Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated amount, together with interest thereon at
the Federal Funds Effective Rate to the date of repayment, shall have been
received by Lender.

 

SECTION 8.14. Patriot Act.  Lender hereby notifies Borrower that pursuant to the
requirements of Section 326 of the Patriot Act:

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.  To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, Lender will ask for Borrower’s name,
taxpayer identification number, business address, and other information that
will allow Lender to identify Borrower. Lender may also ask Borrower to see
Borrower’s legal organizational documents or other identifying documents.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

41

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

BORROWER:

 

 

 

MESA LABORATORIES, INC., a Colorado corporation

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

 

 

 

 

LENDER:

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

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