Exhibit
10.1


 


CREDIT
AGREEMENT


 


Dated
as of March 6, 2008


 


between


 


COPART,
INC.


 


and


 


BANK OF
AMERICA, N.A.


 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.01

  	
   

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
  15

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
  15

  
	
  1.04

  	
   

  	
  Rounding

  	
  15

  
	
  1.05

  	
   

  	
  References to Agreements and Laws

  	
  15

  
	
  1.06

  	
   

  	
  Times of Day

  	
  16

  
	
  1.07

  	
   

  	
  Letter of Credit Amounts

  	
  16

  
	
  1.08

  	
   

  	
  Exchange Rates; Currency Equivalents; Change of
  Currency

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  THE
  COMMITMENT AND CREDIT EXTENSIONS

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  Loans

  	
  16

  
	
  2.02

  	
   

  	
  Borrowings, Conversions and Continuations of Loans

  	
  17

  
	
  2.03

  	
   

  	
  Letters of Credit

  	
  18

  
	
  2.04

  	
   

  	
  Prepayments

  	
  22

  
	
  2.05

  	
   

  	
  Termination or Reduction of Commitment

  	
  22

  
	
  2.06

  	
   

  	
  Repayment of Loans

  	
  23

  
	
  2.07

  	
   

  	
  Interest

  	
  23

  
	
  2.08

  	
   

  	
  Fees

  	
  23

  
	
  2.09

  	
   

  	
  Computation of Interest and Fees

  	
  24

  
	
  2.10

  	
   

  	
  Evidence of Debt

  	
  24

  
	
  2.11

  	
   

  	
  Payments Generally

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  TAXES,
  YIELD PROTECTION AND ILLEGALITY

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  3.01

  	
   

  	
  Taxes

  	
  25

  
	
  3.02

  	
   

  	
  Illegality

  	
  27

  
	
  3.03

  	
   

  	
  Inability to Determine Eurocurrency Rate

  	
  27

  
	
  3.04

  	
   

  	
  Increased Cost and Reduced Return; Capital Adequacy

  	
  27

  
	
  3.05

  	
   

  	
  Funding Losses

  	
  28

  
	
  3.06

  	
   

  	
  Reserves on Eurocurrency Rate Loans

  	
  29

  
	
  3.07

  	
   

  	
  Requests for Compensation

  	
  29

  
	
  3.08

  	
   

  	
  Survival

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  CONDITIONS
  PRECEDENT TO CREDIT EXTENSIONS

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  4.01

  	
   

  	
  Conditions of Initial Credit Extension

  	
  30

  
	
  4.02

  	
   

  	
  Conditions to all Credit Extensions

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  5.01

  	
   

  	
  Existence, Qualification and Power; Compliance with
  Laws

  	
  32

  
	
  5.02

  	
   

  	
  Authorization; No Contravention

  	
  32

  
	
  5.03

  	
   

  	
  Governmental Authorization; Other Consents

  	
  32

  
	
  5.04

  	
   

  	
  Binding Effect

  	
  32

  
	
  5.05

  	
   

  	
  Financial Statements; No Material Adverse Effect

  	
  32

  



 


i

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  5.06

  	
   

  	
  Litigation

  	
  32

  
	
  5.07

  	
   

  	
  No Default

  	
  32

  
	
  5.08

  	
   

  	
  Ownership of Property; Liens

  	
  33

  
	
  5.09

  	
   

  	
  Environmental Compliance

  	
  33

  
	
  5.10

  	
   

  	
  Insurance

  	
  33

  
	
  5.11

  	
   

  	
  Taxes

  	
  33

  
	
  5.12

  	
   

  	
  Subsidiaries

  	
  33

  
	
  5.13

  	
   

  	
  Margin Regulations; Investment Company Act

  	
  33

  
	
  5.14

  	
   

  	
  Disclosure

  	
  33

  
	
  5.15

  	
   

  	
  Compliance with Laws

  	
  34

  
	
  5.16

  	
   

  	
  Intellectual Property; Licenses, Etc

  	
  34

  
	
  5.17

  	
   

  	
  Taxpayer Identification
  Number

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  6.01

  	
   

  	
  Financial Statements

  	
  35

  
	
  6.02

  	
   

  	
  Certificates; Other Information

  	
  35

  
	
  6.03

  	
   

  	
  Notices

  	
  36

  
	
  6.04

  	
   

  	
  Payment of Taxes

  	
  36

  
	
  6.05

  	
   

  	
  Preservation of Existence, Etc

  	
  36

  
	
  6.06

  	
   

  	
  Maintenance of Properties

  	
  37

  
	
  6.07

  	
   

  	
  Maintenance of Insurance

  	
  37

  
	
  6.08

  	
   

  	
  Compliance with Laws

  	
  37

  
	
  6.09

  	
   

  	
  Books and Records

  	
  37

  
	
  6.10

  	
   

  	
  Inspection Rights

  	
  37

  
	
  6.11

  	
   

  	
  Use of Proceeds

  	
  38

  
	
  6.12

  	
   

  	
  Additional Guarantors

  	
  38

  
	
  6.13

  	
   

  	
  Cooperation

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  NEGATIVE
  COVENANTS

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  7.01

  	
   

  	
  Liens

  	
  39

  
	
  7.02

  	
   

  	
  Investments

  	
  39

  
	
  7.03

  	
   

  	
  Indebtedness

  	
  40

  
	
  7.04

  	
   

  	
  Fundamental Changes

  	
  41

  
	
  7.05

  	
   

  	
  Dispositions

  	
  41

  
	
  7.06

  	
   

  	
  Restricted Payments

  	
  42

  
	
  7.07

  	
   

  	
  Change in Nature of Business

  	
  43

  
	
  7.08

  	
   

  	
  Transactions with Affiliates

  	
  43

  
	
  7.09

  	
   

  	
  Burdensome Agreements

  	
  43

  
	
  7.10

  	
   

  	
  Use of Proceeds

  	
  44

  
	
  7.11

  	
   

  	
  Financial Covenants

  	
  44

  
	
  7.12

  	
   

  	
  Capital Expenditures

  	
  44

  
	
  7.13

  	
   

  	
  Accounting Changes

  	
  45

  



 


ii

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  EVENTS
  OF DEFAULT AND REMEDIES

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  8.01

  	
   

  	
  Events of Default

  	
  45

  
	
  8.02

  	
   

  	
  Remedies Upon Event of Default

  	
  46

  
	
  8.03

  	
   

  	
  Application of Funds

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  MISCELLANEOUS

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01

  	
   

  	
  Amendments; Etc

  	
  47

  
	
  9.02

  	
   

  	
  Notices and Other Communications; Facsimile Copies

  	
  47

  
	
  9.03

  	
   

  	
  No Waiver; Cumulative Remedies

  	
  48

  
	
  9.04

  	
   

  	
  Attorney Costs and Expenses

  	
  48

  
	
  9.05

  	
   

  	
  Indemnification by the Borrower

  	
  49

  
	
  9.06

  	
   

  	
  Payments Set Aside

  	
  49

  
	
  9.07

  	
   

  	
  Successors and Assigns

  	
  50

  
	
  9.08

  	
   

  	
  Confidentiality

  	
  51

  
	
  9.09

  	
   

  	
  Set-off

  	
  51

  
	
  9.10

  	
   

  	
  Automatic Debits

  	
  51

  
	
  9.11

  	
   

  	
  Interest Rate Limitation

  	
  52

  
	
  9.12

  	
   

  	
  Counterparts

  	
  52

  
	
  9.13

  	
   

  	
  Integration

  	
  52

  
	
  9.14

  	
   

  	
  Survival of Representations and Warranties

  	
  52

  
	
  9.15

  	
   

  	
  Severability

  	
  52

  
	
  9.16

  	
   

  	
  Governing Law; Arbitration; Waiver of Jury Trial

  	
  53

  
	
  9.17

  	
   

  	
  USA Patriot Act Notice

  	
  55

  
	
  9.18

  	
   

  	
  Time of the Essence

  	
  55

  
	
  9.19

  	
   

  	
  Judgment Currency

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
  S-1

  



 


iii

















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.02

  	
  Notice Addresses and Accounts for Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Form of

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
  Loan Notice

  	
   

  
	
  B

  	
  Note

  	
   

  
	
  C

  	
  Financial Statement Certificate

  	
   

  
	
  D

  	
  Compliance Certificate

  	
   

  
	
  E

  	
  Guaranty

  	
   

  
	
  F

  	
  Opinion Matters

  	
   

  



 


iv

















 


CREDIT
AGREEMENT


 


This CREDIT AGREEMENT (“Agreement”) is entered
into as of March 6, 2008 by and between COPART, INC., a California
corporation (the “Borrower”), and BANK OF AMERICA, N.A. (the “Lender”).


 


The Borrower has requested that the Lender provide a
revolving multicurrency credit facility for the Borrower, and the Lender is
willing to do so on the terms and conditions set forth herein.


 


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


 


ARTICLE I



DEFINITIONS AND ACCOUNTING TERMS


 


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


 


“Acquisition”
shall mean any transaction or series of related transactions for the purpose of
or resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any business or division of
a Person, (b) the acquisition of in excess of 50% of the capital stock or
other equity interests of any Person, or otherwise causing any Person to become
a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) in which the
Borrower or a Subsidiary is the surviving Person.


 


“Affiliate” means, with respect to any Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto. 
Without limiting the generality of the foregoing, a Person shall be
deemed to be Controlled by another Person if such other Person possesses,
directly or indirectly, power to vote 10% or more of the securities having
ordinary voting power for the election of directors, managing general partners
or the equivalent.


 


“Agreement” means this Credit Agreement.


 


“Alternative Currency” means Sterling and each
other lawful currency (other than Dollars) that is readily available and freely
transferable and convertible into Dollars as requested by the Borrower and
approved by the Lender in its sole discretion.


 


“Alternative Currency Equivalent” means, at any
time, with respect to any amount denominated in Dollars, the equivalent amount
thereof in the applicable Alternative Currency as determined by the Lender at
such time on the basis of the Spot Rate (determined in respect of the most
recent Revaluation Date) for the purchase of such Alternative Currency with
Dollars.


 


1

















 


“Alternative Currency Sublimit” means an amount
equal to the lesser of the Commitment and $100,000,000.  The Alternative Currency Sublimit is part of,
and not in addition to, the Commitment.


 


“Annual Expenditure Limit” means (a) with
respect to the initial Limitation Period, an unlimited amount, and (b) with
respect to each Limitation Period occurring thereafter, an aggregate amount
equal to the sum of (i) 80% of Consolidated EBITDA minus (ii) Federal,
state, local and foreign income taxes paid by the Borrower and its Subsidiaries
minus (iii) Consolidated Scheduled Debt Amortization, in each case
(i), (ii) and (iii), for the most recent fiscal year for which a
Compliance Certificate has been delivered by the Borrower pursuant to Section 6.02(a).


 


“Annual Restricted Payments” has the meaning
specified in Section 7.06(i).


 


“Applicable Rate”
means the following percentages per annum, based upon the Consolidated Net
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Lender pursuant to Section 6.02(b):


 


Applicable Rate


 


	
  Pricing

  Level

  	
   

  	
  Consolidated Net

  Leverage Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Letter of Credit

  Fee

  	
   

  	
  Eurocurrency

  Rate +

  	
   

  	
  Prime

  Rate +

  	
   

  
	
  I

  	
   

  	
  < 0.00:1.00

  	
   

  	
  0.075

  	
  %

  	
  0.475

  	
  %

  	
  0.500

  	
  %

  	
  0.00

  	
  %

  
	
  II

  	
   

  	
  >0.00:1.00 but <
  1.25:1.00

  	
   

  	
  0.100

  	
  %

  	
  0.625

  	
  %

  	
  0.625

  	
  %

  	
  0.00

  	
  %

  
	
  III

  	
   

  	
  > 1.25:1.00 but <
  1.75:1.00

  	
   

  	
  0.125

  	
  %

  	
  0.750

  	
  %

  	
  0.750

  	
  %

  	
  0.00

  	
  %

  
	
  IV

  	
   

  	
  > 1.75:1.00

  	
   

  	
  0.150

  	
  %

  	
  0.875

  	
  %

  	
  0.875

  	
  %

  	
  0.00

  	
  %

  



 


Any increase or decrease in the Applicable Rate
resulting from a change in the Consolidated Net Leverage Ratio shall become
effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(b); provided,
however, that if a Compliance Certificate is not delivered when due in
accordance with such Section, then Pricing Level IV shall apply as of the first
Business Day after the date on which such Compliance Certificate was required
to have been delivered (and thereafter the Pricing Level otherwise determined
in accordance with this definition shall apply).  The Applicable Rate in effect from the
Closing Date through the first Business Day immediately following the date of delivery
of the Compliance Certificate in respect of the fiscal quarter of the Borrower
ending on or about January 31, 2007 shall be determined based upon Pricing
Level I.


 


“Applicable Time” means, with respect to any
borrowings and payments in any Alternative Currency, the local time in the
place of settlement for such Alternative Currency as may be determined by the
Lender to be necessary for timely settlement on the relevant date in accordance
with normal banking procedures in the place of payment.


 


“Attorney Costs” means and includes all fees,
expenses and disbursements of any law firm or other external counsel and,
without duplication, the allocated cost of internal legal services and all
expenses and disbursements of internal counsel.


 


“Availability Period” means the period from and
including the Closing Date to the earlier of (a) the Maturity Date and (b) the
date of termination of the Commitment.


 


“Borrower” has the meaning specified in the
introductory paragraph hereto.


 


2

















 


“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close
under the Laws of, or are in fact closed in, the state where the Lender’s
lending office with respect to Obligations denominated in Dollars is located
and:  (a) if such day relates to any
interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars or
any Alternative Currency, any fundings, disbursements, settlements and payments
in Dollars or any Alternative Currency in respect of any such Eurocurrency Rate
Loan, or any other dealings in Dollars or any Alternative Currency to be
carried out pursuant to this Agreement in respect of any such Eurocurrency Rate
Loan, means any such day on which dealings in deposits in the relevant currency
are conducted by and between banks in the London interbank market or other
applicable interbank market for such currency; and (b) if applicable, any
such day on which any clearing system for such currency is open for settlement
of payment in such currency and/or the Lender’s lending office with respect to
Obligations denominated in such currency is open for foreign exchange business.


 


“Cash Collateralize” has the meaning specified
in Section 2.03(l).


 


“Change of Control” means an event or series of
events by which:


 


(a)                                  any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) other than the Permitted
Holders becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of 30% or more of the
equity securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and such “person” or “group” holds more of such equity securities than are
held in the aggregate by the Permitted Holders); or


 


(b)                                 during
any period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member
of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).


 


“Closing Date” means the first date on which
all the conditions precedent in Section 4.01 are satisfied or
waived by the Lender.


 


“Code” means the Internal Revenue Code of 1986.


 


3
















 


“Commitment” means the obligation of the Lender
to make Loans and issue Letters of Credit hereunder in an aggregate principal
amount at any one time not to exceed $200,000,000, as such amount may be
adjusted from time to time in accordance with this Agreement.


 


“Commitment Fee” has the meaning specified in Section 2.08.


 


“Compliance Certificate” means a certificate
substantially in the form of Exhibit D.


 


“Consolidated EBITDA” means, for any period,
for the Borrower and its Subsidiaries on a consolidated basis, an amount equal
to Consolidated Net Income for such period plus (a) the following
to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Charges for such period, (ii) the provision for Federal, state,
local and foreign income taxes payable by the Borrower and its Subsidiaries for
such period, (iii) depreciation and amortization expense for such period, (iv) non-cash
charges or expenses related to equity plans or stock option awards in such
period and (v) other non-recurring expenses of the Borrower and its
Subsidiaries reducing such Consolidated Net Income which do not represent a
cash item in such period or any future period and minus (b) the
following to the extent included in calculating such Consolidated Net Income: (i) Federal,
state, local and foreign income tax credits of the Borrower and its
Subsidiaries for such period and (ii) all non-cash items increasing
Consolidated Net Income for such period; provided, however, that
solely for the purpose of
the computations of the Consolidated Net Leverage Ratio, the Consolidated Total
Leverage Ratio and the Consolidated Interest Coverage Ratio, if there has
occurred an Acquisition during the relevant period, Consolidated EBITDA shall
be calculated, at the option of the Borrower, on a pro forma
basis in accordance with the SEC pro forma reporting rules under the
Exchange Act (provided that any SEC rules that would require
audited financial statements shall not be applicable if audited financial
statements are not available for the target of the acquisition), as if such
Acquisition occurred on the first day of the applicable period.


 


“Consolidated Funded Indebtedness” means, as of
any date of determination, for the Borrower and its Subsidiaries on a
consolidated basis, (a) all Indebtedness of the types specified in clauses
(a), (d), (e) and (f) of the definition of Indebtedness; and (b) all
Guarantees in respect of any of the foregoing. 
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
such Person is a general partner or a joint venturer, unless such Indebtedness
is expressly made non-recourse to such Person..


 


“Consolidated Interest Charges” means, for any
period for the Borrower and its Subsidiaries on a consolidated basis, all
interest expense during such period determined in accordance with GAAP.


 


“Consolidated Interest Coverage Ratio” means,
as of any date of determination, the ratio of (a) Consolidated EBITDA for
the Test Period most recently ended to (b) Consolidated Interest
Charges for such Test Period.


 


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


 


4

















 


“Consolidated Net Indebtedness” means, as of
any date of determination, for the Borrower and its Subsidiaries on a
consolidated basis, (a) Consolidated Funded Indebtedness as of such date minus
(b) the aggregate amount of all cash and cash equivalents and short-term
investments (as would be shown on the Borrower’s balance sheet in accordance
with GAAP) held by the Borrower and its Subsidiaries as of such date.


 


“Consolidated Net Leverage Ratio” means, as of
any date of determination, the ratio of (a) Consolidated Net Indebtedness
as of such date to  (b) Consolidated
EBITDA for the Test Period most recently ended.


 


“Consolidated Revenue” means, for any period,
revenue of the Borrower and its Subsidiaries on a consolidated basis, for such
period.


 


“Consolidated Scheduled Debt Amortization”
means, for any period, the aggregate
principal amount of all regularly scheduled principal payments of Indebtedness
made by the Borrower and its Subsidiaries during such period (excluding
principal payments in respect of any revolving loans under any revolving credit
facility) determined on a consolidated basis.


 


“Consolidated Total Assets” means total assets
of the Borrower and its Subsidiaries on a consolidated basis.


 


“Consolidated Total Leverage Ratio” means, as
of any date of determination, the ratio of (a) Consolidated Funded Indebtedness
as of such date to  (b) Consolidated
EBITDA for the Test Period most recently ended.


 


“Contractual Obligation” means, as to any
Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.


 


“Control” has the meaning specified in the
definition of “Affiliate.”


 


“Credit Extension” means each of (a) a
borrowing of a Loan and (b) an L/C Credit Extension.


 


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


 


“Default” means any event or condition that
constitutes an Event of Default or that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.


 


“Default Rate” means an interest rate equal to (a) the
Prime Rate plus (b) the Applicable Rate, if any, applicable to
Prime Rate Loans plus (c) 2% per annum; provided, however,
that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an
interest rate equal to the interest rate (including any Applicable Rate and any
Mandatory Cost) otherwise applicable to such Loan plus 2% per
annum, in each case to the fullest extent permitted by applicable Laws.


 


“Disclosure Letter” means that certain letter,
dated as of the Closing Date, containing certain schedules, delivered by the
Loan Parties to the Lender pursuant to Section 4.01(a).


 


5

















 


“Disposition” or “Dispose” means the
sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.


 


“Dollar” and “$” mean lawful money of the
United States.


 


“Dollar
Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Lender at such time on the basis of the Spot Rate
(determined in respect of the most recent Revaluation Date) for the purchase of
Dollars with such Alternative Currency.


 


“Domestic Material Subsidiary” means any
Domestic Subsidiary of the Borrower (a) with assets (exclusive of
goodwill) the net book value of which (measured as of the end of the Borrower’s
most recently ended fiscal year) is in excess of 1% of Consolidated Total
Assets, measured as of the last day of the Borrower’s most recent fiscal year
for which financial statements are available, or (b) that had revenues
(for the Borrower’s most recent fiscal year) in excess of 1.5% of Consolidated
Revenue for the Borrower’s most recent fiscal year for which financial
statements are available.  Such
determinations shall be made with respect to the Domestic Subsidiaries at the
time that the annual financial statements for the Borrower and its Subsidiaries
are delivered pursuant to Section 6.01(a); provided, however,
that if a Person becomes a Subsidiary pursuant to or in connection with an
Acquisition, then such determination shall be made as of the date of such
Acquisition, based on the financial statements of such Person for its most
recent quarter end (or for the four most recent quarters, as applicable) for
which financial statements are available (which may be unaudited).


 


“Domestic Subsidiary” means any Subsidiary that
is organized under the laws of any political subdivision of the United States.


 


“Environmental Laws” means any and all Federal,
state, local, and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974.


 


“Eurocurrency
Rate” means, for any Interest Period with respect to a Eurocurrency Rate
Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Lender from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for deposits in the relevant currency
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period.  If such rate is
not available at such time for any reason, then the “Eurocurrency Rate” for
such Interest Period shall be the rate per annum determined by the Lender to be
the rate at which deposits in the relevant currency for delivery on the first
day of such Interest Period in Same Day Funds in the approximate amount of the
Eurocurrency Rate Loan being made, continued or converted by the Lender and
with a term equivalent to such Interest Period would be offered by the Lender’s
London Branch (or other branch or Affiliate of the Lender) to major banks in
the London or other offshore interbank market for such currency at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.


 


6

















 


“Eurocurrency Rate Loan” means a Loan that
bears interest based on the Eurocurrency Rate. 
Eurocurrency Rate Loans may be denominated in Dollars or in an
Alternative Currency.  All Loans
denominated in an Alternative Currency must be Eurocurrency Rate Loans.


 


“Event of Default” has the meaning specified in
Section 8.01.


 


“Exchange Act”
means the Securities Exchange Act of 1934.


 


“Financial Statement Certificate” means a
certificate substantially in the form of Exhibit C.


 


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


 


“GAAP” means generally accepted accounting
principles in the United States as in effect from time to time, consistently
applied.


 


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


 


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


 


“Guarantors” means, collectively, each Domestic
Material Subsidiary listed in Schedule 5.12 to the Disclosure Letter and
each other Domestic Material Subsidiary which becomes and remains a Guarantor
hereunder pursuant to Section 6.12.


 


7

















 


“Guaranty” means the Guaranty made by the
Guarantors in favor of the Lender, substantially in the form of Exhibit E.


 


“Guaranty Accession” means the Accession
Agreement, substantially in the form of Annex 1 to the Guaranty.


 


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


 


“Indebtedness” means, as to any Person at a
particular time, without duplication, all of the following, whether or not included
as indebtedness or liabilities in accordance with GAAP: (a) all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds (other than surety bonds), debentures, notes, loan
agreements or other similar instruments; (b) all direct or contingent
obligations of such Person arising under letters of credit (including standby
and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments; (c) net obligations of such Person under any Swap Contracts;
(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business); (e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; (f) leases that are required to
be shown as capital leases in accordance with GAAP; and (g) all Guarantees
of such Person in respect of any of the foregoing.  For all purposes hereof, the Indebtedness of
any Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.


 


“Indemnified Liabilities” has the meaning
specified in Section 9.05.


 


“Indemnitees” has the meaning specified in Section 9.05.


 


“Interest Payment Date” means (a) as to
any Loan other than a Prime Rate Loan, the last day of each Interest Period
applicable to such Loan, and the Maturity Date; provided,  however,
that if any Interest Period for a Eurocurrency Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any
Prime Rate Loan, the last Business Day of each calendar month and the Maturity
Date.


 


“Interest Period” means, as to each
Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency
Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan
and ending on the date one, two, or three or six months thereafter, as selected
by the Borrower in its related Loan Notice; provided that: (a) any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day; (b) any Interest Period that begins 


 


8

















 


on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest Period;
and (c) no Interest Period shall extend beyond the Maturity Date.


 


“Investment” means, as to any Person (a) the
purchase or other acquisition of capital stock or other securities of another
Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or
equity participation or interest in, another Person, including any partnership
or joint venture interest in such other Person, or (c) an
Acquisition.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.


 


“Involuntary Disposition” means any loss of,
damage to or destruction of, or any condemnation or other taking for public use
of, any property of the Borrower or any Subsidiary.


 


“IP Rights” has the meaning specified in Section 5.16.


 


“IRS” means the United States Internal Revenue
Service.


 


“ISP” means, with respect to any Letter of
Credit, the “International Standby Practices 1998” published by the Institute
of International Banking Law & Practice, Inc. (or such later
version thereof as may be in effect at the time of issuance).


 


“Laws” means, collectively, all international,
foreign, Federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of
law.


 


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


 


“L/C Documents” means, with respect to any
Letter of Credit, the Letter of Credit Application (or analogous document
related to any Existing Letter of Credit), and any other document, agreement
and instrument entered into by the Lender and the Borrower or in favor of the
Lender and relating to such Letter of Credit.


 


“L/C Obligations” means, as at any date of
determination, the aggregate amount available to be drawn under all outstanding
Letters of Credit plus the aggregate of all unreimbursed drawings under
any outstanding Letters of Credit.


 


“Lender” has the meaning specified in the
introductory paragraph to this Agreement.


 


“Letter of Credit” means any standby letter of credit issued
hereunder.  Letters of Credit may be
issued in Dollars or in an Alternative Currency.


 


“Letter of Credit Application” means an
application and agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the Lender.


 


9

















 


“Letter of Credit Fee” has the meaning
specified in Section 2.08.


 


“Letter of Credit Expiration Date” means the
day that is seven days prior to the Maturity Date (or, if such day is not a
Business Day, the next preceding Business Day).


 


“Letter of Credit Sublimit” means an amount
equal to $50,000,000.  The Letter of
Credit Sublimit is part of, and not in addition to, the Commitment.


 


“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing).


 


“Limitation Period” means, as applicable, (a) the
period beginning on the Closing Date and ending on the date of delivery to the
Lender of the Compliance Certificate required to be delivered in connection
with the audited annual financial statements of the Borrower for the fiscal
year of the Borrower in which the Closing Date occurs, or (b) at all times
from and after the date of delivery of the Compliance Certificate referred to
in clause (a), any applicable period beginning on the date of delivery of a
Compliance Certificate delivered in connection with the annual audited
financial statements of the Borrower indicating that the Annual Expenditure
Limit will be in effect and ending on the date of delivery of the next
Compliance Certificate delivered in connection with the annual audited
financial statements of the Borrower.


 


“Loan” has the meaning specified in Section 2.01.


 


“Loan Documents” means this Agreement, any
Note, the Guaranty, each of the L/C Documents and any other certificates or
agreements executed by or on behalf of any Loan Party in connection with this
Agreement or any other Loan Document.


 


“Loan Notice” means a notice of (a) a
borrowing of a Loan, (b) a conversion of a Loan from one Type to the
other, or (c) a continuation of a Eurocurrency Rate Loan as the same Type,
pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.


 


“Loan Parties” means, collectively, the
Borrower and each Guarantor.


 


“Mandatory Cost” means, with respect to any
period, the percentage rate per annum determined by the Lender in accordance
with its usual and customary practices to be (to the extent applicable) the
addition to the interest rate hereunder required by the Lender to compensate it
for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of its functions); or (b) the
requirements of the European Central Bank. 
Any such determination shall, in the absence of manifest error, be
conclusive and binding on all parties hereto. 
The Lender will, at the request of the Borrower, deliver to the Borrower
a statement setting forth the calculation of any Mandatory Cost.


 


“Material Adverse Effect” means (a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, liabilities (actual or contingent), or condition
(financial or otherwise) of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of
any Loan Party to perform its payment obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.


 


10

















 


“Maturity Date” means March 6, 2013.


 


“Note” means a promissory note made by the
Borrower in favor of the Lender evidencing Loans made by the Lender,
substantially in the form of Exhibit B.


 


“Obligations” means all advances to, and debts,
liabilities, obligations, covenants and duties of, any Loan Party arising under
any Loan Document with respect to any Loan or Letter of Credit, whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising and including interest
and fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest
and fees are allowed claims in such proceeding.


 


“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws (or equivalent or comparable constitutive documents with respect to
any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.


 


“Outstanding Amount” means (a) with
respect to Loans on any date, the Dollar Equivalent amount of the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans occurring on such date; and (b) with
respect to any L/C Obligations on any date, the Dollar Equivalent amount of the
amount of such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of any drawings under any Letters of Credit.


 


“Participant” has the meaning specified in Section 9.07(d).


 


“Permitted Acquisition” means any Acquisition
that conforms to the following requirements: (a) the assets, Person,
division or line of business to be acquired shall be (i) in the same or a
related line of business as that conducted by the Borrower and its Subsidiaries
on the date hereof or (ii) in a business that is ancillary and in
furtherance of the line of business as that conducted by the Borrower and its
Subsidiaries on the date hereof, (b) all transactions related to such
Acquisition shall be consummated in all material respects in accordance with
applicable Law, (c) no Loan Party shall, as a result of or in connection
with any such acquisition, assume or incur any direct or contingent liabilities
(whether relating to environmental, tax, litigation, or other matters) that
could reasonably be expected, as of the date of such acquisition, to result in
the existence or occurrence of a Material Adverse Effect; (d) such
Acquisition may not be an Unfriendly Acquisition, (e) if the aggregate
cash and non-cash consideration paid in connection with such Acquisition shall
be equal to or greater than 3% of Consolidated Total Assets 


 


11

















 


(measured as of the last
day of the Borrower’s most recent fiscal year end for which financial
statements are available), the Borrower shall have given the Lender at least 20
Business Days’ prior written notice of such Acquisition prior to closing such
Acquisition, (f) after giving effect to such Acquisition, the Borrower
shall be in compliance with the financial covenants set forth in Section 7.11
on a pro forma basis as of the last day of
the fiscal quarter most recently ended, and, if the aggregate cash and non-cash
consideration paid in connection with such Acquisition shall be equal to or
greater than $50,000,000, the Borrower shall have delivered to the Lender a
certificate of a Responsible Officer of the Borrower to such effect, together
with all relevant financial computations evidencing such compliance and a copy
of any executed purchase agreement or similar agreement with respect to such
Acquisition, (g) immediately prior to, and after giving effect to, such
Acquisition, no Default shall have occurred and be continuing or would result
therefrom, and (h) all actions required to be taken under Section 6.12
with respect to any acquired or newly formed Domestic Subsidiary in connection
with such Acquisition, shall have been or will be taken in accordance
therewith.


 


“Permitted Holders” means Willis J. Johnson,
Barry Rosenstein, JANA Partners LLC and Thomas W. Smith and their Affiliates.


 


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


 


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


 


“Prime Rate Loan” means a Loan that bears
interest based on the Prime Rate. All Prime
Rate Loans shall be denominated in Dollars.


 


“Responsible Officer” means the chief executive
officer, president, chief financial officer, treasurer, or assistant treasurer
of a Loan Party.  Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.


 


“Restricted Payment” means any dividend or
other distribution (whether in cash, securities or other property) with respect
to any capital stock or other equity interests of the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
capital stock or other equity interest or of any option, warrant or other right
to acquire any such capital stock or other equity interest; provided
that a debt security convertible into capital stock or any other equity
interest shall not be deemed an option, warrant or other right to acquire any
such capital stock or other equity interest.


 


12

















 


“Revaluation Date”
means (a) with respect to any Loan, each of the following:  (i) each date of a borrowing of a
Eurocurrency Rate Loan denominated in an Alternative Currency, (ii) each
date of a continuation of a Eurocurrency Rate Loan denominated in an
Alternative Currency pursuant to Section 2.02, and (iii) such
additional dates as the Lender shall require; and (b) with respect to any
Letter of Credit, each of the following: 
(i) each date of issuance of a Letter of Credit denominated in an
Alternative Currency, (ii) each date of an amendment of any such Letter of
Credit having the effect of increasing the amount thereof (solely with respect
to the increased amount), (iii) each date of any payment by the Lender
under any Letter of Credit denominated in an Alternative Currency, and (iv) such
additional dates as the Lender shall require.


 


“Same Day Funds” means (a) with respect to
disbursements and payments in Dollars, immediately available funds, and (b) with
respect to disbursements and payments in an Alternative Currency, same day or
other funds as may be determined by the Lender to be customary in the place of
disbursement or payment for the settlement of international banking
transactions in the relevant Alternative Currency.


 


“SEC” means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any of its principal
functions.


 


“Special Notice Currency” means at any time an
Alternative Currency, other than the currency of a country that is a member of
the Organization for Economic Cooperation and Development at such time located
in North America or Europe.


 


“Spot Rate” for a currency means the rate
quoted by the Lender as the spot rate for the purchase by it of such currency
with another currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date as of which the
foreign exchange computation is made; provided  that
the Lender may obtain such spot rate from another financial institution
designated by the Lender if it does not have as of the date of determination a
spot buying rate for any such currency; and provided  further that
the Lender may use such spot rate quoted on the date as of which the foreign
exchange computation is made in the case of any Letter of Credit denominated in
an Alternative Currency.


 


“Sterling” and “£”
mean the lawful currency of the United Kingdom.


 


“Subordinated
Indebtedness” means indebtedness of the Borrower and its Subsidiaries which
is incurred from time to time and subordinated in right of payment to the
Obligations.


 


“Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.


 


“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or 


 


13

















 


bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any
such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating
to such Swap Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based
upon one or more mid-market or other readily available quotations provided by
any recognized dealer in such Swap Contracts (which may include the Lender or
any Affiliate of the Lender).


 


“Taxes” has the
meaning specified in Section 3.01.


 


“Test Period” means any period of four
consecutive fiscal quarters of the Borrower.


 


“Threshold Amount” means $25,000,000.


 


“Type” means, with respect to a Loan, its
character as a Prime Rate Loan or a Eurocurrency Rate Loan.


 


“Unfriendly Acquisition” means any Acquisition
that has not, at the time of the first public announcement of an offer relating
thereto, been approved or recommended by the board of directors (or other
legally recognized governing body) of the Person to be acquired; except that
with respect to any Acquisition of a non-U.S. Person, an otherwise friendly
Acquisition shall not be deemed to be unfriendly if it is not customary in such
jurisdiction to obtain such approval prior to the first public announcement of an
offer relating to a friendly Acquisition.


 


“United States” and “U.S.” mean the
United States of America.


 


“Wholly-Owned Subsidiary” means, as to any
Person at any time, (a) any corporation 100% of whose capital stock (other
than directors qualifying shares or local ownership requirements) is at such
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person, and (b) any partnership, association, joint venture, or other
entity in which such Person and/or one or more Wholly-Owned Subsidiaries of
such Person has a 100% equity interest at such time.


 


14

















 


1.02        Other
Interpretive Provisions. 
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:


 


(a)       The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.


 


(b)       (i) The
words “herein,” “hereto,” “hereof” and “hereunder”
and words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof. (ii) Article,
Section, Exhibit and Schedule references are to the Loan Document in which
such reference appears. (iii) The term “including” is by way of example
and not limitation. (iv) The term “documents” includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.


 


(c)       In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through”
means “to and including.”


 


(d)       Section headings
herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.


 


1.03        Accounting
Terms.  (a)  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP applied on a
consistent basis.


 


(b)       If at
any time any change in GAAP would affect the computation of any financial ratio
or requirement set forth in any Loan Document, and either the Borrower or the
Lender shall so request, the Lender and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Lender), provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Lender financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in
GAAP.


 


1.04        Rounding.  Any financial ratios required to be
maintained by the 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
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).


 


1.05        References
to Agreements and Laws. 
Unless otherwise expressly provided herein, (a) references to
Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.


 


15

















 


1.06        Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Pacific time (daylight or
standard, as applicable).


 


1.07        Letter
of Credit Amounts. 
Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any Issuer Document related
thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum
stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.


 


1.08        Exchange
Rates; Currency Equivalents; Change of Currency.  (a)  The Lender shall determine the Spot
Rates as of each Revaluation Date to be used for calculating Dollar Equivalent
amounts of Loans and Outstanding Amounts denominated in a currency other than
Dollars.  Such Spot Rates shall become effective
as of such Revaluation Date and shall be the Spot Rates employed in converting
any amounts between the applicable currencies until the next Revaluation Date
to occur.  Except for purposes of
financial statements delivered by any Loan Parties hereunder or calculating
financial covenants hereunder or except as otherwise provided herein, the
applicable amount of any currency (other than Dollars) for purposes of the Loan
Documents shall be such Dollar Equivalent amount as so determined by the
Lender.


 


(b)       Wherever
in this Agreement in connection with a borrowing, conversion, continuation or
prepayment of a Eurocurrency Rate Loan, an amount, such as a required minimum
or multiple amount, is expressed in Dollars, but the borrowing or Eurocurrency
Rate Loan is denominated in an Alternative Currency, such amount shall be the
relevant Alternative Currency Equivalent of such Dollar amount (rounded to the
nearest unit of such Alternative Currency, with 0.5 of a unit being rounded
upward), as determined by the Lender.


 


(c)       Each
provision of this Agreement also shall be subject to such reasonable changes of
construction as the Lender may from time to time specify to be appropriate to
reflect a change in currency of any country and any relevant market conventions
or practices relating to the change in currency.


 


ARTICLE II



THE COMMITMENT AND CREDIT EXTENSIONS


 


2.01        Loans.  Subject to the terms and conditions set forth
herein, the Lender agrees to make loans (each such loan, a “Loan”) to
the Borrower in Dollars or in one or more Alternative Currencies from time to
time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of the Commitment; provided,
however, that after giving effect to any borrowing, (i) the
Outstanding Amount of all Loans, plus the Outstanding Amount of all L/C
Obligations, shall not exceed the Commitment, and (ii)  the aggregate
Outstanding Amount of all Loans and L/C Obligations denominated in Alternative
Currencies shall not exceed the Alternative Currency Sublimit.  Within the limits of the Commitment, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.01, prepay under Section 2.04, and
reborrow under this Section 2.01. 
A Loan may be a Prime Rate Loan or a Eurocurrency Rate Loan, as further
provided herein.


 


16

















 


2.02        Borrowings,
Conversions and Continuations of Loans.  (a) Each borrowing, each conversion of a
Loan from one Type to the other, and each continuation of a Eurocurrency Rate
Loan shall be made upon the Borrower’s irrevocable notice to the Lender, which
may be given by telephone.  Each such
notice must be received by the Lender not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any borrowing of, conversion to or
continuation of Eurocurrency Rate Loans denominated in Dollars or of any
conversion of Eurocurrency Rate Loans denominated in Dollars to Prime Rate
Loans, (ii) four Business Days (or five Business Days in the case of a
Special Notice Currency)  prior to the requested date of
any borrowing or continuation of Eurocurrency Rate Loans denominated in
Alternative Currencies, and (iii) on the requested date of any borrowing
of a Prime Rate Loan.  Notwithstanding
anything to the contrary contained herein, but subject to the provisions of Section 9.02(d),
any such telephonic notice may be given by an individual who has been
authorized in writing to do so by a Responsible Officer of the Borrower.  Each such telephonic notice must be confirmed
promptly by delivery to the Lender of a written Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower.  Each borrowing of, conversion to or
continuation of a Eurocurrency Rate Loan shall be in a principal amount of $1,000,000
or a whole multiple of $1,000,000 in excess thereof.  Each borrowing of or conversion to a Prime
Rate Loan shall be in a principal amount of $100,000 or a whole multiple of
$100,000 in excess thereof.  Each Loan
Notice (whether telephonic or written) shall specify (i) whether the
Borrower is requesting a borrowing, a conversion of a Loan from one Type to the
other, or a continuation of a Eurocurrency Rate Loan, (ii) the requested
date of the borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of the Loan to be
borrowed, converted or continued, (iv) the Type of Loan to be borrowed or
to which an existing Loan is to be converted, (v) the applicable currency,
and (vi) if applicable, the duration of the Interest Period with respect
thereto. If the Borrower fails to specify a currency in a Loan Notice
requesting a borrowing, then the Loans so requested shall be made in
Dollars.  If the Borrower fails to
specify a Type of Loan in a Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Loans shall be made as, or converted to, Prime Rate Loans; provided, however,
that in the case of a failure to timely request a continuation of Loans
denominated in an Alternative Currency, such Loans shall be continued as
Eurocurrency Rate Loans in their original currency with an Interest Period of
one month.  Any automatic conversion to
Prime Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurocurrency Rate Loans.  If the Borrower requests a borrowing of,
conversion to, or continuation of Eurocurrency Rate Loans in any such Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. 
No Loan may be converted into or continued as a Loan denominated in a
different currency, but instead must be prepaid in the original currency of
such Loan and reborrowed in the other currency.


 


(b)       Upon
satisfaction of the applicable conditions set forth in Section 4.02
(and, if a borrowing is the initial Credit Extension, Section 4.01),
the Lender shall make the proceeds of each Loan available to the Borrower
either by (i) crediting the account of the Borrower on the books of the
Lender with the amount of such proceeds or (ii) wire transfer of such
proceeds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Lender by the Borrower.


 


17

















 


(c)       Except
as otherwise provided herein, a Eurocurrency Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurocurrency Rate
Loan.  During the existence of a Default,
no Loans may be requested as, converted to or continued as Eurocurrency Rate
Loans (whether in Dollars or any Alternative Currency) without the consent of
the Lender, and the Lender may demand that any or all of the then outstanding
Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or
redenominated into Dollars in the amount of the Dollar Equivalent thereof, on
the last day of the then current Interest Period with respect thereto.


 


(d)       The
Lender shall promptly notify the Borrower of the interest rate applicable to
any Interest Period for a Eurocurrency Rate Loan upon determination of such
interest rate.  The determination of the
Eurocurrency Rate by the Lender shall be conclusive in the absence of manifest
error.  At any time that a Prime Rate
Loan is outstanding, the Lender shall notify the Borrower of any change in the
Prime Rate promptly following the public announcement of such change.


 


(e)       After
giving effect to all borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more
than ten Interest Periods in effect.


 


2.03        Letters
of Credit.


 


(a)       Subject
to the terms and conditions set forth herein, the Lender agrees from time to
time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of
the Borrower denominated in Dollars or in one or more Alternative Currencies,
to amend or extend Letters of Credit previously issued by it, and to honor
drawings under Letters of Credit; provided that after giving effect to
any L/C Credit Extension with respect to any Letter of Credit, (i) the
aggregate Outstanding Amount of the Loans, plus the Outstanding Amount
of all L/C Obligations, shall not exceed the Commitment, (ii) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit, and (iii) the aggregate Outstanding Amount of all Loans and L/C
Obligations denominated in Alternative Currencies shall not exceed the
Alternative Currency Sublimit.  Within
the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.


 


(b)       Letters
of Credit may include a provision providing that the maturity date thereof will
be automatically extended each year for an additional year unless the Lender
gives written notice to the contrary.


 


(c)       The
issuance of any Letter of Credit, and any amendment to, or extension of, a
Letter of Credit, shall be subject to the Lender’s written approval, and shall
be in form and content reasonably satisfactory to the Lender and in favor of a
beneficiary reasonably acceptable to the Lender.  Without limiting the foregoing, the Lender
shall not be under any obligation to issue any Letter of Credit if (i) the
issuance of such Letter of Credit would violate one or more policies of the
Lender applicable to letters of credit generally; (ii) except as otherwise
agreed by the Lender, such Letter of Credit is in an initial stated amount less
than $100,000; (iii) such Letter of Credit is to be denominated in a
currency other than Dollars or an Alternative Currency; (iv) the expiry
date of such Letter of Credit would occur after the Letter of Credit Expiration
Date; (v) subject to subsection (b), the expiry date of such Letter of
Credit would occur more 


 


18

















 


than
twelve months after the date of issuance or last extension; or (vi) the
Lender does not as of the issuance date of such requested Letter of Credit
issue Letters of Credit in the requested currency.  The Lender shall be under no obligation to
amend any Letter of Credit if (A) the Lender would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.


 


(d)       Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the Lender in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower.  Such Letter of Credit
Application must be received by the Lender not later than 11:00 a.m. at
least two Business Days (or such later date and time as the Lender may agree in
a particular instance in their sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. 
In the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the Lender: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount and currency
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to
be presented by such beneficiary in case of any drawing thereunder; (G) the
purpose and nature of the requested Letter of Credit; and (H) such other
matters as the Lender may require.  In
the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the Lender (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the Lender
may require.  Additionally, the Borrower
shall furnish to the Lender such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any L/C
Documents, as the Lender may require.


 


(e)       Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the Lender will also deliver to the Borrower a true and complete copy of such
Letter of Credit or amendment.


 


(f)        Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Lender shall notify the Borrower thereof.  In the case of a Letter of Credit denominated
in an Alternative Currency, the Borrower shall reimburse the Lender in such
Alternative Currency, unless (A) the Lender (at its option) shall have specified
in such notice that it will require reimbursement in Dollars, or (B) in
the absence of any such requirement for reimbursement in Dollars, the Borrower
shall have notified the Lender promptly following receipt of the notice of
drawing that the Borrower will reimburse the Lender in Dollars.  In the case of any such reimbursement in
Dollars of a drawing under a Letter of Credit denominated in an Alternative
Currency, the Lender shall notify the Borrower of the Dollar Equivalent of the
amount of the drawing promptly following the determination thereof.  Not later than 11:00 a.m. on the first
Business Day after the date of any payment by the Lender under a Letter of
Credit to be reimbursed in Dollars, or the Applicable Time on the first
Business Day after the date of any payment by the Lender under a Letter of
Credit to be reimbursed in an Alternative Currency (each such date, an “Honor
Date”), the Borrower shall reimburse the Lender in an amount equal to the
amount of such drawing and in the applicable currency.


 


19

















 


(g)       Any sum
drawn under a Letter of Credit may, at the option of the Lender, be deemed to
be a Loan under this Agreement on the Business Day after the Honor Date.  In such event, the Borrower shall be deemed
to have requested a Prime Rate Loan in an amount equal to the unreimbursed
drawing, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Prime Rate Loans, but subject to the amount of the
unutilized portion of the Commitment and the conditions set forth in Section 4.02
(other than the delivery of a Loan Notice). 
If such unreimbursed drawing is denominated in an Alternative Currency,
it shall be redenominated into Dollars on such borrowing date in the amount of
the Dollar Equivalent thereof.  Such
Prime Rate Loan will bear interest and be due as described elsewhere in this
Agreement.


 


(h)       If the
Borrower fails to so reimburse the Lender by such time specified above on the
Business Day after the Honor Date and any amount of the unreimbursed drawing is
not refinanced by a Prime Rate Loan hereunder, the amount of the unreimbursed
drawing shall be due and payable on demand made by the Lender to the Borrower
(together with interest) and shall bear interest (after as well as before
judgment) at the Default Rate.  If such
unreimbursed drawing is denominated in an Alternative Currency, it shall be
redenominated into Dollars on such Business Day in the amount of the Dollar
Equivalent thereof.


 


(i)        The
obligation of the Borrower to reimburse the Lender for each drawing under any
Letter of Credit issued for the account of the Borrower shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including the
following:  (i)     any lack of validity or enforceability of such Letter of Credit,
this Agreement or any other Credit Document; (ii) the existence of any
claim, counterclaim, setoff, defense or other right that the Borrower or any
Subsidiary thereof may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Lender or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit; (iv) any payment by the Lender under such
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment made by
the Lender under such Letter of Credit to any Person purporting to be a trustee
in bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; (v) any adverse change in
the relevant exchange rates or in the availability of the relevant Alternative
Currency to the Borrower or any Subsidiary or in the relevant currency markets
generally; or (vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.


 


(j)        The
Borrower shall promptly examine a copy of each Letter of Credit issued for its
account and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the Borrower’s instructions or other
irregularity, the Borrower will immediately notify the Lender.  The Borrower shall be conclusively deemed to
have waived any such claim against the Lender and its correspondents unless
such notice is given as aforesaid.


 


20

















 


(k)       The
Borrower agrees that, in paying any drawing under a Letter of Credit, the
Lender shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the Lender, any of the other Indemnitees nor any correspondent,
participant or assignee of the Lender shall be liable or responsible for any of
the matters described in clauses (i) through (v) of Subsection (i);
provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the Lender, and the
Lender may be liable to the Borrower, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by the Lender’s willful
misconduct or gross negligence or the Lender’s willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit.   In furtherance and not in limitation of the
foregoing, the Lender may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the Lender shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.


 


(l)        In
addition to any requirement in the L/C Documents with respect to Cash
Collateral for the L/C Obligations, if the Lender notifies the Borrower at any
time that the Outstanding Amount of all L/C Obligations at such time exceeds by
$50,000 or more the Letter of Credit Sublimit then in effect, then, within two
Business Days after receipt of such notice, the Borrower shall Cash
Collateralize the L/C Obligations in an amount equal to the amount by which the
Outstanding Amount of all L/C Obligations exceeds the Letter of Credit
Sublimit.  The Lender may, at any time
and from time to time after the initial deposit of Cash Collateral, request
that additional Cash Collateral be provided in order to protect against the
results of exchange rate fluctuations. For purposes of this Agreement, “Cash
Collateralize” means to pledge and deposit with or deliver to the Lender,
as collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the
Lender.  Derivatives of such term have
corresponding meanings.  The Borrower
hereby grants to the Lender a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at the Lender.


 


(m)      Unless
otherwise expressly agreed by the Lender and the Borrower when a Letter of
Credit is issued, the rules of the ISP shall apply to each Letter of
Credit.


 


(n)       In the
event of any conflict between the terms hereof and the terms of any L/C
Document, the terms hereof shall control.


 


21

















 


2.04        Prepayments.


 


(a)       The
Borrower may, upon notice to the Lender, at any time or from time to time
voluntarily prepay any Loan in whole or in part without premium or penalty; provided
that (a) such notice must be received by the Lender not later than
11:00 a.m. (i) three Business Days prior to any date of prepayment of
Eurocurrency Rate Loans denominated in Dollars, (ii) four Business Days
(or five, in the case of prepayment of Loans denominated in Special Notice
Currencies) prior to any date of prepayment of Eurocurrency Rate Loans
denominated in Alternative Currencies, and (iii) on the date of prepayment
of a Prime Rate Loan; (b) any prepayment of a Eurocurrency Rate Loan shall
be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in
excess thereof; and (c) any prepayment of a Prime Rate Loan shall be in a
principal amount of $100,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loan(s) to
be prepaid.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a
Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to Section 3.05.


 


(b)       (i) If
the Lender notifies the Borrower at any time that the Outstanding Amount of all
Loans and L/C Obligations (the “Total Outstandings”) at such time
exceeds by $50,000 or more the Commitment then in effect, then, within two
Business Days after receipt of such notice, the Borrower shall prepay Loans
and/or Cash Collateralize the L/C Obligations in an aggregate amount sufficient
to reduce such Outstanding Amount as of such date of payment to an amount not
to exceed 100% of the Commitment then in effect; provided, however,
that, subject to the provisions of Section 2.03(l), the Borrower shall
not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Commitment then in effect.  The Lender
may, at any time and from time to time after the initial deposit of such Cash
Collateral, request that additional Cash Collateral be provided in order to
protect against the results of further exchange rate fluctuations.  (ii) If the Lender notifies the Borrower
at any time that the Outstanding Amount of all Loans denominated in Alternative
Currencies at such time exceeds by $50,000 or more the Alternative Currency
Sublimit then in effect, then, within two Business Days after receipt of such
notice, the Borrower shall prepay Loans in an aggregate amount sufficient to
reduce such Outstanding Amount as of such date of payment to an amount not to
exceed 100% of the Alternative Currency Sublimit then in effect.


 


2.05        Termination
or Reduction of Commitment.


 


(a)       The
Borrower may, upon notice to the Lender, terminate the Commitment, or from time
to time permanently reduce the Commitment; provided that (a) any
such notice shall be received by the Lender not later than 11:00 a.m.,
five Business Days prior to the date of termination or reduction, (b) any
such partial reduction shall be in an aggregate amount of $1,000,000 or any
whole multiple of $500,000 in excess thereof, and (c) the Borrower shall
not terminate or reduce the Commitment if, after giving effect thereto and to
any concurrent prepayments hereunder, the Outstanding Amount would exceed the
Commitment.  If, after giving effect to
any reduction of the Commitment, the Alternative Currency Sublimit or the
Letter of Credit Sublimit exceeds the amount of the Commitment, such Sublimit
shall be automatically reduced by the amount of such excess.  Except as required by the Lender, the amount
of any such Commitment reduction shall not be applied to the Alternative
Currency Sublimit or the Letter of Credit Sublimit unless otherwise specified
by the Borrower.


 


22
















 


(b)       On each
date set forth below, the Commitment shall be reduced by the amount set forth
opposite such date below:


 


	
  Date

  	
   

  	
  Amount of Reduction

  	
   

  
	
  March 6, 2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  March 6, 2010

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  March 6, 2011

  	
   

  	
  $

  	
  25,000,000

  	
   

  



 


(c)  All Commitment Fees accrued until the
effective date of any termination or reduction of the Commitment shall be paid
on the effective date of such termination or reduction.


 


2.06        Repayment
of Loans.  The Borrower shall repay to the Lender on the
Maturity Date the aggregate principal amount of Loans outstanding on such date.


 


2.07        Interest.  (a) Subject
to the provisions of subsection (b), (i) during such periods as any
Loan shall constitute a Eurocurrency Rate Loan, such Loan shall bear interest
on the outstanding principal amount thereof for each Interest Period at a rate
per annum equal to the Eurocurrency Rate for such Interest Period plus
the Applicable Rate plus, if applicable, the Mandatory Cost; and (ii) during
such periods as any Loan shall constitute a Prime Rate Loan, such Prime Rate
Loan shall bear interest on the outstanding principal amount thereof at a rate
per annum equal to the Prime Rate plus the Applicable Rate.


 


(b)       If any
amount payable by the Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity,
by acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.  Furthermore, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.  Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.


 


(c)       The
Borrower shall pay to the Lender interest on each Loan in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein.  Interest hereunder shall be due
and payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief
Law.


 


2.08        Fees.  (a)  Commitment
Fee.  The Borrower shall pay to the
Lender, in Dollars, a commitment fee (the “Commitment Fee”) in an amount
equal to the Applicable Rate multiplied by the Dollar Equivalent of the
actual daily amount by which the Commitment exceeds the Outstanding Amount of
Loans and L/C Obligations for the preceding quarterly period.  The Commitment Fee shall accrue at all times
during the Availability Period, including at any time 


 


23

















 


during
which any condition in Article IV is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date.  The Commitment
Fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.


 


(b)       Upfront
Fee. The Borrower shall pay to the Lender on or prior to the Closing Date
an upfront fee in the amount of $150,000. 
Such fee shall be fully earned when paid and shall not be refundable for
any reason whatsoever.


 


(c)       Letter
of Credit Fee.  The Borrower shall
pay to the Lender, in Dollars, a Letter of Credit fee (the “Letter of Credit
Fee”) equal to the Applicable Rate multiplied by the Dollar
Equivalent of the daily amount available to be drawn under each outstanding
Letter of Credit.  Letter of Credit Fees
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand, and if there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn
under each Letter of Credit shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate
was in effect.  Notwithstanding anything
to the contrary contained herein, upon the request of the Lender, while any
Event of Default exists, all Letter of Credit Fees shall accrue at a rate equal
to the Applicable Rate plus 2.0% per annum.


 


(d)       Other
Fees.  The Borrower shall pay to the
Lender, in Dollars, the customary issuance, presentation, amendment and other
processing fees, and other standard fees, costs and charges, of the Lender
relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.


 


2.09        Computation
of Interest and Fees.  All computations of interest on Prime Rate
Loans when the Prime Rate is determined with reference to the Lender’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year) or, in the case of
interest in respect of Loans denominated in Alternative Currencies as to which
market practice differs from the foregoing, in accordance with such market
practice.  Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall,
subject to Section 2.11(a), bear interest for one day.


 


2.10        Evidence
of Debt.  The Credit Extensions made by the Lender
shall be evidenced by one or more accounts or records maintained by the Lender
in the ordinary course of business.  The
accounts or records maintained by the Lender shall be conclusive absent
manifest error of the amount of the Credit Extensions made by the Lender to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the Obligations.  Upon the request of the Lender, the Borrower
shall execute and deliver to the 


 


24

















 


Lender
a Note, which shall evidence the Lender’s Loans in addition to such accounts or
records.  The Lender may attach schedules
to the Note and endorse thereon the date, Type, amount and maturity of each
Loan and payments with respect thereto.


 


2.11        Payments
Generally.  (a) All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as
otherwise expressly provided herein and except with respect to principal of and
interest on Loans denominated in an Alternative Currency, all payments by the Borrower
hereunder shall be made to the Lender at the applicable lending office in
Dollars and in Same Day Funds not later than noon on the date specified
herein.  Except as otherwise expressly
provided herein, all payments by the Borrower hereunder with respect to
principal and interest on Loans denominated in an Alternative Currency shall be
made to the Lender at the applicable lending office in such Alternative
Currency and in Same Day Funds not later than the Applicable Time specified by
the Lender on the dates specified herein. Without limiting the generality of
the foregoing, the Lender may require that any payments due under this
Agreement be made in the United States. 
If, for any reason, the Borrower is prohibited by any Law from making
any required payment hereunder in an Alternative Currency, the Borrower shall
make such payment in Dollars in the Dollar Equivalent of the Alternative
Currency payment amount.    All payments
received by the Lender (i) after noon, in the case of payments in Dollars,
or (ii) after the Applicable Time specified by the Lender in the case of
payments in an Alternative Currency, shall in each case be deemed received on
the next succeeding Business Day and any applicable interest or fee shall
continue to accrue..


 


(b)       If any
payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.


 


(c)       Nothing
herein shall be deemed to obligate the Lender to obtain the funds for any Loan
in any particular place or manner or to constitute a representation by the
Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.


 


ARTICLE III



TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.01        Taxes.  (a) Any
and all payments by the Borrower to or for the account of the Lender under any
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities with respect
thereto, excluding any such amounts imposed on or measured by the
Lender’s overall net income, and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which the Lender is organized or maintains a
lending office (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as “Taxes”).  If the Borrower shall be required by any Laws
to deduct any Taxes from or in respect of any sum payable under any Loan
Document to the Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), the Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay 


 


25

















 


the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Lender documents reasonably
satisfactory to the Lender evidencing payment thereof.


 


(b)       In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or
from the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”).


 


(c)       If the
Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in
respect of any sum payable under any Loan Document to the Lender, the Borrower
shall also pay to the Lender, at the time interest is paid, such additional
amount that the Lender specifies is necessary to preserve the after-tax yield
(after factoring in all taxes, including taxes imposed on or measured by net
income) that the Lender would have received if such Taxes or Other Taxes
had not been imposed.


 


(d)       The
Borrower agrees to indemnify the Lender for (i) the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability
(including additions to tax, penalties, interest and expenses) arising
therefrom or with respect thereto, in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  Payment under
this subsection (d) shall be made within 30 days after the date the
Lender makes a demand therefor.


 


(e)       The
Lender agrees promptly to deliver to the Borrower, as the Borrower shall
reasonably request, in a timely fashion after the Closing Date, such documents
and forms required by any relevant taxing authorities under the Laws of any
non-U.S. jurisdiction, duly executed and completed by the Lender, as are
required under such Laws to confirm the Lender’s entitlement to any available
exemption from, or reduction of, applicable withholding taxes in respect of all
payments to be made to the Lender outside of the U.S. by the Borrower pursuant
to this Agreement or otherwise to establish the Lender’s status for withholding
tax purposes in such other jurisdiction. 
The Lender shall promptly (i) notify the Borrower of any change in
circumstances which would modify or render invalid any such  claimed exemption or reduction, and (ii) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of the Lender, and as may be reasonably necessary (including the
re-designation of its lending office) to avoid any requirement of applicable
Laws of any such jurisdiction that the Borrower make any deduction or
withholding for taxes from amounts payable to the Lender.  Additionally, the Borrower shall promptly
deliver to the Lender, as the Lender shall reasonably request, in a timely
fashion after the Closing Date, such documents and forms required by any
relevant taxing authorities under the Laws of any jurisdiction, duly executed
and completed by the Borrower, as are required to be furnished by the Lender
under such Laws in connection with any payment by the Lender of Taxes or Other
Taxes, or otherwise in connection with the Loan Documents, with respect to such
jurisdiction.


 


26

















 


(f)        If the
Lender determines, in its reasonable discretion, that it has received a refund
of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to
this Section 3.01, it shall pay over such refund to the Borrower
(but only to the extent of any such indemnity payments or additional amounts,
as applicable, paid by the Borrower under this Section 3.01 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
the Lender in the event the Lender is required to repay such refund to such
Governmental Authority.  This Section 3.01(f) shall
not be construed to require the Lender to make available its tax returns (or
any other information relating to its Taxes that it deems confidential) to the
Borrower or any other Person.


 


3.02        Illegality. 
If the Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for the Lender or its
lending office to make, maintain or fund Eurocurrency Rate Loans (whether
denominated in Dollars or any Alternative Currency), or to determine or charge
interest rates based upon the Eurocurrency Rate, or any Governmental Authority
has imposed material restrictions on the authority of the Lender to purchase or
sell, or to take deposits of, Dollars or any Alternative Currency in the
applicable interbank market, then, on notice thereof by the Lender to the
Borrower, any obligation of the Lender to make or continue Eurocurrency Rate
Loans in the affected currency or currencies or to convert Prime Rate Loans to
Eurocurrency Rate Loans shall be suspended until the Lender notifies the
Borrower that the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice, the
Borrower shall, upon demand from the Lender, prepay or, if applicable and such
Loans are denominated in Dollars, convert all Eurocurrency Rate Loans to Prime
Rate Loans, either on the last day of the Interest Period therefor, if the Lender
may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such
Eurocurrency Rate Loans.  Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.


 


3.03        Inability
to Determine Eurocurrency Rate.  If the Lender
determines that for any reason (a) deposits (whether in Dollars or an
Alternative Currency) are not being offered to banks in the applicable offshore
interbank market for such currency for the applicable amount and Interest
Period of such Eurocurrency Rate Loan, (b) adequate and reasonable means
do not exist for determining the Eurocurrency Rate for any requested Interest
Period with respect to a proposed Eurocurrency Rate Loan (whether denominated
in Dollars or an Alternative Currency), or (c) the Eurocurrency Rate for
any requested Interest Period with respect to a proposed Eurocurrency Rate Loan
does not adequately and fairly reflect the cost to the Lender of funding such
Loan, the Lender will promptly so notify the Borrower.  Thereafter, the obligation of the Lender to
make or maintain Eurocurrency Rate Loans in the affected currency or currencies
shall be suspended until the Lender revokes such notice.  Upon receipt of such notice, the Borrower may
revoke any pending request for a borrowing of, conversion to or continuation of
a Eurocurrency Rate Loan in the affected currency or currencies or, failing
that, will be deemed to have converted such request into a request for a
borrowing of a Prime Rate Loan in Dollar Equivalent of the amount specified
therein.


 


27

















 


3.04        Increased
Cost and Reduced Return; Capital Adequacy.  (a) If
the Lender determines that the introduction of or any change in or in the
interpretation of any Law, or the Lender’s compliance therewith, shall:  (i) impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, the Lender (except (A) any reserve
requirement contemplated by Section 3.06)  and (B) the requirements of the Bank of
England and the Financial Services Authority or the European Central Bank
reflected in the Mandatory Cost, other than as set forth below) or the L/C
Issuer; (ii) subject the Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit or any Eurocurrency Rate Loan
made by it, or change the basis of taxation of payments to the Lender or the
L/C Issuer in respect thereof (except for (A) Taxes or Other Taxes (as to
which Section 3.01 shall govern), and (B) changes in the rate
or basis of imposition of any amount excluded from the definition of Taxes
pursuant to Section 3.01(a)); (iii) result in the failure of
the Mandatory Cost, as calculated hereunder, to represent the cost to the
Lender of complying with the requirements of the Bank of England and/or the
Financial Services Authority or the European Central Bank in relation to its
making, funding or maintaining Eurocurrency Rate Loans; or (iv) impose on
the Lender or the London interbank market any other condition, cost or expense
affecting this Agreement or Eurocurrency Rate Loans made by the Lender or any
Letter of Credit; and the result of any of the foregoing shall be to increase
the cost to the Lender of making or maintaining any Eurocurrency Rate Loan (or
of maintaining its obligation to make any such Loan), or to increase the cost
to the Lender of participating in, issuing or maintaining any Letter of Credit,
or to reduce the amount of any sum received or receivable by the Lender
hereunder (whether of principal, interest or any other amount), then from time
to time upon demand of the Lender, the Borrower shall pay to the Lender such
additional amounts as will compensate the Lender for such increased cost or
reduction.


 


(b)       If the
Lender determines that the introduction of any Law regarding capital adequacy
or any change therein or in the interpretation thereof, or compliance by the
Lender (or its lending office) therewith, has the effect of reducing the
rate of return on the capital of the Lender or any corporation controlling the
Lender as a consequence of the Lender’s obligations hereunder (taking into
consideration its policies with respect to capital adequacy and the Lender’s
desired return on capital), then from time to time upon demand of the Lender,
the Borrower shall pay to the Lender such additional amounts as will compensate
the Lender for such reduction.


 


(c)       Any
failure or delay on the part of the Lender to demand compensation pursuant to
the foregoing provisions of this Section shall not constitute a waiver of
the Lender’s right to demand such compensation, provided that the
Borrower shall not be required to compensate the Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that the Lender
notifies the Borrower of the introduction of, change in, change in the
interpretation of, or change in the Lender’s compliance with, the Law giving
rise to such increased costs or reductions and of the Lender’s intention to
claim compensation therefor (except that, if the introduction of, change in,
change in the interpretation of, or change in the Lender’s compliance with such
Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).


 


3.05        Funding
Losses.  Upon demand of the Lender from time to time,
the Borrower shall promptly compensate the Lender for and hold the Lender
harmless from any loss, cost or expense incurred by it as a result of:  (a) any continuation, conversion,
payment or prepayment of 


 


28

















 


any
Loan other than a Prime Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason
of acceleration, or otherwise); (b) any failure by the Borrower to make
payment of any Loan or drawing under any Letter of Credit (or interest due
thereon) denominated in an Alternative Currency on its scheduled due date or
any payment thereof in a different currency; or (c) any failure by the Borrower (for a reason other than
the failure of the Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Prime Rate Loan on the date or in the amount
notified by the Borrower, including any
loss of anticipated profits, any foreign exchange losses and any loss or
expense arising from the liquidation or reemployment of funds obtained by it to
maintain such Loan or from fees payable to terminate the deposits from which
such funds were obtained or from the performance of any foreign exchange
contract. 
The Borrower shall also pay any customary administrative fees charged by
the Lender in connection with the foregoing. 
For purposes of calculating amounts payable by the Borrower to
the Lender under this Section 3.05, the Lender shall be deemed to have funded each Eurocurrency Rate
Loan at the Eurocurrency Rate for such Loan by a matching deposit or other
borrowing in the offshore interbank eurodollar market for such currency for a
comparable amount and for a comparable period, whether or not such Eurocurrency
Rate Loan was in fact so funded.


 


3.06        Reserves
on Eurocurrency Rate Loans.  The Borrower
shall pay to the Lender:  (i) as
long as the Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurocurrency Rate Loan equal to the actual
costs of such reserves allocated to such Loan by the Lender (as determined by
the Lender in good faith, which determination shall be conclusive), which shall
be due and payable on each date on which interest is payable on such Loan, and (ii) as long as the
Lender shall be required to comply with any reserve ratio requirement or analogous requirement of
any other central banking or
financial regulatory authority imposed in respect of the maintenance of the
Commitment or the funding of the Eurocurrency Rate Loans, such additional costs
(expressed as a percentage per annum and rounded upwards, if necessary, to the
nearest five decimal places) equal to the actual costs allocated to such
Commitment or Loan by the Lender (as determined by the Lender in good faith,
which determination shall be conclusive), which  in each case shall
be due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice of such
additional interest or costs from the Lender. 
If the Lender fails to give notice 10 days prior to the relevant
Interest Payment Date, such additional interest or costs shall be due and
payable 10 days from receipt of such notice. 
For purposes of calculating amounts payable by the Borrower to the
Lender under this Section 3.06, the Lender shall be deemed to have funded each Eurocurrency Rate
Loan made by it at the Eurocurrency Rate for such Loan by a matching deposit or
other borrowing in the offshore interbank market for such currency for a comparable
amount and for a comparable period, whether or not such Eurocurrency Rate Loan
was in fact so funded.


 


3.07        Requests
for Compensation.  A certificate of the Lender claiming compensation under this Article III
and setting forth in reasonable detail the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error.  In determining such amount, the Lender may use any reasonable averaging
and attribution methods that are specified in reasonable detail.


 


29

















 


3.08        Survival. 
All of the Borrower’s obligations under this Article III shall
survive termination of the Commitment and repayment of all other Obligations
hereunder.


 


ARTICLE IV



CONDITIONS PRECEDENT TO CREDIT EXTENSIONS


 


4.01        Conditions
of Initial Credit Extension.  The
obligation of the Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:


 


(a)       The
Lender’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental officials,
a recent date before the Closing Date) and each in form and substance
satisfactory to the Lender and its legal counsel:


 


(i)            executed
counterparts of this Agreement, the Disclosure Letter and the Guaranty
sufficient in number for distribution to the Lender and the Borrower;


 


(ii)           a
Note (if requested by the Lender) executed by the Borrower in favor of the
Lender;


 


(iii)          such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Lender may
require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a party;


 


(iv)          such
documents and certifications as the Lender may reasonably require to evidence
that each Loan Party is duly organized or formed, and that each such Loan Party
is validly existing, in good standing and qualified to engage in business in
its state of organization or formation and in each state in which such Loan
Party’s principal offices are located;


 


(v)           a
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B) stating
that no such consents, licenses or approvals are so required;


 


(vi)          audited
financial statements of the Borrower and its Subsidiaries for the fiscal year
ended on or about July 31, 2007 and unaudited financial statements for the
fiscal quarter ended on or about October 31, 2007;


 


(vii)         a
favorable opinion of legal counsel to the Borrower, addressed to the Lender, as
to the matters specified in Exhibit F and such other matters
concerning the Borrower and the Loan Documents as the Lender may reasonably
request; and


 


(viii)        such
other assurances, certificates, documents, or consents or opinions as the
Lender reasonably may require;


 


30

















 


(b)       Any
fees required to be paid on or before the Closing Date, and any invoiced Attorney
Costs, shall have been paid.


 


(c)       The
Closing Date shall have occurred on or before March 6, 2008.


 


4.02        Conditions
to all Credit Extensions.  The obligation of the Lender
to make any Credit Extension (other than conversion or extension of a Loan or a
continuation of a Eurocurrency Rate Loan) is subject to the following
conditions precedent:


 


(a)       The
representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document (i) that are
qualified by materiality shall be true and correct, and (ii) that are not
qualified by materiality, shall be true and correct in all material respects,
in each case, on and as of the date of such Credit Extension, except, in each
case, to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct as of such
earlier date;


 


(b)       no
Default shall exist, or would result from such proposed Credit Extension;


 


(c)       the
Lender shall have received a Loan Notice in accordance with the requirements
hereof; and


 


(d)       in the
case of a Credit Extension to be denominated in an Alternative Currency, there
shall not have occurred any change in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls which in the reasonable opinion of the Lender would make it
impracticable for such Credit Extension to be denominated in the relevant
Alternative Currency.


 


Each Loan Notice (other than conversion or extension
of a Loan or a continuation of a Eurocurrency Rate Loan) submitted by the
Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 4.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension.


 


ARTICLE V



REPRESENTATIONS AND WARRANTIES


 


The Borrower represents and warrants to the Lender
that:


 


5.01        Existence,
Qualification and Power; Compliance with Laws.  Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of
the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on
its business and (ii) execute, deliver and perform its obligations under
the Loan Documents to which it is a party, (c) is duly qualified and is
licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license, and (d) is in compliance with all
Laws; except in each case referred to in clause (a) (with respect
to good standing), (b)(i), (c) or (d), to the extent that any failure to
do so could not reasonably be expected to have a Material Adverse Effect.


 


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5.02        Authorization;
No Contravention.  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of any of such Person’s Organization Documents; (b) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, (i) any Contractual Obligation to which such Person is a party or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; or (c) violate any
Law.


 


5.03        Governmental
Authorization; Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by any Loan Party of
this Agreement or any other Loan Document.


 


5.04        Binding
Effect.  This Agreement
has been, and each other Loan Document, when delivered hereunder, will have
been, duly executed and delivered by each Loan Party that is party
thereto.  This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting creditors’ rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law).


 


5.05        Financial
Statements; No Material Adverse Effect.  (a) The financial statements of the
Borrower and its Subsidiaries which have been delivered to the Lender (i) present
fairly in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries as of the date of such
financial statements and for the applicable periods presented, and (ii) to
the extent required by GAAP, show all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its Subsidiaries as of
the date thereof, including liabilities for taxes, material commitments and
Indebtedness. (b) Since July 31, 2007, there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect. (c) All
financial projections and forecasts delivered to the Lender pursuant hereto
represent the Borrower’s best estimates and assumptions as to future
performance, which the Borrower believes to be fair and reasonable as of the
time made in the light of current and reasonably foreseeable business
conditions.


 


5.06        Litigation.  Except as specifically disclosed in Schedule 5.06
of the Disclosure Letter, there are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport
to affect or pertain to this Agreement or any other Loan Document, or any of
the transactions contemplated hereby, or (b) either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.


 


5.07        No
Default.  Neither the Borrower nor any
Subsidiary is in default under or with respect to any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.  No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.


 


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5.08        Ownership
of Property; Liens. 
Each of the Borrower and each Subsidiary has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 
The property of the Borrower and its Subsidiaries is subject to no
Liens, other than Liens permitted by Section 7.01.


 


5.09        Environmental
Compliance.  The
Borrower and its Subsidiaries conduct in the ordinary course of business a
review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on
their respective businesses, operations and properties, and as a result thereof
the Borrower has reasonably concluded that such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.


 


5.10        Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies in such amounts with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable
Subsidiary operates.


 


5.11        Taxes.  The Borrower and its Subsidiaries have filed
all Federal and state income and other material tax returns and reports
required to be filed, and have paid all Federal and state income and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP.  There
is no proposed tax assessment against the Borrower or any Subsidiary that
would, if made, have a Material Adverse Effect.


 


5.12        Subsidiaries.  As of the Closing Date, the Borrower has (a) no
Subsidiaries other than those specifically disclosed in Part (a) of
Schedule 5.12 to the Disclosure Letter and (b) has no equity
investments in any other Person other than those specifically disclosed in Part (b) of
Schedule 5.12 to the Disclosure Letter. 
Part (a) of Schedule 5.12 to the Disclosure
Letter accurately sets forth as of the date hereof the status of each
Subsidiary as a Domestic Subsidiary and a Domestic Material Subsidiary, as
applicable.


 


5.13        Margin
Regulations; Investment Company Act.  (a) The Borrower is not engaged and will
not engage, principally or as one of its important activities, in the business
of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock, in violation of applicable Laws. (b) None of the
Borrower, any Person Controlling the Borrower, or any Subsidiary is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.


 


5.14        Disclosure.  The Borrower has disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be 


 


33

















 


expected
to result in a Material Adverse Effect. 
When taken together with the Borrower’s filings with the Securities and
Exchange Commission, no report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any
Loan Party to the Lender in connection with the transactions contemplated
hereby and the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of a material fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect
to projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.


 


5.15        Compliance
with Laws.  Each of the
Borrower and each Subsidiary is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties (including ERISA), except in such
instances in which (a) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.


 


5.16        Intellectual
Property; Licenses, Etc.  The
Borrower and its Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other
Person.  To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person.  No claim or litigation
regarding any of the foregoing is pending or, to the best knowledge of the
Borrower, threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.


 


5.17        Taxpayer
Identification Number. 
The true and correct U.S. taxpayer identification number of the Borrower
is set forth on Schedule 9.02 to the Disclosure Letter.


 


ARTICLE VI



AFFIRMATIVE COVENANTS


 


So long as the Commitment shall be in effect, any Loan
or other Obligation (other than inchoate indemnity obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
the Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:


 


6.01        Financial
Statements.  Deliver to
the Lender, in form and detail satisfactory to the Lender:  (a) as soon as available, but in any
event within 90 days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative 


 


34

















 


form
the figures for the previous fiscal year, all in reasonable detail and prepared
in accordance with GAAP; and (b) as soon as available, but in any event
within 45 days after the end of the first three fiscal quarters of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal
quarter and for the portion of the Borrower’s fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.  Any such quarterly financial
statements shall be certified by a Responsible Officer of the Borrower as
fairly presenting in all material respects the financial condition and results
of operations of the Borrower and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of
footnotes.  Any such annual financial
statements shall be audited and accompanied by a report and opinion of Ernst &
Young LLP or another independent certified public accountant of nationally
recognized standing reasonably acceptable to the Lender, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like qualification
or exception or any qualification or exception as to the scope of such
audit.  As to any information contained
in materials furnished pursuant to Section 6.02(d), the Borrower
shall not be separately required to furnish such information under clause (a) or
(b) above, but the foregoing shall not be in derogation of the obligation
of the Borrower to furnish the information and materials described in clauses (a) and
(b) above at the times specified therein.


 


6.02        Certificates;
Other Information. 
Deliver to the Lender, in form and detail satisfactory to the Lender:


 


(a)       concurrently
with the delivery of the financial statements referred to in Section 6.01,
a duly completed Financial Statement Certificate and a duly completed
Compliance Certificate, each signed by a Responsible Officer of the Borrower;


 


(b)       as soon
as available and in any event not later than the date of delivery of the
Borrower’s annual financial statements required to be delivered under Section 6.01, a
list of  Subsidiaries, including
specification of any Domestic Subsidiaries and Domestic Material Subsidiaries,
containing the information with respect thereto as is contemplated by Schedule 5.12
to the Disclosure Letter;


 


(c)       as soon
as available and in any event not later than October 31 of each calendar
year, financial projections of the Borrower and its Subsidiaries for such
calendar year;


 


(d)       promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the SEC under Section 13 or 15(d) of the Exchange Act, or with any
national securities exchange, and not otherwise required to be delivered to the
Lender pursuant hereto;


 


(e)       promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party or any Subsidiary thereof; and


 


35

















 


(f)        promptly,
such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Lender may from time to time reasonably request.


 


Documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to
the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (A) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the website address listed on Schedule 9.02; or (B) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which the Lender has access (whether a commercial,
third-party website or whether sponsored by the Lender); provided that
the Borrower shall notify the Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft
copies) of such documents. 
Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Financial Statement
Certificates and the Compliance Certificates required by Section 6.02(b) to
the Lender (manually signed copies of which may be delivered electronically as
pdf files).


 


6.03        Notices.  Promptly notify the Lender:  (a) of the occurrence of any Event of
Default; (b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws; and (c) of
any material change in accounting policies or financial reporting practices by
the Borrower or any Subsidiary, except where such change is a result of such
Subsidiary being required to produce financial statements capable of being
consolidated with those of the Borrower. 
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. 
Each notice pursuant to Section 6.03(a) shall describe
with particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.


 


6.04        Payment
of Taxes.  Pay and
discharge as the same shall become due and payable, all of its material tax
liabilities, assessments and governmental charges or levies upon it or its properties
or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary.


 


6.05        Preservation
of Existence, Etc.  (a) Preserve,
renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization except (i) in
the case of the good standing, to the extent that any failure to do so could
not reasonably be expected to have a Material Adverse Effect and (ii) in a
transaction 


 


36

















 


permitted
by Section 7.04 or 7.05; (b) take all reasonable action
to maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.


 


6.06        Maintenance
of Properties.  (a) Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; (b) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect;
and (c) use the standard of care typical in the industry in the operation
and maintenance of its facilities, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.


 


6.07        Maintenance
of Insurance.  Maintain
with financially sound and reputable insurance companies insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons.


 


6.08        Compliance
with Laws.  Comply in
all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted; or (b) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.


 


6.09        Books
and Records.  (a) Maintain
proper books of record and account sufficient to permit the preparation of
consolidated financial statements in accordance with GAAP; and (b) maintain
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be.


 


6.10        Inspection
Rights.  Permit
representatives and independent contractors of the Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrower and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided, however,
that when an Event of Default exists the Lender (or any of its representatives
or independent contractors) may do any of the foregoing at the expense of the Borrower
at any time during normal business hours and without advance notice.  Notwithstanding the foregoing, so long as no
Default shall have occurred and be continuing, neither the Borrower nor any
Subsidiary shall be required to disclose, permit the inspection, examination,
photocopying or making extracts of, or discuss any document, information or
other matter that (a) constitutes non-financial trade secrets or
non-financial proprietary information or (b) the disclosure of which to
the Lender is then prohibited by Law or any agreement binding on the Borrower
or such Subsidiary for the purpose of concealing information from the Lender.


 


37
















 


6.11        Use
of Proceeds.  Use the
proceeds of the Credit Extensions (a) to repurchase shares of the Borrower’s
outstanding common stock within the limits specified in Section 7.06(d);
(b) to finance capital expenditures in the ordinary course of the Borrower’s
business; (c) for working capital purposes; and (d) for other general
corporate purposes not in contravention of any Law or any Loan Document.


 


6.12        Additional
Guarantors.  Within
thirty (30) days (or such longer period to which the Lender may agree in writing)
after (a) the time that any Person becomes a Domestic Subsidiary as a
result of the creation or formation of such Subsidiary, a Permitted Acquisition
or otherwise (other than any Domestic Subsidiary which does not meet the
definition of Domestic Material Subsidiary), or (b) the date of delivery
of financial statements with respect to a fiscal quarter that would indicate
that the status of any existing Domestic Subsidiary not party to the Guaranty
shall have changed such that it meets the definition of Domestic Material
Subsidiary, then unless such Domestic Subsidiary is merged into the Borrower or
a Guarantor (with the Borrower or such Guarantor being the surviving Person)
prior to the expiration of such thirty-day period (or such longer period to which
the Lender may agree in writing), the Borrower shall (i) cause such
Subsidiary to execute and deliver to the Lender a Guaranty Accession, and (ii)  provide
the Lender such board resolutions, officer’s certificates, corporate and other
documents and opinions of counsel as the Lender shall reasonably request, which
shall be in form and substance satisfactory to the Lender.


 


6.13        Cooperation.  Execute such further documents and take any
other action reasonably requested by the Lender to carry out the purpose and
intent of this Agreement.


 


ARTICLE VII



NEGATIVE COVENANTS


 


So long as the Commitment shall be in effect, any Loan
or other Obligation (other than inchoate indemnity obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:


 


7.01        Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following: 
(a) Liens in favor of the Lender or any Affiliate thereof; (b) Liens
existing on the date hereof and listed on Schedule 7.01 to the
Disclosure Letter and any renewals or extensions thereof, provided that
the property covered thereby is not increased and any renewal or extension of
the obligations secured or benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes, assessments or governmental charges or levies not yet
due, or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP; (d) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than 60 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person; (e) pledges
or 


 


38

















 


deposits
in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA; (f) deposits to secure the performance of bids,
trade contracts and leases (other than Indebtedness), statutory obligations,
surety bonds (other than bonds related to judgments or litigation), performance
bonds and other obligations of a like nature incurred in the ordinary course of
business, including with respect to agreements providing for indemnification,
adjustment of purchase price, earnest money or similar obligations in
connection with any Acquisition or Disposition undertaken in compliance with
the terms of this Agreement; (g) statutory, common law or contractual
Liens of landlords, any interest of title of a lessor or sublessor or of a
lessee or sublessee under any lease of real estate, and easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, do not materially detract from the value of
the property subject thereto or materially interfere with the ordinary conduct
of the business of the applicable Person; (h) Liens securing Indebtedness
permitted under Section 7.03(d) in respect of capital leases
and purchase money obligations for fixed or capital assets; provided
that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness (along with assessions thereto,
replacements thereof and proceeds (including insurance proceeds) thereof, and (ii) the
Indebtedness secured thereby does not exceed the cost of the property being
acquired on the date of acquisition; (i) Liens on specific tangible assets
(including real estate, but not including inventory and other current assets)
acquired in any Permitted Acquisitions after the date of this Agreement; provided,
however, that (i) such Liens existed at the time of such Permitted
Acquisition and were not created in anticipation thereof, (ii) any such
Lien does not by its terms cover any assets after the time of such Permitted
Acquisition which were not covered immediately prior thereto, and (iii) any
such Lien does not by its terms secure any Indebtedness other than Indebtedness
existing immediately prior to the time of such Permitted Acquisition; (j) Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h) or securing appeal or other
surety bonds related to such judgments; (k) Liens (not securing
Indebtedness) of depository institutions and securities intermediaries
(including rights of setoff and similar rights) with respect to deposit
accounts or securities accounts; (l) Liens on insurance proceeds securing
the payment of financed insurance premiums; (m) customary Liens granted in
favor of a trustee to secure fees and other amounts owing to such trustee under
an indenture or other agreement pursuant to which Indebtedness permitted by Section 7.02
is issued; (n) any interest of title of a lessor under, and Liens
evidenced by UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, operating leases; (o) Liens
deemed to exist in connection with Investments in repurchase agreements
permitted under Section 7.02; and (p) other Liens securing
obligations not prohibited by this Agreement in an aggregate amount not
exceeding at any time outstanding 2.5% of Consolidated Total Assets as of the
end of the fiscal quarter most recently ended for which financial statements
have been delivered.


 


7.02        Investments.  Make any Investments, except: (a) Investments
existing on the Closing Date and listed on Schedule 7.02 to the
Disclosure Letter; (b) Investments held by the Borrower or such Subsidiary
in the form of cash equivalents or short-term investments (as would be shown on
the Borrower’s balance sheet in accordance with GAAP) and other Investments
that are permitted under the Borrower’s investment policy as approved by the
Lender from time to time; (c) advances made by the Borrower or any of its
Subsidiaries in the ordinary course of such Person’s business to officers,
directors and employees of the Borrower or any such Subsidiary for travel,
entertainment, relocation and analogous ordinary business purposes; (d) Investments



 


39

















 


of the
Borrower in any Wholly-Owned Subsidiary and Investments of any Wholly-Owned
Subsidiary in the Borrower or in another Wholly-Owned Subsidiary; (e) Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss or in connection with a bankruptcy
or reorganization of an account debtor; (f) Guarantees permitted by Section 7.03;
(g) Acquisitions which constitute Permitted Acquisitions; (h) Investments
arising under Swap Contracts permitted hereunder; (i) Investments
consisting of pledges and deposits permitted by clauses (e) and (f) of
Section 7.01; (j) Investments of any Person that becomes a
Subsidiary after the Closing Date, provided that (i) such
Investments exist at the time such Person becomes a Subsidiary and (ii) such
Investments were not made in anticipation of such person becoming a Subsidiary;
(k) Investments consisting of the non-cash consideration received by the
Borrower or any Subsidiary in connection with any Disposition permitted
hereunder; and (l) other Investments; provided that (i) the
aggregate amount of all cash consideration paid by the Borrower and its
Subsidiaries in connection with all Permitted Acquisitions under clause (g) of
this Section 7.02 or other Investments (“Other Investments”)
under clause (l) of this Section 7.02 made during the initial
Limitation Period, together with the aggregate amount of all Capital
Expenditures and Restricted Payments made, declared or paid by the Borrower and
its Subsidiaries during the initial Limitation Period, shall not exceed the
Annual Expenditure Limit with respect to the initial Limitation Period, and (ii) at
the time of any such Permitted Acquisition or Other Investment occurring after
the initial Limitation Period (and after giving effect thereto), if the
Consolidated Total Leverage Ratio as of the last day of the most recent fiscal
year of the Borrower for which financial statements have been delivered
pursuant to Section 6.01 (as certified by the Borrower in the
applicable Compliance Certificate delivered hereunder) is equal to or greater
than 1.00:1.00, the aggregate amount of all cash consideration paid by the
Borrower and its Subsidiaries in connection with all such Permitted
Acquisitions made in the applicable Limitation Period and all Other Investments
made in the applicable Limitation Period, together with the aggregate amount of
all Capital Expenditures and Annual Restricted Payments made, declared or paid
by the Borrower and its Subsidiaries during such Limitation Period, shall not
exceed the Annual Expenditure Limit with respect to such Limitation Period, and
provided  further that if the Consolidated Total Leverage Ratio as
of the last day of the most recent fiscal year of the Borrower for which
financial statements have been delivered pursuant to Section 6.01
(as certified by the Borrower in the applicable Compliance Certificate
delivered hereunder) is less than 1.00:1.00, then the aggregate amount of all
such consideration paid in connection with any Permitted Acquisitions and Other
Investments during such Limitation Period, together with the aggregate amount
of all Capital Expenditures and Annual Restricted Payments made, declared or
paid by the Borrower and its Subsidiaries during such Limitation Period, may
exceed the Annual Expenditure Limit for such Limitation Period.


 


7.03        Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except: (a) Indebtedness under the Loan Documents; (b) Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 to the
Disclosure Letter and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such Indebtedness is not increased
at the time of such refinancing, refunding, renewal or extension except by an
amount equal to a reasonable premium or other reasonable amount paid, and fees
and expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder; (c) Guarantees
of the Borrower or any Subsidiary in respect of 


 


40

















 


Indebtedness
otherwise permitted hereunder of the Borrower or any Wholly-Owned Subsidiary; (d) Indebtedness
in respect of capital leases and purchase money obligations for fixed or
capital assets within the limitations set forth in Section 7.01(h);
provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $15,000,000; (e) obligations
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view”; (f) Indebtedness in respect of Investments permitted under Section 7.02;
(g) unsecured Subordinated Indebtedness in an aggregate principal amount
not to exceed $50,000,000 at any time outstanding; (h) Indebtedness
consisting of letters of credit, bankers acceptances or similar instruments in
an aggregate amount of $8,600,000 at any time outstanding (inclusive of any of
the foregoing permitted by clause (b)); (i) other unsecured Indebtedness
of the Borrower and its Subsidiaries in an aggregate principal amount at any
time outstanding not exceeding 4% of Consolidated Total Assets as of the end of
the fiscal quarter most recently ended for which financial statements have been
delivered; and (j) other Indebtedness owing to the Lender and its
Affiliates.


 


7.04        Fundamental
Changes.  Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of related transactions) all or
substantially all of its assets (whether now owned or hereafter
acquired) to or in favor of any Person, except that, so long as no Default
exists or would result therefrom:  (a) any
Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any Wholly-Owned Subsidiary is merging
with another Subsidiary, a Wholly-Owned Subsidiary shall be the continuing or
surviving Person; (b) any Subsidiary may Dispose of all or substantially
all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or to another Subsidiary; provided that if the Subsidiary in
such a transaction is a Wholly-Owned Subsidiary, then the Person thereafter
owning the assets must either be the Borrower or a Wholly-Owned Subsidiary, and
if the Subsidiary is a Guarantor, the Person thereafter owning the assets must
either be the Borrower or a Guarantor; and (c) the Borrower or any of its
Subsidiaries may enter into a transaction constituting an Investment permitted
by Section 7.02.


 


7.05        Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except: (a) Dispositions of obsolete or
worn out property, whether now owned or hereafter acquired, in the ordinary
course of business; (b) Dispositions of inventory in the ordinary course
of business; (c) Dispositions of equipment or real property to the extent
that (i) such property is exchanged for credit against the purchase price
of similar replacement property or (ii) the proceeds of such Disposition
are reasonably promptly applied to the purchase price of such replacement
property; (d) Dispositions of property by any Subsidiary to the Borrower
or to a Wholly-Owned Subsidiary and Dispositions by the Borrower to any
Wholly-Owned Subsidiary; (e) Dispositions otherwise permitted by Sections
7.01, 7.02 and 7.04 and Dispositions in connection with
a sale-leaseback transaction where the lease is an operating lease or is a
capital lease permitted under Section 7.03(d); (f) non-exclusive
licenses of IP Rights in the ordinary course of business and exclusive licenses
of IP Rights so long as substantially all of the economic value of the IP
Rights is not transferred by any such exclusive license; (g) any
Involuntary Disposition; (h) the sale or disposition of Cash Equivalents
for fair market value; (i) 


 


41

















 


leases
or subleases granted to others not interfering in any material respect with the
business of Borrower and
its Subsidiaries; (j) the disposition of accounts receivable in connection
with the collection or compromise thereof; and (k) Dispositions
by the Borrower and its Subsidiaries not otherwise permitted under this Section 7.05;
provided that (i) at the time of such Disposition, no Default shall
exist or would result from such Disposition and (ii) the aggregate book
value of all property Disposed of in reliance on this clause (k) shall not
exceed $125,000,000 during the term of this Agreement; provided, however,
that any Disposition pursuant to clauses (a) through (k) (except
for intercompany Dispositions permitted hereby) shall be for fair market value.


 


7.06        Restricted
Payments.  Declare or
make any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that, so long as no Default shall have
occurred and be continuing at the time thereof or would result therefrom:  (a) each Subsidiary may make Restricted
Payments to the Borrower and to Wholly-Owned Subsidiaries (and, in the case of
a Restricted Payment by a non-Wholly-Owned Subsidiary, to the Borrower and any
Subsidiary and to each other owner of capital stock or other equity interests
of such Subsidiary on a pro rata basis based on their relative ownership interests);
(b) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common equity interests of such Person; (c) the Borrower and each
Subsidiary may make Restricted Payments with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other
common equity interests; (d) the Borrower may make Restricted Payments in
connection with employee benefit plans or in connection with the employment,
termination or compensation of its employees, former employees, officers and
directors in an aggregate amount not to exceed $5,000,000 in any fiscal year of
the Borrower; (e) the Borrower may distribute rights pursuant to a
shareholder rights plan or redeem such rights, provided that such
redemption is in accordance with the terms of such shareholders rights plan; (f) the
Borrower may repurchase fractional shares of its equity securities arising out
of stock dividends, splits or combinations, business combinations or conversion
of convertible securities; (g) the Borrower may make Restricted Payments
in connection with the retention of equity interests in payment of withholding
taxes in connection with equity-based compensation plans; (h) the Borrower
and its Subsidiaries may make Restricted Payments during the initial Limitation
Period in an aggregate amount not exceeding, in the aggregate for all
Restricted Payments, Capital Expenditures, Permitted Acquisitions and Other
Investments for the Borrower and its Subsidiaries made, undertaken, declared or
paid during the initial Limitation Period, the Annual Expenditure Limit with
respect to the initial Limitation Period; and (i) with respect to any
Limitation Period occurring after the initial Limitation Period, if the
Consolidated Total Leverage Ratio as of the last day of the most recent fiscal
year of the Borrower for which financial statements have been delivered
pursuant to Section 6.01 (as certified by the Borrower in the
applicable Compliance Certificate delivered hereunder) is equal to or greater
than 1.00:1.00, the Borrower may make Restricted Payments (the “Annual
Restricted Payments”) not exceeding, in the aggregate for all Annual
Restricted Payments, Capital Expenditures, Permitted Acquisitions and Other
Investments for the Borrower and its Subsidiaries made, declared or paid during
the applicable Limitation Period, the Annual Expenditure Limit with respect to
such Limitation Period, provided that, if the Consolidated Total
Leverage Ratio as of the last day of the most recent fiscal year of the
Borrower for which financial statements have been delivered pursuant to Section 6.01
(as certified by the Borrower in the applicable Compliance Certificate
delivered hereunder) is less than 1.00:1.00, then the Borrower may declare or
make Annual Restricted Payments in such Limitation Period without regard to the
Annual Expenditure Limit for such Limitation Period.


 


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7.07        Change
in Nature of Business. 
Engage in any material line of business substantially different from
those lines of business conducted by the Borrower and its Subsidiaries on the
date hereof or any business reasonably related or incidental thereto.


 


7.08        Transactions
with Affiliates.  Enter
into any transaction of any kind with any Affiliate of the Borrower, whether or
not in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate, provided that
the foregoing restriction shall not apply to (a) transactions between or
among the Borrower and any of its Wholly-Owned Subsidiaries or between and
among any Wholly-Owned Subsidiaries, (b) reasonable and customary
indemnitees and fees paid to members of its board of directors (or equivalent
governing body), and (c) reasonable compensation arrangements and benefit
or equity incentive plans for officers and other employees entered into or
maintained in the ordinary course of business and other extraordinary retention
or bonus or similar arrangements approved by the board of directors of the
Borrower.


 


7.09        Burdensome
Agreements.  Enter into
any Contractual Obligation (other than this Agreement or any other Loan
Document) that:


 


(a)       limits
the ability (i) of any Subsidiary to make Restricted Payments to the
Borrower or any Guarantor or to otherwise transfer property to the Borrower or
any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the
Borrower or (iii) of the Borrower or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person; provided, however,
that clauses (i) through (iii) shall not prohibit (A) any
negative pledge incurred or provided in favor of any holder of Indebtedness
permitted under Section 7.03(d) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness, (B) restrictions in any document or instrument governing any
Lien permitted under Section 7.01, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Lien, (C) customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 7.05
pending the consummation of such sale, (D) contractual encumbrances
existing on the Closing Date or any document or instrument governing
Indebtedness described in Schedule 7.03 to the Disclosure Letter or any
renewals, refinancings, exchanges, refundings or extensions thereof, (E) customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures entered into in the ordinary course of business, (F) customary
provisions contained in leases or licenses of intellectual property and other
similar agreements entered into in the ordinary course of business, (G) customary
provisions restricting subletting or assignment of any lease governing a leasehold
interest, (H) customary provisions restricting assignment of any agreement
entered into in the ordinary course of business, and (I) customary net
worth or similar provisions contained in real property leases entered into by
any Subsidiary, so long as the Borrower has determined in good faith that such
net worth provisions could not reasonably be expected to impair the ability of
the Borrower and its Subsidiaries to meet their ongoing obligations; or


 


(b)       requires
the grant of a Lien to secure an obligation of such Person if a Lien is granted
to secure another obligation of such Person, except for (i) any
Contractual Obligation of any Subsidiary in effect at the time such Subsidiary
becomes a Subsidiary of the Borrower, so long as such Contractual Obligation
was not entered into solely in contemplation of such Person becoming a
Subsidiary of the Borrower, and (ii) any such Contractual Obligation
providing for the granting of a Lien that would be permitted under Section 7.01(p).


 


43

















 


7.10        Use
of Proceeds.  Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose, in each case in violation
of, or for a purpose which violates, or would be inconsistent with, Regulation
U of the FRB.


 


7.11        Financial
Covenants.


 


(a)       Consolidated
Total Leverage Ratio.  Permit the
Consolidated Total Leverage Ratio, as of the end of any fiscal quarter of the
Borrower ending after October 31, 2007, to be greater than
2.00:1:00.


 


(b)       Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio, as of the end of any fiscal quarter of
the Borrower ending after October 31, 2007, to less than 4.00:1.00.


 


7.12        Capital
Expenditures.  Make any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding (i) normal replacements and maintenance which are
properly charged to current operations, (ii) expenditures made in
connection with the replacement, substitution or restoration of assets to the
extent financed (x) from insurance proceeds paid on account of the loss of
or damage to the assets being replaced or restored or (y) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced, and (iii) expenditures made as a tenant as
leasehold improvements during such period to the extent reimbursed by the
landlord during such period) (“Capital Expenditures”) except that
(a) the Borrower and its Subsidiaries may make Capital Expenditures during
the initial Limitation Period in an aggregate amount not exceeding, in the
aggregate for all Capital Expenditures, Permitted Acquisitions, Other
Investments and Restricted Payments for the Borrower and its Subsidiaries made,
declared or paid during such initial Limitation Period, the Annual Expenditure
Limit with respect to such initial Limitation Period, and (b) with respect
to any Limitation Period occurring after the initial Limitation Period, if the
Consolidated Total Leverage Ratio as of the last day of the most recent fiscal
year of the Borrower for which financial statements have been delivered
pursuant to Section 6.01 (as certified by the Borrower in the
applicable Compliance Certificate delivered hereunder) is equal to or greater
than 1.00:1.00, then Capital Expenditures during the applicable Limitation
Period shall be limited to an amount not exceeding, in the aggregate for all
Capital Expenditures, Permitted Acquisitions, Other Investments and Annual
Restricted Payments for the Borrower and its Subsidiaries made, declared or
paid during such Limitation Period, the Annual Expenditure Limit with respect
to such Limitation Period; provided that if the Consolidated Total
Leverage Ratio as of the last day of the most recent fiscal year of the Borrower
for which financial statements have been delivered pursuant to Section 6.01
(as certified by the Borrower in the applicable Compliance Certificate
delivered hereunder) is less than 1.00:1.00, then the Borrower and its
Subsidiaries may make Capital Expenditures in such Limitation Period without
regard to the Annual Expenditure Limit for such Limitation Period.


 


44

















 


7.13        Accounting
Changes.  Make any
change in its (a) accounting policies or reporting practices, except as
required by GAAP, or (b) fiscal year, except a change by a Subsidiary to
conform to the fiscal year of the Borrower.


 


ARTICLE VIII



EVENTS OF DEFAULT AND REMEDIES


 


8.01        Events
of Default.  Any of the
following shall constitute an Event of Default:


 


(a)       Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, or in any L/C Document,
any amount of principal of any Loan or any L/C Obligation, and in the currency
required hereunder, or (ii) within three days after the same becomes due,
any interest on any Loan, or any Commitment Fee, Letter of Credit Fee or other
fee due hereunder, or (iii) within three days after the same becomes due,
any other amount payable hereunder or under any other Loan Document; or


 


(b)       Specific
Covenants.  The Borrower fails to
perform or observe any term, covenant or agreement contained in any of Sections 6.01,
6.02, 6.03, 6.05, 6.10, 6.11,  6.12, 
or Article VII; or


 


(c)       Other
Defaults.  Any Loan Party fails to
perform or observe any other covenant or agreement (not specified in subsection
(a) or (b) above) contained in any Loan Document on
its part to be performed or observed and such failure continues for 30 days; or


 


(d)       Representations
and Warranties.  Any representation,
warranty, certification or written statement of fact made or deemed made by or
on behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith (i) if
qualified by materiality, shall be incorrect or misleading when made or deemed
made, or (ii) if not qualified by materiality, shall be incorrect or
misleading in any material respect when made or deemed made; or


 


(e)       Cross-Default.   (i) The Borrower or any Subsidiary
(A) fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness
under Swap Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than the Threshold
Amount, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event (excluding the conversion of any convertible debt security) occurs, the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased,
prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to
its stated maturity, or such Guarantee to become payable; or (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (A) any event of default under such Swap 


 


45
















 


Contract
as to which the Borrower or any Subsidiary is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined) under
such Swap Contract as to which the Borrower or any Subsidiary is an Affected
Party (as so defined) and, in either event, the Swap Termination Value owed by
the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or


 


(f)        Insolvency
Proceedings, Etc.  Any Loan Party or
any of its Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 45 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for 45 calendar days, or an order
for relief is entered in any such proceeding; or


 


(g)       Inability
to Pay Debts; Attachment.  (i) Any
Loan Party or any of its Subsidiaries becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or levy;
or


 


(h)       Judgments.  There is entered against the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have,
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings
are commenced by any creditor at any time from and after (but not prior to) the
date occurring 30 days after the date of such judgment or order, or (B) there
is a period of 10 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or


 


(i)        Invalidity
of Loan Documents.  Any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or


 


(j)        Change
of Control.  There occurs any Change
of Control with respect to the Borrower.


 


8.02        Remedies
Upon Event of Default. 
If any Event of Default occurs and is continuing, the Lender may take
any or all of the following actions:  (a) declare
the Commitment to be terminated, whereupon the Commitment shall be terminated; (b) declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are


 


46

















 


hereby
expressly waived by the Borrower; (c) require that the Borrower Cash
Collateralize the L/C Obligations as contemplated by the L/C Documents; and (d) exercise
all rights and remedies available to it under the Loan Documents or applicable
law; provided, however, that upon the occurrence of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Bankruptcy Code of the United States, the Commitment shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Lender.


 


8.03        Application
of Funds.  After the
exercise of remedies provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Lender in such order as it
elects in its sole discretion.


 


ARTICLE IX




MISCELLANEOUS


 


9.01        Amendments;
Etc.  No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Lender and the Borrower or
the applicable Loan Party, as the case may be, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.


 


9.02        Notices
and Other Communications; Facsimile Copies.


 


(a)       General.  Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be
mailed, faxed or delivered to the address, facsimile number or (subject to subsection
(c)) electronic mail address specified for notices to the applicable party
on Schedule 9.02; or to such other address, facsimile number or
electronic mail address as shall be designated by such party in a notice to the
other party.  All notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
telephone number specified for notices to the applicable party on Schedule
9.02, or to such other telephone number as shall be designated by such
party in a notice to the other party. 
All such notices and other communications shall be deemed to be given or
made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed
for by or on behalf of the relevant party hereto; (B) if delivered by
mail, four Business Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile, when sent and receipt has been confirmed by telephone;
and (D) if delivered by electronic mail (which form of delivery is subject
to the provisions of subsection (c)), when delivered; provided, however,
that notices and other communications to the Lender pursuant to Article II
shall not be effective until actually received by the Lender.  In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.


 


47

















 


(b)       Effectiveness
of Facsimile Documents and Signatures. 
Loan Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all Loan Parties and the
Lender.  The Lender may also require that
any such documents and signatures be confirmed by a manually-signed original
thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or
signature.


 


(c)       Electronic
Mail.  Notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient.


 


(d)       Reliance
by Lender.  The Lender shall be
entitled to rely and act upon any notices (including telephonic Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrower shall indemnify
the Lender, its Affiliates, and their respective officers, directors,
employees, agents and attorneys-in-fact from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower.  All telephonic notices to and other communications
with the Lender may be recorded by the Lender, and the Borrower hereby consents
to such recording.


 


9.03        No
Waiver; Cumulative Remedies. 
No failure by the Lender to exercise, and no delay by the Lender in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.


 


9.04        Attorney
Costs and Expenses. 
The Borrower agrees (a) to pay or reimburse the Lender for all
reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all reasonable
Attorney Costs and all out-of-pocket expenses incurred by the Lender in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, and (b) to pay or reimburse
the Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred in any arbitration proceeding and during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs.  The foregoing costs and expenses
shall include all out-of-pocket expenses incurred by the Lender and the cost of
independent public accountants and other outside experts retained by the
Lender.  All amounts due under this Section 9.04
shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall
survive the termination of the Commitment and repayment, satisfaction or
discharge of all other Obligations.


 


48

















 


9.05        Indemnification
by the Borrower. 
Whether or not the transactions contemplated hereby are consummated, the
Borrower shall indemnify and hold harmless the Lender, its Affiliates, and
their respective directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) from and against any
and all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or
any other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) the Commitment, any Loan, any Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), or (c) any actual or alleged presence
or release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Borrower, any Subsidiary or any other Loan Party, or
any liability under any Environmental Laws related in any way to the Borrower,
any Subsidiary or any other Loan Party, or (d) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether
any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in whole
or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date).  All amounts due under this Section 9.05
shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall
survive the termination of the Commitment and the repayment, satisfaction or
discharge of all the other Obligations.


 


9.06        Payments
Set Aside.  To the
extent that any payment by or on behalf of the Borrower is made to the Lender,
or the Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.


 


49

















 


9.07        Successors
and Assigns.  (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.


 


(b)       The
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Lender.


 


(c)       The
Lender may at any time assign to any other Person all of its rights and
obligations under this Agreement (including all of the Commitment and the Loans
at the time owing to it) pursuant to documentation acceptable to the Lender and
the assignee; provided that the prior written consent of the Borrower
(such consent not to be unreasonably withheld or delayed) shall be required
unless (i) an Event of Default exists at the time of such assignment, or (ii) such
assignment is to an Affiliate of the Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code.  From and after the effective date specified
in such documentation, the assignee shall be a party to this Agreement and
shall have the rights and obligations of the Lender under this Agreement, and
the Lender shall be released from its obligations under this Agreement (and, in
the case of an assignment of all of the Lender’s rights and obligations under
this Agreement, shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 3.01, 3.04, 3.05,
3.06, 9.04 and 9.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon
request, the Borrower (at its expense) shall execute and deliver new or
replacement Notes to the Lender and the assignee, and shall execute and deliver
any other documents reasonably necessary or appropriate to give effect to such
assignment and to provide for the administration of this Agreement after giving
effect thereto.


 


(d)       The
Lender may at any time, without the consent of, or notice to, the Borrower,
sell participations to any Person (each, a “Participant”) in all or a
portion of the Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans); provided
that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the Borrower
for the performance of such obligations and (iii) the Borrower shall
continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations under this Agreement.  Subject to subsection (e), the
Borrower agrees that each Participant shall be entitled to the benefits of Sections
3.01, 3.04 and 3.05 to the same extent as if it were the
Lender and had acquired its interest by assignment pursuant to subsection
(b).  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.09
as though it were the Lender.


 


(e)       A
Participant shall not be entitled to receive any greater payment under Section 3.01
or 3.04 than the Lender would have been entitled to receive with respect
to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent, including its specific consent to the application of Sections 3.01
and 3.04.  A Participant that is
not a “United States person” within the meaning of Section 7701(a)(30) of
the Code shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to provide to the
Lender such tax forms prescribed by the IRS as are necessary or desirable to
establish an exemption from, or reduction of, U.S. withholding tax.


 


50

















 


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


 


9.09        Set-off.  In addition to any
rights and remedies of the Lender provided by law, upon the occurrence and
during the continuance of any Event of Default, the Lender is authorized at any
time and from time to time, without prior notice to the Borrower or any other
Loan Party, any such notice being waived by the Borrower (on its own behalf and
on behalf of each Loan Party) to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, the Lender to or for the credit or the account of the respective Loan
Parties against any and all Obligations owing to the Lender hereunder or under
any other Loan Document, now or hereafter existing, irrespective of whether or
not the Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
indebtedness.  The Lender agrees promptly
to notify the Borrower after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application.


 


9.10        Automatic
Debits.  With respect to any principal,
interest, fee, or any other cost or expense (including Attorney Costs) due and
payable to the Lender under the Loan Documents, the Borrower hereby irrevocably
authorizes the Lender to debit any deposit account of the 


 


51

















 


Borrower
with the Lender in an amount such that the aggregate amount debited from all
such deposit accounts does not exceed such principal, interest, fee or other
cost or expense.  If there are
insufficient funds in such deposit accounts to cover the amount then due, such
debits will be reversed (in whole or in part, in Lender’s sole discretion) and
such amount not debited shall be deemed to be unpaid.  No such debit under this Section shall
be deemed a set-off.


 


9.11        Interest
Rate Limitation.  Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If the Lender shall receive interest in an
amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrower.  In determining whether the
interest contracted for, charged, or received by the Lender exceeds the Maximum
Rate, the Lender may, to the extent permitted by applicable Law, (a) characterize
any payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.


 


9.12        Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


9.13        Integration.  This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter. 
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; provided that the inclusion of supplemental rights or remedies
in favor of the Lender 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.


 


9.14        Survival
of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Lender, regardless of any investigation made by the Lender or on its behalf
and notwithstanding that the Lender may have had notice or knowledge of any
Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Letter of Credit shall remain outstanding or any Loan
or any other Obligation hereunder shall remain unpaid or unsatisfied.


 


9.15        Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


52

















 


9.16        Governing
Law; Arbitration; Waiver of Jury Trial.  (a) This Agreement shall be governed by,
and construed in accordance with, the law of the State of California.


 


(b)       The
following provisions of this Section concern the resolution of any
controversies or claims between the parties, whether arising in contract, tort
or by statute, including controversies or claims that arise out of or relate
to: (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any other Loan Document (collectively a “Claim”)
and are a material inducement for the parties entering into this
Agreement.  For the purposes of this Section 9.16
only, the term “parties” shall include any parent corporation, Subsidiary or
other Affiliate of the Lender involved in the servicing, management or
administration of any obligation described or evidenced by this Agreement.


 


(c)       At the
request of any party to this Agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code)
(the “Act”).  The Act will apply
even though this Agreement provides that it is governed by the law of the State
of California.


 


(d)       Arbitration
proceedings will be determined in accordance with the Act, the applicable rules and
procedures for the arbitration of disputes of JAMS or any successor thereof (“JAMS”),
and the terms of this Section.  In the
event of any inconsistency, the terms of this Section shall control.


 


(e)       The
arbitration shall be administered by JAMS and conducted, unless otherwise
required by law, in any U.S. state where real or tangible personal property
collateral for the Obligations is located or if there is no such collateral, in
the State of California.  All Claims
shall be determined by one arbitrator; provided, however, that if
Claims exceed Five Million Dollars ($5,000,000), upon the request of any party,
the Claims shall be decided by three arbitrators.  All arbitration hearings shall commence
within ninety (90) days of the demand for arbitration and close within ninety (90)
days of commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing.  However, the arbitrator(s), upon a showing of
good cause, may extend the commencement of the hearing for up to an additional
sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award.  The
arbitration award may be submitted to any court having jurisdiction to be
confirmed and enforced.


 


(f)        The
arbitrator(s) will have the authority to decide whether any Claim is
barred by the statute of limitations and, if so, to dismiss the arbitration on
that basis. For purposes of the application of the statute of limitations, the
service on JAMS under applicable JAMS rules of a notice of Claim is the
equivalent of the filing of a lawsuit. 
Any dispute concerning this arbitration provision or whether a Claim is
arbitrable shall be determined by the arbitrator(s), except as provided in subsection (i).  The arbitrator(s) shall have the power
to award legal fees pursuant to the terms of this Agreement.


 


(g)       To the
extent any Claims are not arbitrated, to the extent permitted by law the Claims
shall be resolved in court by a judge without a jury, except any Claims which
are brought in California state court shall be determined by judicial reference
as described below.


 


53

















 


(h)       The
procedure described above will not apply if the Claim, at the time of the
proposed submission to arbitration, arises from or relates to an obligation to
the Lender secured by real property.  In
this case, all of the parties to the Agreement must consent to submission of
the Claim to arbitration.


 


(i)        Any
Claim which is not arbitrated and which is brought in California state court
will be resolved by a general reference to a referee (or a panel of referees)
as provided in California Code of Civil Procedure Section 638.  The referee (or presiding referee of the
panel) shall be a retired Judge or Justice. 
The referee (or panel of referees) shall be selected by mutual written agreement
of the parties.  If the parties do not
agree, the referee shall be selected by the Presiding Judge of the Court (or
his or her representative) as provided in California Code of Civil Procedure Section 638
and the following related sections.  The
referee shall determine all issues in accordance with existing California law
and the California rules of evidence and civil procedure. The referee
shall be empowered to enter equitable as well as legal relief, provide all
temporary or provisional remedies, enter equitable orders that will be binding
on the parties and rule on any motion which would be authorized in a
trial, including without limitation motions for summary judgment or summary
adjudication.  The award that results
from the decision of the referee(s) will be entered as a judgment in the
court that appointed the referee, in accordance with the provisions of
California Code of Civil Procedure Sections 644(a) and 645.  The parties reserve the right to seek
appellate review of any judgment or order, including but not limited to, orders
pertaining to class certification, to the same extent permitted in a court of
law.


 


(j)        This Section does
not limit the right of any party to:  (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate
judicial or non-judicial foreclosure against any real or personal property
collateral; (iii) exercise any judicial or power of sale rights, or (iv) act
in a court of law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.


 


(k)       The
filing of a court action is not intended to constitute a waiver of the right of
any party, including the suing party, thereafter to require submittal of the Claim
to arbitration or judicial reference.


 


(l)        Any
arbitration, judicial reference or trial by a judge of any Claim will take
place on an individual basis without resort to any form of class or
representative action (the “Class Action Waiver”).  Regardless of anything else in this Section,
the validity and effect of the Class Action Waiver may be determined only
by a court or referee and not by an arbitrator. 
The parties to this Agreement acknowledge that the Class Action
Waiver is material and essential to the arbitration of any disputes between the
parties and is nonseverable from the agreement to arbitrate Claims. If the Class Action
Waiver is limited, voided or found unenforceable, then the parties’ agreement
to arbitrate shall be null and void with respect to such proceeding, subject to
the right to appeal the limitation or invalidation of the Class Action
Waiver.  The Parties acknowledge and
agree that under no circumstances will a class action be arbitrated.


 


(m)      By
agreeing to binding arbitration or judicial reference, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury as permitted
by law in respect of any Claim. 
Furthermore, without intending in any way to limit the foregoing
provisions of this Section 9.16, to the extent any Claim is not
arbitrated or submitted to judicial reference, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury to the extent 


 


54

















 


permitted
by law in respect of such Claim.  This
waiver of jury trial shall remain in effect even if the Class Action
Waiver is limited, voided or found unenforceable.  WHETHER THE CLAIM IS
DECIDED BY ARBITRATION, BY JUDICIAL REFERENCE, OR BY TRIAL BY A JUDGE, THE
PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE
GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.


 


9.17        USA
Patriot Act Notice. 
The Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow the Lender to identify the Borrower in accordance with the Act.


 


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


 


9.19        Judgment
Currency.  If, for the
purposes of obtaining judgment in any court, it is necessary to convert a sum
due hereunder or any other Loan Document in one currency into another currency,
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Lender could purchase the first currency with such other
currency on the Business Day preceding that on which final judgment is
given.  The obligation of the Borrower in
respect of any such sum due from it to the Lender hereunder or under the other
Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance
with the applicable provisions of this Agreement (the “Agreement Currency”),
be discharged only to the extent that on the Business Day following receipt by
the Lender of any sum adjudged to be so due in the Judgment Currency, the
Lender may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency.  If
the amount of the Agreement Currency so purchased is less than the sum originally
due to the Lender from the Borrower in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Lender against such loss. 
If the amount of the Agreement Currency so purchased is greater than the
sum originally due to the Lender in such currency, the Lender agrees to return
the amount of any excess to the Borrower (or to any other Person who may be
entitled thereto under applicable law).


 


[Remainder of page intentionally
left blank; signature page follows]


 


55

















 


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


 


 


	
   

  	
  COPART, INC., as the Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WILLIS J. JOHNSON

  
	
   

  	
   

  
	
   

  	
  Name:   Willis J. Johnson

  
	
   

  	
   

  
	
   

  	
  Title:      Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as the
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RONALD J. DROBNY

  
	
   

  	
   

  
	
   

  	
  Name:   Ronald J. Drobny

  
	
   

  	
   

  
	
   

  	
  Title:     Senior Vice President

  



 


 


Signature Page to Credit
Agreement


 
















 


SCHEDULE 9.02


 


NOTICE
ADDRESSES AND ACCOUNT FOR PAYMENT


 


BORROWER:


 


COPART,
INC.

4665 Business Center Drive


Fairfield CA, 94534


 


	
  Attention:

  	
   

  	
  William E. Franklin

  
	
  Telephone:

  	
   

  	
  (707) 639-5123

  
	
  Telecopier:

  	
   

  	
  (707) 639-5090

  
	
  Email:

  	
   

  	
  will.franklin@copart.com

  
	
  Website:

  	
   

  	
  www.copart.com

  



 


U.S. Taxpayer Identification Number:  94-286-7490


 


 


LENDER:


 


 


For payments and requests for Credit Extensions:


 


BANK OF AMERICA, N.A.

Credit Services


Mailcode: CA4-702-02-25


2001 Clayton Road


Concord, CA 94520


	
  Attn:

  	
   

  	
  Kristine Kelleher

  
	
  Telephone:

  	
   

  	
  (925) 675-8373

  
	
  Facsimile:

  	
   

  	
  (888) 969-2414

  
	
  Email:

  	
   

  	
  kristine.l.kelleher@bankofamerica.com

  



 


Account No (for Dollars):


Bank of America NA


ABA 026009593


Ref: 
Copart, Inc.

Attn: Kristine Kelleher


 


1

















 


Account No. (for Sterling):


Bank of America London


Swift Address: BOFAGB22


Ref: 
Copart, Inc.


Attn: Grand Cayman Unit 1207


 


 


Payment
instructions for each other Alternative Currency (if any):  to be supplied upon approval of such
Alternative Currency


 


For notices (other than Requests for Credit
Extensions):


 


BANK OF AMERICA, N.A.

Bay Area Strategies-Commercial Banking

315 Montgomery Street, 13th Floor

San Francisco, CA 94104-1866


 


	
  Mail Code:

  	
   

  	
  CA5-704-13-11

  
	
  Attn:

  	
   

  	
  Ronald Drobny

  
	
  Telephone:

  	
   

  	
  (415) 953-9023

  
	
  Facsimile:

  	
   

  	
  (415) 622-1878

  
	
  Email:

  	
   

  	
  ronald.drobny@bankofamerica.com

  



 


For notices/communications with respect to Letters
of Credit:


 


BANK OF AMERICA, N.A.

Trade Operations

CA9-70507-05

1000 W. Temple St., Floor 7

Los Angeles, CA 90012-1514


 


	
  Attn:

  	
   

  	
  Sandra Leon

  
	
  Telephone:

  	
   

  	
  (213) 580-8369

  
	
  Facsimile:

  	
   

  	
  (213) 580-8440

  
	
  Email:

  	
   

  	
  Sandra.leon@bankofamerica.com

  



 


2

















 


EXHIBIT A


 


FORM OF
LOAN NOTICE


 


Date:
                              ,


 


To:          Bank
of America, N.A.


 


Ladies and Gentlemen:


 


Reference is made to that certain Credit Agreement,
dated as of March 6, 2008 (as amended, restated, extended, supplemented,
or otherwise modified in writing from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), between Copart, Inc.,
a California corporation (the “Borrower”), and Bank of America,
N.A.


 


The undersigned hereby requests (select one):


 


	
  o  A borrowing of a Loan

  	
  o  A conversion or continuation of a Loan

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  On
                                                          
  (a Business Day).

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  In the amount of
                                            .

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Comprised of 

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Type of Loan requested]

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  For a Eurocurrency Rate
  Loan: with an Interest Period of
                    
  months.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  In the following
  currency:
                                            .

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  COPART, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
										



 


A-1

















 


EXHIBIT B


 


FORM OF
NOTE


 


March 6, 2008


 


FOR VALUE RECEIVED, the undersigned (the “Borrower”)
hereby promises to pay to the order of BANK OF AMERICA, N.A. (the “Lender”),
on the Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of each Loan (as defined in such Credit Agreement) which is
due and payable by the Borrower to the Lender on the Maturity Date under that
certain Credit Agreement, dated as of March 6, 2008 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the “Agreement”;
the terms defined therein being used herein as therein defined), between the
Borrower and the Lender.


 


The Borrower promises to pay interest on the unpaid
principal amount of each Loan from the date of each such Loan until such
principal amount is paid in full, at such interest rates, and at such times as
are specified in the Agreement.  All
payments of principal and interest shall be made to the Lender in the currency
in which such Loan was denominated and in Same Day Funds to the Lender’s
account specified in the Agreement.  If
any amount is not paid in full when due hereunder, such unpaid amount shall
bear interest, to be paid upon demand, from the due date thereof until the date
of actual payment (and before as well as after judgment) computed at the per
annum rate set forth in the Agreement.


 


This Note is the Note referred to in the Agreement and
is entitled to the benefits thereof and is subject to optional prepayment in
whole or in part as provided therein. 
This Note is also entitled to the benefits of any Guaranty.  Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be, immediately
due and payable all as provided in the Agreement.  Loans made by the Lender shall be evidenced
by one or more loan accounts or records maintained by the Lender in the
ordinary course of business.  The Lender
may also attach schedules to this Note and endorse thereon the date, amount,
currency and maturity of the Loans and payments with respect thereto.


 


The Borrower, for itself, its successors and assigns,
hereby waives diligence, presentment, protest and demand and notice of protest,
demand, dishonor and non-payment of this Note.


 


THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.


 


	
   

  	
   

  	
   

  	
  COPART, INC.,
  as the Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							



 


B-1

















 


LOANS
AND PAYMENTS WITH RESPECT THERETO


 


	
  Date

  	
   

  	
  Type of 

  Loan Made

  	
   

  	
  Currency

  and

  Amount of

  Loan Made

  	
   

  	
  End of 

  Interest 

  Period

  	
   

  	
  Amount of

  Principal or

  Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-2

















 


EXHIBIT C


 


FORM OF
FINANCIAL STATEMENT CERTIFICATE


 


Reference is made to that certain Credit Agreement,
dated as of March 6, 2008 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), between Copart, Inc.,
a California corporation (the “Borrower”,) and Bank of America, N.A.
(the “Lender”).


 


The undersigned Responsible Officer hereby certifies
as of the date hereof that he/she is the
[                                      ]
of the Borrower, and that, as such, he is authorized to execute and deliver
this Certificate to the Lender on the behalf of the Borrower, and that:


 


[Use following paragraph for fiscal year-end financial statements]


 


Attached hereto as Schedule 1 are the year-end
audited consolidated financial statements required by Section 6.01(a) of
the Agreement for the fiscal year of the Borrower ended as of
[                            ],
together with the report and opinion of an independent certified public
accountant required by such section.


 


[Use following paragraph for fiscal quarter-end financial statements]


 


Attached hereto as Schedule 1 are the unaudited
consolidated financial statements required by Section 6.01(b) of
the Agreement for the fiscal quarter of the Borrower ended as of
[                            ].  Such financial statements fairly present in
all material respects the financial condition and results of operations of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.


 


IN WITNESS WHEREOF, the undersigned
has executed this Certificate as of
                    ,
        .


 


	
   

  	
   

  	
   

  	
  COPART, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							



 


C-1

















 


EXHIBIT D


 


FORM OF
COMPLIANCE CERTIFICATE


 


Financial Statement Date:
[                      ]


 


To:          Bank
of America, N.A.


 


Ladies and Gentlemen:


 


Reference is made to that certain Credit Agreement,
dated as of March 6, 2008 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), between Copart, Inc.,
a California corporation (the “Borrower”), and Bank of America, N.A.
(the “Lender”).


 


The undersigned Responsible Officer hereby certifies
as of the date hereof that he/she is the
                                                              
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Lender on the behalf of the Borrower, and that:


 


1.             The
undersigned has reviewed and is familiar with the terms of the Agreement and
has made, or has caused to be made under his/her supervision, a detailed review
of the transactions and condition (financial or otherwise) of the Borrower
during the accounting period covered by the financial statements delivered for
the period ended [                           ].


 


2.             A
review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Borrower performed and observed all its
obligations under the Loan Documents, and


 


[select one:]


 


[to the best knowledge of the undersigned during such
fiscal period, the Borrower performed and observed each covenant and condition
of the Loan Documents applicable to it.]


 


–or–


 


[the following covenants or conditions have not been
performed or observed and the following is a list of each such Default and its
nature and status:]


 


3.             The
financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this
Certificate.


 


D-1

















 


IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of                     ,
        .


 


	
   

  	
   

  	
   

  	
  COPART, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							



 


D-2
















 


For
the fiscal quarter and Test Period ended
                                   (“Statement Date”)


 


SCHEDULE 2

to the Compliance Certificate

($ in 000’s)


 


I.                                         Section 7.11(a) –
Consolidated Total Leverage Ratio.


 


	
  A.

  	
  Consolidated
  Funded Indebtedness at Statement Date:

  	
  $

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Consolidated
  EBITDA for the Test Period ending on the Statement Date (Line II.A.10 below):

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Consolidated
  Total Leverage Ratio for covenant compliance purposes (Line I.A ÷
  Line I.B):

  	
  : 1.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Maximum Permitted

  	
  2.00 : 1.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Compliance:

  	
  o
  Yes

  	
  o No

  	
   

  
					



 


II.                                     Section 7.11(b)
– Consolidated Interest Coverage Ratio.


 


	
  A.

  	
  Consolidated
  EBITDA for the Test Period ending on the Statement Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated
  Net Income for such Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Consolidated
  Interest Charges for such Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Income
  taxes for such Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Depreciation
  expenses for such Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Amortization
  expenses for such Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Non-recurring
  non-cash reductions of Consolidated Net Income for Subject Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Non-cash
  charges or expenses related to equity plans or stock option awards for such
  Test Period:

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Income
  tax credits for such Test Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Non-cash
  additions to Consolidated Net Income for such Test Period::

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Consolidated
  EBITDA for such Test Period (Lines II.A.1+2+3+4+5+6+7-8-9):

  	
  $

  



 


D-3

















 


	
  B.

  	
  Consolidated
  Interest Charges for the Test Period ending on the Statement Date:

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Consolidated
  Interest Coverage Ratio for covenant compliance purposes
  (Line II.A.10 ÷ Line II.B):

  	
  : 1.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Minimum Permitted:

  	
  2.00 : 1.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Compliance:

  	
  o
  Yes

  	
  o No

  	
   

  
					



 


III.                                 Consolidated
Net Leverage Ratio.


 


	
  A.

  	
  Consolidated
  Net Indebtedness at Statement Date:

  	
  $

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Consolidated
  EBITDA for the Test Period ending on the Statement Date (Line II.A.10 above):

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Consolidated
  Net Leverage Ratio for pricing purposes (Line I.A ÷ Line I.B):

  	
  : 1.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Pricing Level

  	
  [          ]

  



 


IV.                                7.12
Limit on Capital Expenditures (if applicable).


 


	
  A.

  	
  Aggregate
  amount of Capital Expenditures made by the Borrower and its Subsidiaries
  during the current Limitation Period:

  	
  $

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Available
  portion of the Annual Expenditure Limit with respect to the current
  Limitation Period (i.e., such Annual Expenditure Limit less the sum of
  the aggregate amount of consideration paid by the Borrower and its
  Subsidiaries in connection with Annual Restricted Payments, Permitted
  Acquisitions and Other Investments made, declared or paid during such
  Limitation Period):

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Excess
  (deficiency) for covenant compliance purposes:

  	
  $

  
	
   

  	
   

  	
   

  
	
   

  	
  Compliance:

  	
  o
  Yes

  	
  o No

  	
   

  
					



 


D-4

















 


EXHIBIT
E


 


FORM OF GUARANTY


 


 


[See attachment hereto]


 

















 


GUARANTY


 


THIS GUARANTY (this “Guaranty”), dated as of March 6,
2008, is made by each Guarantor named in the signature pages hereof (each
a “Guarantor” and, collectively, the “Guarantors”), in favor of
Bank of America, N.A. (the “Lender”).


 


Copart, Inc., a California corporation (the “Borrower”),
and the Lender are parties to a Credit Agreement dated as of March 6, 2008
(as amended, modified, renewed, supplemented, or extended from time to time,
the “Credit Agreement”).


 


It is a condition precedent to the borrowings and issuances
of Letters of Credit under the Credit Agreement that each Guarantor guarantees
the indebtedness and other obligations of the Borrower to the Lender as set
forth herein.  Each Guarantor, as a
Subsidiary of the Borrower, will derive substantial direct and indirect
benefits from the making of the Loans to, and issuances of Letters of Credit
for the account of, the Borrower pursuant to the Credit Agreement (which
benefits are hereby acknowledged by each Guarantor).


 


Accordingly, to induce the Lender to enter into the
Credit Agreement, and in consideration thereof, each Guarantor hereby agrees as
follows:


 


SECTION 1                                   Definitions;
Interpretation.


 


(a)                                  Terms
Defined in Credit Agreement.  All
capitalized terms used in this Guaranty (including in the recitals hereof) and
not otherwise defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement.


 


(b)                                 Certain
Defined Terms.  As used in this
Guaranty (including in the recitals hereof), the following terms shall have the
following meanings:


 


“Bankruptcy Code” means the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. §101, et seq.).


 


“Guaranteed Obligations” has the meaning set
forth in Section 2.


 


“Guarantor Documents” means this Guaranty and
all other certificates, documents, agreements and instruments delivered to the
Lender under or in connection with this Guaranty and the Loan Documents.


 


“Insolvency Proceeding” means, with respect to
any Person, (a) any case, action or proceeding with respect to such Person
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in either case undertaken under Debtor Relief Laws.


 


E-1

















 


“Solvent” means, as to any Person at any time,
that (a) the fair value of the property of such Person is greater than the
amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities
evaluated for purposes of §101(32) of the Bankruptcy Code and, in the
alternative, for purposes of the California Uniform Fraudulent Transfer Act; (b) the
present fair saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability
to pay as such debts and liabilities mature; and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person’s property would constitute unreasonably
small capital.


 


“Subordinated Debt” has the meaning set forth
in Section 7.


 


(c)                                  Interpretation.  The rules of interpretation set forth in
Sections 1.02 through 1.06 of the Credit Agreement shall be applicable to this
Guaranty and are incorporated herein by this reference.


 


SECTION 2                                   Guaranty.


 


(a)                                  Guaranty.  Each Guarantor hereby unconditionally and
irrevocably guarantees to the Lender and its successors, endorsees, transferees
and assigns, the full and prompt payment when due (whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise) and
performance of the indebtedness, liabilities and other obligations of the
Borrower to the Lender under or in connection with the Credit Agreement, the
Note and the other Loan Documents, including all unpaid principal of the Loans,
all amounts owing in respect of the L/C Obligations, all interest accrued
thereon, all fees due under the Credit Agreement and all other amounts payable
by the Borrower to the Lender thereunder or in connection therewith.  The terms “indebtedness,” “liabilities” and “obligations”
are used herein in their most comprehensive sense and include any and all
advances, debts, obligations and liabilities, now existing or hereafter
arising, whether voluntary or involuntary and whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, and
whether recovery upon such indebtedness, liabilities and obligations may be or
hereafter become unenforceable or shall be an allowed or disallowed claim under
any Debtor Relief Law, and including interest that accrues after the
commencement by or against any Loan Party or any Affiliate thereof of any
Insolvency Proceeding naming such Person as the debtor in such proceeding.  The foregoing indebtedness, liabilities and
other obligations of the Borrower, and all other indebtedness, liabilities and
obligations to be paid or performed by the Guarantors in connection with this
Guaranty (including any and all amounts due under Section 15),
shall hereinafter be collectively referred to as the “Guaranteed Obligations.”


 


(b)                                 Limitation
of Guaranty.  To the extent that any
court of competent jurisdiction shall impose by final judgment under applicable
law (including the California Uniform Fraudulent Transfer Act and §§544 and 548
of the Bankruptcy Code) any limitations on the amount of any Guarantor’s
liability with respect to the Guaranteed Obligations which the Lender can
enforce under this Guaranty, the Lender by its acceptance hereof accepts such
limitation on the amount of such Guarantor’s liability hereunder to the extent
needed to make this Guaranty and the Guarantor Documents fully enforceable and
nonavoidable.


 


E-2

















 


SECTION 3                                   Liability of
Guarantors.  The liability of the
Guarantors under this Guaranty shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
payment and performance in full of all Guaranteed Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:


 


(a)                                  such
Guarantor’s liability hereunder shall be the immediate, direct, and primary
obligation of such Guarantor and shall not be contingent upon the Lender’s
exercise or enforcement of any remedy it may have against the Borrower or any
other Person, or against any Collateral;


 


(b)                                 this
Guaranty is a guaranty of payment when due and not merely of collectibility;


 


(c)                                  the
Lender may enforce this Guaranty upon the occurrence and during the continuance
of an Event of Default notwithstanding the existence of any dispute between the
Lender and the Borrower with respect to the existence of such Event of Default;


 


(d)                                 such
Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations
shall in no way limit, affect, modify or abridge such Guarantor’s liability for
any portion of the Guaranteed Obligations remaining unsatisfied; and


 


(e)                                  such
Guarantor’s liability with respect to the Guaranteed Obligations shall remain
in full force and effect without regard to, and shall not be impaired or
affected by, nor shall such Guarantor be exonerated or discharged by, any of
the following events:


 


(i)                                        any
Insolvency Proceeding with respect to the Borrower, such Guarantor, any other
Loan Party or any other Person;


 


(ii)                                     any
limitation, discharge, or cessation of the liability of the Borrower, such
Guarantor, any other Loan Party or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of any of the Guaranteed
Obligations or the Loan Documents;


 


(iii)                                  any merger,
acquisition, consolidation or change in structure of the Borrower, such
Guarantor or any other Loan Party or Person, or any sale, lease, transfer or
other disposition of any or all of the assets or shares of the Borrower, such
Guarantor, any other Loan Party or other Person;


 


(iv)                                 any
assignment or other transfer, in whole or in part, of the Lender’s interests in
and rights under this Guaranty or the other Loan Documents, including the
Lender’s right to receive payment of the Guaranteed Obligations, or any
assignment or other transfer, in whole or in part, of the Lender’s interests in
and to any of the Collateral;


 


(v)                                    any
claim, defense, counterclaim or setoff, other than that of prior performance,
that the Borrower, such Guarantor, any other Loan Party or other Person may
have or assert, including any defense of incapacity or lack of corporate or
other authority to execute any of the Loan Documents;


 


E-3

















 


(vi)                                 the
Lender’s amendment, modification, renewal, extension, cancellation or surrender
of any Loan Document or any Guaranteed Obligations;


 


(vii)                              the Lender’s vote, claim,
distribution, election, acceptance, action or inaction in any Insolvency
Proceeding related to the Guaranteed Obligations;


 


(viii)                           any impairment or invalidity
of any collateral securing any of the Guaranteed Obligations or any failure to
perfect any of the Liens of the Lender thereon or therein; and


 


(ix)                                   any
other guaranty, whether by such Guarantor or any other Person, of all or any
part of the Guaranteed Obligations or any other indebtedness, obligations or
liabilities of the Borrower to the Lender.


 


SECTION 4                                   Consents of
Guarantors.  Each Guarantor hereby
unconditionally consents and agrees that, without notice to or further assent
from such Guarantor:


 


(a)                                  the
principal amount of the Guaranteed Obligations may be increased or decreased
and additional Obligations of the Loan Parties under the Loan Documents may be
incurred, by one or more amendments, modifications, renewals or extensions of
any Loan Document or otherwise;


 


(b)                                 the
time, manner, place or terms of any payment under any Loan Document may be
extended or changed, including by an increase or decrease in the interest rate
on any Guaranteed Obligation or any fee or other amount payable under such Loan
Document, by an amendment, modification or renewal of any Loan Document or
otherwise;


 


(c)                                  the
time for the Borrower’s (or any other Person’s) performance of or compliance
with any term, covenant or agreement on its part to be performed or observed
under any Loan Document may be extended, or such performance or compliance
waived, or failure in or departure from such performance or compliance
consented to, all in such manner and upon such terms as the Lender may deem
proper;


 


(d)                                 the
Lender may discharge or release, in whole or in part, any other Loan Party or
any other Person liable for the payment and performance of all or any part of
the Guaranteed Obligations, and may permit or consent to any such action or any
result of such action, and shall not be obligated to demand or enforce payment
upon any of the Collateral or any other collateral, nor shall the Lender be
liable to the Guarantors for any failure to collect or enforce payment or
performance of the Guaranteed Obligations from any Person or to realize on the
Collateral or other collateral therefor;


 


(e)                                  in
addition to the Collateral, the Lender may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale
thereof;


 


E-4

















 


(f)                                    the
Lender may request and accept other guaranties of the Guaranteed Obligations
and any other indebtedness, obligations or liabilities of the Borrower to the
Lender and may, from time to time, in whole or in part, surrender, release,
subordinate, modify, waive, rescind, compromise or extend any such guaranty and
may permit or consent to any such action or the result of any such action; and


 


(g)                                 the
Lender may exercise, or waive or otherwise refrain from exercising, any other
right, remedy, power or privilege (including the right to accelerate the
maturity of any Loan and any power of sale) granted by any Loan Document or
other security document or agreement, or otherwise available to the Lender,
with respect to the Guaranteed Obligations, even if the exercise of such right,
remedy, power or privilege affects or eliminates any right of subrogation or
any other right of the Guarantors against the Borrower;


 


all as the Lender may
deem advisable, and all without impairing, abridging, releasing or affecting
this Guaranty.


 


SECTION 5                                   Guarantor Waivers.


 


(a)                                  Certain
Waivers.  Each Guarantor waives and
agrees not to assert:


 


(i)                                      any
right to require the Lender to marshal assets in favor of the Borrower, such
Guarantor, any other Loan Party or any other Person, to proceed against the
Borrower, any other Loan Party or any other Person, or to pursue any other
right, remedy, power or privilege of the Lender whatsoever;


 


(ii)                                   the
defense of the statute of limitations in any action hereunder or for the
collection or performance of the Guaranteed Obligations;


 


(iii)                                any
defense arising by reason of any lack of corporate or other authority or any
other defense of the Borrower, such Guarantor or any other Person;


 


(iv)                               any
defense based upon the Lender’s errors or omissions in the administration of
the Guaranteed Obligations;


 


(v)                                  any
rights to set-offs and counterclaims;


 


(vi)                               any
defense based upon an election of remedies which destroys or impairs the
subrogation rights of such Guarantor or the right of such Guarantor to proceed
against the Borrower or any other obligor of the Guaranteed Obligations for
reimbursement; and


 


(vii)                            without
limiting the generality of the foregoing, to the fullest extent permitted by
law, any defenses or benefits that may be derived from or afforded by
applicable law limiting the liability of or exonerating guarantors or sureties,
or which may conflict with the terms of this Guaranty, including any rights and
defenses which are or may become available to each Guarantor by reason of
California Civil Code §§2787 through 2855, 2899 and 3433; provided that
this Section 5(a) shall not limit subrogation rights in a
manner that is broader than the limitations set forth in Section 6
hereof.


 


(b)                                 Additional
Waivers.  Each Guarantor waives any
and all notice of the acceptance of this Guaranty, and any and all notice of
the creation, renewal, modification, extension or accrual of the Guaranteed
Obligations, or the reliance by the Lender upon this Guaranty, or the exercise
of any right, power or privilege hereunder. 
The Guaranteed Obligations shall 


 


E-5

















 


conclusively be deemed to
have been created, contracted, incurred and permitted to exist in reliance upon
this Guaranty.  Each Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Borrower,
such Guarantor or any other Person with respect to the Guaranteed Obligations.


 


(c)                                  Independent
Obligations.  The obligations of each
Guarantor hereunder are independent of and separate from the obligations of the
Borrower and any other Loan Party and upon the occurrence and during the
continuance of any Event of Default, a separate action or actions may be
brought against such Guarantor, whether or not the Borrower or any such other
Loan Party is joined therein or a separate action or actions are brought
against the Borrower or any such other Loan Party.


 


(d)                                 Financial
Condition of Borrower.  No Guarantor
shall have any right to require the Lender to obtain or disclose any information
with respect to:  (i) the financial
condition or character of any Loan Party or the ability of any Loan Party to
pay and perform the Guaranteed Obligations; (ii) the Guaranteed
Obligations; (iii) any collateral at any time securing the Guaranteed
Obligations; (iv) the existence or nonexistence of any other guarantees of
all or any part of the Guaranteed Obligations; (v) any action or inaction
on the part of the Lender or any other Person; or (vi) any other matter,
fact or occurrence whatsoever.


 


SECTION 6                                   Subrogation.  Until the Guaranteed Obligations shall be
satisfied in full and the Commitment shall be terminated, no Guarantor shall
have, and no Guarantor shall directly or indirectly exercise, (a) any
rights that it may acquire by way of subrogation under this Guaranty, by any
payment hereunder or otherwise, (b) any rights of contribution,
indemnification, reimbursement or similar suretyship claims arising out of this
Guaranty or (c) any other right which it might otherwise have or acquire
(in any way whatsoever) which could entitle it at any time to share or
participate in any right, remedy or security of the Lender as against the
Borrower or other Loan Parties, whether in connection with this Guaranty, any
of the other Loan Documents or otherwise. 
If any amount shall be paid to any Guarantor on account of the foregoing
rights at any time when all the Guaranteed Obligations shall not have been paid
in full, such amount shall be held in trust for the benefit of the Lender and
shall forthwith be paid to the Lender to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Loan Documents.


 


SECTION 7                                   Subordination.


 


(a)                                  Subordination
to Payment of Guaranteed Obligations. 
All payments on account of all indebtedness, liabilities and other
obligations of the Borrower to each Guarantor, whether created under, arising
out of or in connection with any documents or instruments evidencing any credit
extensions to Borrower or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts
payable by the Borrower to such Guarantor in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (the “Subordinated
Debt”) shall be subject, subordinate and junior in right of payment and
exercise of remedies, to the extent and in the manner set forth herein, to the
prior payment in full in cash or cash equivalents of the Guaranteed
Obligations.


 


E-6

















 


(b)                                 No
Payments.  As long as any of the
Guaranteed Obligations shall remain outstanding and unpaid, no Guarantor shall
accept or receive any payment or distribution by or on behalf of the Borrower,
directly or indirectly, of assets of the Borrower of any kind or character,
whether in cash, property or securities, including on account of the purchase,
redemption or other acquisition of Subordinated Debt, as a result of any
collection, sale or other disposition of collateral, or by setoff, exchange or
in any other manner, for or on account of the Subordinated Debt (“Subordinated
Debt Payments”), except that if no Event of Default exists, a Guarantor
shall be entitled to accept and receive payments in the ordinary course on the
Subordinated Debt, in accordance with the terms of any documents and
instruments governing the Subordinated Debt and may receive other Subordinated
Debt Payments in respect of Subordinated Debt not evidenced by documents or
instruments, in each case to the extent not prohibited under Article VII
of the Credit Agreement.  During the
existence of an Event of Default (or if any Event of Default would exist
immediately after the making of a Subordinated Debt Payment), and until such
Event of Default is cured or waived, such Guarantor shall not make, accept or
receive any Subordinated Debt Payment. In the event that, notwithstanding the
provisions of this Section 7, any Subordinated Debt Payments shall
be received in contravention of this Section 7 by any Guarantor
before all Guaranteed Obligations are paid in full in cash or cash equivalents,
such Subordinated Debt Payments shall be held in trust for the benefit of the
Lender and shall be paid over or delivered to the Lender for application to the
payment in full in cash or cash equivalents of all Guaranteed Obligations
remaining unpaid to the extent necessary to give effect to this Section 7,
after giving effect to any concurrent payments or distributions to the Lender
in respect of the Guaranteed Obligations.


 


(c)                                  Subordination
of Remedies.  As long as any
Guaranteed Obligations shall remain outstanding and unpaid, no Guarantor shall,
without the prior written consent of the Lender:


 


(i)                                     accelerate,
make demand or otherwise make due and payable prior to the original stated
maturity thereof any Subordinated Debt or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect of
the Subordinated Debt;


 


(ii)                                  exercise
any rights under or with respect to (A) any guaranties of the Subordinated
Debt, or (B) any collateral held by it, including causing or compelling
the pledge or delivery of any collateral, any attachment of, levy upon,
execution against, foreclosure upon or the taking of other action against or
institution of other proceedings with respect to any collateral held by it,
notifying any account debtors of the Borrower or asserting any claim or
interest in any insurance with respect to any collateral, or attempt to do any
of the foregoing;


 


(iii)                               exercise
any rights to set-offs and counterclaims in respect of any indebtedness,
liabilities or obligations of such Guarantor to the Borrower against any of the
Subordinated Debt; or


 


(iv)                              commence,
or cause to be commenced, or join with any creditor other than the Lender in
commencing, any Insolvency Proceeding.


 


(d)                                 Subordination
Upon Any Distribution of Assets of the Borrower.  In the event of any payment or distribution
of assets of the Borrower of any kind or character, whether in cash, property
or securities, upon any Insolvency Proceeding with respect to or involving the 


 


E-7

















 


Borrower, (i) all
amounts owing on account of the Guaranteed Obligations, including all interest
accrued thereon at the contract rate both before and after the initiation of
any such proceeding, whether or not an allowed claim in any such proceeding,
shall first be paid in full in cash, or payment provided for in cash or in cash
equivalents, before any Subordinated Debt Payment is made; and (ii) to the
extent permitted by applicable law, any Subordinated Debt Payment to which such
Guarantor would be entitled except for the provisions hereof, shall be paid or
delivered by the trustee in bankruptcy, receiver, assignee for the benefit of
creditors or other liquidating agent making such payment or distribution
directly to the Lender for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any
concurrent payment or distribution or provision therefor to the Lender in
respect of such Guaranteed Obligations.


 


(e)                                  Authorization
to Lender.  If, while any
Subordinated Debt is outstanding, any Insolvency Proceeding is commenced by or
against the Borrower or its property:


 


(i)                                     the
Lender is hereby irrevocably authorized and empowered (in its name or in the
name of any Guarantor or otherwise), but shall have no obligation, to demand,
sue for, collect and receive every payment or distribution in respect of the
Subordinated Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Debt) as
it may deem necessary or advisable for the exercise or enforcement of any of
the rights or interests of the Lender; and


 


(ii)                                  each
Guarantor shall promptly take such action as the Lender may reasonably request (A) to
collect the Subordinated Debt for the account of the Lender and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B) to
execute and deliver to the Lender, such powers of attorney, assignments and
other instruments as it may request to enable it to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any
and all Subordinated Debt Payments.


 


SECTION 8                                   Continuing
Guaranty; Reinstatement.  This
Guaranty is a continuing guaranty and agreement of subordination relating to
any Guaranteed Obligations, including Guaranteed Obligations which may exist
continuously or which may arise from time to time under successive
transactions, and the Guarantors expressly acknowledge that this Guaranty shall
remain in full force and effect notwithstanding that there may be periods
during which no Guaranteed Obligations exist. 
This Guaranty shall continue in effect and be binding upon the
Guarantors until termination of the Commitment and payment and performance in
full of the Guaranteed Obligations.  This
Guaranty shall continue to be effective or shall be reinstated and revived, as
the case may be, if, for any reason, any payment of the Guaranteed Obligations
by or on behalf of any Loan Party (or receipt of any proceeds of Collateral)
shall be rescinded, invalidated, declared to be fraudulent or preferential, set
aside, voided or otherwise required to be repaid to any Loan Party, its estate,
trustee, receiver or any other Person (including under the Bankruptcy Code or
other state or federal law), or must otherwise be restored by the Lender, whether
as a result of Insolvency Proceedings or otherwise.  To the extent any payment is so rescinded,
set aside, voided or otherwise repaid or restored, the Guaranteed Obligations
shall be revived in full force and effect without reduction or discharge for such
payment.


 


E-8
















 


SECTION 9            Payments


 


(a)           Each Guarantor hereby agrees, in
furtherance of the foregoing provisions of this Guaranty and not in limitation
of any other right which the Lender or any other Person may have against such
Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under §362(a) of the Bankruptcy Code), such Guarantor shall
forthwith pay, or cause to be paid, in cash, to the Lender an amount equal to
the amount of the Guaranteed Obligations then due as aforesaid (including
interest which, but for the filing of a petition in any Insolvency Proceeding
with respect to the Borrower, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Borrower for such
interest in any such Insolvency Proceeding). 
Each Guarantor shall make each payment hereunder, unconditionally in
full without set-off, counterclaim or other defense, on the day when due in
Dollars, in immediately available funds, to the Lender at such office of the
Lender and to such account as are specified in the Credit Agreement.


 


(b)           Each Guarantor agrees that the provisions
of Section 3.01 of the Credit Agreement are hereby incorporated herein by
reference with respect to payment of any amounts by the Guarantor hereunder and
agrees to be bound thereunder as though it were the Borrower, mutatis mutandis, and by its acceptance hereof, the Lender
also agrees thereto.


 


(c)           Any payments by any Guarantor hereunder
the application of which is not otherwise provided for herein, shall be applied
in the order specified in Section 8.03 of the Credit Agreement.


 


(d)           To the extent that any payment by or on
behalf of any Loan Party is made to the Lender, or the Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such setoff had not
occurred.


 


(e)           Notwithstanding anything to the contrary
contained herein or in any Guarantor Document, the interest paid or agreed to
be paid hereunder and under the other Guarantor Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”).  If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Guaranteed Obligations or, if it exceeds
such unpaid principal, refunded to such Guarantor.  In determining whether the interest
contracted for, charged, or received by the Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (i) characterize
any payment that is not principal as an expense, fee, or premium rather than
interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.


 


(f)            The agreements in this Section 9
shall survive the payment of all Guaranteed Obligations.


 


E-9

















 


SECTION 10          Representations
and Warranties.  Each Guarantor represents and warrants to the
Lender that:


 


(a)           Organization and Powers. 
Each Guarantor is (i) duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (ii) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (A) own
its assets and carry on its business and (B) to execute, deliver, and
perform its obligations under this Guaranty and the other Guarantor Documents
to which it is a party, (iii) duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (iv) is in compliance with all Laws, except
in each case referred to in clause (ii)(A), clause (iii) or clause (iv),
to the extent that failure to do so individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.


 


(b)           Authorization; No Conflict. 
The execution, delivery and performance by each Guarantor of this
Guaranty and any other Guarantor Documents have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (i) contravene
the terms of any of such Guarantor’s Organization Documents; (ii) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, or require any payment to be made under (A) any Contractual
Obligation to which such Guarantor is a party or affecting such Guarantor or
the properties of such Guarantor or any of its Subsidiaries or (B) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Guarantor or its property is subject; or (iii) violate
any Law.  Each Guarantor is in compliance
with all Contractual Obligations referred to in clause (ii)(A), except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.


 


(c)           Binding Obligation. 
This Guaranty has been, and the other Guarantor Documents, when executed
and delivered by each Guarantor that is party thereto, will have been, duly
executed and delivered by each such Guarantor that is party thereto.  This Guaranty constitutes, and each other Guarantor
Document when so executed and delivered will constitute, a legal, valid and
binding obligation of such Guarantor, enforceable against each Guarantor that
is party thereto in accordance with its terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting creditors’ rights generally and by
equitable principals (regardless of whether enforcement is sought in equity or
at law).


 


(d)           Governmental Consents. 
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person  is necessary or required in connection with
the execution, delivery or performance by, any Guarantor of this Guaranty or any
other Guarantor Documents.


 


(e)           No Prior Assignment. 
No Guarantor has previously assigned any interest in the Subordinated
Debt or any collateral relating thereto, no Person other than a Guarantor owns
an interest in any of the Subordinated Debt or any such collateral (whether as
joint holders of the Subordinated Debt, participants or otherwise), and the
entire Subordinated Debt is owing only to the Guarantors.


 


E-10

















 


(f)            Solvency.  Immediately
prior to and after and giving effect to the incurrence of each Guarantor’s
obligations under this Guaranty, such Guarantor is and will be Solvent.


 


(g)           Consideration. 
Each Guarantor has received at least “reasonably equivalent value” (as
such phrase is used in §548 of the Bankruptcy Code, in §3439.04 of the
California Uniform Fraudulent Transfer Act and in comparable provisions of
other applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations.


 


(h)           Independent Investigation. 
Each Guarantor hereby acknowledges that it has undertaken its own
independent investigation of the financial condition of the Borrower and all
other matters pertaining to this Guaranty and further acknowledges that it is
not relying in any manner upon any representation or statement of the Lender
with respect thereto.  Each Guarantor
represents and warrants that it has received and reviewed copies of the Loan
Documents and that it is in a position to obtain, and it hereby assumes full
responsibility for obtaining, any additional information concerning the
financial condition of the Borrower and any other matters pertinent hereto that
any Guarantor may desire.  No Guarantor
is relying upon or expecting the Lender to furnish to such Guarantor any
information now or hereafter in the Lender’s possession concerning the
financial condition of the Borrower or any other matter.


 


SECTION 11          Reporting
Covenant.  So long as any Guaranteed Obligations shall
remain unpaid or unsatisfied, any Letter of Credit shall remain outstanding or
the Lender shall have any Commitment, each Guarantor agrees that it shall
furnish to the Lender:  (a) prompt
written notice of any condition or event which has resulted, or that could
reasonably be expected to result, in a Material Adverse Effect; and (b) such
other information respecting the operations, properties, business or condition
(financial or otherwise) of such Guarantor or its Subsidiaries as the Lender
may from time to time reasonably request.


 


SECTION 12          Additional
Affirmative Covenants.  So long as any Guaranteed
Obligations shall remain unpaid or unsatisfied, any Letter of Credit shall
remain outstanding or the Lender shall have any Commitment, each Guarantor
agrees that:


 


(a)           Preservation of Existence, Etc. 
Each Guarantor shall (i) preserve, renew and maintain in full force
and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization, except in a transaction permitted by Section 7.04
or 7.05 of the Credit Agreement; and (ii) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that
failure to do so individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.


 


(b)           Further Assurances and Additional Acts. 
Each Guarantor shall execute, acknowledge, deliver, file, notarize and
register at its own expense all such further agreements, instruments,
certificates, documents and assurances and perform such acts as the Lender
shall deem necessary or appropriate to effectuate the purposes of this Guaranty
and the other Guarantor Documents, and promptly provide the Lender with
evidence of the foregoing satisfactory in form and substance to the Lender.


 


(c)           Credit Agreement Covenants. 
Each Guarantor shall observe, perform and comply with all covenants
applicable to such Guarantor set forth in Articles VI and VII of the Credit
Agreement, which by their terms the Borrower is required to cause such
Guarantor to observe, perform and comply with, as if such covenants were set
forth in full herein.


 


E-11

















 


(d)           Governmental Consents. 
Each Guarantor shall maintain all authorizations, consents, approvals,
licenses, exemptions of, or filings or registrations with, any Governmental
Authority, or approvals or consents of any other Person, required in connection
with this Guaranty or any other Guarantor Documents.


 


SECTION 13          Notices.


 


Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed, emailed (subject to
the provisions of the final sentence of this Section 13) or
delivered, in the case of any Guarantor, to the address or facsimile number or
email address specified on the signature page hereof, and in the case of
the Lender, to the address or facsimile number or email address specified in
Schedule 9.02 of the Credit Agreement, or to such other address, facsimile
number or email address as shall be designated by such party in a notice to the
other parties.  All such notices and
other communications shall be deemed to be given or made upon the earlier to
occur of (a) actual receipt by the intended recipient and (b) (i) if
delivered by hand or by courier, when signed for by the intended recipient; (ii) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (iii) if delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (iv) if delivered by electronic mail (which
form of delivery is subject to the provisions of the final sentence of this Section 13),
when delivered. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, and to
distribute documents for execution by the parties thereto, and may not be used
for any other purpose.


 


SECTION 14          No
Waiver; Cumulative Remedies.  No failure by
the Lender to exercise, and no delay by the Lender in exercising, any right,
remedy, power, or privilege hereunder or under any other Guarantor Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers,
and privileges herein or therein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.


 


SECTION 15          Costs
and Expenses; Indemnification.


 


(a)           Costs and Expenses. 
Each Guarantor shall: (i) pay or reimburse the Lender for all
reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Guaranty and the other Guarantor
Documents and any amendment, waiver, consent or other modification of the provisions
hereof and thereof (whether or not the transactions contemplated hereby or
thereby are consummated), and the consummation and administration of the
transactions contemplated hereby and thereby, including all Attorney Costs; and
(ii) pay or reimburse the Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Guaranty or the other Guarantor Documents
(including all such costs and expenses incurred in any arbitration proceeding
and during any “workout” or restructuring in respect of the Guaranteed
Obligations and during any legal proceeding, and including any proceeding under
any Debtor Relief Law), including all Attorney Costs.


 


E-12

















 


(b)           Indemnification. 
Each Guarantor shall indemnify the Lender and its directors, officers,
employees, counsel, agents and attorneys-in-fact (each such Person being called
an “Indemnitee”) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any third
party or by any Guarantor or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this Guaranty or
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the
Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any liability under any Environmental
Laws related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrower or any other Loan Party,
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such other Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction.


 


(c)           Waiver of Consequential Damages, Etc. 
To the fullest extent permitted by applicable law, no Guarantor shall
assert, and each Guarantor hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Guaranty, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof.  No Indemnitee referred to in
subsection (b) shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission
systems in connection with this Guaranty or the other Loan Documents or the
transactions contemplated hereby or thereby.


 


(d)           Interest.  Any amounts
payable by any Guarantor under this Section 15 or otherwise under
this Guaranty if not paid upon demand shall bear interest from the date of such
demand until paid in full, at a fluctuating interest rate per annum at all times
equal to the Default Rate applicable to Prime Rate Loans to the fullest extent
permitted by applicable Law.  Any such
interest shall be due and payable upon demand and shall be calculated on the
basis of a year of 365 or 366 days, as the case may be, and the actual number
of days elapsed.


 


E-13

















 


(e)           Payment.  All amounts
due under this Section 15 shall be payable within ten Business Days
after demand therefor.


 


(f)            Survival.  The
agreements in this Section 15 shall survive the termination of the
Commitment and the repayment, satisfaction or discharge of all the other
Guaranteed Obligations.


 


SECTION 16          Right
of Set-Off.  If an Event of Default shall have occurred
and be continuing, the Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by the Lender to or for the credit or the account
of any Guarantor against any and all of the obligations of such Guarantor now
or hereafter existing under this Guaranty or any other Guarantor Document to
the Lender, irrespective of whether or not the Lender shall have made any
demand under this Guaranty or any other Loan Document and although such
obligations of such Guarantor may be contingent or unmatured or are owed to a
branch or office of the Lender different from the branch or office holding such
deposit or obligated on such indebtedness. 
The rights of the Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) that the Lender
may have.  The Lender (by its acceptance
hereof) agrees to notify the affected Guarantor promptly after any such setoff
and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.


 


SECTION 17          Benefits
of Guaranty.  This Guaranty is entered into for the sole
protection and benefit of the Lender and its successors and assigns, and no
other Person (other than any Participant or Indemnitee specified herein) shall
be a direct or indirect beneficiary of, or shall have any direct or indirect
cause of action or claim in connection with, this Guaranty.  The Lender, by its acceptance of this
Guaranty, shall not have any obligations under this Guaranty to any Person
other than (a) the Guarantors, and (b) the Lender or any Indemnitee,
and such obligations shall be limited to those expressly stated herein.


 


SECTION 18          Binding
Effect; Assignment.


 


(a)           Binding Effect. 
This Guaranty shall be binding upon each Guarantor and their respective
permitted successors and assigns, and shall inure to the benefit of and be
enforceable by the Lender and its permitted successors, endorsees, transferees
and assigns.


 


(b)           Assignment.  Except to the
extent otherwise provided in the Credit Agreement, no Guarantor shall have the
right to assign or transfer its rights and obligations hereunder or under any
other Guarantor Documents without the prior written consent of the Lender.  The Lender may, without notice to or consent
by any Guarantor, sell, assign, transfer or grant participations in all or any
portion of the Lender’s rights and obligations hereunder and under the other
Guarantor Documents in connection with any sale, assignment, transfer or grant
of a participation by the Lender in accordance with Section 9.07 of the
Credit Agreement in its rights and obligations thereunder and under the other
Loan Documents.  In the event of any
grant of such a participation, the Participant shall be deemed to have a right
of setoff under Section 16 in respect of its participation to the same
extent as if it were the “Lender”.


 


E-14

















 


SECTION 19          Governing Law and Jurisdiction.


 


(a)           This Guaranty shall be governed by, and
construed in accordance with, the law of the State of California.


 


(b)           This Section 19 concerns the
resolution of any controversies or claims between the parties, whether arising
in contract, tort or by statute, including controversies or claims that arise
out of or relate to: (i) this Guaranty (including any renewals, extensions
or modifications); or (ii) any other Loan Document (collectively a “Claim”).  For the purposes of this arbitration
provision only, the term “parties” shall include any parent corporation,
Subsidiary or other Affiliate of the Lender involved in the servicing,
management or administration of any obligation described or evidenced by this
Guaranty.


 


(c)           At the request of any party, any Claim
shall be resolved by binding arbitration in accordance with the Federal
Arbitration Act (Title 9, U.S. Code) (the “Act”).  The Act will apply even though this Guaranty
provides that it is governed by the law of the State of California.


 


(d)           Arbitration proceedings will be
determined in accordance with the Act, the applicable rules and procedures
for the arbitration of disputes of JAMS or any successor thereof (“JAMS”),
and the terms of this paragraph.  In the
event of any inconsistency, the terms of this Section 19 shall
control.


 


(e)           The arbitration shall be administered by
JAMS and conducted, unless otherwise required by law, in any U.S. state where
real or tangible personal property collateral for the Guaranteed Obligations is
located or if there is no such collateral, in the State of California.  All Claims shall be determined by one
arbitrator; provided, however, that if Claims exceed Five Million
Dollars ($5,000,000), upon the request of any party, the Claims shall be
decided by three arbitrators.  All
arbitration hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and the award of
the arbitrator(s) shall be issued within thirty (30) days of the close of
the hearing.  However, the arbitrator(s),
upon a showing of good cause, may extend the commencement of the hearing for up
to an additional sixty (60) days. The arbitrator(s) shall provide a
concise written statement of reasons for the award.  The arbitration award may be submitted to any
court having jurisdiction to be confirmed and enforced.


 


(f)            The arbitrator(s) will have the
authority to decide whether any Claim is barred by the statute of limitations
and, if so, to dismiss the arbitration on that basis. For purposes of the
application of the statute of limitations, the service on JAMS under applicable
JAMS rules of a notice of Claim is the equivalent of the filing of a
lawsuit.  Any dispute concerning this
arbitration provision or whether a Claim is arbitrable shall be determined by
the arbitrator(s).  The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this Guaranty.


 


(g)           To the extent any Claims are not
arbitrated, to the extent permitted by law the Claims shall be resolved in
court by a judge without a jury, except any Claims which are brought in
California state court shall be determined by judicial reference as described
below.


 


E-15

















 


(h)           The procedure described above will not
apply if the Claim, at the time of the proposed submission to arbitration,
arises from or relates to an obligation to the Lender secured by real
property.  In this case, all of the
parties to this Guaranty must consent to submission of the Claim to
arbitration.


 


(i)            Any Claim which is not arbitrated and
which is brought in California state court will be resolved by a general
reference to a referee (or a panel of referees) as provided in California Code
of Civil Procedure Section 638.  The
referee (or presiding referee of the panel) shall be a retired Judge or
Justice.  The referee (or panel of
referees) shall be selected by mutual written agreement of the parties.  If the parties do not agree, the referee
shall be selected by the Presiding Judge of the Court (or his or her
representative) as provided in California Code of Civil Procedure Section 638
and the following related sections.  The
referee shall determine all issues in accordance with existing California law
and the California rules of evidence and civil procedure. The referee
shall be empowered to enter equitable as well as legal relief, provide all
temporary or provisional remedies, enter equitable orders that will be binding
on the parties and rule on any motion which would be authorized in a
trial, including without limitation motions for summary judgment or summary
adjudication.  The award that results
from the decision of the referee(s) will be entered as a judgment in the
court that appointed the referee, in accordance with the provisions of
California Code of Civil Procedure Sections 644(a) and 645.  The parties reserve the right to seek
appellate review of any judgment or order, including but not limited to, orders
pertaining to class certification, to the same extent permitted in a court of
law.


 


(j)            This Section does not limit the
right of any party to: (i) exercise self-help remedies, such as but not
limited to, setoff; (ii) initiate judicial or non-judicial foreclosure
against any real or personal property collateral; (iii) exercise any
judicial or power of sale rights, or (iv) act in a court of law to obtain
an interim remedy, such as but not limited to, injunctive relief, writ of
possession or appointment of a receiver, or additional or supplementary
remedies.


 


(k)           The filing of a court action is not
intended to constitute a waiver of the right of any party, including the suing
party, thereafter to require submittal of the Claim to arbitration.


 


(l)            By agreeing to binding arbitration, the
parties irrevocably and voluntarily waive any right they may have to a trial by
jury in respect of any Claim. 
Furthermore, without intending in any way to limit this Guaranty to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim.  This provision is a material
inducement for the parties entering into or accepting this Guaranty.


 


SECTION 20          No
Advisory or Fiduciary Responsibility.  In connection
with all aspects of each transaction contemplated by the Loan Documents, each
Guarantor acknowledges and agrees that: (a) the credit facilities provided
for under the Credit Agreement and any related arranging or other services in
connection therewith (including in connection with any amendment, waiver or
other modification of any Loan Document) are an arm’s-length commercial
transaction between the Borrower, the Guarantors and their respective
Affiliates, on the one hand, and the Lender, on the other hand, and each
Guarantor is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by the
Loan Documents (including any amendment, waiver or other modification thereof);
(b) in connection with the process leading to such transaction, the Lender
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary, for the 


 


E-16

















 


Borrower, the Guarantors
or any of the respective Affiliates, stockholders, creditors or employees or
any other Person; (c) the Lender has not assumed and will not assume an
advisory, agency or fiduciary responsibility in favor of the Borrower or the
Guarantors with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification of any Loan Document (irrespective of whether the Lender has
advised or is currently advising the Borrower, the Guarantors or any of their
respective Affiliates on other matters) and the Lender has no obligation to the
Borrower, the Guarantors or any of their respective Affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth in the Loan Documents; (d) the Lender and its Affiliates may be
engaged in a broad range of transactions that involve interests that differ
from those of the Borrower, the Guarantors and their respective Affiliates, and
the Lender has no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (e) the Lender has not
provided and will not provide any legal, accounting, regulatory or tax advice
with respect to any of the transactions contemplated hereby (including any
amendment, waiver or other modification of any Loan Document) and each
Guarantor has consulted its own legal, accounting, regulatory and tax advisors
to the extent it has deemed appropriate. 
Each Guarantor hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against the Lender with respect
to any breach or alleged breach of agency or fiduciary duty.


 


SECTION 21          Amendments
and Waivers.  This Guaranty shall not be amended except by
written agreement of the Guarantors and the Lender.  No waiver of any rights of the Lender under
any provision of this Guaranty or consent to any departure by any Guarantor
therefrom shall be effective unless in writing and signed by the Lender.  Any such amendment, waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.


 


SECTION 22          Severability. 
If any provision of this Guaranty or the other Guarantor Documents is
held to be illegal, invalid or unenforceable, (a) the legality, validity
and enforceability of the remaining provisions of this Guaranty and the other
Guarantor Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity
of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


SECTION 23          Future
Guarantors.  At such time following the date hereof as any
Subsidiary of the Borrower (an “Acceding Subsidiary”) is required to
accede hereto pursuant to the terms of Section 6.12 of the Credit
Agreement, such Acceding Subsidiary shall execute and deliver to the Lender an
accession agreement substantially in the form of Annex 1 (the “Accession
Agreement”), signifying its agreement to be bound by the provisions of this
Guaranty as a Guarantor to the same extent as if such Acceding Subsidiary had
originally executed this Guaranty as of the date hereof.


 


SECTION 24          Counterparts;
Integration; Effectiveness.  This Guaranty
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Guaranty and the other Guarantor Documents
constitute the entire contract among the 


 


E-17

















 


parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01 of
the Credit Agreement, this Guaranty shall become effective when the Lender
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the Guarantors. 
Delivery of an executed counterpart of a signature page of this
Guaranty by facsimile shall be effective as delivery of a manually executed
counterpart of this Guaranty.


 


SECTION 25          Survival
of Representations and Warranties.  All
representations and warranties made hereunder and in any other Guarantor Document
or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof.  Such representations and
warranties have been or will be relied upon by the Lender, regardless of any
investigation made by the Lender or on its behalf and notwithstanding that the
Lender may have had notice or knowledge of any Default at the time of any
Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.


 


SECTION 26          USA
PATRIOT Act Notice.  The Lender hereby notifies each Guarantor
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies such Guarantor, which
information includes the name and address of such Guarantor and other
information that will allow the Lender to identify such Guarantor in accordance
with the Act.


 


SECTION 27          Time
is of the Essence.  Time is of the essence of this Guaranty and
the other Guarantor Documents.


 


(remainder of page intentionally
left blank; signature pages follow)


 


E-18
















 


IN WITNESS WHEREOF, each Guarantor has executed this
Guaranty, as of the date first above written.


 


	
   

  	
  COPART OF ARIZONA, INC.,
  as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-19

















 


	
   

  	
  COPART OF CONNECTICUT,
  INC., as

  a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-20

















 


	
   

  	
  COPART OF LOUISIANA, INC.,
  as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-21

















 


	
   

  	
  COPART OF MISSOURI, INC.,
  as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-22

















 


	
   

  	
  COPART OF TENNESSEE, INC.,
  as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-23

















 


	
   

  	
  COPART OF WASHINGTON, INC.,
  as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email: will.franklin@copart.com

  
					



 


E-24

















 


	
   

  	
  DALLAS COPART SALVAGE AUTO

  AUCTIONS LIMITED PARTNERSHIP,

  as a Guarantor

  
	
   

  	
   

  
	
   

  	
  By: COPART OF
  TEXAS, INC., its general

  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-25

















 


	
   

  	
  HOUSTON COPART SALVAGE
  AUTO

  AUCTIONS LIMITED PARTNERSHIP,

  as a Guarantor

  
	
   

  	
   

  
	
   

  	
  By: COPART OF
  HOUSTON, INC., its

  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
					



 


E-26

















 


Annex
1


to
the Guaranty


 


FORM OF
ACCESSION AGREEMENT


 


	
  To:

  	
  Bank of America, N.A.

  
	
   

  	
   

  
	
  Re:

  	
  Copart, Inc.

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  Ladies and Gentlemen:

  



 


This Accession Agreement
is made and delivered pursuant to Section 23 of that certain
Guaranty dated as of March 6, 2008 (as amended, modified, renewed or
extended from time to time, the “Guaranty”), made by each Guarantor
named in the signature pages thereof (each a “Guarantor”), in favor
of Bank of America, N.A. (the “Lender”). 
All capitalized terms used in this Accession Agreement and not otherwise
defined herein shall have the meanings assigned to them in either the Guaranty
or the Credit Agreement, as applicable.


 


Copart, Inc., a
California corporation (the “Borrower”), is party to that certain Credit
Agreement dated as of March 6, 2008 (the “Credit Agreement”) by and
between the Borrower and the Lender.


 


The undersigned,
                                                      
[insert name of acceding Guarantor], a
                                          
[corporation, partnership, limited liability
company, etc.], is a Subsidiary of the Borrower and hereby
acknowledges for the benefit of the Lender that it shall be a “Guarantor” for
all purposes of the Guaranty effective from the date hereof.  The undersigned confirms that the
representations and warranties set forth in Section 10 of the
Guaranty are true and correct as to the undersigned as of the date hereof.


 


Without limiting the
foregoing, the undersigned hereby agrees to perform all of the obligations of a
Guarantor under, and to be bound in all respects by the terms of, the Guaranty,
including Sections 11, 12, 15 and 16 thereof, to
the same extent and with the same force and effect as if the undersigned were
an original signatory thereto.


 


This Accession Agreement
shall constitute a Loan Document under the Credit Agreement.


 


THIS ACCESSION AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. THE PROVISIONS SET FORTH IN SECTION 19 OF THE GUARANTY,
INCLUDING THOSE PROVISIONS RELATING TO JUDICIAL REFERENCE AND THE WAIVER OF THE
RIGHT TO A JURY TRIAL, ARE APPLICABLE TO THIS ACCESSION AGREEMENT AND ARE
HEREBY INCORPORATED HEREIN IN FULL.


 


E-27

















 


IN WITNESS WHEREOF, the undersigned has executed this
Accession Agreement, as of the date first above written.


 


 


	
   

  	
  [GUARANTOR]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Copart, Inc.

  
	
   

  	
  4665 Business Center
  Drive

  
	
   

  	
  Fairfield CA, 94534

  
	
   

  	
  Attn.: William E.
  Franklin

  
	
   

  	
  Tel: (707) 639-5123

  
	
   

  	
  Fax: (707) 639-5090

  
	
   

  	
  Email:
  will.franklin@copart.com

  
				



 


E-28

















 


EXHIBIT
F


 


OPINION MATTERS


 


The matters addressed in the following sections of the
Agreement should be covered within the scope of the opinion required to be
delivered on behalf of the Borrower pursuant to Section 4.01(a)(vii) of
the Agreement:


 


·                                          Section 5.01(a),
(b), and (c)


 


·                                          Section 5.02


 


·                                          Section 5.03


 


·                                          Section 5.04


 


F-1