mis_8k0118ex108.htm


    Exhibit
      10.8

    


    STANDBY
      LETTER OF CREDIT
      AGREEMENT

    
      
        

      



    


    To:  WELLS
      FARGO BANK, NATIONAL
      ASSOCIATION

    


    Applicant
      hereby requests that you,
      Wells Fargo Bank, National Association ("Wells Fargo"), issue in your name
      one
      or more standby letters of credit pursuant to Applications for the issuance
      of
      such Credits and the terms and conditions of this Agreement.  Each
      Credit will be issued at Applicant's request and for its account, and, unless
      otherwise specifically provided in any Loan Document, at your
      option.  Applicant agrees that the terms and conditions in this
      Agreement shall apply to each Application and the Credit issued pursuant to
      each
      Application, and to transactions under each Application, each Credit and this
      Agreement.

    


    SECTION
      1. DEFINITIONS.  As
      used in this Agreement, the following terms shall have the meanings set forth
      after each term: "Agreement"
means
      this Standby Letter of
      Credit Agreement as it may be revised or amended from time to
      time.  "Applicant"
means
      collectively each
      person and/or entity signing this Agreement as Applicant.  "Application"
means
      your printed form
      titled "Application For Standby Letter of Credit" or any other form acceptable
      to you on which Applicant applies for the issuance by you of a Credit and/or
      an
      application for amendment of a Credit or any combination of such applications,
      as the context may require.  "Beneficiary"
means
      the person or entity
      named on an Application as the beneficiary or any transferee of such
      beneficiary.  "Collateral"
      means the Property, together
      with the proceeds of such Property, securing any or all of Applicant's
      obligations and liabilities at any time existing under or in connection with
      any
      L/C Document and/or any Loan Document. "Commission
      Fee" means
      the fee, computed at the commission fee rate specified by you or specified
      in
      any Loan Document, charged by you at the time or times specified by you on
      the
      amount of each Credit and on the amount of each increase in a Credit for the
      time period each Credit is outstanding. "Credit"
means
      an instrument or
      document titled "Irrevocable Standby Letter of Credit" or "Standby Letter of
      Credit", or any instrument or document whatever it is titled or whether or
      not
      it is titled functioning as a standby letter of credit, issued under or pursuant
      to an Application, and all renewals, extensions and amendments of such
      instrument or document.  "Demand"
means
      any sight draft,
      electronic or telegraphic transmission or other written demand drawn or made,
      or
      purported to be drawn or made, under or in connection with any
      Credit.  "Document"
means
      any instrument,
      statement, certificate or other document referred to in or related to any Credit
      or required by any Credit to be presented with any Demand.  "Dollars"
means
      the lawful currency at
      any time for the payment of public or private debts in the United States of
      America.  "Event
      of
      Default"
means
      any of the events set forth in Section 13 of this
      Agreement.  "Expiration
      Date"
means
      the date any Credit expires.  "Guarantor"
means
      any person or entity
      guaranteeing the payment and/or performance of any or all of Applicant's
      obligations under or in connection with any L/C Document and/or any Loan
      Document.  "Holding Company"
means
      any company or other
      entity directly or indirectly controlling you.  "L/C
      Document"
means
      this Agreement, each Application, each Credit, and each
      Demand.  "Loan
      Document"
means
      each and any promissory note, loan agreement, security agreement,
      pledge agreement, guarantee or other agreement or document executed in
      connection with, or relating to, any extension of credit under which any Credit
      is issued.  "Maximum
      Rate"
      means the maximum amount of interest (as defined by applicable laws), if any,
      permitted to be paid, taken, reserved, received, collected or charged under
      applicable laws, as the same may be amended or modified from time to
      time.  "Negotiation
      Fee" means
      the fee, computed at the negotiation fee rate specified by you or specified
      in
      any Loan Document, charged by you on the amount of each Demand paid by you
      or
      any other bank specified by you when each Demand is paid.  "Payment
      Office"
means
      the office specified by you or specified in any Loan Document as
      the office where reimbursements and other payments under or in connection with
      any L/C Document are to be made by Applicant.  "Prime
      Rate"
means
      the rate of interest most recently announced within Wells Fargo at
      its principal office as its Prime Rate, with the understanding that the Prime
      Rate is one of Wells Fargo's base rates and serves as the basis upon which
      effective rates of interest are calculated for those loans making reference
      thereto, and is evidenced by the recording thereof after its announcement in
      such internal publication or publications as Wells Fargo may
      designate.  "Property"
means
      all forms of property,
      whether tangible or intangible, real, personal or mixed.  "Rate
      of
      Exchange"
      means Wells Fargo's then current selling rate of exchange in San Francisco,
      California for sales of the currency of payment of any Demand, or of any fees
      or
      expenses or other amounts payable under this Agreement, for cable transfer
      to
      the country of which such currency is the legal tender.  "UCP"
means
      the Uniform Customs
      and Practice for Documentary Credits, an International Chamber of Commerce
      publication, or any substitution therefor or replacement
      thereof.  "Unpaid
      and Undrawn
      Balance"
means
      at any time the entire amount which has not been paid by you under
      all the Credits issued for Applicant's account, including, without limitation,
      the amount of each Demand on which you have not yet effected payment as well
      as
      the amount undrawn under all such Credits.  "Wells
      Fargo &
Company" means Wells Fargo & Company, a Delaware
      corporation.

    


    SECTION
      2.  HONORING DEMANDS AND
      DOCUMENTS.  You may receive, accept and honor, as complying
      with the terms of any Credit, any Demand and any Documents accompanying such
      Demand; provided, however, that such Demand and accompanying Documents appear
      on
      their face to comply substantially with the provisions of such Credit and are,
      or appear on their face to be, signed or issued by (a) a person or entity
      authorized under such Credit to draw, sign or issue such Demand and accompanying
      Documents, or (b) an administrator, executor, trustee in bankruptcy, debtor
      in
      possession, assignee for the benefit of creditors, liquidator, receiver or
      other
      legal representative or successor in interest by operation of law of any such
      person or entity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SECTION
      3. REIMBURSEMENT FOR PAYMENT
      OF
      DEMANDS.  Applicant shall reimburse you for all amounts paid by
      you on each Demand, including, without limitation, all such amounts paid by
      you
      to any paying, negotiating or other bank.  If in connection with the
      issuance of any Credit, you agree to pay any other bank the amount of any
      payment or negotiation made by such other bank under such Credit upon your
      receipt of a cable, telex or other written telecommunication advising you of
      such payment or negotiation, or authorize any other bank to debit your account
      for the amount of such payment or negotiation, Applicant agrees to reimburse
      you
      for all such amounts paid by you, or debited to your account with such other
      bank, even if any Demand or Document specified in such Credit fails to arrive
      in
      whole or in part or if, upon the arrival of any such Demand or Document, the
      terms of such Credit have not been complied with or such Demand or Document
      does
      not conform to the requirements of such Credit or is not otherwise in
      order.

    


    SECTION
      4. FEES AND
      EXPENSES.  Applicant agrees to pay to you (a) all Commission
      Fees, Negotiation Fees, cable fees, amendment fees, non-usance fees, and
      cancellation fees of, and all out-of-pocket expenses incurred by, you under
      or
      in connection with any L/C Document, and (b) all fees and charges of banks
      or
      other entities other than you under or in connection with any L/C Document
      if
      any Application (i) does not indicate who will pay such fees and charges, (ii)
      indicates that such fees and charges are to be paid by Applicant, or (iii)
      indicates that such fees and charges are to be paid by the Beneficiary and
      the
      Beneficiary does not, for any reason whatsoever, pay such fees or
      charges.  There shall be no refund of any portion of any Commission
      Fee in the event any Credit is used, reduced, amended, modified or terminated
      before its Expiration Date.

    


    SECTION
      5. DEFAULT
      INTEREST.  Unless otherwise specified in any Loan Document, or on an Application
      and
      agreed to by you, all amounts to be reimbursed by Applicant to you, and all
      fees
      and expenses to be paid by Applicant to you, and all other amounts due from
      Applicant to you under or in connection with any L/C Documents, will bear
      interest (to the extent permitted by law), payable on demand, from the date
      you
      paid the amounts to be reimbursed or the date such fees, expenses and other
      amounts were due until such amounts are paid in full, at a rate per annum
      (computed on the basis of a 360-day year, actual days elapsed) which is the
      lesser of (a) two percent (2%) above the Prime Rate in effect from time to
      time,
      or (b) the Maximum Rate.

    


    SECTION
      6. TIME AND METHOD OF REIMBURSEMENT
      AND
      PAYMENT.  Unless otherwise specified in this Section, in any
      Loan Document, or on an Application and agreed to by you, all amounts to be
      reimbursed by Applicant to you, all fees and expenses to be paid by Applicant
      to
      you, and all interest and other amounts due to you from Applicant under or
      in
      connection with any L/C Documents will be reimbursed or paid at the Payment
      Office in Dollars in immediately available funds without setoff or counterclaim
      (i) on demand or, (ii) at your option by your debiting any of Applicant's
      accounts with you, with each such debit being made without presentment, protest,
      demand for reimbursement or payment, notice of dishonor or any other notice
      whatsoever, all of which are hereby expressly waived by
      Applicant.  Each such debit will be made at the time each Demand is
      paid by you or, if earlier, at the time each amount is paid by you to any
      paying, negotiating or other bank, or at the time each fee and expense is to
      be
      paid or any interest or other amount is due under or in connection with any
      L/C
      Documents.  If any Demand or any fee, expense, interest or other
      amount payable under or in connection with any L/C Documents is payable in
      a
      currency other than Dollars, Applicant agrees to reimburse you for all amounts
      paid by you on such Demand, and/or to pay you all such fees, expenses, interest
      and other amounts, in one of the three following ways, as determined by you
      in
      your sole discretion in each case: (a) at such place as you shall direct, in
      such other currency; or (b) at the Payment Office in the Dollar equivalent
      of
      the amount of such other currency calculated at the Rate of Exchange on the
      date
      determined by you in your sole discretion; or (c) at the Payment Office in
      the
      Dollar equivalent, as determined by you (which determination shall be deemed
      correct absent manifest error), of such fees, expenses, interest or other
      amounts or of the actual cost to you of paying such Demand.  Applicant
      assumes all political, economic and other risks of disruptions or interruptions
      in any currency exchange.

    


    SECTION
      7. AGREEMENTS OF
      APPLICANT.  Applicant agrees that (a) unless otherwise
      specifically provided in any Loan Document, you shall not be obligated at any
      time to issue any Credit for Applicant's account; (b) unless otherwise
      specifically provided in any Loan Document, if any Credit is issued by you
      for
      Applicant's account, you shall not be obligated to issue any further Credit
      for
      Applicant's account or to make other extensions of credit to Applicant or in
      any
      other manner to extend any financial consideration to Applicant; (c) you have
      not given Applicant any legal or other advice with regard to any L/C Document
      or
      Loan Document; (d) if you at any time discuss with Applicant the wording for
      any
      Credit, any such discussion will not constitute legal or other advice by you
      or
      any representation or warranty by you that any wording or Credit will satisfy
      Applicant's needs; (e) Applicant is responsible for the wording of each Credit,
      including, without limitation, any drawing conditions, and will not rely on
      you
      in any way in connection with the wording of any Credit or the structuring
      of
      any transaction related to any Credit; (f) Applicant, and not you, is
      responsible for entering into the contracts relating to the Credits between
      Applicant and the Beneficiaries and for causing Credits to be issued; (g) you
      may, as you deem appropriate, modify or alter and use in any Credit the
      terminology contained on the Application for such Credit; (h) unless the
      Application for a Credit specifies whether the Documents to be presented with
      a
      Demand under such Credit must be sent to you in one parcel or in two parcels
      or
      may be sent to you in any number of parcels, you may, if you so desire, make
      such determination and specify in the Credit whether such Documents must
      be

    sent
      in
      one parcel or two parcels or may be sent in any number of parcels; (i) you
      shall
      not be deemed Applicant's agent or the agent of any Beneficiary or any other
      user of any Credit, and neither Applicant, nor any Beneficiary nor any other
      user of any Credit shall be deemed your agent; (j) Applicant will promptly
      examine all Documents and each Credit if and when they are delivered to
      Applicant and, in the event of any claim of noncompliance of any Documents
      or
      any Credit with Applicant's instructions or any Application, or in the event
      of
      any other irregularity, Applicant will promptly notify you in writing of such
      noncompliance or irregularity, Applicant being conclusively deemed to have
      waived any such claim of noncompliance or irregularity unless such notice is
      promptly given; (k) all directions and correspondence relating to any L/C
      Document are to be sent at Applicant's risk; (l) if any Credit has a provision
      concerning the automatic extension of its Expiration Date, you may, at your
      sole
      option, give notice of nonrenewal of such Credit and if Applicant does not
      at
      any time want such Credit to be renewed Applicant will so notify you at least
      fifteen (15) calendar days before you are to notify the Beneficiary of such
      Credit or any advising bank of such nonrenewal pursuant to the terms of such
      Credit; (m) Applicant will not seek to obtain, apply for, or acquiesce in any
      temporary or permanent restraining order, preliminary or permanent injunction,
      permanent injunction or any other pretrial or permanent injunctive or similar
      relief, restraining, prohibiting or enjoining you, any of your correspondents
      or
      any advising, confirming, negotiating, paying or other bank from paying or
      negotiating any Demand or honoring any other obligation under or in connection
      with any Credit; and (n) except for Applicant's obligations specifically
      affected by those actions or failures to act referred to in subsections (ii)
      and
      (vii) of this Section 7(n) which you have performed or approved or accepted,
      Applicant's obligations under or in connection with each L/C Document and Loan
      Document shall be absolute, unconditional and irrevocable, and shall be
      performed strictly in accordance with the terms of each such L/C Document and
      Loan Document under all circumstances whatsoever, including, without limitation,
      the following circumstances, the circumstances listed in Section 12(b) through
      (u) of this Agreement, and any other event or circumstance similar to such
      circumstances: (i) any lack of validity or enforceability of any L/C Document,
      any Loan Document, any Document or any agreement relating to any of the
      foregoing; (ii) any amendment of or waiver relating to, or any consent to or
      departure from, any L/C Document, any Loan Document or any Document; (iii)
      any
      release or substitution at any time of any Property held as Collateral; (iv)
      your failure to deliver to Applicant any Document you have received with a
      drawing under a Credit because doing so would, or is likely to, violate any
      law,
      rule or regulation of any government authority; (v) the existence of any claim,
      set-off, defense or other right which Applicant may have at any time against
      you
      or any Beneficiary (or any person or entity for whom any Beneficiary may be
      acting) or any other person or entity, whether under or in connection with
      any
      L/C Document, any Loan Document, any Document or any Property referred to in
      or
      related to any of the foregoing or under or in connection with any unrelated
      transaction; (vi) any breach of contract or other dispute between or among
      any
      two or more of you, Applicant, any Beneficiary, any transferee of any
      Beneficiary, any person or entity for whom any Beneficiary or any transferee
      of
      any Beneficiary may be acting, or any other person or entity; or (vii) any
      delay, extension of time, renewal, compromise or other indulgence granted or
      agreed to by you with or without notice to Applicant, or Applicant's approval,
      in respect of any of Applicant's indebtedness or other obligations to you under
      or in connection with any L/C Document or any Loan Document.

     

    
      
        
        

      

      
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    SECTION
      8.  COMPLIANCE WITH LAWS AND
      REGULATIONS.  Applicant represents and warrants to you that no
      Application, Credit or transaction under any Application and/or Credit will
      contravene any law or regulation of the government of the United States or
      any
      state thereof.  Applicant agrees (a) to comply with all federal, state
      and foreign exchange regulations and other government laws and regulations
      now
      or hereafter applicable to any L/C Document, to any payments under or in
      connection with any L/C Document, to each transaction under or in connection
      with any L/C Document, or to the import, export, shipping or financing of the
      Property referred to in or shipped under or in connection with any Credit,
      and
      (b) to reimburse you for such amounts as you may be required to expend as a
      result of such laws or regulations, or any change therein  or in the
      interpretation thereof by any court or administrative or government authority
      charged with the administration of such laws or regulations.

    


    SECTION
      9. TAXES, RESERVES AND CAPITAL
      ADEQUACY
      REQUIREMENTS.  In addition to, and notwithstanding any other
      provision of any L/C Document or any Loan Document, in the event that any law,
      treaty, rule, regulation, guideline, request, order, directive or determination
      (whether or not having the force of law) of or from any government authority,
      including, without limitation, any court, central bank or government regulatory
      authority, or any change therein or in the interpretation or application
      thereof, (a) does or shall subject you to any tax of any kind whatsoever with
      respect to the L/C Documents, or change the basis of taxation of payments to
      you
      of any amount payable thereunder (except for changes in the rate of tax on
      your
      net income); (b) does or shall impose, modify or hold applicable any reserve,
      special deposit, assessment, compulsory loan, Federal Deposit Insurance
      Corporation insurance or similar requirement against assets held by, deposits
      or
      other liabilities in or for the account of, advances or loans by, other credit
      extended by or any other acquisition of funds by, any of your offices; (c)
      does
      or shall impose, modify or hold applicable any capital adequacy requirements
      (whether or not having the force of law); or (d) does or shall impose on you
      any
      other condition; and the result of any of the foregoing is (i) to increase
      the
      cost to you of issuing or maintaining any Credit or of performing any
      transaction under any L/C Document, (ii) to reduce any amount receivable by
      you
      under any L/C Document, or (iii) to reduce the rate of return on your capital
      or
      the capital of the Holding Company to a level below that which you or the
      Holding Company could have achieved but for any imposition, modification or
      application of any capital adequacy requirement (taking into consideration
      your
      policy and the policy of the Holding Company, as the case may be, with respect
      to capital adequacy), and any such increase or reduction is material (as
      determined by you or the Holding Company, as the case may be, in your or the
      Holding Company's sole discretion); then, in any such case,
      Applicant agrees to pay to you or the Holding Company, as the case may be,
      such
      amount or amounts as may be necessary to compensate you or the Holding Company
      for (A) any such additional cost, (B) any reduction in the amount received
      by
      you under any L/C Document, or (C) to the extent allocable (as determined by
      you
      or the Holding Company, as the case may be, in your or the Holding Company's
      sole discretion) to any L/C Document, any reduction in the rate of return on
      your capital or the capital of the Holding Company.

     

    
      
        
        

      

      
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    SECTION
      10.  COLLATERAL.  In
      addition to, and not in substitution for, any Property delivered, conveyed,
      transferred or assigned to you under any Loan Document as security for any
      or
      all of Applicant's obligations and liabilities to you at any time existing
      under
      or in connection with any L/C Document or any Loan Document, Applicant grants
      to
      you a security interest in and to the following Collateral, whether or not
      any
      such Collateral is in your possession or control or the possession or control
      of
      your agents or correspondents or in transit to, or set apart for, you or your
      agents or correspondents, until such time as all Applicant's obligations and
      liabilities to you at any time existing under or in connection with each L/C
      Document and each Loan Document have been fully paid and discharged, all as
      security for such obligations and liabilities, (a) all
      Applicant's  property, claims, demands, right, title and interest in
      and to the balance of each of Applicant's deposit accounts with you now or
      at
      any time hereafter existing, and all evidences of such deposit accounts, (b)
      all
      Property belonging to Applicant or in which it may have an interest, now or at
      any time hereafter delivered, conveyed, transferred, assigned, pledged or paid
      to you or your agents or correspondents in any manner whatsoever, whether as
      security or for safekeeping or otherwise, including, without limitation, any
      items received for collection or transmission, and the proceeds of such items,
      whether or not such Property is in whole or in part released to Applicant on
      trust or bailee receipt or otherwise, and (c) where Applicant is more than
      one
      person or entity, all right, title and interest of each of Applicants in and
      to
      all the Property which any of Applicants may now or hereafter obtain as security
      for the obligations of any one or more of Applicants to one or more of the
      others of Applicants arising under or in connection with the transaction to
      which any Credit relates.  Further, in addition to, and not in
      substitution for, any Property delivered, conveyed, transferred or assigned
      to
      you under any Loan Document as security for any or all of Applicant's
      obligations and liabilities to you at any time existing under or in connection
      with any L/C Document or any Loan Document, Applicant agrees to deliver, convey,
      transfer and assign to you on demand, as security, Property of a value and
      character satisfactory to you, (i) if you at any time feel insecure about
      Applicant's ability or willingness to repay any amounts which you have paid
      or
      may pay in the future on any Demand or in honoring any other of your obligations
      under or in connection with any Credit, or (ii) without limiting the generality
      of the foregoing, if any temporary or permanent restraining order, preliminary
      or permanent injunction, or any other pretrial or permanent injunctive or
      similar relief is obtained restraining, prohibiting or enjoining you, any of
      your correspondents, or any advising, confirming, negotiating, paying or other
      bank from paying or negotiating any Demand or honoring any other obligation
      under or in connection with any Credit.  Applicant agrees that the
      receipt by you or any of your agents or correspondents at any time of any kind
      of security, including, without limitation, cash, shall not be deemed a waiver
      of any of your rights or powers under this Agreement.  Applicant
      agrees to sign and deliver to you on demand, all such deeds of trust, security
      agreements, financing statements and other documents as you shall at any time
      request which are necessary or desirable (in your sole opinion) to grant to
      you
      an effective and perfected security interest in and to any or all of the
      Collateral.  Applicant agrees to pay all filing and recording fees
      related to the perfection of any security interest granted to you in accordance
      with this Section.  Applicant hereby agrees that any or all of the
      Collateral may be held and disposed of as provided in this Agreement by
      you.  Upon any transfer, sale, delivery, surrender or endorsement of
      any Document or Property which is or was part of the Collateral, Applicant
      will
      indemnify and hold you and your agents and correspondents harmless from and
      against each and every claim, demand, action or suit which may arise against
      you
      or any of your agents or correspondents by reason of such transfer, sale,
      delivery, surrender or endorsement.

    


    SECTION
      11. INDEMNIFICATION.  Except to
      the extent any of the following are caused by your lack of good faith, gross
      negligence, willful misconduct, failure to honor any Demand presented under
      any
      Credit when such Demand and its accompanying Documents appear on their face
      to
      comply strictly with the terms of such Credit, or honor of any Demand under
      a
      Credit when such Demand and its accompanying Documents do not appear on their
      face to comply substantially with the terms of such Credit, Applicant agrees,
      notwithstanding any other provision of this Agreement, to reimburse and
      indemnify you for (a) all amounts paid by you to any Beneficiary under or in
      connection with any guarantee or similar undertaking issued by such Beneficiary
      to a third party at Applicant's request, whether such request is communicated
      directly by Applicant or through you to such Beneficiary; and (b) all damages,
      losses, liabilities, actions, claims, suits, penalties, judgments, obligations,
      costs or expenses, of any kind whatsoever and howsoever caused, including,
      without limitation, attorneys' fees and interest, paid, suffered or incurred
      by,
      or imposed upon, you directly or indirectly arising out of or in connection
      with
      (i) any L/C Document, any Loan Document, any Document or any Property referred
      to in or related to any Credit; (ii) Applicant's failure to comply with any
      of
      its obligations under this Agreement; (iii) the issuance of any Credit; (iv)
      the
      transfer of any Credit; (v) any guarantee or similar undertaking, or any
      transactions thereunder, issued by any Beneficiary to a third party at
      Applicant's request, whether such request is communicated directly by Applicant
      or through you to such Beneficiary; (vi) any communication made by you, on
      Applicant's instructions, to any Beneficiary requesting that such Beneficiary
      issue a guarantee or similar undertaking to a third party or the issuance of
      any
      such guarantee or similar undertaking; (vii) the collection of any amounts
      Applicant owes to you under or in
      connection with any L/C Document
      or any Loan Document; (viii) the foreclosure against, or other enforcement
      of,
      any Collateral; (ix) the protection, exercise or enforcement of your rights
      and
      remedies under or in connection with any L/C Document or any Loan Document;
      (x)
      any court decrees or orders, including, without limitation, temporary or
      permanent restraining orders, preliminary or permanent injunctions, or any
      other
      pretrial or permanent injunctive or similar relief, restraining, prohibiting
      or
      enjoining or seeking to restrain, prohibit or enjoin you, any of your
      correspondents or any advising, confirming, negotiating, paying or other bank
      from paying or negotiating any Demand or honoring any other obligation under
      or
      in connection with any Credit; or (xi) any Credit being governed by laws or
      rules other than the UCP in effect on the date such Credit is
      issued.  The indemnity provided in this Section will survive the
      termination of this Agreement and the expiration or cancellation of any or
      all
      the Credits.  Without limiting any provision of this Agreement, it is
      the express intention of the parties to this Agreement that the indemnity
      contained in this Section shall apply to each person to be indemnified without
      regard to the sole or contributory negligence of such
      person.

     

    
      
        
        

      

      
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    SECTION
      12.  LIMITATION OF LIABILITY.Notwithstandingany
      other provision of this
      Agreement, neither you nor any of your agents or correspondents will have any
      liability to Applicant for any action, neglect or omission under or in
      connection with any L/C Document, Loan Document or Credit, including, without
      limitation, the issuance or any amendment of any Credit, the failure to issue
      or
      amend any Credit, or the honoring or dishonoring of any Demand under any Credit,
      and such action or neglect or omission will bind Applicant, except to the extent
      any such action or neglect or omission is caused by, or arises from, your lack
      of good faith, gross negligence, willful misconduct, failure to honor any Demand
      presented under any Credit when such Demand and its accompanying Documents
      appear on their face to comply strictly with the terms of such Credit, or honor
      of any Demand under a Credit when such Demand and its accompanying Documents
      do
      not appear on their face to comply substantially with the terms of such
      Credit.  Notwithstanding any other provision of any L/C Document, but
      without in any way affecting, except as specifically provided in this sentence,
      your obligation under this Agreement to honor any Demand presented under any
      Credit when such Demand and its accompanying Documents appear on their face
      to
      comply strictly with the terms of such Credit and to dishonor any Demand under
      a
      Credit when such Demand and its accompanying Documents do not appear on their
      face to comply substantially with the terms of such Credit, in no event shall
      you or your officers or directors be liable or responsible for the following,
      regardless of whether any claim is based on contract or tort:  (a) any
      special, consequential, indirect or incidental damages, including, without
      limitation, lost profits, arising out of or in connection with the issuance
      of
      any Credit or any action taken or not taken by you in connection with any L/C
      Document, any Loan Document, or any Document or Property referred to in or
      related to any Credit; (b) the honoring of any Demand in accordance with any
      order or directive of any court or government or regulatory body or entity
      requiring such honor despite any temporary restraining order, restraining order,
      preliminary injunction, permanent injunction or any type of pretrial or
      permanent injunctive relief or any similar relief, however named, restraining,
      prohibiting or enjoining such honor; (c) the dishonoring of any Demand in
      accordance with any legal or other restriction in force at the time and in
      the
      place of presentment or payment; (d) verifying the existence or reasonableness
      of any act or condition referenced, or any statement made, in connection with
      any drawing or presentment under any Credit; (e) the use which may be made
      of
      any Credit; (f) the validity of any purported transfer of any Credit or the
      identity of any purported transferee of any Beneficiary; (g) any acts or
      omissions of any Beneficiary or any other user of any Credit; (h) the form,
      validity, sufficiency, correctness, genuineness or legal effect of any Demand
      or
      any Document, or of any signatures or endorsements on any Demand or Document,
      even if any Demand or any Document should in fact prove to be in any or all
      respects invalid, insufficient, fraudulent or forged; (i) payment by you of
      any
      Demand when the Demand and any accompanying Documents appear on their face
      to
      comply substantially with the terms of the Credit to which they relate or
      dishonor by you of any Demand when the Demand and any accompanying Documents
      do
      not strictly comply on their face with the terms of the Credit to which they
      relate; (j) the failure of any Demand or Document to bear any reference or
      adequate reference to the Credit to which it relates; (k) the failure of any
      Document to accompany any Demand; (l) the failure of any person or entity to
      note the amount of any Demand on the Credit to which it relates or on any
      Document; (m) the failure of any person or entity to surrender or take up any
      Credit; (n) the failure of any Beneficiary to comply with the terms of any
      Credit or to meet the obligations of such Beneficiary to Applicant; (o) the
      failure of any person or entity to send or forward Documents if and as required
      by the terms of any Credit; (p) any errors, inaccuracies, omissions,
      interruptions or delays in transmission or delivery of any messages, directions
      or correspondence by mail, cable, telegraph, wireless or otherwise, whether
      or
      not they are in cipher; (q) any notice of nonrenewal of a Credit sent by you
      not
      being received on time or at any time by the Beneficiary of such Credit; (r)
      any
      inaccuracies in the translation of any messages, directions or correspondence;
      (s) any Beneficiary's use of the proceeds of any Demand; (t) any Beneficiary's
      failure to repay to you or Applicant the proceeds of any Demand if the terms
      of
      any Credit require such repayment; or (u) any act, error, neglect, default,
      negligence, gross negligence, omission, willful misconduct, lack of good faith,
      insolvency or failure in business of any of your agents or correspondents or
      of
      any advising, confirming, negotiating, paying or other bank.  Except
      to the extent caused by, or arising from, your lack of good faith, gross
      negligence, willful misconduct, failure to honor any Demand presented under
      any
      Credit when such Demand
      and its accompanying Documents
      appear on their face to comply strictly with the terms of such Credit, or honor
      of any Demand under a Credit when such Demand and its accompanying Documents
      do
      not appear on their face to comply substantially with the terms of such Credit,
      the occurrence of any one or more of the contingencies referred to in the
      preceding sentence shall not affect, impair or prevent the vesting of your
      rights or powers under this Agreement or any Loan Document or Applicant's
      obligation to make reimbursement or payment to you under this Agreement or
      any
      Loan Document.  The provisions of this Section will survive the
      termination of this Agreement and any Loan Documents and the expiration or
      cancellation of any or all the Credits.

     

    
      
        
        

      

      
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    SECTION
      13.  EVENTS OF
      DEFAULT.  Each of the following shall constitute an Event of
      Default under this Agreement: (a) Applicant's or any Guarantor's failure to
      pay
      any principal, interest, fee or other amount when due under or in connection
      with any L/C Document or any Loan Document; (b) Applicant's failure to deliver
      to you Property of a value and character satisfactory to you at any time you
      have demanded security from Applicant pursuant to Section 10 of this Agreement;
      (c) the occurrence and continuance of any default or defined event of default
      under any Loan Document or any other agreement, document or instrument signed
      or
      made by Applicant or any Guarantor in your favor; (d) Applicant's or any
      Guarantor's failure to perform or observe any term, covenant or agreement
      contained in this Agreement or any Loan Document (other than those referred
      to
      in subsections (a), (b) and (c) of this Section), or the breach of any other
      obligation owed by Applicant or any Guarantor to you, and any such failure
      or
      breach shall be impossible to remedy or shall remain unremedied for thirty
      (30)
      calendar days after such failure or breach occurs; (e) any representation,
      warranty or certification made or furnished by Applicant or any Guarantor under
      or in connection with any L/C Document, any Loan Document or any Collateral,
      or
      as an inducement to you to enter into any L/C Document or Loan Document or
      to
      accept any Collateral, shall be materially false, incorrect or incomplete when
      made; (f) any material provision of this Agreement or any Loan Document shall
      at
      any time for any reason cease to be valid and binding on Applicant or any
      Guarantor or shall be declared to be null and void, or the validity or
      enforceability thereof shall be contested by Applicant, any Guarantor or any
      government agency or authority, or Applicant or any Guarantor shall deny that
      it
      has any or further liability or obligation under this Agreement or any Loan
      Document; (g) Applicant's or any Guarantor's failure to pay or perform when
      due
      any indebtedness or other obligation Applicant or such Guarantor has to any
      person or entity other than you if such failure gives the payee of such
      indebtedness or the beneficiary of the performance of such obligation the right
      to accelerate the time of payment of such indebtedness or the performance of
      such obligation; (h) any guarantee of, or any security covering, any of
      Applicant's indebtedness to you arising under or in connection with any L/C
      Document or any Loan Document fails to be in full force and effect at any time;
      (i) any material adverse change in Applicant's or any Guarantor's financial
      condition; (j) Applicant or any Guarantor suspends the transaction of its usual
      business or is expelled or suspended from any exchange; (k) Applicant or any
      Guarantor dies or is incapacitated; (l) Applicant or any Guarantor dissolves
      or
      liquidates; (m) Applicant or any Guarantor is not generally paying its debts
      as
      they become due; (n) Applicant or any Guarantor becomes insolvent, however
      such
      insolvency may be evidenced, or Applicant or any Guarantor makes any general
      assignment for the benefit of creditors; (o) a petition is filed by or against
      Applicant or any Guarantor seeking Applicant's or such Guarantor's liquidation
      or reorganization under the Bankruptcy Reform Act, Title 11 of the United States
      Code, as amended or recodified from time to time, or a similar action is brought
      by or against Applicant or any Guarantor under any federal, state or foreign
      law; (p) a proceeding is instituted by or against Applicant or any Guarantor
      for
      any relief under any bankruptcy, insolvency or other law relating to the relief
      of debtors, reorganization, readjustment or extension of indebtedness or
      composition with creditors; (q) a custodian or a receiver is appointed for,
      or a
      writ or order of attachment, execution or garnishment is issued, levied or
      made
      against, any of Applicant's or any Guarantor's Property or assets; (r) an
      application is made by any of Applicant's or any Guarantor's judgment creditors
      for an order directing you to pay over money or to deliver other of Applicant's
      or such Guarantor's Property; or (s) any government authority or any court
      takes
      possession of any substantial part of Applicant's or any Guarantor's Property
      or
      assets or assumes control over Applicant's or any Guarantor's
      affairs.

    


    SECTION
      14.  REMEDIES.  Upon the
      occurrence and continuance of any Event of Default all amounts paid by you
      on
      any Demand which have not previously been repaid to you, together with all
      interest on such amounts, and the Unpaid and Undrawn Balance, if any, shall
      automatically be owing by Applicant to you and shall be due and payable by
      Applicant on demand without presentment or any other notice of any kind,
      including, without limitation, notice of nonperformance, notice of protest,
      protest, notice of dishonor, notice of intention to accelerate, or notice of
      acceleration, all of which are expressly waived by Applicant.  Upon
      payment of the Unpaid and Undrawn Balance to you Applicant shall have no further
      legal or equitable interest therein, and you will not be required to segregate
      on your books or records the Unpaid and Undrawn Balance paid by
      Applicant.  After you receive the Unpaid and Undrawn Balance, you
      agree to pay to Applicant, upon termination of all of your liability under
      all
      the Credits and Demands, a sum equal to the amount which has not been drawn
      under all the Credits less all amounts due and owing to you from Applicant
      under
      or in connection with the L/C Documents and the Loan
      Documents.  Further, upon the occurrence and continuance of any Event
      of Default, you may sell immediately, without demand for payment, advertisement
      or notice to Applicant, all of which are hereby expressly waived, any and all
      Collateral, received or to be received, at private sale or public auction or
      at
      brokers' board or upon any exchange or otherwise, at your option, in such parcel
      or parcels, at such times and places, for such prices and upon such terms and
      conditions as you may deem proper, and you may apply the net proceeds of each
      sale, together with any sums due from you to Applicant, to the payment of any
      and all obligations and liabilities due from Applicant to you under or in
      connection with the L/C Documents and the Loan Documents,
      all without prejudice to your rights against Applicant with respect to any
      and
      all such obligations and liabilities which may be or remain
      unpaid.  If any such sale be at brokers' board or at public auction or
      upon any exchange, you may yourself be a purchaser at such sale free from any
      right of redemption, which Applicant hereby expressly waive and
      release.  All your rights and remedies existing under the L/C
      Documents and the Loan Documents are in addition to, and not exclusive of,
      any
      rights or remedies otherwise available to you under applicable
      law.  In addition to any rights now or hereafter granted under
      applicable law, and not by way of limitation of any such rights, upon the
      occurrence and continuance of any Event of Default, Applicant hereby authorizes
      you at any time or from time to time, without notice to Applicant or to any
      other person (any such notice being hereby expressly waived by Applicant) and
      to
      the extent permitted by law, to appropriate and to apply any and all Applicant's
      deposits (general or special, including, without limitation, indebtedness
      evidenced by certificates of deposit) with you or elsewhere, whether matured
      or
      unmatured, and any other indebtedness at any time held or owing by you to or
      for
      Applicant's credit or its account, against and on account of Applicant's
      obligations and liabilities to you under or in connection with any of the L/C
      Documents or the Loan Documents, irrespective of whether or not you shall have
      made any demand for payment of any or all such obligations and liabilities
      or
      declared any or all such obligations and liabilities to be due and payable,
      and
      although any or all such obligations and liabilities shall be contingent or
      unmatured.

     

    
      
        
        

      

      
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    SECTION
      15.  GENERAL WAIVERS.  No
      delay, extension of time, renewal, compromise or other indulgence which may
      occur or be granted by you under any L/C Document or any Loan Document shall
      impair your rights or powers under this Agreement or any
      Application.  You shall not be deemed to have waived any of your
      rights under this Agreement or any Application unless such waiver is in writing
      signed by your authorized representative.  No such waiver, unless
      expressly provided therein, shall be effective as to any transactions which
      occur subsequent to the date of such waiver or as to the continuance of any
      Event of Default after such waiver.

    


    SECTION
      16.  AMENDMENTS AND MODIFICATIONS
      TO THIS
      AGREEMENT AND THE CREDITS.  No amendment or modification of
      this Agreement shall be effective unless it is in writing signed by Applicant's
      and your authorized representative(s).  At Applicant's verbal or
      written request, or with Applicant's verbal or written consent, and without
      extinguishing or otherwise affecting Applicant's obligations under this
      Agreement or any Loan Document, you may with respect to any Credit, in writing
      or by any other action, but you will not be obligated to, (a) increase the
      amount of such Credit, (b) extend the time for, and amend or modify the terms
      and conditions governing, the making and honoring of any Demand or Document
      or
      any other terms and conditions of such Credit, or (c) waive the failure of
      any
      Demand or Document to comply with the terms of such Credit, and any Collateral
      pledged or granted to you in connection with such Credit will secure Applicant's
      obligations to you with respect to such Credit as amended, modified or
      waived.  No amendment to, or modification of, the terms of any Credit
      will become effective if the Beneficiary of such Credit or any confirming bank
      objects to such amendment or modification.  If any Credit is amended
      or modified in accordance with this Section, Applicant shall be bound by, and
      obligated under, the provisions of this Agreement with respect to such Credit
      as
      so amended or modified, and any action taken by you or any advising, confirming,
      negotiating, paying or other bank in accordance with such amendment or
      modification.

    


    SECTION
      17.   SUCCESSORS AND
      ASSIGNS.  The terms and conditions of this Agreement and each
      Application shall bind Applicant's heirs, executors, administrators, successors
      and assigns, and all rights, benefits and privileges conferred on you under
      or
      in connection with each L/C Document and each Loan Document shall be and hereby
      are extended to, conferred upon and may be enforced by your successors and
      assigns.  Applicant will not assign this Agreement or Applicant's
      obligations or liabilities to you under or in connection with any L/C Document
      or Loan Document to any person or entity without your prior written
      approval.

    


    SECTION
      18.  GOVERNING LAW.  This
      Agreement and each Application, and Applicant's and your performance under
      this
      Agreement and each Application, shall be governed by and be construed in
      accordance with the laws of the State of California.  Unless you
      otherwise specifically agree in writing, each Credit, the opening of each
      Credit, the performance by you under each Credit, and the performance by the
      Beneficiary and any advising, confirming, negotiating, paying or other bank
      under each Credit, shall be governed by and be construed in accordance with
      the
      UCP in force on the date of the issuance of each Credit.

    


    SECTION
      19.  JURISDICTION AND SERVICE
      OF
      PROCESS.  Any suit, action or proceeding against Applicant
      under or with respect to any L/C Document may, at your sole option, be brought
      in (a) the courts of the State of California, (b) the United States District
      Courts in California, (c) the courts of Applicant's jurisdiction of
      incorporation or principal office, or (d) the courts of the jurisdiction where
      any Beneficiary, any advising, confirming, negotiating, paying or other bank,
      or
      any other person or entity has brought any suit, action or proceeding against
      you with respect to any Credit or any Demand, and Applicant hereby submits
      to
      the nonexclusive jurisdiction of such courts for the purpose of any such suit,
      action, proceeding or judgment and waives any other preferential jurisdiction
      by
      reason of domicile.  Applicant will accept joinder in any suit, action
      or proceeding brought in any court or jurisdiction against you by any
      Beneficiary, any advising, confirming, negotiating, paying or other bank or
      any
      other person or entity with respect to any Credit or any
      Demand.  Applicant irrevocably waives any objection, including,
      without limitation, any objection of the laying of venue or any objection based
      on the grounds of forum
      non conveniens,
which Applicant may now or hereafter have to the bringing of
      any
      such action or proceeding.

    Applicant
      further waives any right to transfer or change the venue of any suit, action
      or
      proceeding brought against Applicant by you under or in connection with any
      L/C
      Document.  Applicant irrevocably consents to the service of process in
      any action or proceeding in any court by the mailing of copies thereof by
      registered or certified mail, postage prepaid, to Applicant at its address
      specified next to its signature on this Agreement or at such other address
      as
      Applicant shall have notified to you in writing, such service to be effective
      ten (10) days after such mailing.

     

    
      
        
        

      

      
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    SECTION
      20.  GOVERNING LAW AND DISPUTES
      RESOLVED
      AS PROVIDED IN THE LOAN DOCUMENTS.  Notwithstanding any
      provision to the contrary in this Agreement, if any Credit governed by this
      Agreement is issued under or pursuant to any Loan Document, the law governing
      such Loan Document will also govern this Agreement and each Application and
      Applicant's and your performance under this Agreement and each Application,
      and
      all disputes arising between Applicant and you under or in connection with
      any
      L/C Document will be resolved as provided in such Loan Document, unless any
      such
      dispute is brought by, or involves, the Beneficiary of such Credit, or any
      advising, confirming, negotiating, paying, accepting or other bank, or any
      other
      person or entity other than Applicant, and results in legal action different
      from the form of action provided in such Loan Document.  If pursuant
      to this Section Texas law governs this Agreement, the special Texas provisions
      at the end of this Agreement will apply.

    


    SECTION
      21.  MULTIPLE APPLICANTS AND
      WAIVERS.  If this Agreement is signed by more than one person
      and/or entity as an Applicant, this Agreement and the Applications of each
      such
      person and/or entity shall be the joint and several agreement of all such
      persons and/or entities and all references to "Applicant" or "Applicant's"
      in
      this Agreement and the Applications shall refer to all such persons and/or
      entities jointly and severally.  You shall have no obligation to
      disclose to any Applicant any information or material about any other Applicant
      or any other person which you acquire in any manner.  Each Applicant
      waives any right to require you to proceed against any other Applicant or any
      other person, or marshal assets or proceed against or exhaust any security
      held
      from any other Applicant or any other person.  Each Applicant waives
      any defense to its liability in connection with any Credit or this Agreement
      based upon or arising by reason of (a) any defense of any other Applicant or
      any
      other person; (b) the cessation or limitation from any cause whatsoever, other
      than payment in full of such Applicant’s obligations under this Agreement, of
      the liability of any other Applicant or of any other person in connection with
      any Credit or this Agreement; (c) any act or omission by you which directly
      or
      indirectly results in or aids the release or discharge of any other Applicant
      or
      any other person by operation of law or otherwise, or which in any way impairs
      or suspends any rights or remedies you may have against any other Applicant
      or
      any other person, including, without limitation, the release by you of any
      Guarantor or other person obligated in connection with any Credit or this
      Agreement; (d) the release of any security for any indebtedness owed to you
      in
      connection with any Credit or this Agreement; (e) the application of payments
      received by you from any other Applicant or any other person obligated in
      connection with any Credit or this Agreement to indebtedness of such other
      Applicant or other person to you other than indebtedness in connection with
      any
      Credit or this Agreement, and (f) any modification of the obligations or
      liabilities of any other Applicant or any other person in connection with any
      Credit or this Agreement.  Each Applicant waives all rights and
      defenses it may have arising out of (A) any election of remedies by you, even
      though that election of remedies destroys such Applicant’s rights of subrogation
      or its rights to proceed against any other Applicant or any other person for
      reimbursement, or (B) any loss of rights such Applicant may suffer by reason
      of
      any rights, powers or remedies of any other Applicant or other person in
      connection with any anti-deficiency laws or any other laws limiting, qualifying
      or discharging any such other Applicant's or other person’s indebtedness in
      connection with any Credit or this Agreement, whether by operation of law or
      otherwise.  Until all indebtedness of each Applicant to you arising
      under or in connection with this Agreement or any Credit shall have been paid
      in
      full, each Applicant waives any right of subrogation and any right to enforce
      any remedy which you now have or may hereafter have against any other Applicant
      or any other person, and waives any benefit of, or any right to participate
      in,
      any security now or hereafter held by you.  If any waiver in this
      Agreement is determined to be contrary to any applicable law or public policy,
      such waiver shall be effective only to the extent permitted by law.

    


    SECTION
      22.  SEVERABILITY.  Any
      provision of any L/C Document which is prohibited or unenforceable in any
      jurisdiction shall be, only as to such jurisdiction, ineffective to the extent
      of such prohibition or unenforceability, but all the remaining provisions of
      such L/C Document and all the other L/C Documents shall remain
      valid.

    


    SECTION
      23.  HEADINGS.  The
      headings used in this Agreement are for convenience of reference only and shall
      not define or limit the provisions of this Agreement.

    


    SECTION
      24.  COMPLETE
      AGREEMENT.  The entire agreement with respect to each
      Credit will consist
      of this Agreement and the Application for such Credit, together with any written
      document or instrument signed by Applicant and you, or signed by Applicant
      and
      approved by you, which specifically references such Credit, the Application
      for
      such Credit, or this Agreement.  Except as specifically provided in
      this Agreement, in any Application or in any written document or instrument
      referred to in the preceding sentence, no statements or representations not
      contained in this Agreement, such Application or such written document or
      instrument shall have any force or effect on this Agreement, such Application
      or
      such written document or instrument.

     

    UNLESS
      ANY CREDIT GOVERNED
      BY THIS AGREEMENT IS ISSUED UNDER OR PURSUANT TO A LOAN DOCUMENT WHICH DOES
      NOT
      HAVE TEXAS GOVERNING LAW, IF THE APPLICANT’S ADDRESS BELOW IS IN TEXAS, OR IF
      THE APPLICANT’S HEADQUARTERS OR PRINCIPAL PLACE OF BUSINESS IS IN TEXAS, THE
      FOLLOWING ADDITIONAL PROVISIONS WILL APPLY

     

    
      
        
        

      

      
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    Section
      Texas 1.  GOVERNING LAW.  This
      Agreement and each Application, and Applicant's and your performance under
      this
      Agreement and each Application, shall be governed by and be construed in
      accordance with the laws of the State of Texas.

    


    Section
      Texas 2.  JURISDICTION AND SERVICE
      OF
      PROCESS.  Any suit, action or proceeding against Applicant
      under or with respect to any L/C Document may, at your sole option, be brought
      in (a) the courts of the State of Texas, (b) the United States District Courts
      in Texas, (c) the courts of Applicant's jurisdiction of incorporation or
      principal office, or (d) the courts of the jurisdiction where any Beneficiary,
      any advising, confirming, negotiating, paying or other bank, or any other person
      or entity has brought any suit, action or proceeding against you with respect
      to
      any Credit or any Demand, and Applicant hereby submits to the nonexclusive
      jurisdiction of such courts for the purpose of any such suit, action, proceeding
      or judgment and waives any other preferential jurisdiction by reason of
      domicile.  The remaining provisions of Section 19 of this Agreement
      will apply.

    


    Section
      Texas 3.  CERTAIN TRI-PARTY
      ACCOUNTS.  Applicant and you agree that Chapter 346 of the
      Texas Finance Code (which regulates certain revolving credit accounts and
      revolving tri-party accounts) shall not apply to any revolving loan accounts
      created under, or maintained in connection with, this Agreement, any other
      L/C
      Document, or any Loan Document.

    


    Section
      Texas 4.  BUSINESS
      PURPOSE.  Applicant represents and warrants that all its
      obligations and liabilities evidenced by the L/C Documents and the Loan
      Documents are for a business, commercial, investment, agricultural or other
      similar purpose and not primarily for a personal, family or household
      purpose.

    


    Section
      Texas 5.  COMPLIANCE WITH USURY
      LAWS.  It is Applicant's and your intention to comply strictly
      with applicable usury laws.  Accordingly, notwithstanding any
      provision to the contrary in any L/C Document or in any Loan Document, in no
      event shall any L/C Document or any Loan Document require the payment or permit
      the payment, taking, reserving, receiving, collection or charging of any sums
      constituting interest under applicable laws that exceed the Maximum Rate
      permitted by such laws, as the same may be amended or modified from time to
      time.  If any such excess interest is called for, contracted for,
      charged, taken, reserved or received in connection with any L/C Document or
      any
      Loan Document or in any communication by you or any other person to Applicant
      or
      to any other person, or in the event that all or part of the principal or
      interest owing to you under any L/C Document or any Loan Document shall be
      prepaid or accelerated, so that under any of such circumstances or under any
      other circumstance whatsoever the amount of interest contracted for, charged,
      taken, reserved or received on the amount of principal actually outstanding
      from
      time to time under any L/C Document or any Loan Document exceeds the Maximum
      Rate, then in such event it is agreed that (i) the provisions of this Section
      shall govern and control, (ii) neither Applicant nor any other person or entity
      now or hereafter liable for the payments under any L/C Document or any Loan
      Document shall be obligated to pay the amount of such interest to the extent
      it
      is in excess of the Maximum Rate, (iii) any such excess interest which is or
      has
      been received by you, notwithstanding this Section, shall be credited against
      the then unpaid principal balance owing under any L/C Document or any Loan
      Document, or if all amounts outstanding under any L/C Document or any Loan
      Document have been or would be paid in full by such credit, refunded to
      Applicant, and (iv) the provisions of the L/C Documents and the Loan Documents,
      and any other communication by you or any other person to Applicant shall
      immediately be deemed reformed and such excess interest reduced to the Maximum
      Rate without the necessity of executing any other document.  The right
      to accelerate the maturity of any amounts due under any L/C Document or any
      Loan
      Document does not include the right to accelerate, collect or charge unearned
      interest, but only such interest that has otherwise accrued as of the date
      of
      acceleration.  Without limiting the foregoing, all calculations of the
      rate of interest contracted for, charged, taken, reserved or received in
      connection with any L/C Document or any Loan Document which are made for the
      purpose of determining whether such rate exceeds the Maximum Rate shall be
      made
      to the extent permitted by applicable laws by amortizing, prorating, allocating
      and spreading, during the period of the full term of such L/C Document or such
      Loan Document, including, without limitation, all prior and subsequent renewals
      and extensions of such L/C Document or such Loan Document, all interest at
      any
      time contracted for, charged, taken, reserved or received by you.  The
      terms of this Section shall be deemed to be incorporated into each L/C Document
      and each Loan Document .  To the extent that either Chapter 303 or
      306, or both, of the Texas Finance Code apply in determining the Maximum Rate,
      you hereby elect to determine the applicable rate ceiling by using the weekly
      ceiling from time to time in effect, subject to your right subsequently to
      change such method in accordance with applicable law, as the same may be amended
      or modified from time to time.

    


    Section
      Texas 6.  ALL THE L/C DOCUMENTS AND
      THE LOAN
      DOCUMENTS CONSTITUTE A WRITTEN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
      BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
      ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THE L/C
      DOCUMENTS OR THE LOAN DOCUMENTS OR THE INDEBTEDNESS EVIDENCED BY THE L/C
      DOCUMENTS OR THE LOAN DOCUMENTS.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    IF
      THE APPLICANT’S ADDRESS
      BELOW IS IN OREGON OR IF ITS HEADQUARTERS OR PRINCIPAL PLACE OF BUSINESS IS
      IN
      OREGON, THE FOLLOWING ADDITIONAL PROVISIONS WILL
      APPLY

    


    Section
      Oregon 1.  UNDER OREGON LAW, MOST AGREEMENTS,
      PROMISES AND COMMITMENTS MADE BY A LENDER AFTER OCTOBER 3, 1989 CONCERNING
      LOANS
      AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD
      PURPOSES OR SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING,
      EXPRESS CONSIDERATION, AND BE SIGNED BY THE LENDER TO BE
      ENFORCEABLE.

    


    IF
      THE APPLICANT’S ADDRESS
      BELOW IS IN WASHINGTON OR IF ITS HEADQUARTERS OR PRINCIPAL PLACE OF BUSINESS
      IS
      IN WASHINGTON, THE FOLLOWING ADDITIONAL PROVISIONS WILL
      APPLY

    


    Section
      Washington 1.  ORAL AGREEMENTS OR ORAL COMMITMENTS
      TO LOAN MONEY, EXTEND CREDIT OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT
      ARE
      NOT ENFORCEABLE UNDER WASHINGTON LAW.

    


    IF
      THE APPLICANT’S ADDRESS
      BELOW IS IN NEBRASKA OR IF ITS HEADQUARTERS OR PRINCIPAL PLACE OF BUSINESS
      IS IN
      NEBRASKA, THE FOLLOWING ADDITIONAL PROVISIONS WILL
      APPLY

    


    Section
      Nebraska 1.  ENFORCEABILITY OF WRITTEN
      TERMS
      ONLY.  A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER
      NEBRASKA LAW.  TO PROTECT THE PARTIES FROM ANY MISUNDERSTANDINGS OR
      DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING OR OFFER TO FOREBEAR
      REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION
      WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF,
      CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR
      PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN
      OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE
      EFFECTIVE.

    


    IF
      THE APPLICANT’S ADDRESS
      BELOW IS IN IOWA OR IF ITS HEADQUARTERS OR PRINCIPAL PLACE OF BUSINESS IS IN
      IOWA, THE FOLLOWING ADDITIONAL PROVISIONS WILL APPLY

    


    Section
      Iowa 1.  IMPORTANT:  READ BEFORE
      SIGNING.  THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE
      ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.  NO OTHER TERMS OR ORAL
      PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY
      ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER
      WRITTEN AGREEMENT.

    


    Section
      Iowa 2.  By signing
      this Agreement, Applicant acknowledges receipt of a copy of this
      Agreement.

    


    This
      Agreement is signed by each
      Applicant's duly authorized representative or representatives on the date
      specified below.

     

    
      
        	
                 MAGNETECH
                  INDUSTRIAL SERVICES, INC.

              	 	 MARTELL
                ELECTRIC, LLC
	 	
                [APPLICANT'S
                  NAME]

                    

              	 	  	
                [APPLICANT'S
                  NAME]

                 

                 

              
	 By:	 /s/
                John A. Martell	 	 By:  	 /s/
                John A. Martell
	 Title:	 CEO	 	 Title:	 CEO
	 	
                1125
                  S. Walnut Street

                South
                  Bend, Indiana  46619

              	 	 	
                1125
                  S. Walnut Street

                South
                  Bend, Indiana  46619

              
	 	
                 
                  [ADDRESS]

              	 	 	
                 
                  [ADDRESS]

              
	 	 
                
                DATE:
                  January 14,
                  2008

              	 	 	 
                
                DATE:
                  January 14,
                  2008

              


      

      


      


      


      Signatures
        continued on following
        page

    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	
                   HK
                    ENGINE COMPONENTS, LLC

                	 	 IDEAL
                  CONSOLIDATED, INC.
	 	
                  [APPLICANT'S
                    NAME]

                      

                	 	  	
                  [APPLICANT'S
                    NAME]

                   

                   

                
	 By:	 /s/
                  John A. Martell	 	 By:  	 /s/
                  John A. Martell
	 Title:	 CEO	 	 Title:	 CEO
	 	
                  1125
                    S. Walnut Street

                  South
                    Bend, Indiana  46619

                	 	 	
                  1125
                    S. Walnut Street

                  South
                    Bend, Indiana  46619

                
	 	
                   
                    [ADDRESS]

                	 	 	
                   
                    [ADDRESS]

                
	 	 
                  
                  DATE:
                    January 14,
                    2008

                	 	 	 
                  
                  DATE:
                    January 14,
                    2008

                


        

        


        

           

          
            
              	
                       MAGNETECH
                        POWER SERVICES, LLC

                    	 	 3-D
                      SERVICE, LTD.
	 	
                      [APPLICANT'S
                        NAME]

                          

                    	 	  	
                      [APPLICANT'S
                        NAME]

                       

                       

                    
	 By:	 /s/
                      John A. Martell	 	 By:  	 /s/
                      John A. Martell
	 Title:	 CEO	 	 Title:	 CEO
	 	
                      1125
                        S. Walnut Street

                      South
                        Bend, Indiana  46619

                    	 	 	
                      800
                        Nave Road

                      Massillon,
                        Ohio  44646

                    
	 	
                       
                        [ADDRESS]

                    	 	 	
                       
                        [ADDRESS]

                    
	 	 
                      
                      DATE:
                        January 14,
                        2008

                    	 	 	 
                      
                      DATE:
                        January 14,
                        2008

                    


            

            


               

              
                
                  	
                           AMERICAN
                            MOTIVE POWER, INC. 

                        	 	 
	 	
                          [APPLICANT'S
                            NAME]

                           

                              

                        	 	  	
                           

                           

                        
	 By:	 /s/
                          John A. Martell	 	  	 
	 Title:	 CEO	 	 	 
	 	
                          9431
                            Foster Wheeler Rd.

                          Dansville,
                            NY  14437

                        	 	  	
                           

                        
	 	
                           
                            [ADDRESS]

                        	 	 	
                        
	 	 
                          
                          DATE:
                            January 14,
                            2008

                        	 	 	 
                          
                           

                        


                

                


              

            

          

        

      

    

    


    11