CREDIT AGREEMENT

Dated as of February _____, 2003

among

NEW HORIZONS WORLDWIDE, INC.,

as Borrower

THE LENDERS NAMED HEREIN

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

CREDIT AGREEMENT

Dated as of February ___, 2003

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

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

Article 1.

DEFINITIONS AND ACCOUNTING TERMS

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

| | Accounts
means all accounts, as such term is defined in the UCC, now owned or
hereafter acquired by any Person, including (a) all accounts receivable,
other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by chattel paper,
documents or instruments (as such terms are defined in
the UCC)), whether arising out of goods sold or services rendered by it or from
any other transaction (including any such obligations that may be
characterized as an account or contract right under the UCC), (b) all
purchase orders or receipts for goods or services, (c) all rights to any
goods represented by any of the foregoing (including unpaid sellers
rights of rescission, replevin, reclamation and stoppage in transit and rights
to returned, reclaimed or repossessed goods), (d) all monies due or to
become due to such Person under all purchase orders and contracts for the sale
of goods or the performance of services or both by such Person or in connection
with any other transaction (whether or not yet earned by performance on the part
of such Person) now or hereafter in existence, including the right to receive
the proceeds of said purchase orders and contracts, and (e) all collateral
security and guaranties of any kind, now or hereafter in existence, given by any
Person with respect to any of the foregoing.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Acquired
Person means (a) any Person that is the subject of an Acquisition
after the Closing Date and (b) any assets constituting a discrete business
or operation unit that is the subject of an Acquisition after the Closing Date.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-1-

| | Adjusted
EBITDA means, with respect to any fiscal period, the sum
of, without duplication, (a) EBITDA for such fiscal period, plus
(b) to the extent deducted in determining Net Income for such fiscal period,
non-cash charges of Borrower and its Subsidiaries during such fiscal period
relating to Borrowers and its Subsidiaries compliance with Financial
Accounting Standards Board Statement No. 142, plus (c) to the extent
deducted in determining Net Income for such fiscal period, non-cash charges
recorded against earnings in Borrowers and its Subsidiaries
financial statements for such fiscal period with respect to the write-down of
leasehold estates as a result of the sublease of such leasehold estates,
plus (d) to the extent deducted in determining Net Income for such fiscal
period, the aggregate amortization of loan fees and prepaid expenses of Borrower
and its Subsidiaries with respect to the BofA Credit Facilities for that portion
of such fiscal period occurring before January 1, 2003, plus (e) to the
extent deducted in determining Net Income for such fiscal period, the non-cash
audit adjustment with respect to Borrowers 2002 Fiscal Year with regard to
accounting for deferred rent; provided that for purposes of calculating
Adjusted EBITDA for the Rolling Period ended December 31, 2002 or
for any Fiscal Quarter ended during such Rolling Period, in the event that
Borrower and its Subsidiaries record a charge against earnings with respect to a
change in accounting estimate for revenue recognition of Borrower and its
Subsidiaries in Borrowers and its Subsidiaries financial statements
for the Fiscal Quarter ended December 31, 2002, one-fourth of such charge
(determined on a pre-tax basis)(the Quarterly Revenue Recognition
Adjustment) shall be allocated to each Fiscal Quarter of 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Administrative
Agent means Wells Fargo when acting in its capacity as the
Administrative Agent under any of the Loan Documents, or any successor
Administrative Agent.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Administrative
Agents Office means the Administrative Agents address as
set forth on the signature pages of this Agreement, or such other address as the
Administrative Agent hereafter may designate by written notice to Borrower and
the Lenders.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Advance
means any advance made or to be made by any Lender to Borrower as provided in
Article 2, and includes each Revolving Advance and Term
Advance.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | Affiliate
means, as to any Person, any other Person which directly or indirectly controls,
or is under common control with, or is controlled by, such Person. As used in
this definition, control (and the correlative terms,
controlled by and under common control with) shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise); provided that,
in any event, any Person that owns, directly or indirectly, 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation that has more than 100 record holders of such
securities, or 10% or more of the partnership or other ownership interests of
any other Person that has more than 100 record holders of such interests, will
be deemed to be an Affiliate of such corporation, partnership or other Person.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-2-

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

| | Amortization
Date means, with respect to Term Borrowings, March 31, 2003, each
Quarterly Payment Date thereafter through the Term Maturity Date, and the
Term Maturity Date.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Applicable
Base Rate Margin means, with respect to any Base Rate Advance, (a) for
the Initial Pricing Period, 1.50% (150 basis points) per annum, and (b) for each
other Pricing Period, the interest rate margin set forth below (expressed in
basis points per annum) opposite the Applicable Pricing Level for that Pricing
Period:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Applicable                 Margin
                               Pricing
                                Level
                                  I                       150
                                  II                       50
                                  III                       0`

| | Applicable
Benchmark Amount means, (a) with respect to each Fiscal Quarter ending
during the period from March 31, 2003 through and including December 31, 2003,
$8,900,000, and (b) with respect to each Fiscal Quarter ending during the period
from March 31, 2004 through and including December 31, 2004, $8,800,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Applicable
Commitment Fee Margin means, (a) for the Initial Pricing Period, 0.50%
(50 basis points) per annum, and (b) for each other Pricing Period, the margin
set forth below (expressed in basis points per annum) opposite the Applicable
Pricing Level for that Pricing Period:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-3-

`Applicable                 Margin
                              Pricing
                               Level
                               I                          50
                               II                         37.5
                               III                        25`

| | Applicable
Eurodollar Rate Margin means, with respect to any Eurodollar Rate
Advance, (a) for the Initial Pricing Period, 3.75% (375 basis points) per annum,
and (b) for each other Pricing Period, the interest rate margin set forth below
(expressed in basis points per annum) opposite the Applicable Pricing Level for
that Pricing Period:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Applicable                 Margin
                              Pricing
                               Level
                               I                          375
                               II                         275
                               III                        225`

| | Applicable
Pricing Level means, for each Pricing Period subsequent to the
Initial Pricing Period, the pricing level set forth below opposite Adjusted
EBITDA as of the last day of the Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period, for the Rolling Period then ended:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Pricing Level              Adjusted EBITDA
                     I                    Less than $8,900,000
                     II                   Greater than or equal to $8,900,000, but less
                                          than $11,200,000
                     III                  Greater than or equal to $11,200,000`

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

-4-

| | 
Assignment and Acceptancemeans an assignment and acceptance agreement substantially in the form of Exhibit A.
| | ----------------------------------------------------------------------------------------------------------------

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

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

| | 
Base Rate Advancemeans an Advance that bears interest in relation to the  Base Rate as
          provided in Section 3.1(b).
| | -------------------------------------------------------------------------------------------------------------------------------

| | BofA
Credit Facilities means the credit facilities provided to Borrower
pursuant to that certain Credit Agreement dated as of April 25, 2001 among
Borrower, the Lenders party thereto, and Bank of America, N.A., as agent, as
such Credit Agreement may have been amended, supplemented or otherwise modified
prior to the Closing Date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
Borrowing means a Revolving Borrowing or a Term Borrowing.
| | -------------------------------------------------------------

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

| | 
Capital Lease Obligations means all monetary obligations of a Person under any Capital Lease.
| | ------------------------------------------------------------------------------------------------

| | Cash
means, when used in connection with any Person, all monetary and non-monetary
items owned by that Person that are treated as cash in accordance with GAAP,
consistently applied.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-5-

| | 
Cash Equivalents means, when used in connection with any Person, that Person's Investments in:
| | -------------------------------------------------------------------------------------------------



| | category,
when used with respect to any Advance, means the designation of whether such
Advance is a Revolving Advance or a Term Advance.
| | ------------------------------------------------------------------------------------------------------------------------------------------

| | Certificate
means a certificate signed by a Senior Officer or Responsible Official (as
applicable) of the Person providing the certificate.
| | ---------------------------------------------------------------------------------------------------------------------------------------------

| | Change
in Control means any of the following events: (a) the sale,
lease, transfer or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Borrower and its Subsidiaries taken as a
whole to any person or group (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act),
(b) Borrower shall fail to own, directly or indirectly, 100% of the
outstanding capital stock or other equity interests of any Subsidiary of
Borrower, (c) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
control over, 20% or more of the capital stock or other equity interests of
Borrower, (d) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning of such
24-month period were directors of Borrower (together with any new director whose
election by Borrowers Board of Directors or whose nomination for election
by Borrowers shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors of
Borrower then in office or (e) any transaction or series of related
transactions constituting a change in control or similar occurrence
under documentation evidencing or governing Indebtedness of Borrower and/or any
of its Subsidiaries of $250,000 or more, which gives the holder(s) of such
Indebtedness the right to accelerate or otherwise require payment of such
Indebtedness prior to the maturity date thereof. As used herein,
beneficial ownership shall have the meaning provided in
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-7-

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

| | Closing
Date Lenders means Wells Fargo and any other lender party to this
Agreement as of the Closing Date.
| | -------------------------------------------------------------------------------------------------------------

| | Code means the Internal Revenue Code of 1986, as amended or replaced and as in effect from

         time to time.
| | --------------------------------------------------------------------------------------------------------------------

| | Collateral means all of the collateral covered by the Collateral Documents.
| | -----------------------------------------------------------------------------

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

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

| | Commercial
Letter of Credit Agreement means the commercial letter of credit
agreement to be executed by Borrower, in form and substance satisfactory to
Issuing Lender, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended, restated or supplanted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Commitment means a Revolving Commitment or a Term Commitment.
| | ---------------------------------------------------------------

| | Compliance
Certificate means a certificate in the form of Exhibit B,
properly completed and signed by the chief financial officer of Borrower.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | Continuation,
Continue and Continued each refers to a
continuation of Eurodollar Rate Advances from one Eurodollar Period to the next
Eurodollar Period pursuant to Section 2.4(c).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-8-

| | Control Account Agreement has the meaning set forth in the Security Agreement.
| | --------------------------------------------------------------------------------

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

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

| | Debt
Service Coverage Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (a) Adjusted EBITDA for the Rolling Period
ending on that date to (b) the sum of (i) Interest Expense for
such Rolling Period, plus (ii) Scheduled Funded Debt Payments for such
Rolling Period, plus (iii) the aggregate of all taxes, as determined in
accordance with GAAP, of Borrower and its Subsidiaries, to the extent the same
are indicated on the income statement of Borrower and its Subsidiaries for such
Rolling Period (including any tax benefit, if reported, but excluding the tax
effect of an extraordinary or non-operating gain or loss), plus (iv) the
aggregate Earnout Payments required to be paid in cash by Borrower and its
Subsidiaries during such Rolling Period, minus (v) to the extent any of
the first three Fiscal Quarters of Borrowers 2002 Fiscal Year is included
in such calculation, an amount equal to, for each such Fiscal Quarter, forty
percent (40%) of the Quarterly Revenue Recognition Adjustment, plus (vi)
to the extent that the fourth Fiscal Quarter of Borrowers 2002 Fiscal Year
is included in such calculation, an amount equal to the product of
(A) forty percent (40%) times (B) the product of (I) the
Quarterly Revenue Recognition Adjustment times (II) 3.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Default Rate means the interest rate prescribed in Section 3.7.
| | -----------------------------------------------------------------

| | Designated
Deposit Account means a deposit account to be maintained by Borrower
with Wells Fargo or one of its Affiliates, as from time to time designated by
Borrower by written notification to the Administrative Agent. As of the Closing
Date, the Designated Deposit Account is account number 4945-095149 maintained
with Wells Fargo.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Designated Eurodollar Market means, with respect to any Eurodollar Rate Advance, the London

         Eurodollar Market.
| | --------------------------------------------------------------------------------------------------------------------------

| | Disposition
means the sale, transfer or other disposition in any single transaction or
series of related transactions of any asset, or group of related assets, of
Borrower or any Subsidiary other than (a) Cash, Cash Equivalents,
Investments (other than Investments in a Subsidiary), Inventory or
other assets sold or otherwise disposed of in the ordinary course of business of
Borrower or any Subsidiary, (b) equipment sold or otherwise disposed of where
substantially similar equipment in replacement thereof has theretofore been
acquired, or thereafter within 90 days is acquired, by Borrower or any
Subsidiary, and (c) obsolete assets no longer useful in the business of Borrower
or any Subsidiary whose carrying value on the books of Borrower or such
Subsidiary is less than $250,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-9-

| | Distribution
means, with respect to any equity interest or Security issued by a Person, or
any warrant or right to acquire any equity interest or Security of a Person, (a)
the retirement, redemption, purchase, or other acquisition for value by such
Person of any such equity interest or Security, (b) the declaration or (without
duplication) payment by such person of any dividend in Cash or in Property
(other than in common stock or common member interest, as the case
may be, of such Person) on or with respect to any such equity interest or
Security, (c) any Investment by such Person in the holder of any such equity
interest or Security, and (d) any other payment by such Person constituting a
distribution under applicable Laws with respect to such equity interest or
Security.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Dollars or $ means United States of America dollars.
| | --------------------------------------------------------

| | Earnout
Payment means any payment which is (a) required to be made by Borrower
or any of its Subsidiaries in respect of any Acquisition and (b) based on the
earnings or revenues of the related Acquired Person.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | EBITDA
means, with respect to any fiscal period, the sum of (a) Net
Income for that fiscal period, plus (b) any extraordinary or
non-operating loss reflected in such Net Income, minus (c) any
extraordinary or non-operating gain reflected in such Net Income, plus
(d) Interest Expense of Borrower and its Subsidiaries for that fiscal
period, plus (e) the aggregate amount of federal and state taxes on
or measured by income of Borrower and its Subsidiaries for that fiscal period
(whether or not payable during that fiscal period), plus
(f) depreciation and amortization expense of Borrower and its Subsidiaries
for that fiscal period, plus (g) all other non-cash, extraordinary
expenses of Borrower and its Subsidiaries for that fiscal period, in each case
as determined in accordance with GAAP, consistently applied and, in the case of
items (d), (e), (f), and (g) only to the extent
reflected in the determination of Net Income for that fiscal period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Eligible
Assignee means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank having total
assets of $250,000,000 or more, (d) any (i) savings bank, savings and
loan association or similar financial institution or (ii) insurance company
engaged in the business of writing insurance which, in either case (A) has
total assets of $250,000,000 or more, (B) is engaged in the business of
lending money and extending credit under credit facilities similar to those
extended under this Agreement and (C) is operationally and procedurally
able to meet the obligations of a Lender hereunder to the same degree as a
commercial bank and (e) any other financial institution (including a
mutual fund or other fund) having total assets of $250,000,000 or more which
meets the requirements set forth in subclauses (B) and (C) of
clause (d) above; provided that each Eligible Assignee must
be organized under the Laws of the United States of America, any State
thereof or the District of Columbia.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-10-

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

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

| | Eurodollar
Banking Day means any Banking Day on which dealings in Dollar deposits
are conducted by and among banks in the Designated Eurodollar Market.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | Eurodollar
Base Rate means, with respect to any Eurodollar Rate Advance
comprising part of the same Borrowing, the rate per annum for United States
dollar deposits quoted by Administrative Agent as the Inter-Bank Market Offered
Rate, with the understanding that such rate is quoted by Administrative Agent
for the purpose of calculating effective rates of interest for loans making
reference thereto, on the first day of a Eurodollar Period for delivery of funds
on said date for a period of time approximately equal to the number of days in
such Eurodollar Period and in an amount approximately equal to the principal
amount to which such Eurodollar Period applies. Borrower understands and agrees
that Administrative Agent may base its quotation of the Inter-Bank Market
Offered Rate upon such offers or other market indicators of the Inter-Bank
Market as Administrative Agent in its discretion deems appropriate including,
but not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

| | Eurodollar
Obligations means eurocurrency liabilities, as defined in
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Lender.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-11-



| | Eurodollar
Rate means, with respect to any Eurodollar Rate Advance comprising
part of the same Borrowing, an interest rate per annum (rounded upward, if
necessary, to the nearest 1/8 of one percent) determined pursuant to the
following formula:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Eurodollar                Eurodollar Base Rate
                  Rate              =       1.00-Eurodollar Reserve
                                                   Percentage`

| | Eurodollar Rate Advance means an Advance that bears interest in relation to the Eurodollar
         Rate as provided in Section 3.1(c).
| | -----------------------------------------------------------------------------------------------------------------------------------------

| | Eurodollar
Reserve Percentage means, with respect to any Eurodollar Rate Advance
comprising part of the same Borrowing, the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
Eurocurrency Liabilities (as defined in Regulation D of the Federal
Reserve Board, as amended), adjusted by Administrative Agent for expected
changes in such reserve percentage during the applicable Eurodollar Period.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Event of Default
          shall have the meaning provided in Section 9.1.
| | ----------------------------------------------------------------------------

| | Excess
Cash Flow means, with respect to any Fiscal Quarter, the
difference between (a) Adjusted EBITDA for the Rolling Period
ending on the last day of such Fiscal Quarter, minus (b) the Applicable
Benchmark Amount for such Fiscal Quarter. If such amount is less than zero,
Excess Cash Flow for such Fiscal Quarter shall be $0.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-12-

| | Facility means the Revolving Facility or the Term Facility, as the context may require.
| | -----------------------------------------------------------------------------------------

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

| | Fiscal
Quarter means the fiscal quarter of Borrower and its Subsidiaries
ending on each March 31, June 30, September 30 and December 31.
| | ------------------------------------------------------------------------------------------------------------------------------------------

| | Fiscal Year means the fiscal year of Borrower and its Subsidiaries ending on each December 31.
| | ------------------------------------------------------------------------------------------------

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

| | Funded
Debt Ratio means, as of the last day of any Fiscal Quarter, the
ratio of (a) Funded Debt as of such date to
(b) Adjusted EBITDA for the Rolling Period ending on that date.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-13-

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

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

| | Guarantors means, collectively, each Subsidiary of Borrower.
| | --------------------------------------------------------------

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

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

-14-

| | Hazardous Materials Laws means all Laws pertaining to the treatment, transportation or
                    disposal of Hazardous Materials on or about any Real Property owned or leased by Borrower or any
         Subsidiary thereof, or any portion thereof, including without limitation the following:  the Federal
         Water Pollution Control Act (33 U.S.C.ss. 1251, et seq.), the Federal Resource Conservation and Recovery

         Act of 1976 (42 U.S.C.ss. 6901, et seq.), the Comprehensive Environmental Response, Compensation and

         Liability Act of 1980, as amended (42 U.S.C.ss. 9601, et seq.) and the Superfund Amendments and

         Reauthorization Act of 1986, the Hazardous Materials Transportation Act, as amended (44 U.S.C.ss. 1801,
         et seq.), the Toxic Substances Control Act, 15 U.S.C.ss. 2601 et seq., the California Health and Safety

         Code (Section 25100, et seq.), the California Water Code and the California Administrative Code, in each

         case as such Laws are amended from time to time.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Initial Pricing Period means the period from and including the Closing Date through and

         including May 15, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------

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

| | Intercompany Notes means, collectively, the intercompany promissory notes required pursuant
to Section 5.12.
| | --------------------------------------------------------------------------------------------------------------

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

-15-

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

| | Inventory
means all inventory, as such term is defined in the UCC, now owned
or hereafter acquired by any Person, wherever located, including all goods,
merchandise and other personal property held for sale or lease by any such
Person, or which is furnished by such Person under any contract of service or is
held by such Person as raw materials, work or goods in process, materials and
supplies of every nature used or consumed or to be used or consumed by such
Person in the ordinary course of its business, whether now owned or hereafter
acquired by such Person.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Investment
means, when used in connection with any Person, any investment by or of that
Person, whether by means of purchase or other acquisition of stock or other
Securities of any other Person or by means of a loan, advance creating a debt,
capital contribution, guaranty or other debt or equity participation or interest
in any other Person, including any partnership, limited liability company
and joint venture interests of such Person. The amount of any Investment shall
be the amount actually invested (minus any return of capital with respect
to such Investment which has actually been received in Cash or has been
converted into Cash), without adjustment for subsequent increases or decreases
in the value of such Investment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Laws
means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Lender
means each Closing Date Lender and each lender that may hereafter become a party
to this Agreement pursuant to Section 11.8. When reference is made in
this Agreement or any other Loan Document to any relevant Lender in
connection with any of the Facilities, such reference shall be deemed to refer
to a Lender that has a Commitment or outstanding Advances under such Facility.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Letter
of Credit means any of the Commercial Letters of Credit or Standby
Letters of Credit issued by the Issuing Lender under the Revolving Facility
pursuant to Section 2.5, either as originally issued or as the same
may be supplemented, modified, amended, extended, restated or supplanted.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Letter
of Credit Agreements means, collectively, the Standby Letter of Credit
Agreement, the Commercial Letter of Credit Agreement and any and all similar
documents executed and delivered by Borrower in connection with the Issuing
Lenders issuance of Letters of Credit.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-16-

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

| | Loan
Documents means, collectively, this Agreement, the Notes, the
Subsidiary Guaranty, the Collateral Documents, the Letter of Credit Agreements,
any Request for Borrowing, any Request for Letter of Credit (and any
corresponding application and/or reimbursement agreement with respect to any
Letter of Credit), any Compliance Certificate, any Pricing Certificate and any
other agreements of any type or nature hereafter executed and delivered by
Borrower or any Subsidiary to the Administrative Agent or to any Lender in any
way relating to or in furtherance of this Agreement, in each case either as
originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Margin Stock  means "margin stock" as such term is defined in Regulation U.
| | -----------------------------------------------------------------------------

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

| | Material
Contracts means, collectively, (a) the agreements identified on
Schedule 1.2 attached hereto and (b) any other agreement that
would, if terminated, materially adversely affect the condition, financial or
otherwise of Borrower and its Subsidiaries, taken as a whole.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Maturity Date means, as the context may require, the Revolving Facility Maturity Date or the

         Term Maturity Date.
| | ----------------------------------------------------------------------------------------------------------------------------

| | Maximum Revolving Credit Amount means, as of any date of determination, the than applicable

         aggregate Revolving Commitments.
| | ----------------------------------------------------------------------------------------------------------------------------------------

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

-17-

| | Net
Cash Issuance Proceeds means, with respect to the issuance of any
equity Security by Borrower or any Subsidiary, the Cash proceeds received by or
for the account of Borrower or such Subsidiary in consideration of such issuance
net of (a) underwriting discounts and commissions actually
paid to any Person not an Affiliate of Borrower and (b) professional fees
and disbursements actually paid in connection therewith.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
Cash Sales Proceeds means, with respect to any Disposition, the
sum of (a) the Cash proceeds received by or for the account
of Borrower and its Subsidiaries from such Disposition plus (b) the
amount of Cash received by or for the account of Borrower and its Subsidiaries
upon the sale, collection or other liquidation of any proceeds that are not Cash
from such Disposition, in each case net of (i) any amount
required to be paid to any Person owning an interest in the assets disposed of,
(ii) any amount applied to the repayment of Indebtedness secured by a Lien
permitted under Section 6.9 on the asset disposed of,
(iii) any transfer, income or other taxes payable as a result of such
Disposition, (iv) professional fees and expenses, fees due to any
Governmental Agency, brokers commissions and other out-of-pocket costs of
sale actually paid to any Person that is not an Affiliate of Borrower
attributable to such Disposition, and (v) any reserves established in
accordance with GAAP in connection with such Disposition
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
Income means, with respect to any fiscal period, the consolidated net
income of Borrower and its Subsidiaries for that period, determined in
accordance with GAAP, consistently applied.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Note means any of the Revolving Notes or the Term Notes and Notes means, collectively, the
         Revolving Notes and the Term Notes.
| | -------------------------------------------------------------------------------------------------------------------------------------------

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

| | Obligors
means, collectively, Borrower and its Subsidiaries and, in each case where any
of the foregoing is a partnership, each general partner thereof.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | Opinions
of Counsel means the favorable written legal opinions of Calfee,
Halter & Griswold, LLP, Call & Jensen and Baker & Daniels, each
special counsel to some or all of the Obligors, in form and substance
satisfactory to Administrative Agent.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-18-

| | PBGC means the Pension Benefit Guaranty Corporation or any successor thereof established

         under ERISA.
| | -----------------------------------------------------------------------------------------------------------------

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

| | Permitted Encumbrances means:
| | -------------------------------



| | Permitted
Right of Others means a Right of Others consisting of (a) an
interest (other than a legal or equitable co-ownership interest,
an option or right to acquire a legal or equitable co-ownership interest and any
interest of a ground lessor under a ground lease), that does not materially
impair the fair market value or use of Property for the purposes for which it is
or may reasonably be expected to be held, (b) an option or right to acquire
a Lien that would be a Permitted Encumbrance or other encumbrance permitted
pursuant to Section 6.9, (c) the subordination of a lease or
sublease in favor of a financing entity and (d) a license, or similar
right, of or to Intangible Assets granted in the ordinary course of business.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Pledge
Agreement means the pledge agreement to be executed and delivered
pursuant Article 8 by the Pledgors, in the form of Exhibit C,
either as originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pledged
Collateral means the certificates evidencing (a) all of the
equity interests now or hereafter held by Borrower and its Subsidiaries in all
Subsidiaries of Borrower and (b) the Intercompany Notes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pledgors
means, collectively, Borrower and all Subsidiaries that have any ownership
interest in any other Subsidiary or are the payee of an Intercompany Note.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Pricing
Period means (a) the Initial Pricing Period and (b), subsequent
to the Initial Pricing Period, (i) the period commencing on each May 16 and
ending on the next following August 15, (c) the period commencing on each
August 16 and ending on the next following November 15, (d) the period
commencing on each November 16 and ending on the next following February 28 or
29, as applicable, and (e) the period commencing on each March 1 and ending
on the next following May 15.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Prime
Rate means the rate of interest most recently announced within Wells
Fargo, at its principal office in San Francisco, California, as its
prime rate. The prime rate is one of several base rates
used by Wells Fargo and serves as the basis upon which effective rates of
interest are calculated for loans and other credits making reference thereto.
The prime rate is evidenced by the recording thereof after its
announcement in such internal publication or publications as Wells Fargo may
designate. Any change in the Prime Rate shall take effect on the day the change
is announced within Wells Fargo.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-21-

| | Projections means the projections of Borrower and its Subsidiaries delivered to

         Administrative Agent prior to the Closing Date.
| | -------------------------------------------------------------------------------------------------------------------------------------------

| | Property means any interest in any kind of property or asset, whether real, personal or

         mixed, or tangible or intangible.
| | -------------------------------------------------------------------------------------------------------------------------------------

| | Pro
Rata Share of any amount means, with respect to any Lender under any
Facility at any time, the product of (a) a fraction the
numerator of which is the amount of such Lenders Commitment under such
Facility (or, if such Commitment shall have expired or been terminated, the
amount of such Lenders Advances under such Facility), and the denominator
of which is the aggregate Commitments or Advances, as the case may be, under
such Facility at such time, multiplied by (b) such amount.
Schedule 1.1 sets forth the Pro Rata Shares of the Closing Date
Lenders as of the Closing Date for each of the Facilities.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Quarterly Payment Date means each March 31, June 30, September 30 and December 31.
| | ------------------------------------------------------------------------------------

| | Quarterly
Revenue Recognition Adjustment has the meaning given such term in the
definition of Adjusted EBITDA.
| | ------------------------------------------------------------------------------------------------------------------

| | Real
Property means, as of any date of determination, all real property
then or theretofore owned, leased or occupied by Borrower or any Subsidiary.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

-22-

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

| | Requisite
Lenders means at any time Lenders owed or holding in the aggregate
66.67% or more of the sum of (a) the then aggregate unpaid
principal amount of the Advances plus (b) the then Aggregate
Effective Amount (to the extent not then included as Advances)
plus (c) the then aggregate unused portion of the Revolving
Commitments.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Responsible
Official means, as to any Person, (a) any Senior Officer of such
Person and (b) any other responsible official of such Person so designated
in a written notice thereof from a Senior Officer of such Person to the
Administrative Agent, on behalf of the Lenders. The Lenders shall be entitled to
conclusively rely upon any document or certificate that is signed or executed by
a Responsible Official of Borrower or any Subsidiary as having been authorized
by all necessary corporate, partnership, limited liability company and/or other
action on the part of Borrower or such Subsidiary.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revolving Advance means an Advance made pursuant to Section 2.1(a).
| | ---------------------------------------------------------------------

| | Revolving Borrowing means a borrowing consisting of simultaneous Revolving Advances of the

         same Type.
| | -----------------------------------------------------------------------------------------------------------------

| | Revolving
Commitment means, with respect to each relevant Lender, the
commitment, if any, of such Lender to make Revolving Advances (expressed as the
maximum aggregate amount of the Revolving Advances to be made by such Lender
hereunder), as such commitment may be (a) reduced from time to time
pursuant to Section 2.6 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section
11.8. The initial amount of each relevant Lenders Revolving Commitment
is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant
to which such Lender shall have assumed its Revolving Commitment, as applicable.
The initial aggregate amount of the Lenders Revolving Commitments is
$1,500,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revolving
Credit Facility Usage means, as of any date of determination, the sum
of (a) the aggregate principal amount of funded Indebtedness then outstanding
under the Revolving Notes plus (b) the Aggregate Effective Amount under
all outstanding Letters of Credit.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revolving Facility means the revolving credit facility provided hereunder in respect of the

         aggregate Revolving Commitments.
| | ----------------------------------------------------------------------------------------------------------------------------------------

| | Revolving
Facility Maturity Date means the earlier of (a) February 15, 2005
and (b) the termination or cancellation of the Revolving Facility (and all
of the Revolving Commitments pertaining thereto) pursuant to the terms of this
Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-23-

| | Revolving
Note means any of the promissory notes made by Borrower to a Lender
evidencing Advances under that Lenders Revolving Commitment, substantially
in the form of Exhibit H, either as originally executed or as the
same may from time to time be supplemented, modified, amended, renewed, extended
or supplanted.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Rolling Period means any period of four consecutive Fiscal Quarters of Borrower and its

         Subsidiaries.
| | -----------------------------------------------------------------------------------------------------------------

| | Scheduled
Funded Debt Payments means, as to any Person with respect to any
fiscal period, the sum of all scheduled payments of principal on Funded Debt
(including the principal component of payments due on Capital Lease
Obligations).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

| | series,
when used with respect to any Note, means the designation of all issued and
outstanding Revolving Notes or Term Notes, as applicable and as the context may
require.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-24-

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

| | Standby Letter of Credit means each Letter of Credit that is not a Commercial Letter of

         Credit.
| | -----------------------------------------------------------------------------------------------------------

| | Standby
Letter of Credit Agreement means the standby letter of credit
agreement to be executed by Borrower, in form and substance satisfactory to
Issuing Lender, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended, restated or supplanted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Subordinated
Obligations means, as of any date of determination (without
duplication), any Indebtedness of Borrower or any Subsidiary on that date which
has been subordinated in right of payment to the Obligations in a manner
reasonably satisfactory to the Administrative Agent and the Requisite Lenders
and contains such other protective terms with respect to senior debt
(such as payment blockage) as the Administrative Agent and the Requisite Lenders
may reasonably require.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Subsidiary
means, as of any date of determination and with respect to any Person, any
corporation, limited liability company or partnership (whether or not, in any
case, characterized as such or as a joint venture), whether now
existing or hereafter organized or acquired: (a) in the case of a
corporation or limited liability company, of which a majority of the securities
having ordinary voting power for the election of directors or other governing
body (other than securities having such power only by reason of the happening of
a contingency) are at the time beneficially owned by such Person and/or one or
more Subsidiaries of such Person, or (b) in the case of a partnership, of
which a majority of the partnership or other ownership interests are at the time
beneficially owned by such Person and/or one or more of its Subsidiaries. Any
reference to a Subsidiary or Subsidiaries shall, unless
otherwise provided, be deemed to be a reference to a Subsidiary (or
Subsidiaries, as the case may be) of Borrower.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-25-

| | Subsidiary
Guaranty means the continuing guaranty of the Obligations to be
executed and delivered pursuant to Article 8 by the Guarantors, in the
form of Exhibit J, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or supplanted.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Term Advance means an advance made pursuant to Section 2.1(b).
| | ----------------------------------------------------------------

| | Term Amortization Amount means, with respect to each Amortization Date, $750,000.
| | -----------------------------------------------------------------------------------

| | Term Borrowing means a borrowing consisting of simultaneous Term Advances of the same Type.
| | ---------------------------------------------------------------------------------------------

| | Term
Commitment means, with respect to each Closing Date Lender, the
commitment, if any, of such Closing Date Lender to make a Term Advance on the
Closing Date (expressed as the maximum principal amount of the Term Advances to
be made by such Lender hereunder), as such commitment may be reduced pursuant to
Section 2.6. The amount of each Closing Date Lenders Term
Commitment is set forth on Schedule 1.1. The aggregate amount of the
Closing Date Lenders Term Commitments is $10,639,021.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Term Facility means the term loan facility provided hereunder in respect of the aggregate

         Term Advances.
| | --------------------------------------------------------------------------------------------------------------------

| | Term Maturity Date means February 15, 2005.
| | ---------------------------------------------

| | Term
Note means any of the promissory notes made by Borrower to a Lender
evidencing Term Advances by that Lender, substantially in the form of Exhibit
K, either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Termination
Date means the date on which the Advances and all other Obligations
under this Agreement and the other Loan Documents are indefeasibly paid in full,
in Cash, and Borrower shall have no further right to borrow any moneys or obtain
other credit extensions or financial accommodations under this Agreement or any
of the other Loan Documents.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-26-

| | Type
refers to the distinction between Advances bearing interest at the Base Rate and
Advances bearing interest at the Eurodollar Rate.
| | -----------------------------------------------------------------------------------------------------------------------------------------

| | UCC
means the Uniform Commercial Code as the same may from time to time be enacted
and in effect in the State of California; provided that, in the event by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of Administrative Agent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 California, the term
UCC shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Wells Fargo means Wells Fargo Bank, National Association.
| | -----------------------------------------------------------

| | 1.2  
Use of Defined Terms.  Any defined term used in the plural shall refer to all members of the relevant

class, and any defined term used in the singular shall refer to any one or more of the members of the relevant
class.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.3   
Accounting Terms;
Covenant Calculations. All accounting terms not specifically defined in this
Agreement shall be construed in conformity with, and all financial data required
to be submitted by this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, except as otherwise specifically
prescribed herein. In the event that GAAP changes during the term of this
Agreement such that the covenants contained in Sections 6.14, 6.15
and 6.16 would then be calculated in a different manner or with different
components, (i) Borrower and the Lenders agree to amend this Agreement in
such respects as are necessary to conform those covenants as criteria for
evaluating Borrowers financial condition to substantially the same
criteria as were effective prior to such change in GAAP and (ii) Borrower
shall be deemed to be in compliance with the covenants contained in the
aforesaid Sections if and to the extent that Borrower would have been in
compliance therewith under GAAP as in effect immediately prior to such change,
but shall have the obligation to deliver each of the materials described in
Article 7 to the Administrative Agent and the Lenders, on the dates
therein specified, with financial data presented in a manner which conforms with
GAAP as in effect immediately prior to such change.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

-27-

| | 1.6   References to
Borrower and its Subsidiaries. Any reference herein to
Borrower and its Subsidiaries or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

-28-

Article 2.

ADVANCES AND LETTERS OF CREDIT

| | 2.1    
    Advances-General.
| | -----------------------------



| | 2.2   
Base Rate
Advances. Each request by Borrower for a Borrowing comprised of Base Rate
Advances shall be made pursuant to a Request for Borrowing (or telephonic or
other request for Borrowing referred to in the second sentence of
Section 2.1(c), if applicable) received by the Administrative Agent,
at the Administrative Agents Office, not later than 10:00 a.m.
California time, on the date of the requested Borrowing, provided such
date is a Banking Day. All Advances shall constitute Base Rate Advances unless
properly designated as a Eurodollar Rate Advance pursuant to
Section 2.3 or 2.4.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-30-

| | 2.3   
     Eurodollar Rate Advances.
| | -------------------------------------



| | 2.4    
    Conversion and Continuation of Advances.
| | ----------------------------------------------------



-32-

| | 2.5    
    Letters of Credit.
| | ------------------------------







| | 2.6
        Termination or Reduction of the Commitments.
| | --------------------------------------------------------



-36-

| | 2.7   Administrative
Agents Right to Assume Funds Available for Advances. Unless the
Administrative Agent shall have been notified by any relevant Lender no later
than 10:00 a.m., California time, on the Banking Day of the proposed
funding by the Administrative Agent of any Borrowing that such Lender does not
intend to make available to the Administrative Agent such Lenders portion
of the total amount of such Borrowing, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
date of the Borrowing and the Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative
Agents demand therefor, the Administrative Agent promptly shall notify
Borrower and Borrower shall pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover from such
Lender interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments or to prejudice any rights which the Administrative
Agent or Borrower may have against any Lender as a result of any default by such
Lender hereunder.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.8   Collateral. The
Obligations shall be secured by a first priority (subject to Liens permitted by
Section 6.9) perfected Lien on the Collateral pursuant to the
Collateral Documents, which Collateral shall consist of Borrowers and its
Subsidiaries Accounts, general intangibles, instruments, chattel paper,
deposit accounts, investment property (including, without limitation, equity
interests in Subsidiaries of Borrower), and proceeds thereof, as further set
forth in the Collateral Documents.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-37-

Article 3.

PAYMENTS AND FEES

| | 3.1   
Principal and Interest.
| | ------------------------------



| | 3.2  
 Unused Revolving
Facility Commitment Fee. From the Closing Date through the Revolving
Facility Maturity Date, Borrower shall pay to the Administrative Agent, for the
ratable accounts of the applicable Lenders in accordance with their respective
Pro Rata Shares, a commitment fee equal to the Applicable Commitment Fee Margin
times the average daily amount by which the Maximum Revolving Credit
Amount exceeds the sum of (a) the aggregate principal amount
of funded Indebtedness then outstanding under the Revolving Notes plus
(b) the Aggregate Effective Amount under all outstanding Standby Letters of
Credit. The commitment fee shall be payable quarterly in arrears on each
Quarterly Payment Date.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.3   Closing Fee.
Borrower shall pay to the Closing Date Lenders, through the Administrative
Agent, the closing fee in the amount heretofore agreed upon by letter agreement
between Borrower and each Closing Date Lender. All such fees shall be fully
earned when paid and shall be non-refundable.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-39-

| | 3.4   
     Letter of Credit Fees.  With respect to each Letter of Credit, Borrower shall pay the following fees:
| | -----------------------------------------------------------------------------------------------------------------



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

| | 3.5
  Increased Commitment
Costs. If any Lender shall determine in good faith that the introduction
after the Closing Date of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein or any change in the
interpretation or administration thereof by any central bank or other
Governmental Agency charged with the interpretation or administration thereof,
or compliance by such Lender (or its Eurodollar Lending Office) or any
corporation controlling such Lender, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of Law) of any such
central bank or other authority not imposed as a result of such Lenders or
such corporations failure to comply with any other Laws, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lenders or such corporations policies with respect to capital
adequacy and such Lenders desired return on capital) determines in good
faith that the amount of such capital is increased, or the rate of return on
capital is reduced, as a consequence of its obligations under this Agreement,
then, within ten (10) days after demand of such Lender, Borrower shall pay
to such Lender, from time to time as specified in good faith by such Lender,
additional amounts sufficient to compensate such Lender in light of such
circumstances, to the extent reasonably allocable to such obligations under this
Agreement, provided that Borrower shall not be obligated to pay any such
amount which arose prior to the date which is ninety days preceding the date of
such demand or is attributable to periods prior to the date which is ninety days
preceding the date of such demand. Each Lenders determination of such
amounts shall be conclusive in the absence of manifest error.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-40-

| | 3.6
       Eurodollar Costs and Related Matters.
| | ------------------------------------------------



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

(c)  
If, after the date hereof, the existence or occurrence of any Special Eurodollar
Circumstance shall, in the good faith opinion of any Lender, make it unlawful or
impossible for such Lender or its Eurodollar Lending Office to make, maintain or
fund its portion of any Borrowing consisting of Eurodollar Rate Advances, or
materially restrict the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the Designated Eurodollar Market, or to determine or
charge interest rates based upon the Eurodollar Rate, then such Lenders
obligation to make Eurodollar Rate Advances shall be suspended for the duration
of such illegality or impossibility and the Administrative Agent forthwith shall
give notice thereof to the other Lenders and Borrower. Upon receipt of such
notice, the outstanding principal amount of such Lenders affected
Eurodollar Rate Advances, together with accrued interest thereon, automatically
shall be converted to Base Rate Advances on either (i) the last day of the
Eurodollar Period(s) applicable to such Eurodollar Rate Advances if such Lender
may lawfully continue to maintain and fund such Eurodollar Rate Advances to such
day(s) or (ii) immediately if such Lender may not lawfully continue to fund
and maintain such Eurodollar Rate Advances to such day(s), provided that
in such event the conversion shall not be subject to payment of a prepayment fee
under Section 3.6(e). Each Lender agrees to endeavor promptly to
notify Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will cause such Lender to notify Borrower as set forth
in the first sentence of this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender. In the event that any Lender is
unable, for the reasons set forth above, to make, maintain or fund any
Eurodollar Rate Advance, such Lender shall fund such Eurodollar Rate Advance as
a Base Rate Advance for the same period of time, and such amount shall be
treated in all respects as a Base Rate Advance. In the event that any
Lenders obligation to make Eurodollar Rate Advances has been suspended
under this Section, such Lender shall promptly notify the Administrative Agent
and Borrower of the cessation of the Special Eurodollar Circumstance which gave
rise to such suspension.

-42-

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

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

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

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

(e)  
Upon payment or prepayment of any Eurodollar Rate Advance (other than as
the result of a conversion required under Section 3.6(c)) on a day
other than the last day in the applicable Eurodollar Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or upon
the failure of Borrower (for a reason other than the breach by a Lender of its
obligation pursuant to Section 2.1(a)) to borrow on the date or in
the amount specified for a Borrowing comprised of Eurodollar Rate Advances in
any Request for Borrowing, Borrower shall pay to the appropriate Lender within
five (5) Banking Days after demand a prepayment fee or failure to borrow
fee, as the case may be (determined as though 100% of the Eurodollar Rate
Advance had been funded in the Designated Eurodollar Market) equal to the sum of
the discounted monthly differences for each month from the month of prepayment
or failure to borrow through the month in which such Eurodollar Period matures,
calculated as follows for each such month:

-43-

(1)  
Determine the amount of interest which would have accrued each month on
the amount prepaid or not borrowed at the interest rate applicable to such
amount had it remained outstanding until the last day of the Eurodollar Period
applicable thereto;

(2)  
Subtract from the amount determined in (1) above the amount of
interest which would have accrued for the same month on the amount prepaid or
not borrowed for the remaining term of such Eurodollar Period at the Eurodollar
Rate plus the Applicable Eurodollar Rate Margin in effect on the date of
prepayment or failure to borrow for new loans made for such term and in a
principal amount equal to the amount prepaid or not borrowed;

(3)  
If the result obtained in (2) for any month is greater than zero,
discount that difference by the Eurodollar Rate plus the Applicable
Eurodollar Rate Margin used in (2) above.

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

(f)    
    Each Lender agrees to endeavor promptly to notify Borrower of any event of
         which it has actual knowledge, occurring after the Closing Date, which will entitle such Lender to
         compensation pursuant to clause (a) or clause (b) of this Section, and agrees to designate a different

         Eurodollar Lending Office if such designation will avoid the need for or reduce the amount of such
         compensation and will not, in the good faith judgment of such Lender, otherwise be materially
         disadvantageous to such Lender.  Any request for compensation by a Lender under this Section shall set
         forth the basis upon which it has been determined that such an amount is due from Borrower, a
         calculation of the amount due, and a certification that the corresponding costs have been incurred by
         such Lender.

| | 3.7   
Late Payments and
Default Rate. Subject to the last sentence of this Section 3.7, if
any installment of principal or interest or any fee or cost or other amount
payable under any Loan Document to the Administrative Agent or any Lender is not
paid when due, it shall thereafter bear interest at a fluctuating interest rate
per annum at all times equal to the sum of the interest rate
otherwise applicable thereto hereunder (or, if no interest rate is otherwise
applicable thereto hereunder, the Base Rate) plus 2.00% (the
Default Rate), to the fullest extent permitted by applicable
Laws. While any Event of Default exists or after acceleration, at the option of
the Requisite Lenders and subject to the last sentence of this Section
3.7, Borrower shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by Law) on the principal amount of all
outstanding Obligations, at the Default Rate, to the fullest extent permitted by
Law. Accrued and unpaid interest on past due amounts (including interest
on past due interest) shall be compounded monthly, on the last day of each
calendar month, to the fullest extent permitted by applicable Laws.
Administrative Agent shall provide notice to Borrower of the imposition of the
Default Rate pursuant to this Agreement, provided that imposition of the
Default Rate in each case shall be effective as of the date of the Event of
Default or other event giving rise to such imposition, unless otherwise
indicated in such notice.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-44-

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

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

| | 3.10  
Manner and Treatment of Payments.
| | ----------------------------------------



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

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

| | 3.13  
 Administrative
Agents Right to Assume Payments Will be Made. Unless the
Administrative Agent shall have been notified by Borrower prior to the date on
which any payment to be made by Borrower hereunder is due that Borrower does not
intend to remit such payment (or otherwise cause sufficient funds to be
available in the Designated Deposit Account for debit pursuant to
Section 3.10(b)), the Administrative Agent may, in its discretion,
assume that Borrower has remitted such payment (or caused funds sufficient to
make such payment to be available) when so due and the Administrative Agent may,
in its discretion and in reliance upon such assumption, make available to each
Lender on such payment date, an amount equal to such Lenders share of such
assumed payment. If Borrower has not in fact remitted such payment (or caused
funds sufficient to make such payment to be available) to the Administrative
Agent, each Lender shall forthwith on demand repay to the Administrative Agent
the amount of such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent at the Federal Funds Rate.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-46-

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

| | 3.15  
 Survivability.
All of Borrowers obligations under Sections 3.5
and 3.6 shall survive for the ninety day period following the
Termination Date, and Borrower shall remain obligated thereunder for all claims
under such Sections made by any Lender to Borrower prior to the expiration of
such period.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-47-

Borrower represents and warrants to the Administrative Agent
and each of the Lenders that:

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

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



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

-48-

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

| | 4.4   

     Subsidiaries.
| | --------------------------



-49-

| | 4.5   Financial
Statements. Borrower has furnished to the Lenders (a)  the audited
consolidated financial statements of Borrower and its Subsidiaries for the
Fiscal Year ended December 31, 2001 and (b) the unaudited consolidated
financial statements of Borrower and its Subsidiaries for the Fiscal Quarter
ended September 30, 2002. The financial statements described above fairly
present in all material respects the financial condition, results of operations
and changes in financial position of Borrower and its Subsidiaries as of such
dates and for such periods in conformity with GAAP consistently applied subject
only to normal year-end accruals and audit adjustments.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.6  
 No Other
Liabilities; No Material Adverse Changes. Borrower and its Subsidiaries do
not have any material liability or material contingent liability required under
GAAP to be reflected or disclosed, and not reflected or disclosed, in the
balance sheet included in the financial statements described in
Section 4.5(b), other than liabilities and contingent
liabilities arising in the ordinary course of business since the date of such
balance sheet. Except as disclosed to Administrative Agent prior to the Closing
Date, no circumstance or event has occurred, as of the Closing Date, that
constitutes a Material Adverse Effect since December 31, 2001.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.7  
 Title to and
Location of Property. Borrower and its Subsidiaries have valid title to the
Property (other than assets which are the subject of a Capital Lease
Obligation) reflected in the balance sheet included in the financial statements
described in Section 4.5(b), other than items of
Property or exceptions to title which are in each case immaterial and Property
subsequently sold or disposed of in the ordinary course of business (or
otherwise disposed of in a manner permitted by this Agreement). Such Property is
free and clear of all Liens and Rights of Others, other than Liens or
Rights of Others described in Schedule 4.7A and Permitted
Encumbrances, other encumbrances permitted pursuant to Section 6.9,
and Permitted Rights of Others. All Property of Borrower and its Subsidiaries is
located at one of the locations described in Schedule 4.7B or at such
other locations within the United States of America as Borrower and/or its
Subsidiaries, subsequent to the Closing Date, shall move such Property (other
than deposit (whether a demand, time, savings, passbook or similar account) and
investment accounts) and shall have notified Administrative Agent in writing
prior to any such move. Schedule 4.7B sets forth (a) all office,
warehouse and manufacturing and other space of Borrower and its Subsidiaries
where any Property of Borrower or any of its Subsidiaries is located and (b) all
deposit (whether a demand, time, savings, passbook or similar account) and
investment accounts of Borrower and its Subsidiaries, identifying such account
by account number, type, location of depositary institution and applicable owner
thereof.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.8   
Intangible
Assets. Borrower and its Subsidiaries own, or possess the right to use to
the extent necessary in their respective businesses, all material trademarks,
trade names, copyrights, patents, patent rights, computer software, licenses and
other Intangible Assets that are used in the conduct of their businesses as now
operated, and no such Intangible Asset, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect. Except as described in Schedule
4.8, in the enforcement of its rights as a secured creditor, the
Administrative Agent (or any applicable Lender) will not be required to own or
otherwise possess the right to use any patent, trademark or other intellectual
property, or any license to use the same, in order to sell any Inventory of
Borrower or any of its Subsidiaries after the occurrence of an Event of Default.
Schedule 4.8 sets forth all patents, patent applications,
trademarks, trade names and trade styles used by Borrower or any of its
Subsidiaries at any time within the five (5) year period ending on the Closing
Date.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-50-

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

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

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

| | 4.12    
   No Default.  No event has occurred and is continuing that is a Default or Event of Default.
| | -------------------------------------------------------------------------------------------------------

-51-

| | 4.13   
ERISA.
| | --------------



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

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

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

-52-

| | 4.17  
 Projections. As
of the Closing Date, to the best knowledge of Borrower, the assumptions set
forth in the Projections are reasonable and consistent with each other and with
all facts known to Borrower, and the Projections are reasonably based on such
assumptions. Nothing in this Section 4.17 shall be construed as a
representation or covenant that the Projections in fact will be achieved.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.18  
 Hazardous
Materials. Except as described in Schedule 4.18,
(a) neither Borrower nor any of the other Obligors at any time has disposed
of, discharged, released or threatened the release of any Hazardous Materials
on, from or under the Real Property in violation of any Hazardous Materials Law
that would individually or in the aggregate constitute a Material Adverse
Effect, (b) no condition exists that violates any Hazardous Material Law
affecting any Real Property except for such violations that would not
individually or in the aggregate constitute a Material Adverse Effect,
(c) no Real Property or any portion thereof is or has been utilized by
Borrower or any Subsidiary as a site for the manufacture of any Hazardous
Materials except any such usage that would not individually or in the aggregate
constitute a Material Adverse Effect and (d) to the extent that any
Hazardous Materials are used, generated or stored by Borrower or any Subsidiary
on any Real Property, or transported to or from such Real Property by Borrower,
or any Subsidiary, such use, generation, storage and transportation are in
compliance in all material respects with all Hazardous Materials Laws.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.19  
 Security
Interests. Upon the execution and delivery of the Security Agreement, the
Security Agreement will create a valid security interest in the Collateral
described therein securing the Obligations (subject only to Permitted
Encumbrances, Permitted Rights of Others and other matters permitted by
Section 6.9 and to such qualifications and exceptions as are
contained in the UCC with respect to the priority of security interests
perfected by means other than the filing of a financing statement or with
respect to the creation of security interests in Property to which
Division 9 of the UCC does not apply) and all actions necessary to perfect
the security interests so created, other than filing of the UCC-1
financing statements delivered to the Administrative Agent pursuant to
Section 8.1 with the appropriate Governmental Agency, have been
taken and completed. Upon the execution and delivery of any Control Account
Agreement by the depositary institution party thereto and the Borrower or any
applicable Subsidiary, such Control Account Agreement will create a valid
security interest in the Collateral described therein (subject only to Liens
permitted by the terms of such Control Account Agreement and Liens permitted by
Section 6.9) securing the Obligations and all actions necessary to
perfect the security interests so created will have been taken and completed.
Upon the execution and delivery of the Pledge Agreement, the Pledge Agreement
will create a valid security interest in the Pledged Collateral described
therein and upon delivery of the applicable Pledged Collateral to the
Administrative Agent all action necessary to perfect the security interest so
created as a first priority security interest will have been taken and
completed.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.20  
 Employee
Matters. There is no strike, work stoppage or labor dispute with any union
or group of employees pending or, to the best knowledge of Borrower overtly
threatened involving Borrower or any Subsidiary that would constitute a Material
Adverse Effect.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-53-

| | 4.21   
Fiscal Year.  Borrower and its Subsidiaries each operate on a fiscal year ending on December 31.
| | --------------------------------------------------------------------------------------------------------

| | 4.22  
 Solvency. After
giving effect to this Agreement and the other Loan Documents (including after
giving effect to Advances under this Agreement as of the Closing Date), Borrower
shall be Solvent.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-54-

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

| | 5.1  
 Payment of Taxes and
Other Potential Liens. Pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon any of them, upon their respective
Property or any part thereof and upon their respective income or profits or any
part thereof, except that Borrower and its Subsidiaries shall not be
required to pay or cause to be paid (a) any tax, assessment, charge or levy
that is not yet past due, or is being contested in good faith by appropriate
proceedings so long as the relevant entity has established and maintains
adequate reserves for the payment of the same or (b) any immaterial tax so
long as no material Property of Borrower or any Subsidiary thereof is at
impending risk of being seized, levied upon or forfeited.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.2   
Preservation of
Existence. Preserve and maintain their respective existences (except as
permitted by Section 6.3) in the jurisdiction of their formation and all
material authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations from any Governmental Agency that
are necessary for the transaction of their respective business and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the ownership
or leasing of their respective Properties except where the failure to so
qualify or remain qualified would not constitute a Material Adverse Effect.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.3  
 Maintenance of
Properties. Maintain, preserve and protect all of their respective
Properties in good order and condition, subject to wear and tear in the ordinary
course of business, and not permit any waste of their respective Properties,
except (i) that the failure to maintain, preserve and protect a
particular item of Property that is at the end of its useful life or that is not
of significant value, either intrinsically or to the operations of Borrower or
any of its Subsidiaries, shall not constitute a violation of this covenant, and
(ii) this covenant shall not be construed to prohibit any Disposition of
assets otherwise permitted pursuant to Section 6.4.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.4    
Maintenance of Insurance.
| | ---------------------------------



| | 5.5   Compliance With
Laws. Comply with all Requirements of Law noncompliance with which
constitutes a Material Adverse Effect, except that Borrower and its
Subsidiaries need not comply with a Requirement of Law then being contested by
any of them in good faith by appropriate proceedings.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.6    
Inspection
Rights. Upon reasonable notice, at any time during regular business hours
and, as requested by the Administrative Agent (but not so as to materially
interfere with the business of Borrower or any of the Subsidiaries) permit the
Administrative Agent, or any Lender, or any authorized employee, agent or
representative thereof, to examine, audit and make copies and abstracts from the
records and books of account of Borrower and its Subsidiaries (including
any software or CD Rom programs relating thereto), and to visit and inspect the
Properties of Borrower and its Subsidiaries and to discuss the affairs, finances
and accounts of Borrower and its Subsidiaries with any of their officers, key
employees or accountants and, upon request, furnish promptly to the
Administrative Agent or any Lender true copies of all financial information made
available to the board of directors or audit committee of the board of directors
of Borrower. If any of the Properties, books or records of Borrower or any of
its Subsidiaries are in the possession of a third party, Borrower authorizes
that third party to permit the Administrative Agent or any Lender or any agents
thereof to have access to perform inspections or audits and to respond to the
Administrative Agents or any Lenders request for information
concerning such Properties, books and records. Notwithstanding the foregoing, no
prior notice of any such examination, audit, visit, inspection or discussion
shall be required if an Event of Default has occurred and remains in effect or
if the Administrative Agent has reason to believe that a Default or Event of
Default then exists.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-56-

| | 5.7   Keeping of Records
and Books of Account. Keep adequate records and books of account reflecting
all financial transactions in conformity with GAAP, consistently applied, and in
material conformity with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over Borrowers and its Subsidiaries.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.8   
Compliance With
Agreements. Promptly and fully comply with all Contractual Obligations to
which any one or more of them is a party, except for any such Contractual
Obligations (a) the performance of which would cause a Default or
(b) then being contested by any of them in good faith by appropriate
proceedings or (c) if the failure to comply does not constitute a Material
Adverse Effect.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.9   Use of Proceeds.
Use the proceeds of all Advances to (a) refinance the BofA Credit Facilities and
(b) provide for the working capital and general corporate purpose needs of
Borrower and its Subsidiaries.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.10  
 Hazardous Materials
Laws. Keep and maintain all Real Property and each portion thereof in
compliance in all respects with all applicable Hazardous Materials Laws (except
such noncompliance that would not individually or in the aggregate constitute a
Material Adverse Effect) and promptly notify the Administrative Agent in writing
(attaching a copy of any pertinent written material) of (a) any and all
material enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing by a Governmental Agency
pursuant to any applicable Hazardous Materials Laws, (b) any and all
material claims made or threatened in writing by any Person against Borrower or
any Subsidiary relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials and (c) discovery by
any Senior Officer of Borrower of any material occurrence or condition on any
real property adjoining or in the vicinity of such Real Property that could
reasonably be expected to cause such Real Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such Real Property under any applicable Hazardous Materials Laws.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-57-

| | 5.11  
 Future
Subsidiaries; Additional Security Documentation. (a) Cause each Subsidiary
formed or acquired by Borrower or any Subsidiary of Borrower after the Closing
Date to execute and deliver to the Administrative Agent (i) an appropriate
joinder to the Subsidiary Guaranty, the Security Agreement and/or the Pledge
Agreement, (ii) such landlord/mortgagee waivers as the Administrative Agent
shall reasonably request and (iii) such other agreements, financing
statements and other documents (including those of the type described in
Section 8.1(a)(9), together with an opinion of counsel from counsel
and in form and substance reasonably acceptable to the Administrative Agent, and
(b) pledge to the Administrative Agent pursuant to the Pledge Agreement all
of the capital stock or other equity interests of any Subsidiary formed or
acquired after the Closing Date. In addition to the foregoing, Borrower and its
Subsidiaries shall cause such documents and instruments as may be reasonably
requested by the Administrative Agent from time to time to be executed and
delivered and do such further acts and things as reasonably may be required in
order for the Administrative Agent to obtain a fully perfected first priority
Lien on all Collateral, subject to Permitted Encumbrances, Permitted Rights of
Others and other matters permitted by Section 6.9.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.12  
 Intercompany
Notes. Cause each Subsidiary and Affiliate of Borrower to execute a
promissory note (in a form reasonably acceptable to Administrative Agent)
evidencing any Indebtedness of such Subsidiary or Affiliate to Borrower, or any
Subsidiary of Borrower, and cause each payee of such promissory note to deliver
the same to the Administrative Agent, with an endorsement in blank, as Pledged
Collateral.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-58-

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

| | 6.1  
 Prepayment of
Indebtedness. Prepay any principal or interest on any Indebtedness of
Borrower or any Subsidiary prior to the date when due, or make any payment or
deposit with any Person that has the effect of providing for the satisfaction of
any Indebtedness of Borrower or any Subsidiary prior to the date when due,
except (a) Indebtedness to the Administrative Agent and the Lenders
under this Agreement and the other Loan Documents, and (b) Indebtedness to
other Persons the prepayment of which is approved in advance by the Requisite
Lenders in writing.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.2  
 Prepayment of
Subordinated Obligations. Pay any (a) principal (including sinking fund
payments) or any other amount (other than scheduled interest
payments) with respect to any Subordinated Obligation, or purchase or redeem any
Subordinated Obligation or deposit any monies, securities or other Property with
any trustee or other Person to provide assurance that the principal or any
portion thereof of any Subordinated Obligation will be paid when due or
otherwise to provide for the defeasance of any Subordinated Obligation or
(b) scheduled interest on any Subordinated Obligation if the payment
thereof is then prohibited under the terms of the subordination provisions
governing such Subordinated Obligation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.3  
 Merger,
Consolidation. Merge into or consolidate with any other entity, nor acquire
all or substantially all of the assets of any other entity, except mergers and
consolidations of a Subsidiary of Borrower into Borrower (with Borrower as the
surviving entity), or of domestic wholly-owned Subsidiaries with each other,
provided that (a) no Default or Event of Default then exists or would
result therefrom and (b) any such surviving entity shall have
executed such amendments to the Loan Documents, if any, as the Administrative
Agent may reasonably determine are appropriate as a result of such merger.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.4  
 Dispositions.
Make any Disposition of its Property, whether now owned or hereafter acquired,
exceptDispositions in an aggregate amount not to exceed $1,000,000 in
any Fiscal Year ending after the Closing Date; provided that (i) at the
time of any such Disposition, no Default or Event of Default shall exist or
shall result from such Disposition, (ii) the sales price relating to any such
Disposition shall be paid in Cash, and (iii) Borrower shall comply with
Section 3.1(e) in connection with any such Disposition; provided
further that if any Property consisting of computers, desks, chairs or other
tangible office equipment is lost or destroyed or taken by condemnation such
event shall not qualify as a Disposition for purposes of the dollar
limit set forth in this Section 6.4 and Borrower shall be not be required
to comply with Section 3.1(e) with respect to any such event if (a) no
Event of Default has occurred and is continuing, (b) the proceeds received by
Borrower and/or its applicable Subsidiaries with respect to such any such item
of Property shall be in an amount sufficient to purchase another asset
performing the same or similar function of substantially similar quality, and
(c) any such item is replaced within 90 days from such disposition with another
asset performing the same or a similar function and of substantially similar
quality.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-59-

| | 6.5  
 Other
Indebtedness. Create, incur, assume or permit to exist any Indebtedness
resulting from borrowings, loans or advances, whether secured or unsecured,
matured or unmatured, liquidated or unliquidated, joint or several,
except (a) the Obligations, (b) Indebtedness owed to Borrower or any of
its Subsidiaries, subject to the limitations on such Indebtedness set forth in
Section 6.7(b), (c) Indebtedness existing on the Closing Date and
disclosed in Schedule 6.5, and refinancings, renewals, extensions or
amendments that do not increase the amount thereof, (d) Indebtedness consisting
of Capital Lease Obligations, or otherwise incurred to finance the purchase or
construction of capital or fixed assets (which shall be deemed to exist if the
Indebtedness is incurred at or within 90 days before or after the purchase or
construction of the capital or fixed asset), or to refinance any such
Indebtedness, provided that the aggregate principal amount of such
Indebtedness shall not exceed $3,000,000 at any one time outstanding (as
determined in accordance with GAAP consistently applied), and (e) Indebtedness
which arises from Earnout Payments.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.6   
Guaranties.
Guarantee or become liable in any way as surety, endorser (other than as
endorser of negotiable instruments for deposit or collection in the ordinary
course of business), accommodation endorser or otherwise for, nor pledge or
hypothecate any assets of Borrower or any of its Subsidiaries as security for,
any liabilities or obligations of any other Person, except (a) any of the
foregoing existing on the Closing Date and disclosed on Schedule 6.6, (b)
any of the foregoing in favor of the Administrative Agent (on behalf of the
Lenders), (c) endorsements for collection or deposit in the ordinary course of
business, (d) under surety bonds for an amount not in excess of $300,000 per
surety bond, (e) Interest Rate Protection Agreements approved by Administrative
Agent, and (f) contingent obligations with respect to the minimum aggregate
license fees to the extent of $15,000,000 as payable pursuant to Exhibit C of
the Content License and Distribution Agreement between New Horizons Computer
Learning Centers, Inc. and Element K LLC.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.7   
Loans, Advances,
Investments, Acquisitions. Make any loans or advances to or Investments in
any Person, or any Acquisitions, except (a) any of the foregoing existing as of
the Closing Date and disclosed on Schedule6.7, (b) extensions of credit
by Borrower or New Horizons Education Corporation, a Delaware corporation, to
Subsidiaries of Borrower, provided that the provisions of
Section 5.12 are complied with respect to each such extension of
credit, (c) Investments in Cash Equivalents, (d) Investments consisting of
advances to officers, directors and employees of Borrower and its Subsidiaries
for travel, entertainment, relocation, anticipated bonus and analogous ordinary
business purposes provided that the aggregate amount of such Investments
does not exceed $1,250,000 at any time outstanding.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.8   
Distributions.  Declare or pay or make any Distribution, whether from capital, income or otherwise, and
whether in Cash or other Property.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.9  
 Pledge of
Assets. Mortgage, pledge, grant or permit to exist a Lien upon all or any
portion of Borrowers or any of its Subsidiaries assets now owned or
hereafter acquired, except (a) any of the foregoing in favor of the
Administrative Agent (on behalf of the Lenders), (b) any of the foregoing which
is existing as of the Closing Date and which is disclosed on Schedule
4.7A and any renewals/extensions or amendments thereof, provided that
the obligations secured or benefited thereby are not increased, (c) Permitted
Encumbrances, (d) Liens securing Indebtedness permitted by Section 6.5(d)
on and limited to the capital or fixed assets acquired, constructed or financed
with the proceeds of such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness, (e) Liens on Property
acquired by Borrower or any Subsidiary that were in existence at the time of the
acquisition of such Property and were not created in contemplation of such
acquisition, and (f) Liens in favor of Wells Fargo, as administrative agent for
the lenders under the BofA Credit Facilities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-60-

| | 6.10  
 Hostile Tender
Offers. Make any offer to purchase or acquire, or consummate a purchase or
acquisition of, five percent (5%) or more of the voting interest in any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower that it opposes such
offer or purchase and such notice has not been withdrawn or superseded.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.11  
 ERISA.
(a) At any time, permit any Pension Plan to: (i) engage in any
non-exempt prohibited transaction (as defined in Section 4975
of the Code); (ii) fail to comply with ERISA or any other applicable Laws;
(iii) incur any material accumulated funding deficiency (as
defined in Section 302 of ERISA); or (iv) terminate in any manner,
which, with respect to each event listed above, could reasonably be expected to
result in a Material Adverse Effect, or (b) withdraw, completely or
partially, from any Multiemployer Plan if to do so could reasonably be expected
to result in a Material Adverse Effect.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.12   
Change in Nature of Business.  Make any change in the nature of the business of Borrower and the other
Obligors as at present conducted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.13  
 Transactions with
Affiliates. Enter into any transaction of any kind with any Affiliate of
Borrower other than (without duplication): (a) salary, bonus,
employee stock option and other compensation arrangements with directors or
officers in the ordinary course of business, and (b) transactions on
overall terms at least as favorable to Borrower or its Subsidiaries as would be
the case in an arms-length transaction between unrelated parties of equal
bargaining power. For purposes of this Section 6.13, Subsidiaries of
Borrower shall not be deemed to be Affiliates of Borrower.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.14   
Funded Debt Ratio.  Permit the Funded Debt Ratio, as of the last day of any Fiscal Quarter, to be
greater than the ratio set forth below opposite such Fiscal Quarter or the period during which such Fiscal
Quarter ends:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Period/Fiscal Quarter                              Maximum Ratio

                           December 31, 2002                                    3.50:1.00
                           March 31, 2003                                       2.60:1.00
                           June 30, 2003                                        2.50:1.00
                           September 30, 2003                                   2.00:1.00
                           December 31, 2003 through March 31, 2004             1.75:1.00
                           April 1, 2004 through December 31, 2004              1.50:1.00`

-61-

| | 6.15   Debt Service
Coverage Ratio. Permit the Debt Service Coverage Ratio, as of the last day
of any Fiscal Quarter, to be less than the ratio set forth below opposite such
Fiscal Quarter or the period during which such Fiscal Quarter ends:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Period/Fiscal Quarter                              Minimum Ratio

                           December 31, 2002                                    1.50:1.00
                           March 31, 2003                                       1.30:1.00
                           June 30, 2003                                        1.30:1.00
                           September 30, 2003 through December 31, 2004         1.75:1.00`

| | 6.16  
 Minimum Quarterly
Adjusted EBITDA. Permit Adjusted EBITDA, as of the last day of any Fiscal
Quarter, for the Fiscal Quarter then ended, to be less than the amount set forth
below opposite such Fiscal Quarter or the period during which such Fiscal
Quarter ends:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Period/Fiscal Quarter                              Minimum Amount

                           December 31, 2002                                    $320,000
                           March 31, 2003 through June 30, 2003                 $1,700,000
                           July 1, 2003 through December 31, 2004               $1,800,000`

| | 6.17  
 Minimum Cash.
Permit the aggregate amount of Cash and Cash Equivalents held by Borrower and
its Subsidiaries in Borrowersand its Subsidiariesdeposit accounts or other investment accounts (provided that each such
investment account is able to be liquidated in three Banking Days or less), as
of the last day of any Fiscal Quarter, to be less than $3,500,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.18  
 Capital
Expenditures. Make any investment in fixed assets in any Fiscal Year in
excess of an aggregate of $5,000,000 per Fiscal Year; provided that the
following shall be excluded for purposes of compliance with this Section
6.18: expenditures which are made in connection with the replacement or
restoration of assets to the extent financed (to the extent such financing is
permitted hereunder) either (a) from insurance proceeds paid on account of the
loss of or damage to the assets being replaced or restored, or (b) with proceeds
from the sale or other disposition of an asset which is replaced within 90 days
from such sale or other disposition with another asset performing the same or a
similar function.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-62-

| | 6.19  
 Amendments.
Amend or modify any term or provision of (a) any indenture, agreement or
instrument evidencing or governing any Subordinated Obligation or (b) any
material provision of any Material Contract, if in any such case such amendment
or modification in any respect will or may adversely affect the interest of the
Lenders.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.20   
Change in Location
of Chief Executive Offices, Jurisdiction of Organization  and
Assets. Relocate the chief executive office, or change the jurisdiction of
organization, of Borrower or any of its Subsidiaries without first giving the
Administrative Agent thirty (30) days prior written notice of any
relocation or change. Borrower shall not move, nor shall it permit any
Subsidiary to move, any of its respective Property to a jurisdiction
other than any one of the jurisdictions identified in Schedule
6.20 without first giving the Administrative Agent
ten (10) calendar days prior written notice of any such proposed
relocation, other than to the extent that any such Property has
been sold pursuant to a sale in the ordinary course of business permitted
hereunder.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.21   
Use of
Lenders Name. Use any Lenders name (or the name of any of any
Lenders Affiliates) in connection with any of their business operations
except to identify the existence of the Facilities and the names of the
Lenders in the ordinary course of Borrowers business. Nothing contained in
this Agreement is intended to permit or authorize Borrower to make any
commitment or contract on behalf of any Lender or the Administrative Agent.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.22   
Change of Fiscal Periods.  Change its Fiscal Year or any other fiscal period with respect to which it
reports financial results hereunder or otherwise.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.23   
Certain Other Restricted Payments.  Pay or otherwise incur management, consulting or other similar fees
to any  Affiliate of Borrower.
| | ----------------------------------------------------------------------------------------------------------------------------------------------

-63-

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



| | 7.2  
 Compliance
Certificates. So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of any of the Commitments remains
outstanding, Borrower shall, at Borrowers sole expense, deliver to the
Administrative Agent for distribution by it to the Lenders concurrently with the
financial statements required pursuant to Sections 7.1(a)
and 7.1(b), a Compliance Certificate signed by the president or
chief financial officer of Borrower.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-66-

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



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



-70-

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



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



-75-

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

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

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

| | 10.4  
 Lenders
Credit Decisions. Each Lender agrees that it has, independently and without
reliance upon the Administrative Agent, any other Lender or the directors,
officers, agents, employees or attorneys of the Administrative Agent or of any
other Lender, and instead in reliance upon information supplied to it by or on
behalf of Borrower and upon such other information as it has deemed appropriate,
made its own independent credit analysis and decision to enter into this
Agreement. Each Lender also agrees that it shall, independently and without
reliance upon the Administrative Agent, any other Lender or the directors,
officers, agents, employees or attorneys of the Administrative Agent or of any
other Lender, continue to make its own independent credit analyses and decisions
in acting or not acting under the Loan Documents.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-76-

| | 10.5   
    Action by Administrative Agent.
| | -------------------------------------------



-77-

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



-78-

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

| | 10.8  
 Successor
Administrative Agent. The Administrative Agent may, and at the request of
the Requisite Lenders shall, resign as Administrative Agent upon reasonable
notice to the Lenders and Borrower effective upon acceptance of appointment by a
successor Administrative Agent. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Requisite Lenders shall appoint
from among the Lenders a successor Administrative Agent for the Lenders, which
successor Administrative Agent shall be approved by Borrower (and such approval
shall not be unreasonably withheld or delayed). If no successor Administrative
Agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and Borrower, a successor Administrative Agent from among the
Lenders. Upon the acceptance of its appointment as successor Administrative
Agent hereunder, such successor Administrative Agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
Administrative Agent shall mean such successor Administrative Agent
and the retiring Administrative Agents appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agents resignation hereunder as Administrative Agent, the provisions of
this Article 10, and Sections 11.3 and 11.11,
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement. Notwithstanding the
foregoing, if no successor Administrative Agent has accepted appointment as
Administrative Agent by the date which is thirty (30) days following a
retiring Administrative Agents notice of resignation, the retiring
Administrative Agents resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Administrative Agent as provided for above.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-79-

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

-80-

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

| | 11.2  
 Amendments;
Consents. No amendment, modification, supplement, extension, termination or
waiver of any provision of this Agreement or any other Loan Document, no
approval or consent thereunder, and no consent to any departure by Borrower or
any other Party therefrom, may in any event be effective unless in writing
signed by the Administrative Agent with the written approval of the Requisite
Lenders (and, in the case of any amendment, modification or supplement of or to
any Loan Document to which Borrower is a Party, signed by Borrower, and, in the
case of any amendment, modification or supplement to Article 10,
signed by the Administrative Agent), and then only in the specific instance and
for the specific purpose given; and, without the approval in writing of all the
Lenders, no amendment, modification, supplement, termination, waiver or consent
may be effective:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

| | 11.3   
Costs, Expenses and
Taxes. Borrower shall pay within five (5) Banking Days after demand,
accompanied by an invoice therefor, the reasonable costs and expenses of the
Administrative Agent in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and any amendment
thereto or waiver thereof. Borrower shall also pay on demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the Administrative Agent
and the Lenders in connection with the refinancing, restructuring,
reorganization (including a bankruptcy reorganization) and enforcement or
attempted enforcement of the Loan Documents, and any matter related thereto. The
foregoing costs and expenses shall include filing fees, recording fees, title
insurance fees, appraisal fees, search fees, and other out-of-pocket expenses
and the reasonable fees and out-of-pocket expenses of any legal counsel
(including reasonably allocated costs of legal counsel employed by the
Administrative Agent or any Lender), independent public accountants and other
outside experts retained by the Administrative Agent or any Lender, whether or
not such costs and expenses are incurred or suffered by the Administrative Agent
or any Lender in connection with or during the course of any bankruptcy or
insolvency proceedings of any Borrower, any other Obligor or any Subsidiary
thereof. Borrower shall pay any and all documentary and other taxes,
excluding (i) taxes imposed on or measured in whole or in part by a
Lenders overall net income imposed on it by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or maintains its
principal office or Eurodollar Lending Office or (B) any jurisdiction (or
political subdivision thereof) in which it is doing business, and
all costs, expenses, fees and charges payable or determined to be payable in
connection with the filing or recording of this Agreement, any other Loan
Document or any other instrument or writing to be delivered hereunder or
thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify on the terms set forth in
Section 11.11 the Administrative Agent and the Lenders from and
against any and all loss, liability or legal or other expense with respect to or
resulting from any delay in paying or failure to pay any such tax, cost,
expense, fee or charge or that any of them may suffer or incur by reason of the
failure of any Obligor (or any Subsidiary thereof) to perform any of its
Obligations. Any amount payable to the Administrative Agent or any Lender under
this Section 11.3 shall bear interest from the fifth Banking Day
following the date of demand for payment at the Default Rate.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-82-

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

| | 11.5  
 Survival of
Representations and Warranties. All representations and warranties contained
herein or in any other Loan Document, or in any certificate or other writing
delivered by or on behalf of any one or more of the Parties to any Loan
Document, will survive the making of the Advances hereunder and the execution
and delivery of the Notes, and have been or will be relied upon by the
Administrative Agent and Lenders, notwithstanding any investigation made by the
Administrative Agent or any Lender or on their behalf.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

-83-

| | 11.8  
Binding Effect; Assignment.
| | ----------------------------------



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

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

-86-

| | 11.11   
Indemnity by
Borrower. Borrower agrees to indemnify, save and hold harmless the
Administrative Agent and each Lender and their respective directors, officers,
agents, attorneys and employees (collectively the
Indemnitees) from and against: (a) any and all claims,
demands, actions or causes of action (except a claim, demand, action, or
cause of action for any amount excluded from the definition of Taxes
in Section 3.10(e)) if the claim, demand, action or cause of action
arises out of or relates to any act or omission (or alleged act or omission) of
Borrower, any other Obligor, any Affiliate of any Obligor or any partner,
officer, director, stockholder, or other equity interest holder of any Obligor
relating to any of the Facilities, the use or contemplated use of proceeds of
any Borrowing, or the relationship of Borrower and the Lenders under this
Agreement; (b) any administrative or investigative proceeding by any
Governmental Agency arising out of or related to a claim, demand, action or
cause of action described in clause (a) above; and (c) any and
all liabilities, losses, reasonable costs or expenses (including
reasonable attorneys fees and the reasonably allocated costs of attorneys
employed by any Indemnitee and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action or cause of action;
provided that no Indemnitee shall be entitled to indemnification for any
liability, loss, cost or expense caused by its own gross negligence or willful
misconduct or for any liability, loss, cost or expense asserted against it by
another Indemnitee. If any claim, demand, action or cause of action is asserted
against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the
failure to so promptly notify Borrower shall not affect Borrowers
obligations under this Section unless such failure materially prejudices
Borrowers right to participate in the contest of such claim, demand,
action or cause of action, as hereinafter provided. Such Indemnitee may (and
shall, if requested by Borrower in writing) contest the validity, applicability
and amount of such claim, demand, action or cause of action and shall permit
Borrower to participate in such contest. Any Indemnitee that proposes to settle
or compromise any claim or proceeding for which Borrower may be liable for
payment of indemnity hereunder shall give Borrower written notice of the terms
of such proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrowers prior
consent (which shall not be unreasonably withheld or delayed). In connection
with any claim, demand, action or cause of action covered by this
Section 11.11 against more than one Indemnitee, all such Indemnitees
shall be represented by the same legal counsel (which may be a law firm engaged
by the Indemnitees or attorneys employed by an Indemnitee or a combination of
the foregoing) selected by the Indemnitees, provided, that if such legal
counsel determines in good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each affected
Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee, with all such legal counsel using reasonable
efforts to avoid unnecessary duplication of effort by counsel for all
Indemnitees; and further provided that the Administrative Agent
(as an Indemnitee) shall at all times be entitled to representation by separate
legal counsel (which may be a law firm or attorneys employed by the
Administrative Agent or a combination of the foregoing). Any obligation or
liability of Borrower to any Indemnitee under this Section 11.11
shall survive the expiration or termination of this Agreement and the repayment
of all Borrowings and the payment and performance of all other Obligations owed
to the Lenders.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-87-

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



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

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

-89-

| | 11.15  
 Further
Assurances. Borrower shall, at its expense and without expense to the
Lenders or the Administrative Agent, do, execute and deliver such further acts
and documents as the Requisite Lenders or the Administrative Agent from time to
time reasonably require for the assuring and confirming unto the Lenders or the
Administrative Agent of the rights hereby created or intended now or hereafter
so to be, or for carrying out the intention or facilitating the performance of
the terms of any Loan Document.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.16  
 Integration.
This Agreement, together with the other Loan Documents and the letter agreement
referred to in Section 3.3, comprises the complete and integrated
agreement of the parties on the subject matter hereof and supersedes all prior
agreements, written or oral, on the subject matter hereof. In the event of any
conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control and govern;
provided that the inclusion of supplemental rights or remedies in favor
of the Administrative Agent or the Lenders in any other Loan Document shall not
be deemed a conflict with this Agreement. Each Loan Document was drafted with
the joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

-90-

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

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

| | 11.21  
[Intentionally Omitted].
| | --------------------------------

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

| | 11.23  
 Waiver of Right to
Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-91-

| | 11.24  
 Purported Oral
Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF
OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES
WITH SECTION 11.2. BORROWER AGREES THAT IT WILL NOT RELY ON ANY
COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY
REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY
WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-92-

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

| | NEW HORIZONS WORLDWIDE, INC.,
                                            a Delaware corporation
| | ------------------------------------------------------------------------------------------------

| | By: |                         
| | --- | ------------------------
| |     |                         
| |     | [Printed Name and Title]

| | Address for Borrower:                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                  
| | New Horizons Worldwide, Inc.                                                                                                                                                                                                                     
| | 1900 S. State College Blvd.                                                                                                                                                                                                                      
| | Suite 200                                                                                                                                                                                                                                        
| | Anaheim, California  92806                                                                                                                                                                                                                       
| | Attn: Robert S. McMillan, Vice President                                                                                                                                                                                                         
| | and Chief Financial Officer                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                  
| | Telecopier:  (714) 938-6004                                                                                                                                                                                                                      
| | Telephone:  (714) 940-8001                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                  
| | With a copy to:                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                  
| | Calfee, Halter & Griswold LLP                                                                                                                                                                                                                    
| | 1400 McDonald Investment Center
              800 Superior Avenue
              Cleveland, Ohio  44114 
              Attn:  Thomas A. Cicarella, Esq.
              Telecopier:  (216) 241-0816        
              Telephone:  (216) 622-8378

S-1

| | WELLS FARGO BANK, NATIONAL ASSOCIATION,
              as Administrative Agent
| | -----------------------------------------------------------------------------

| | By: |                         
| | --- | ------------------------
| |     |                         
| |     | [Printed Name and Title]

| | Address for notices to Administrative Agent for borrowings and
                                                              payments:
                                                              Wells Fargo Bank, National Association
                                                              2030 Main Street, Suite 900
                                                              Irvine, California  92614
                                                              Attn:  New Horizons Account Officer
                                                              Telecopier:  (949) 261-1830
                                                              Telephone:  (949) 251-4155
                                                              With a copy to:
                                                              Wells Fargo Bank, National Association
                                                              201 Third Street, 8th Floor
                                                              San Francisco, California 94103
                                                              Attn:  New Horizons Agency Officer
                                                              Telecopier:  (415) 546-6353
                                                              Telephone:  (415) 477-5339
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

S-2

| | WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                                              as a Lender
| | -----------------------------------------------------------------------------------------------------------------

| | By: |                         
| | --- | ------------------------
| |     |                         
| |     | [Printed Name and Title]

| | Address:
                                                              Wells Fargo Bank, National Association
                                                              2030 Main Street, Suite 900
                                                              Irvine, California  92614
                                                              Attn: New Horizons Account Officer
                                                              Telecopier:  (949) 261-1830
                                                              Telephone:  (949) 251-4155
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

S-3

SCHEDULE 1.1
                                          LENDER COMMITMENTS AND
                                                PRO RATA SHARES

`BANK                     LINE OF CREDIT          %                 TERM LOAN              %               TOTAL                   %

WELLS FARGO              $1,500,000.00           100.0000%         $10,639,021.00         100.0000%       $12,139,021.00          100.0000%




TOTAL                    $1,500,000.00           100.0000%         $10,639,021.00         100.0000%       $12,139,021.00          100.0000%`

-i-

`TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----


Article 1. DEFINITIONS AND ACCOUNTING TERMS...................................................................1
    1.1       Defined Terms...................................................................................1
    1.2       Use of Defined Terms...........................................................................27
    1.3       Accounting Terms; Covenant Calculations........................................................27
    1.4       Rounding.......................................................................................27
    1.5       Exhibits and Schedules.........................................................................27
    1.6       References to "Borrower and its Subsidiaries"..................................................28
    1.7       Miscellaneous Terms............................................................................28

Article 2. ADVANCES AND LETTERS OF CREDIT....................................................................29
    2.1       Advances-General...............................................................................29
    2.2       Base Rate Advances.............................................................................30
    2.3       Eurodollar Rate Advances.......................................................................31
    2.4       Conversion and Continuation of Advances........................................................31
       (a)    Optional Conversion............................................................................31
       (b)    Certain Mandatory Conversions..................................................................32
       (c)    Continuations..................................................................................32
    2.5       Letters of Credit..............................................................................33
    2.6       Termination or Reduction of the Commitments....................................................36
       (a)    Optional.......................................................................................36
       (b)    Mandatory......................................................................................36
       (c)    Reduction Pro Rata; No Reinstatements..........................................................36
    2.7       Administrative Agent's Right to Assume Funds Available for Advances............................37
    2.8       Collateral.....................................................................................37

Article 3. PAYMENTS AND FEES.................................................................................38
    3.1       Principal and Interest.........................................................................38
    3.2       Unused Revolving Facility Commitment Fee.......................................................39
    3.3       Closing Fee....................................................................................39
    3.4       Letter of Credit Fees..........................................................................40
    3.5       Increased Commitment Costs.....................................................................40
    3.6       Eurodollar Costs and Related Matters...........................................................41
    3.7       Late Payments and Default Rate.................................................................44
    3.8       Computation of Interest and Fees...............................................................45
    3.9       Non-Banking Days...............................................................................45
    3.10      Manner and Treatment of Payments...............................................................45
    3.11      Funding Sources................................................................................46
    3.12      Failure to Charge Not Subsequent Waiver........................................................46
    3.13      Administrative Agent's Right to Assume Payments Will be Made...................................46
    3.14      Fee Determination Detail.......................................................................47
    3.15      Survivability..................................................................................47`

-i-

`Article 4. REPRESENTATIONS AND WARRANTIES....................................................................48
    4.1       Existence and Qualification; Power; Compliance With Laws.......................................48
    4.2       Authority; Compliance With Other Agreements and Instruments and Government Regulations.........48
    4.3       No Governmental Approvals Required.............................................................49
    4.4       Subsidiaries...................................................................................49
    4.5       Financial Statements...........................................................................50
    4.6       No Other Liabilities; No Material Adverse Changes..............................................50
    4.7       Title to and Location of Property..............................................................50
    4.8       Intangible Assets..............................................................................50
    4.9       Public Utility Holding Company Act.............................................................51
    4.10      Litigation.....................................................................................51
    4.11      Binding Obligations............................................................................51
    4.12      No Default.....................................................................................51
    4.13      ERISA..........................................................................................51
    4.14      Regulation U; Investment Company Act...........................................................52
    4.15      Disclosure.....................................................................................52
    4.16      Tax Liability..................................................................................52
    4.17      Projections....................................................................................53
    4.18      Hazardous Materials............................................................................53
    4.19      Security Interests.............................................................................53
    4.20      Employee Matters...............................................................................53
    4.21      Fiscal Year....................................................................................54
    4.22      Solvency.......................................................................................54

Article 5. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS).........................55
    5.1       Payment of Taxes and Other Potential Liens.....................................................55
    5.2       Preservation of Existence......................................................................55
    5.3       Maintenance of Properties......................................................................55
    5.4       Maintenance of Insurance.......................................................................55
    5.5       Compliance With Laws...........................................................................56
    5.6       Inspection Rights..............................................................................56
    5.7       Keeping of Records and Books of Account........................................................57
    5.8       Compliance With Agreements.....................................................................57
    5.9       Use of Proceeds................................................................................57
    5.10      Hazardous Materials Laws.......................................................................57
    5.11      Future Subsidiaries; Additional Security Documentation.........................................58
    5.12      Intercompany Notes.............................................................................58`

-ii-

`Article 6. NEGATIVE COVENANTS................................................................................59
    6.1       Prepayment of Indebtedness.....................................................................59
    6.2       Prepayment of Subordinated Obligations.........................................................59
    6.3       Merger, Consolidation..........................................................................59
    6.4       Dispositions...................................................................................59
    6.5       Other Indebtedness.............................................................................60
    6.6       Guaranties.....................................................................................60
    6.7       Loans, Advances, Investments, Acquisitions.....................................................60
    6.8       Distributions..................................................................................60
    6.9       Pledge of Assets...............................................................................60
    6.10      Hostile Tender Offers..........................................................................61
    6.11      ERISA..........................................................................................61
    6.12      Change in Nature of Business...................................................................61
    6.13      Transactions with Affiliates...................................................................61
    6.14      Funded Debt Ratio..............................................................................61
    6.15      Debt Service Coverage Ratio....................................................................62
    6.16      Minimum Quarterly Adjusted EBITDA..............................................................62
    6.17      Minimum Cash...................................................................................62
    6.18      Capital Expenditures...........................................................................62
    6.19      Amendments.....................................................................................63
    6.20      Change in Location of Chief Executive Offices, Jurisdiction of Organization  and Assets........63
    6.21      Use of Lender's Name...........................................................................63
    6.22      Change of Fiscal Periods.......................................................................63
    6.23      Certain Other Restricted Payments..............................................................63

Article 7. INFORMATION AND REPORTING REQUIREMENTS............................................................64
    7.1       Financial and Business Information.............................................................64
    7.2       Compliance Certificates........................................................................66

Article 8. CONDITIONS........................................................................................67
    8.1       Initial Advances...............................................................................67
    8.2       Any Advance....................................................................................69

Article 9. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT..............................................71
    9.1       Events of Default..............................................................................71
    9.2       Remedies Upon Event of Default.................................................................73`

-iii-

`Article 10. THE ADMINISTRATIVE AGENT.........................................................................76
    10.1      Appointment and Authorization..................................................................76
    10.2      Administrative Agent and Affiliates............................................................76
    10.3      Proportionate Interest in any Collateral.......................................................76
    10.4      Lenders' Credit Decisions......................................................................76
    10.5      Action by Administrative Agent.................................................................77
    10.6      Liability of Administrative Agent..............................................................78
    10.7      Indemnification................................................................................79
    10.8      Successor Administrative Agent.................................................................79
    10.9      No Obligations of Borrower.....................................................................80

Article 11. MISCELLANEOUS....................................................................................81
    11.1      Cumulative Remedies; No Waiver.................................................................81
    11.2      Amendments; Consents...........................................................................81
    11.3      Costs, Expenses and Taxes......................................................................82
    11.4      Nature of Lenders' Obligations.................................................................83
    11.5      Survival of Representations and Warranties.....................................................83
    11.6      Notices........................................................................................83
    11.7      Execution of Loan Documents....................................................................83
    11.8      Binding Effect; Assignment.....................................................................83
    11.9      Right of Setoff................................................................................86
    11.10     Sharing of Setoffs.............................................................................86
    11.11     Indemnity by Borrower..........................................................................87
    11.12     Nonliability of the Lenders....................................................................88
    11.13     No Third Parties Benefited.....................................................................89
    11.14     Confidentiality................................................................................89
    11.15     Further Assurances.............................................................................90
    11.16     Integration....................................................................................90
    11.17     Governing Law..................................................................................90
    11.18     Severability of Provisions.....................................................................90
    11.19     Headings.......................................................................................91
    11.20     Time of the Essence............................................................................91
    11.21     [Intentionally Omitted]........................................................................91
    11.22     Hazardous Material Indemnity...................................................................91
    11.23     Waiver of Right to Trial by Jury...............................................................91
    11.24     Purported Oral Amendments......................................................................92


Exhibits

A        -........Assignment and Acceptance
B        -........Compliance Certificate
C        -........Pledge Agreement
D        -........Pricing Certificate
E        -........Request for Borrowing
F        -........Request for Continuation/Conversion
G        -........Request for Letter of Credit
H        -........Revolving Note
I        -........Security Agreement
J        -........Subsidiary Guaranty
K        -........Term Note`

-iv-

`Schedules

1.1      Lender Commitments/Pro Rata Shares
1.2      Material Contracts
4.4      Subsidiaries
4.7A     Existing Liens, Negative Pledges and Rights of Others
4.7B     Location of Property
4.8      Intangible Assets; Restrictions on Use
4.10     Material Litigation
4.18     Hazardous Materials Matters
6.5      Existing Indebtedness
6.6      Existing Guaranties
6.7      Existing Loans, Advances, Investments
6.20     Locations of Chief Executive Offices and Assets`

-v-