Document:

exv10w1

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Dated as of September 7, 2005

among

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Lenders,

BANK OF AMERICA, N. A.,

as the Administrative Agent,

and

MERCURY AIR GROUP, INC.,

MAYTAG AIRCRAFT CORPORATION,

MERCURY AIR CARGO, INC.

MERCFUEL, INC.,

HERMES AVIATION, INC., and

SWIFT GLOBAL LOGISTICS, INC.

as the Borrowers

and

JUPITER AIRLINE SERVICES, INC.,

EXCEL CARGO, INC., and

VULCAN AVIATION, INC.

as the Guarantors and, together with the Borrowers, the Obligated Parties

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1 Definitions, Accounting Terms, and Interpretive Provisions	 	 	1	 
	Section 1.1
	 	Definitions	 	 	1	 
	Section 1.2
	 	Accounting Terms	 	 	29	 
	Section 1.3
	 	Interpretive Provisions	 	 	29	 
	Section 1.4
	 	No Strict Construction	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE 2 Loans and Letters of Credit	 	 	30	 
	Section 2.1
	 	Credit Facility	 	 	30	 
	Section 2.2
	 	Revolving Loans	 	 	30	 
	Section 2.3
	 	[Reserved.]	 	 	34	 
	Section 2.4
	 	Letters of Credit	 	 	34	 
	Section 2.5
	 	Bank Products	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE 3 INTEREST AND FEES	 	 	39	 
	Section 3.1
	 	Interest	 	 	39	 
	Section 3.2
	 	Continuation and Conversion Elections	 	 	40	 
	Section 3.3
	 	Maximum Interest Rate	 	 	41	 
	Section 3.4
	 	Unused Line Fee	 	 	42	 
	Section 3.5
	 	Letter of Credit Fees and Expenses	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE 4 PRINCIPAL PAYMENTS AND PREPAYMENTS	 	 	43	 
	Section 4.1
	 	Repayment	 	 	43	 
	Section 4.2
	 	Termination of Credit Facility	 	 	43	 
	Section 4.3
	 	Mandatory Prepayment of the Loans	 	 	44	 
	Section 4.4
	 	LIBOR Rate Loan Prepayments	 	 	45	 
	Section 4.5
	 	Payments as Revolving Loans	 	 	45	 
	Section 4.6
	 	Apportionment, Application, and Reversal of Payments	 	 	46	 
	Section 4.7
	 	Indemnity for Returned Payments	 	 	47	 
	Section 4.8
	 	The Administrative Agent’s and the Lenders’ Books	 	 	 	 
	 
	 	and Records; Monthly Statements	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	48	 
	Section 5.1
	 	Taxes	 	 	48	 
	Section 5.2
	 	Illegality	 	 	49	 
	Section 5.3
	 	Increased Costs and Reduction of Return	 	 	49	 
	Section 5.4
	 	Funding Losses	 	 	50	 
	Section 5.5
	 	Inability to Determine Rates	 	 	50	 
	Section 5.6
	 	Certificate of the Affected Lender	 	 	51	 
	Section 5.7
	 	Replacement of Affected Lender	 	 	51	 
	Section 5.8
	 	Survival	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE 6 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES	 	 	52	 
	Section 6.1
	 	Books and Records	 	 	52	 
	Section 6.2
	 	Financial and Other Information	 	 	52	 
	Section 6.3
	 	Notices	 	 	57	 

					
	 	 	 	 	 
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	ARTICLE 7 GENERAL WARRANTIES AND REPRESENTATIONS	 	 	60	 
	Section 7.1
	 	Authorization, Validity, and Enforceability of the Loan Documents	 	 	60	 
	Section 7.2
	 	Validity and Priority of Security Interest	 	 	60	 
	Section 7.3
	 	Organization, Authority, and Good Standing	 	 	61	 
	Section 7.4
	 	Capitalization and Subsidiaries	 	 	61	 
	Section 7.5
	 	Corporate Name; Prior Transactions	 	 	61	 
	Section 7.6
	 	Financial Statements and Projections	 	 	61	 
	Section 7.7
	 	Solvency	 	 	62	 
	Section 7.8
	 	Debt	 	 	62	 
	Section 7.9
	 	Distributions	 	 	62	 
	Section 7.10
	 	Real Estate; Leases	 	 	62	 
	Section 7.11
	 	Proprietary Rights	 	 	62	 
	Section 7.12
	 	Trade Names	 	 	63	 
	Section 7.13
	 	Litigation	 	 	63	 
	Section 7.14
	 	Labor Matters	 	 	63	 
	Section 7.15
	 	Environmental Law	 	 	63	 
	Section 7.16
	 	No Violation of Law	 	 	64	 
	Section 7.17
	 	No Default	 	 	64	 
	Section 7.18
	 	ERISA Compliance	 	 	64	 
	Section 7.19
	 	Taxes	 	 	65	 
	Section 7.20
	 	Regulated Entities	 	 	65	 
	Section 7.21
	 	Use of Proceeds; Margin Regulations	 	 	65	 
	Section 7.22
	 	No Material Adverse Change	 	 	66	 
	Section 7.23
	 	Full Disclosure	 	 	66	 
	Section 7.24
	 	Material Agreements	 	 	66	 
	Section 7.25
	 	Bank Accounts	 	 	66	 
	Section 7.26
	 	Commercial Tort Claims	 	 	66	 
	Section 7.27
	 	Governmental Authorization	 	 	66	 
	Section 7.28
	 	Common Enterprise	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE 8 AFFIRMATIVE AND NEGATIVE COVENANTS	 	 	67	 
	Section 8.1
	 	Taxes and Other Obligations	 	 	67	 
	Section 8.2
	 	Legal Existence and Good Standing	 	 	67	 
	Section 8.3
	 	Compliance with Law and Agreements; Maintenance of Licenses	 	 	67	 
	Section 8.4
	 	Maintenance of Property; Inspection of Property	 	 	68	 
	Section 8.5
	 	Insurance	 	 	69	 
	Section 8.6
	 	Condemnation	 	 	70	 
	Section 8.7
	 	Environmental Law	 	 	70	 
	Section 8.8
	 	Compliance with ERISA	 	 	71	 
	Section 8.9
	 	Mergers, Consolidations, or Sales	 	 	71	 
	Section 8.10
	 	Distributions; Capital Change; Restricted Investments	 	 	72	 
	Section 8.11
	 	Guaranties	 	 	72	 
	Section 8.12
	 	Debt	 	 	72	 
	Section 8.13
	 	Prepayment; Amendment of Debt Agreements	 	 	73	 
	Section 8.14
	 	Transactions with Affiliates	 	 	73	 
	Section 8.15
	 	Investment Banking and Finder’s Fees	 	 	73	 
	Section 8.16
	 	Business Conducted	 	 	73	 

					
	 	 	 	 	 
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	Section 8.17
	 	Liens	 	 	74	 
	Section 8.18
	 	Sale and Leaseback Transactions	 	 	74	 
	Section 8.19
	 	New Subsidiaries; Addition of Subsidiaries as Borrowers	 	 	74	 
	Section 8.20
	 	Fiscal Year	 	 	74	 
	Section 8.21
	 	Fixed Charge Coverage Ratio	 	 	74	 
	Section 8.22
	 	Capital Expenditures	 	 	75	 
	Section 8.23
	 	Use of Proceeds	 	 	75	 
	Section 8.24
	 	Bank as Depository	 	 	76	 
	Section 8.25
	 	Guaranties of the Obligations	 	 	76	 
	Section 8.26
	 	Government Contracts	 	 	76	 
	Section 8.27
	 	Additional Collateral; Further Assurances	 	 	76	 
	 
	 	 	 	 	 	 
	ARTICLE 9 CONDITIONS OF LENDING	 	 	77	 
	Section 9.1
	 	Conditions Precedent to Making of Loans on the Closing Date	 	 	77	 
	Section 9.2
	 	Conditions Precedent to Each Loan	 	 	81	 
	 
	 	 	 	 	 	 
	ARTICLE 10 SECURITY	 	 	82	 
	Section 10.1
	 	Grant of Lien	 	 	82	 
	Section 10.2
	 	Perfection and Protection of Security Interest	 	 	83	 
	Section 10.3
	 	Location of Collateral	 	 	85	 
	Section 10.4
	 	Reserved	 	 	85	 
	Section 10.5
	 	Accounts	 	 	85	 
	Section 10.6
	 	Collection of Accounts; Payments	 	 	86	 
	Section 10.7
	 	Inventory; Perpetual Inventory	 	 	87	 
	Section 10.8
	 	Equipment	 	 	88	 
	Section 10.9
	 	[Reserved.]	 	 	88	 
	Section 10.10
	 	Documents, Instruments, and Chattel Paper	 	 	88	 
	Section 10.11
	 	Right to Cure	 	 	89	 
	Section 10.12
	 	Power of Attorney	 	 	89	 
	Section 10.13
	 	The Administrative Agent’s and the Lenders’ Rights,	 	 	 	 
	 
	 	Duties, and Liabilities	 	 	90	 
	Section 10.14
	 	Patent, Trademark, and Copyright Collateral	 	 	91	 
	Section 10.15
	 	Indemnification	 	 	93	 
	Section 10.16
	 	Grant of License to Use Proprietary Rights	 	 	93	 
	Section 10.17
	 	Limitation on the Administrative Agent’s and the Lenders’	 	 	 	 
	 
	 	Duty in Respect of the Collateral	 	 	93	 
	Section 10.18
	 	Miscellaneous	 	 	94	 
	 
	 	 	 	 	 	 
	ARTICLE 11 DEFAULT; REMEDIES	 	 	94	 
	Section 11.1
	 	Events of Default	 	 	94	 
	Section 11.2
	 	Remedies	 	 	97	 
	 
	 	 	 	 	 	 
	ARTICLE 12 TERM AND TERMINATION	 	 	102	 
	Section 12.1
	 	Term and Termination	 	 	102	 

					
	 	 	 	 	 
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	ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS	 	 	103	 
	Section 13.1
	 	Amendments and Waivers	 	 	103	 
	Section 13.2
	 	Assignments; Participations	 	 	105	 
	 
	 	 	 	 	 	 
	ARTICLE 14 THE ADMINISTRATIVE AGENT	 	 	107	 
	Section 14.1
	 	Appointment and Authorization	 	 	107	 
	Section 14.2
	 	Delegation of Duties	 	 	108	 
	Section 14.3
	 	Liability of the Administrative Agent	 	 	109	 
	Section 14.4
	 	Reliance by the Administrative Agent	 	 	109	 
	Section 14.5
	 	Notice of Default	 	 	110	 
	Section 14.6
	 	Credit Decision	 	 	110	 
	Section 14.7
	 	Indemnification	 	 	110	 
	Section 14.8
	 	The Administrative Agent in its Individual Capacity	 	 	111	 
	Section 14.9
	 	Successor Agent	 	 	111	 
	Section 14.10
	 	Withholding Tax	 	 	112	 
	Section 14.11
	 	Collateral Matters	 	 	113	 
	Section 14.12
	 	Restrictions on Actions by Lenders; Sharing of Payments	 	 	115	 
	Section 14.13
	 	Agency for Perfection	 	 	115	 
	Section 14.14
	 	Payments by Administrative Agent to the Lenders	 	 	116	 
	Section 14.15
	 	Settlement	 	 	116	 
	Section 14.16
	 	Letters of Credit; Intra-Lender Issues	 	 	120	 
	Section 14.17
	 	Concerning the Collateral and the Related Loan Documents	 	 	122	 
	Section 14.18
	 	Field Audit and Examination Reports; Disclaimer by Lenders	 	 	122	 
	Section 14.19
	 	Relation Among the Lenders	 	 	123	 
	Section 14.20
	 	Administrative Agent May File Proofs of Claim	 	 	123	 
	 
	 	 	 	 	 	 
	ARTICLE 15 MISCELLANEOUS	 	 	124	 
	Section 15.1
	 	No Waivers; Cumulative Remedies	 	 	124	 
	Section 15.2
	 	Severability	 	 	124	 
	Section 15.3
	 	Governing Law; Choice of Forum; Service of Process	 	 	124	 
	Section 15.4
	 	Waiver of Jury Trial	 	 	126	 
	Section 15.5
	 	Survival of Representations and Warranties	 	 	127	 
	Section 15.6
	 	Other Security and Guaranties	 	 	127	 
	Section 15.7
	 	Fees and Expenses	 	 	127	 
	Section 15.8
	 	Notices and Information	 	 	128	 
	Section 15.9
	 	Waiver of Notices	 	 	130	 
	Section 15.10
	 	Binding Effect	 	 	131	 
	Section 15.11
	 	Indemnity of the Credit Providers by the Obligated Parties	 	 	131	 
	Section 15.12
	 	Limitation of Liability	 	 	132	 
	Section 15.13
	 	Final Agreement	 	 	132	 
	Section 15.14
	 	Counterparts	 	 	132	 
	Section 15.15
	 	Right of Setoff	 	 	133	 
	Section 15.16
	 	Confidentiality	 	 	133	 
	Section 15.17
	 	USA Patriot Act Notice	 	 	134	 
	Section 15.18
	 	Joint and Several Liability	 	 	134	 
	Section 15.19
	 	Contribution and Indemnification among the Obligated Parties	 	 	135	 

					
	 	 	 	 	 
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	Section 15.20
	 	Agency of the Parent for Each Other Obligated Party	 	 	136	 
	Section 15.21
	 	Additional Borrowers and Guarantors	 	 	136	 
	Section 15.22
	 	Express Waivers By the Obligated Parties In Respect	 	 	 	 
	 
	 	of Cross Guaranties and Cross Collateralization	 	 	137	 
	Section 15.23
	 	Amendment and Restatement	 	 	138	 

					
	 	 	 	 	 
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	EXHIBITS:
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Reserved
	Exhibit B

	 	—
	 	Form of Borrowing Base Certificate
	Exhibit C

	 	—
	 	Form of Compliance Certificate
	Exhibit D

	 	—
	 	Form of Notice of Borrowing
	Exhibit E

	 	—
	 	Form of Notice of Continuation/Conversion
	Exhibit F

	 	—
	 	Form of Assignment and Acceptance
	 
	 	 	 	 
	SCHEDULES:
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.1(A)

	 	—
	 	Commitments
	Schedule 1.1(B)

	 	—
	 	Permitted Investments
	Schedule 1.1(C)

	 	—
	 	Permitted Liens
	Schedule 1.1(D)

	 	—
	 	Existing Letters of Credit
	Schedule 1.1(E)

	 	—
	 	Approved Foreign Account Debtors
	Schedule 1.1(F)

	 	—
	 	Additional Expenses
	Schedule 7.3

	 	—
	 	Organization; Authority; and Good Standing
	Schedule 7.4

	 	—
	 	Capitalization; Subsidiaries
	Schedule 7.5

	 	—
	 	Corporate name; Prior Transactions
	Schedule 7.10

	 	—
	 	Real Estate; Leases
	Schedule 7.11

	 	—
	 	Proprietary Rights
	Schedule 7.12

	 	—
	 	Trade Names
	Schedule 7.13

	 	—
	 	Litigation
	Schedule 7.14

	 	—
	 	Labor Matters
	Schedule 7.15

	 	—
	 	Environmental Matters
	Schedule 7.18

	 	—
	 	ERISA
	Schedule 7.24

	 	—
	 	Material Agreements
	Schedule 7.25

	 	—
	 	Bank Accounts
	Schedule 7.26

	 	—
	 	Commercial Tort Claims
	Schedule 8.12

	 	—
	 	Debt
	Schedule 8.27

	 	—
	 	Excluded Subsidiaries
	Schedule 10.3

	 	—
	 	Locations of Collateral
	Schedule 10.6(a)

	 	—
	 	Permitted Non-Lockbox Collections

					
	 	 	 	 	 
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     This Amended and Restated Loan and Security Agreement, dated as of September 7, 2005, is among
the lending institutions from time to time party hereto (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), Bank of America, N.A., as
administrative agent for the Lenders (in its capacity as administrative agent, the
“Administrative Agent”), Mercury Air Group, Inc., a Delaware corporation (the
“Parent”), and each of its subsidiaries party from time to time hereto (such subsidiaries,
together with the Parent, are referred to hereinafter each individually as a “Borrower” and
collectively as the “Borrowers”) and each of the other Obligated Parties (as hereinafter
defined) signatory to this Agreement.

RECITALS:

     A. The Parent, certain of its subsidiaries (together with the Parent, the “Original
Borrowers”), the Administrative Agent, and the Lenders are parties to that certain Loan
Agreement dated as of July 29, 2004 (as amended, the “Original Loan Agreement”), pursuant
to which the Lenders have extended financial accommodations to the Original Borrowers as provided
therein.

     B. Each of the Guarantors (other than the Parent) guarantees all of the indebtedness,
liabilities, and obligations outstanding under the Original Loan Agreement.

     C. The Obligated Parties have requested that the Lenders make available to the Borrowers a
revolving credit facility for loans and letters of credit, which extensions of credit the Borrowers
will use for the purposes permitted by Section 8.23.

     D. The Lenders have agreed to make available to the Borrowers a revolving credit facility upon
the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this
Agreement, and for valuable consideration, the receipt of which is hereby acknowledged, the
Lenders, the Administrative Agent, and the Obligated Parties hereby agree as follows.

ARTICLE 1

Definitions, Accounting Terms, and Interpretive Provisions

     Section 1.1 Definitions. Capitalized terms wherever used in this Agreement and the
other Loan Documents, unless otherwise defined therein, shall have the meanings specified in this
Section 1.1.

     “Account Debtor” means each Person obligated in any way on or in connection with an
Account, Chattel Paper, or General Intangible (including a payment intangible).

     “Accounts” means “accounts”, as such term is defined in the UCC, and any rights to
payment for the sale or lease of goods or rendition of services, whether or not they have been
earned by performance.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 1

 

 

     “Accommodation Payment” has the meaning specified in Section 15.19.

     “ACH Transactions” means any cash management, disbursement, or related services,
including overdrafts and the automated clearinghouse transfer of funds by the Bank for the account
of any Obligated Party.

     “Adjusted Net Earnings from Operations” means, with respect to any fiscal period of
any Person (the “subject Person”), net income of the subject Person on a consolidated basis after
provision for income taxes for such fiscal period, as determined in accordance with GAAP and
reported on the financial statements of the subject Person for such fiscal period, excluding any
and all of the following included in the determination of such net income: (a) gain or loss
arising from the sale of any capital assets; (b) gain arising from any write-up in the book value
of any asset; (c) earnings of any other Person, substantially all the assets of which have been
acquired by the subject Person in any manner, to the extent realized by such other Person prior to
the date of acquisition; (d) earnings of any other Person in which the subject Person has an
ownership interest unless (and only to the extent) such earnings shall actually have been received
by the subject Person in the form of cash distributions; (e) earnings of any Person to which assets
of the subject Person shall have been sold, transferred, or disposed of, or into which the subject
Person shall have been merged, or that has been a party with the subject Person to any
consolidation or other form of reorganization, prior to the date of such transaction; (f) gain
arising from the acquisition of debt or equity securities of the subject Person or from
cancellation or forgiveness of Debt; (g) gain arising from extraordinary items, as determined in
accordance with GAAP, or from any other non-recurring transaction; (h) those expenses set forth on
Schedule 1.1(F); and (i) additional non-recurring expenses incurred after the Closing Date
to be approved in advance by Administrative Agent.

     “Administrative Agent” means the Bank, solely in its capacity as administrative agent
for the Lenders, and any successor administrative agent.

     “Affiliate” means, (i) as to any Person excluding Parent (the “subject Person”), any
other Person that directly or indirectly, is in control of, is controlled by, or is under common
control with, the subject Person or that owns, directly or indirectly, 5.0% or more of the
outstanding Capital Stock of the subject Person; and (ii) as to Parent, any Person, or group that
is an investor, that directly or indirectly is in control of, is controlled by, or is under common
control with Parent or that controls, directly or indirectly, 20.0% or more of the voting power of
Parent. A Person shall be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the management and policies
of the other Person, whether through the ownership of voting securities, by contract, or otherwise.

     “Agent Advances” has the meaning specified in Section 2.2(j).

     “Agent-Related Persons” means the Administrative Agent, together with its Affiliates,
and the officers, directors, employees, counsel, representatives, agents, and attorneys-in-fact of
the Administrative Agent and its Affiliates.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 2

 

 

     “Agent’s Liens” means the Liens in the Collateral granted to the Administrative Agent,
for the benefit of the Credit Providers, pursuant to the terms of this Agreement and the other Loan
Documents.

     “Aggregate Revolver Outstandings” means, at any time, the sum of: (a) the unpaid
balance of the Revolving Loans; (b) the aggregate undrawn face amount of all outstanding Letters of
Credit; and (c) the aggregate amount of any unpaid reimbursement obligations in respect of Letters
of Credit.

     “Agreement” means this Amended and Restated Loan and Security Agreement, as it may be
amended, restated, or otherwise modified from time to time.

     “Allocable Amount” has the meaning specified in Section 15.19.

     “Anniversary Date” means an anniversary of the Closing Date.

“Applicable Margin” means, as of the Closing Date,

     (a) with respect to Base Rate Revolving Loans and all other Obligations (other than
LIBOR Rate Loans), 0.50% per annum,

     (b) with respect to LIBOR Rate Revolving Loans, 2.25%,

     (c) with respect to the Unused Line Fee Percentage, 0.375% per annum; and

     (d) with respect to the Letter of Credit Fee Percentage, 2.00%,

in each case subject to adjustment from time to time thereafter to the applicable percentage
specified corresponding to the Fixed Charge Coverage Ratio, as set forth below, respectively:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base Rate	 	LIBOR Rate	 	 	 	 	 	Letter of
	Fixed Charge Coverage	 	Revolving	 	Revolving	 	Unused Line	 	Credit
	Ratio	 	Loans	 	Loans	 	Fee Percentage	 	Fee Percentage
	Greater than 1.35 to 1.00

	 	 	0.25	%	 	 	2.00	%	 	 	0.25	%	 	 	1.75	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than 1.10 to
1.00 but less than or
equal to 1.35 to 1.00

	 	 	0.50	%	 	 	2.25	%	 	 	0.375	%	 	 	2.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less than or equal to
1.10 to 1.00

	 	 	0.75	%	 	 	2.50	%	 	 	0.375	%	 	 	2.25	%

For the purpose of determining any such adjustments to the Applicable Margin, the Fixed Charge
Coverage Ratio shall be determined, beginning with the Fiscal Quarter ending June 30, 2006, based
upon the Financial Statements of the Parent and its Subsidiaries for the immediately preceding four
Fiscal Quarters of the Parent, and for each Fiscal Quarter of the Parent ending thereafter,
delivered to the Administrative Agent as required by Section 6.2(a) (with respect to the
Financial Statements as of the last day of each Fiscal Year) or Section 6.2(b)(i) (with
respect

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 3

 

 

to the Financial Statements for each of the other Fiscal Quarters of each Fiscal Year), and, except
as set forth below, any such adjustment, if any, shall become effective prospectively on and after
the first day of the calendar month following the date of delivery of such Financial Statements and
corresponding compliance certificates to the Administrative Agent. Concurrently with the delivery
of such Financial Statements, the Parent shall deliver to the Administrative Agent a certificate,
signed by a Responsible Officer, setting forth in reasonable detail the basis for the continuance
of, or any change in, the Applicable Margin. Notwithstanding the foregoing, if the Obligated
Parties fail to timely deliver any such Financial Statements to the Administrative Agent, (i) the
Applicable Margin shall be deemed to have been increased (to the extent that the Applicable Margin
otherwise determined in accordance with this definition would be increased based on such Financial
Statements), with retroactive effect, as of the date that such Financial Statements were due to be
delivered to the Administrative Agent and (ii) if such Financial Statements are delivered more than
thirty days past the due date therefor, then the Applicable Margin shall be deemed to be equal to
the highest level set forth in the preceding table. The Borrowers hereby authorize the
Administrative Agent to charge the Borrowers’ Loan Account for additional interest or fees payable
by the Borrowers as a result of any such retroactive increase in the Applicable Margin as set forth
above. If a Default or an Event of Default exists at the time any reduction in the Applicable
Margin is to be implemented, such reduction shall not occur until the first day of the calendar
month following the date on which such Default or Event of Default is Waived or Cured.

     “Assignee” has the meaning specified in Section 13.2(a).

     “Assignment and Acceptance” has the meaning specified in Section 13.2(a).

     “Attorney Costs” means and includes all reasonable fees, expenses, and disbursements
of any law firm or other counsel engaged by the Administrative Agent and the reasonably allocated
costs and expenses of internal legal services of the Administrative Agent.

     “Bank” means Bank of America, N.A., a national banking association, or any successor
entity thereto.

     “Bank Products” means each and any of the following types of services or facilities
extended to the Obligated Parties by the Bank or any Affiliate of the Bank: (a) commercial credit
cards; (b) cash management services (including controlled disbursement services, ACH Transactions,
and interstate depository network services), (c) return items; (d) Hedge Agreements; and (e)
foreign exchange.

     “Bank Product Reserves” means all reserves that the Administrative Agent from time to
time establishes in its sole discretion for the Bank Products then provided or outstanding.

     “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et
seq.).

     “Base Rate” means, for any day, the rate of interest in effect for such day as
publicly announced from time to time by the Bank in Charlotte, North Carolina as its “prime rate”
(the “prime rate” being a rate set by the Bank based upon various factors including the Bank’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).

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 4

 

 

Any change in the prime rate announced by the Bank shall take effect at the opening of
business on the day specified in the public announcement of such change. Each Interest Rate based
upon the Base Rate shall be adjusted simultaneously with any change in the Base Rate.

     “Base Rate Loans” means, collectively, the Base Rate Revolving Loans.

     “Base Rate Revolving Loan” means any portion of the Revolving Loans during any period
in which such portion bears interest based on the Base Rate.

     “Borrower” means, separately and individually, any of Parent, Maytag Aircraft
Corporation, Mercury Air Cargo, Inc., Mercfuel, Inc., Hermes Aviation, Inc., and Swift Global
Logistics, Inc. and any other Person who becomes a party to this Agreement as a “Borrower” pursuant
to the terms hereof, jointly, severally, and collectively, and “Borrowers” means more than
one or all of the foregoing Persons, jointly, severally, and collectively, as the context requires.

     “Borrowing” means (a) a borrowing hereunder consisting of Revolving Loans made
available to the Borrowers, or any of them, on the same day: (i) by the Lenders; (ii) by the Bank
(in the case of a Borrowing funded as a Non-Ratable Loan); or (iii) by the Administrative Agent (in
the case of a Borrowing consisting of an Agent Advance); or (b) the issuance of a Letter of Credit
hereunder.

     “Borrowing Base” means, at any time, an amount equal to the lesser of (a) the Maximum
Revolver Amount or (b) the sum of, without duplication, (i) 85% of the Net Amount of Eligible
Accounts, other than Accounts owing by the federal government of the U.S., plus (ii) the
lesser of (A) $4,000,000 or (B) 85% of Eligible Accounts owing by the federal government of the
U.S., plus (iii) the lesser of (A) $6,000,000 or (B) 85% of the Net Amount of Eligible
Foreign Accounts, minus (iv) Reserves.

     “Borrowing Base Certificate” means a certificate by a Responsible Officer of the
Borrowers, or the Parent on behalf of the Borrowers, substantially in the form of Exhibit B
(or another form acceptable to the Administrative Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof (including to the extent a
Borrower has received notice of any Reserve from the Administrative Agent, any of the Reserves
included in such calculation pursuant to clause (b) of the definition of Borrowing Base),
all in such detail as shall be satisfactory to the Administrative Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrowers, or the Parent on behalf of the Borrowers, and certified to the
Administrative Agent; provided that the Administrative Agent shall have the right to review
and adjust, in the exercise of its credit judgment, any such calculation (a) to reflect its
estimate of declines in value of any of the Collateral described therein, (b) to reflect the
receipt of proceeds of the Collateral, and (c) to the extent that such calculation is not made in
accordance with the terms of this Agreement.

     “Business Day” means (a) any day that is not a Saturday, Sunday, or a day on which
banks in Pasadena, California or Charlotte, North Carolina are required or permitted to be closed
and (b) with respect to all notices, determinations, fundings, and payments in connection with the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 5

 

 

LIBOR Rate or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a)
preceding and that is also a day on which trading in Dollars is carried on by and between banks in
the London interbank market.

     “Capital Adequacy Regulation” means any guideline, request, or directive of any
central bank or other Governmental Authority, or any other law, rule, or regulation, whether or not
having the force of law, in each case, regarding capital adequacy of any bank or of any corporation
controlling a bank.

     “Capital Expenditures” means, with respect to any Person, all payments made by such
Person with respect to the cost of any Fixed Asset or improvement, or replacement, substitution, or
addition thereto, that has a useful life of more than one year, including those costs arising in
connection with the direct or indirect acquisition of such asset or improvement by way of increased
product or service charges or in connection with a Capital Lease, excluding (a) expenditure of
insurance proceeds to rebuild or replace any asset or improvement after a casualty loss and (b)
leasehold improvement expenditures for which such Person is reimbursed promptly by the lessor.

     “Capital Lease” means any lease of property by a Person that, in accordance with GAAP,
should be reflected as a capital lease on the balance sheet of such Person.

     “Capital Stock” means any and all corporate stock, units, shares, partnership
interests, membership interests, equity interests, rights, securities, or other equivalent
evidences of ownership (howsoever designated) issued by any Person (whether certificated or
uncertificated).

     “Change of Control” means the occurrence of any of the following: (a) except as
allowed by Section 8.9, the adoption of a plan relating to the liquidation or dissolution
of any Obligated Party; (b) the acquisition by any “person” or “group” (as each such term is used
in Section 13(d) and Section 14(d) of the Exchange Act) of a direct or indirect interest of more
than 25% of the outstanding voting Capital Stock of the Parent by way of merger or consolidation or
otherwise, excluding any acquisition by any “person” or “group” who, as of the Closing Date, has a
direct or indirect interest of more than 25.0% of the outstanding voting capital stock of the
Parent; or (c) except as allowed by Section 8.9, any Obligated Party (other than the
Parent) shall cease to be a Wholly-Owned Subsidiary of the Parent.

     “Chattel Paper” means “chattel paper”, as such term is defined in the UCC, and any
electronic chattel paper.

     “Clearing Account” means each bank account maintained with the Bank or a Clearing
Bank, subject to a Deposit Account Control Agreement providing for the Administrative Agent’s
dominion and control upon notice from the Administrative Agent to such Clearing Bank, to which the
funds of an Obligated Party (including proceeds of Accounts and other Collateral) are deposited or
credited, and that is maintained in the name of the Administrative Agent or such Obligated Party
(as the Administrative Agent may determine) on terms acceptable to the Administrative Agent. For
purposes of this Agreement, “Clearing Account” includes account No. 14593-24594 opened by
Mercury Air Group, Inc. with the Bank, and any additional Clearing Accounts opened by any Obligated
Party with the Bank and pledged in accordance with

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 6

 

 

Article 10, and any renewals or rollovers thereof, any successor or substitute deposit
accounts, including any such deposit account as it may have been renumbered or retitled, any
proceeds thereof (including any interest paid thereon),and any general intangibles and choses in
action arising therefrom or related thereto. Whenever there is more than one Clearing Account, the
term “Clearing Account” shall refer to all such Clearing Accounts, collectively.

     “Clearing Bank” means any banking institution reasonably acceptable to the
Administrative Agent with whom a Clearing Account has been established.

     “Closing Date” means the date of this Agreement.

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” has the meaning specified in Section 10.1.

     “Collateral Waiver Agreement” means any agreement, in form and substance satisfactory
to the Administrative Agent, between the Administrative Agent and any landlord of any Obligated
Party for any Real Estate where any Collateral is located or any third party (including any bailee,
consignee, customs broker, processor, warehouseman, or other similar Person) in possession of any
Collateral, as such agreement may be amended, restated, or otherwise modified from time to time.

     “Commitment” means, at any time with respect to a Lender, the principal amount set
forth beside such Lender’s name under the heading “Revolving Commitment” on Schedule
1.1(A) or on the signature page of the most recent Assignment and Acceptance to which such
Lender is a party, as such Revolving Commitment may be adjusted from time to time in accordance
with the provisions of this Agreement, and “Commitments” means, collectively, the aggregate
amount of the Commitment of each of the Lenders, collectively.

     “Compliance Certificate” has the meaning specified in Section 6.2(d).

     “Contaminant” means any material defined as waste, pollutant, hazardous substance,
toxic substance, hazardous waste, or special waste under any Environmental Law (including petroleum
or petroleum-derived substance or waste, asbestos in any form or condition, and polychlorinated
biphenyls), or any constituent of any such substance or waste.

     “Continuation/Conversion Date” means the effective date of (a) any continuation of
LIBOR Rate Loans as LIBOR Rate Loans and (b) any conversion of LIBOR Rate Loans to Base Rate Loans
or of Base Rate Loans to LIBOR Rate Loans.

     “Covenant Testing Event” means (a) the Closing Date, (b) the date of the occurrence of
any Event of Default or (c) any date on which the Unused Availability is less than $8,000,000.

     “Covenant Testing Period” means the period of time following any Covenant Testing
Event until Unused Availability, including any Suppressed Unused Availability, is at least
$10,000,000 for seventy-five (75) consecutive days thereafter.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 7

 

 

     “Credit Providers” means, collectively, the Administrative Agent (in its capacity as
administrative agent for the Lenders hereunder and as provider of Agent Advances), the Lenders, the
Bank (in its capacity as provider of Non-Ratable Loans and Bank Products), the Letter of Credit
Issuer, and the Indemnified Persons, and “Credit Provider” means any of the foregoing,
individually.

     “Critical Borrowers” means, collectively, Parent, Maytag Aircraft Corporation, Mercury
Air Cargo, Inc., and Mercfuel, Inc.

     “Cured” means cured to the Administrative Agent’s sole satisfaction, to the extent
permitted by this Agreement or the other Loan Documents.

     “Debt” means, without duplication, with respect to any Person (the “subject Person”)
all liabilities, obligations, and indebtedness of the subject Person to any other Person, of any
kind or nature, now or hereafter owing, arising, due, or payable, howsoever evidenced, created,
incurred, acquired, or owing, whether primary, secondary, direct, contingent, fixed, or otherwise,
consisting of indebtedness for borrowed money or the deferred purchase price of property, excluding
trade payables and the endorsement of checks and other similar instruments in the ordinary course
of business, but including, without in any way limiting the generality of the foregoing: (a) in the
case of the Obligated Parties, the Obligations; (b) all such indebtedness, liabilities, and
obligations of any Person secured by any Lien on the subject Person’s property, even if the subject
Person shall not have assumed or become liable for the payment thereof; provided that all
such indebtedness, liabilities, and obligations that are limited in recourse to such property shall
be included in Debt only to the extent of the book value of such property as would be shown on a
balance sheet of the subject Person prepared in accordance with GAAP; (c) all such indebtedness,
liabilities, and obligations created or arising under any Capital Lease or conditional sale or
other title retention agreement with respect to property used or acquired by the subject Person,
even if the rights and remedies of the lessor, seller, or lender thereunder are limited to
repossession of such property; provided that all such indebtedness, liabilities, and
obligations that are limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance sheet of the subject
Person prepared in accordance with GAAP; (d) all indebtedness, liabilities, and obligations under
Guaranties of Debt; (e) the present value (discounted at the Base Rate) of lease payments due under
synthetic leases; and (f) net obligations in respect of Hedge Agreements.

     “Default” means any event or circumstance that, with the giving of notice, the lapse
of time, or both, would (if not Cured, Waived, or otherwise remedied during such time) constitute
an Event of Default.

     “Default Rate” means a fluctuating per annum interest rate at all times equal to the
sum of (a) the otherwise applicable Interest Rate, plus (b) 2.00% per annum. The Default
Rate shall be adjusted simultaneously with any change in the applicable Interest Rate.

     “Defaulting Lender” has the meaning specified in Section 14.15(c).

     “Deposit Account Control Agreement” means an agreement, including a blocked account
agreement, in form and substance satisfactory to the Administrative Agent, among an Obligated

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 8

 

 

Party, a banking institution holding funds of such Obligated Party, and the Administrative
Agent with respect to collection and control of all deposits and balances held in a Deposit Account
maintained by such Obligated Party with such banking institution.

     “Deposit Accounts” means “deposit accounts”, as such term is defined in the UCC.

     “Dilution Reserve” means a reserve against the Borrowing Base, as determined from time
to time by the Administrative Agent in its sole and absolute discretion, of one percent (1%) for
each Dilution Reserve Percentage Point, if any, in excess of five percent (5%).

     “Dilution Reserve Percentage Points” means a percent calculated on a rolling 12 month
basis by dividing (i) the sum of the Borrowers’ credits, allowances, discounts, write-offs,
contra-accounts, offsets and deductions which reduce the value of Accounts, by (ii)
Borrowers’ gross invoices related to the Accounts.

     “Disposition” or “Dispose” means the sale, transfer, license, lease, or other
disposition (including any sale and leaseback transaction) of any property by any Person.

     “Distribution” means, with respect to any Person (other than a natural person) (a) the
payment or making of any dividend or other distribution of property by such Person in respect of
its Capital Stock (or any options or warrants for, or other rights with respect to, such Capital
Stock), other than distributions solely in such Person’s Capital Stock (or any options or warrants
for, or other rights with respect to, such Capital Stock) of the same class or (b) the redemption,
repurchase, retirement, or other acquisition by such Person of any Capital Stock (or any options or
warrants for, or other rights with respect to, such Capital Stock) of such Person.

     “Documents” means “documents”, as such term is defined in the UCC, and bills of
lading, warehouse receipts, and other documents of title.

     “DOL” means the United States Department of Labor or any successor department or
agency.

     “Dollar” and “$” means dollars in the lawful currency of the U.S. Unless
otherwise specified, all payments under any Loan Document shall be made in Dollars.

     “Early Termination Fee” has the meaning specified in Section 4.2.

     “Dominion Event” means (a) the Closing Date, (b) the date of the occurrence of any
Event of Default or (c) any date on which the Unused Availability is less than $9,000,000.

     “Dominion Period” means the period of time following any Dominion Event until Unused
Availability, including any Suppressed Unused Availability, is at least $10,000,000 for
seventy-five (75) consecutive days thereafter.

     “EBITDA” means, with respect to any fiscal period of any Person (the “subject
Person”), Adjusted Net Earnings from Operations, plus, to the extent deducted in the
determination of Adjusted Net Earnings from Operations for such fiscal period, (a) Interest
Expense, (b) federal,

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 9

 

 

state, local, and foreign income taxes, and (c) depreciation and amortization, in each case
for the subject Person on a consolidated basis.

     “Eligible Accounts” means the Accounts of the Borrowers that the Administrative Agent
in the exercise of its reasonable credit judgment determines to be Eligible Accounts. Without
limiting the discretion of the Administrative Agent to establish other criteria of ineligibility,
Eligible Accounts shall not, include any Account (except as may be otherwise specified below):

     (a) that does not arise from the sale of Goods or rendition of services in the ordinary
course of business of a Borrower;

     (b) that is not subject to the Agent’s Liens that are perfected as to such Account, or
that is subject to any other Lien;

     (c) with respect to which either (i) more than 60 days have elapsed since the original
due date therefor, or (ii) more than 90 days have elapsed from the date of the original
invoice therefor, or (iii) no invoice has been issued;

     (d) with respect to which any of the representations, warranties, covenants, and
agreements contained in this Agreement are incorrect or have been breached;

     (e) with respect to which (or any other Account due from the applicable Account
Debtor), in whole or in part, a check, promissory note, draft, trade acceptance, or other
instrument for the payment of money has been received, presented for payment, and returned
uncollected for any reason;

     (f) that is the subject of any debit memo or charge-back, but only to the extent of
such debit memo or charge-back;

     (g) with respect to which the applicable Borrower has extended the time for payment
without the consent of the Administrative Agent;

     (h) that represents a progress billing (for the purposes hereof, “progress billing”
means any invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor’s obligation to pay such invoice is
conditioned upon such Borrower’s completion of any further performance under such contract
or agreement);

     (i) with respect to which any one or more of the following events has occurred to the
Account Debtor on such Account: (i) death or judicial declaration of incompetency of such
Account Debtor who is a natural person; (ii) the filing by or against such Account Debtor of
a request or petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under the Bankruptcy Code or any
other Requirement of Law, now or hereafter in effect; (iii) the making of any general
assignment by such Account Debtor for the benefit of creditors; (iv) the appointment of a
receiver or trustee for such Account Debtor or for any of the assets of such Account Debtor,
including the appointment of or taking possession by a “custodian,” as defined in the
Bankruptcy Code; (v) the institution by or against such

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 10

 

 

Account Debtor of any other type of insolvency proceeding (under the Bankruptcy Code or
otherwise) or of any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, such Account Debtor; (vi) the
sale, assignment, or transfer of all or any material part of the assets of such Account
Debtor; (vii) the nonpayment generally by such Account Debtor of its debts as they become
due; or (viii) the cessation of the business of such Account Debtor as a going concern;

     (j) with respect to which 50% or more of the aggregate Dollar amount of outstanding
Accounts owed at such time to the Borrowers by the Account Debtor thereon is classified as
ineligible pursuant to the other provisions of this definition;

     (k) owed by an Account Debtor that: (i) does not maintain its chief executive office in
the U.S.; (ii) is not organized under the laws of the U.S. or any political subdivision or
state thereof; or (iii) is the government of any foreign country or sovereign state, or of
any state, province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, except to the
extent that such Account is secured or payable by a letter of credit the terms of which are
satisfactory to the Administrative Agent in its discretion and that is in the possession of
the Administrative Agent and that, together with all related Letter-of-Credit Rights, is
subject to a first priority Lien in favor of the Administrative Agent, for the benefit of
the Credit Providers; notwithstanding the restrictions set forth in clauses (i) and (ii)
above, an Account that otherwise meets the criteria of an Eligible Account shall not be
rendered ineligible if the Account is billed to and collected from an operating office
within the U.S.;

     (l) except for those Accounts which are Permitted Affiliate Transactions, owed by an
Account Debtor that is an Affiliate, officer, director, or employee of any Borrower or any
Affiliate of any Borrower;

     (m) except as provided in clause (o) following, with respect to which either
the perfection, enforceability, or validity of the Agent’s Liens in such Account, or the
Administrative Agent’s right or ability to obtain direct payment to the Administrative Agent
of the proceeds of such Account, is governed by any federal, state, or local statutory
requirements other than those of the UCC;

     (n) owed by an Account Debtor to which an Obligated Party or any of its Affiliates, is
indebted in any way (including accrued liabilities), or that is subject to any right of
setoff or recoupment by the Account Debtor, unless the Account Debtor has entered into an
agreement acceptable to the Administrative Agent to waive setoff rights, or if the Account
Debtor thereon has disputed liability or made any claim with respect to any other Account
due from such Account Debtor, but in each such case only to the extent of such indebtedness,
setoff, recoupment, dispute, or claim;

     (o) owed by (i) the government of the U.S., or any department, agency, public
corporation, or other instrumentality thereof, to the extent that the Administrative Agent
has requested that the Borrowers comply with the Federal Assignment of Claims Act of

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 11

 

 

1940, as amended (31 U.S.C. § 3727 et seq.), and any other steps necessary to perfect the
Agent’s Liens therein, and the Borrowers have failed to do so to the Administrative Agent’s
satisfaction with respect to such Account, or (ii) any state, municipality, or other
political subdivision of the U.S., or any department, agency, public corporation, or other
instrumentality thereof and as to which the Administrative Agent determines that its Lien
therein is not or cannot be perfected;

     (p) that represents a sale on a (i) cash or C.O.D. basis or (ii) bill-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or
return basis;

     (q) that is evidenced by a promissory note or other instrument or by Chattel Paper;

     (r) with respect to which the Administrative Agent believes, in the exercise of its
reasonable credit judgment, that the prospect of collection of such Account is impaired or
that such Account may not be paid by reason of the Account Debtor’s financial inability to
pay;

     (s) except as may be permitted by the Administrative Agent in its sole discretion, with
respect to which the Account Debtor is located in any state requiring the filing of a Notice
of Business Activities Report or similar report in order to permit the applicable Borrower
to seek judicial enforcement in such state of payment of such Account, unless such
applicable Borrower has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current year;

     (t) that arises out of finance or similar charges;

     (u) with respect to which the goods giving rise to such Account have not been shipped
and delivered to and accepted by, or have been rejected or objected to by, the Account
Debtor or the services giving rise to such Account have not been performed by the applicable
Borrower, and, if applicable, accepted by the Account Debtor, or the Account Debtor revokes
its acceptance of such goods or services;

     (v) owed by an Account Debtor, or group of affiliated Account Debtors, that is
obligated to the Borrowers respecting Accounts the aggregate unpaid balance of which (i) for
each of Flight Options and Net Jets, Inc., separately, exceeds twenty-five percent (25%) of
the aggregate unpaid balance of all Eligible Accounts owed to the Borrowers at such time by
all of the Borrowers’ Account Debtors, but only to the extent of such excess, provided,
however, that in no event shall the Availability generated by Accounts owing by either of
Flight Options or Net Jets, Inc. exceed $10,000,000, individually, (ii) for each of
CitationShares, Kalitta Air, CNS Cargo Network Services, Cielos de Peru and El AL,
separately, exceeds ten percent (10%) of the aggregate unpaid balance of all Eligible
Accounts owed to the Borrowers at such time by all of the Borrowers’ Account Debtors, but
only to the extent of such excess, and (iii) for all other Account Debtors of the Borrower,
exceeds five percent (5%) of the aggregate unpaid balance of all Eligible

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 12

 

 

Accounts owed to the Borrowers at such time by all of the Borrowers’ Account Debtors, but
only to the extent of such excess, notwithstanding the foregoing, the concentration
percentages set forth in clauses (i) through (iii) may be reduced at any time by the
Administrative Agent in its sole discretion;

     (w) that is the subject of any unreconciled variance between the aging of Accounts
delivered to the Administrative Agent, the general ledger of the applicable Borrower, and
the applicable Borrowing Base Certificate, excluding, however, accrued Accounts for which an
invoice has been issued but, provided, that in no event shall the aggregate amount of
accrued Accounts that otherwise meet the definition of “Eligible Account” exceed
thirty-three percent (33%) of the aggregate unpaid balance of all Eligible Accounts owed to
the Borrowers at such time by all of the Borrowers’ Account Debtors;

     (x) that is owed by AirTrans; or

     (y) that the Administrative Agent determines in its reasonable credit judgment is
ineligible for any other reason.

     “Eligible Assignee” means: (a) a commercial bank, commercial finance company, or
other asset based lender having total assets in excess of One Billion Dollars ($1,000,000,000);
(b) any Lender listed on the signature pages of this Agreement; (c) any Affiliate of any Lender;
and (d) if an Event of Default has occurred and is continuing, any Person reasonably acceptable to
the Administrative Agent.

     “Eligible Foreign Account” means an Account owing by (a) an Account Debtor listed on
Schedule 1.1(E) or (b) any other Account Debtor that has been pre-approved, in the
Administrative Agent’s sole discretion, consistent with other existing Eligible Foreign Accounts,
by the Administrative Agent in writing, that (i) does not maintain its chief executive office in
the U.S.; or (ii) is not organized under the laws of the U.S. or any political subdivision or state
thereof located outside the U.S. and, but for the location of the Account Debtor, would otherwise
be classified as an Eligible Account. For purposes of calculating Eligible Foreign Accounts, (x)
Accounts owed by each of China Eastern Airlines and China Southern Airlines, separately, shall be
deemed ineligible to the extent that the aggregate unpaid balance of which exceeds ten percent
(10%) of the aggregate unpaid balance of all Eligible Accounts owed to the Borrowers at such time
by all of the Borrowers’ Account Debtors, but only to the extent of such excess, and (y) for all
other Eligible Foreign Accounts owed by Account Debtors of the Borrower, any such Account shall be
deemed ineligible to the extent that the aggregate unpaid balance of such Account exceeds five
percent (5%) of the aggregate unpaid balance of all Eligible Accounts owed to the Borrowers at such
time by all of the Borrowers’ Account Debtors, but only to the extent of such excess.
Notwithstanding the foregoing, the concentration percentages set forth in the immediately preceding
sentence may be reduced at any time by the Administrative Agent in its sole discretion.

     “Environmental Compliance Reserve” means any reserve that the Administrative Agent
establishes from time to time in its reasonable credit judgment after prior written notice to the
Borrowers for amounts that are reasonably likely to be expended by an Obligated Party in order

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 13

 

 

for such Obligated Party and its operations and property (a) to comply with any notice from a
Governmental Authority asserting non-compliance with any Environmental Law or (b) to correct any
such material non-compliance identified in a report delivered to the Administrative Agent and the
Lenders pursuant to Section 8.7.

     “Environmental Law” means any Requirement of Law relating to environmental, health,
safety, and land use matters.

     “Environmental Lien” means a Lien in favor of any Governmental Authority or any other
Person for (a) any liability under any Environmental Law or (b) damages arising from, or costs
incurred by such Governmental Authority or other Person in response to, a Release or threatened
Release of a Contaminant into the environment.

     “Equipment” means “equipment”, as such term is defined in the UCC, and all machinery,
equipment, furniture, furnishings, fixtures, and other tangible personal property (except
Inventory), including embedded software, motor vehicles (certificated or uncertificated), aircraft,
dies, tools, jigs, molds, and office equipment, as well as all of such types of property leased by
the applicable Person and all of such Person’s rights and interests with respect thereto under such
leases (including options to purchase), together with all present and future additions and
accessions thereto, replacements therefor, component and auxiliary parts and supplies used or to be
used in connection therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties and rights with respect thereto.

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

     “ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with an Obligated Party within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).

     “ERISA Event” means: (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by an Obligated Party or any ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by an Obligated Party or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan is in
reorganization or insolvent; (d) the filing of a notice of intent to terminate, the treatment of a
Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or the termination, insolvency, or
reorganization of a Multi-employer Plan; (e) the occurrence of an event or condition that might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multi-employer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon an Obligated Party or any ERISA Affiliate.

     “Event of Default” has the meaning specified in Section 11.1.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 14

 

 

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

     “Existing Letters of Credit” means each of the letters of credit listed on
Schedule 1.1(D), issued under the Original Loan Agreement.

     “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/8th of 1.00%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the Administrative Agent.

     “FDIC” means the Federal Deposit Insurance Corporation, and any Governmental Authority
succeeding to any of its principal functions.

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System or
any successor thereto.

     “Financial Statements” means, according to the context in which used, the financial
statements referred to in Section 6.2 and Section 7.6 or any other financial
statements required to be given to the Administrative Agent pursuant to this Agreement.

     “Fiscal Period” means one of the three fiscal periods in a Fiscal Quarter, each of
which is approximately one calendar month in duration. There are twelve Fiscal Periods in each
Fiscal year.

     “Fiscal Quarter” means a period of three calendar months (with respect to the Parent)
beginning on the first day of each July, October, January, and April.

     “Fiscal Year” means, with respect to any Person, such Person’s fiscal year for
financial accounting purposes.

     “Fixed Assets” means, with respect to any Person, the Equipment and Real Estate of
such Person.

     “Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Period of the Parent,
determined for the Parent and its Subsidiaries on a consolidated basis for the preceding twelve
Fiscal Periods, the ratio of EBITDA, divided by Fixed Charges.

     “Fixed Charges” means, with respect to any fiscal period, determined for any Person
(the “subject Person”) on a consolidated basis, without duplication, the sum of Interest Expense,
Capital Expenditures (excluding, in the case of the Obligated Parties, Capital Expenditures funded
with Debt other than Revolving Loans, but including, without duplication, principal payments with
respect to any such Debt), Distributions in respect of any Capital Stock,

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 15

 

 

scheduled principal payments of Debt (other than payments of the IRB Debt), and federal,
state, local, and foreign income taxes (not less than zero), excluding deferred taxes.

     “Funding Account” has the meaning specified in Section 2.2(d).

     “Funding Date” means the date on which a Borrowing occurs.

     “GAAP” means generally accepted accounting principles and practices set forth from
time to time in the opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable stature and authority
within the U.S. accounting profession) that are applicable to the circumstances as of the date of
determination.

     “General Intangibles” means, with respect to any Person, “general intangibles”, as
such term is defined in the UCC, and all other choses in action and causes of action, intangible
personal property of every kind and nature (other than Accounts), including all contract rights,
payment intangibles, Proprietary Rights, corporate or other business records, inventions, designs,
blueprints, plans, specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds that may become due to such Person in connection
with the termination of any Plan or other employee benefit plan or any rights thereto and any other
amounts payable to such Person from any Plan or other employee benefit plan, rights and claims
against carriers and shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which such Person is beneficiary,
rights to receive dividends, distributions, cash, Instruments and other property in respect of or
in exchange for pledged equity interests or Investment Property and any letter of credit,
guarantee, claim, security interest or other security held by or granted to such Person.

     “Goods” means “goods” as such term is defined in the UCC.

     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory, or administrative functions of or
pertaining to government, and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing, and any department, agency, board,
commission, tribunal, committee, or instrumentality of any of the foregoing.

     “Guarantor” means each of (a) Excel Cargo, Inc., Vulcan Aviation, Inc., and Jupiter
Airline Services, Inc. (b) the Borrowers and (c) each other Person who becomes a party to any
Guaranty Agreement pursuant to the terms of this Agreement, and “Guarantors” means two or
more of the foregoing Persons, collectively.

     “Guaranty” means, with respect to any Person, all obligations of such Person that in
any manner directly or indirectly guarantee or assure, or in effect guarantee or assure, the
payment or performance of any indebtedness, dividend, or other obligations of any other Person (the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 16

 

 

“guaranteed obligations”), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, excluding the endorsement of checks and other similar
instruments in the ordinary course of business, but including any such obligations incurred through
an agreement, contingent or otherwise: (a) to purchase the guaranteed obligations or any property
constituting security therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet condition; or (c) to
lease property or to purchase any debt or equity securities or other property or services.

     “Guaranty Agreement” means, each of the Parent Guaranty Agreement and each Subsidiary
Guaranty Agreement, and “Guaranty Agreements” means all of such agreements, collectively.

     “Hedge Agreement” means any and all transactions, agreements, or documents now
existing or hereafter entered into, that provide for an interest rate, credit, commodity, or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging a Person’s exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations, or commodity prices.

     “Indemnified Liabilities” has the meaning specified in Section 15.11(a).

     “Indemnified Person” has the meaning specified in Section 15.11(a).

     “Insolvency Proceeding” means any bankruptcy, insolvency, liquidation, receivership,
assignment for the benefit of creditors, or any similar proceeding or process.

     “Instruments” means “instruments”, as such term is defined in the UCC.

     “Intercompany Accounts” means all assets and liabilities, however arising, that are
due to the Parent or a Subsidiary of the Parent from, that are due from the Parent or a Subsidiary
of the Parent to, or that otherwise arise from any transaction by the Parent or a Subsidiary of the
Parent with, any Affiliate of the Parent or a Subsidiary of the Parent.

     “Interest Expense” means, with respect to any Person for any fiscal period, the
aggregate amount of interest required to be paid or accrued during such period on all Debt of such
Person during such period, whether such interest was or is required to be reflected as an item of
expense or capitalized, including payments consisting of interest in respect of Capital Leases or
synthetic leases, and including unused commitment fees, facility fees, and similar fees and
expenses in connection with the borrowing of money (including all fees and expenses incurred in
connection with Hedge Agreements entered into with respect to any Debt).

     “Interest Payment Date” means, (a) the first day of each calendar month, and (b) the
Termination Date.

     “Interest Period” means, with respect to any LIBOR Rate Loan, the period commencing on
the Funding Date of such Loan or on the Continuation/Conversion Date on which such Loan is
continued as or converted into a LIBOR Rate Loan, and ending on the date one, two, three, or

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 17

 

 

six months thereafter as selected by a Borrower in a Notice of Borrowing or Notice of
Continuation/Conversion, provided that:

          (a) if any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;

          (b) any Interest Period that begins 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 Stated Termination Date.

     “Interest Rate” means each or any of the interest rates, including the Default Rate,
set forth in Section 3.1.

     “Inventory” means “inventory”, as such term is defined in the UCC, and inventory,
goods, and merchandise to be furnished under any contract of service or held for sale or lease,
returned goods, raw materials, work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature, or description that are used or consumed in a Person’s
business or used in connection with the packing, shipping, advertising, selling, or finishing of
such goods, merchandise, and all documents of title or other Documents representing them.

     “Investment” means any acquisition by an Obligated Party of property in exchange for
cash or other property, whether in the form of an acquisition of Capital Stock, Debt, or other
indebtedness or obligation, or the purchase or acquisition of any other assets or property, or a
loan, advance, capital contribution, or subscription, excluding acquisitions in the ordinary course
of business of such Obligated Party of Real Estate, Equipment, and Inventory to be used in the
business of such Obligated Party.

     “Investment Property” means “investment property”, as such term is defined in the UCC,
and any: (a) securities, whether certificated or uncertificated; (b) securities entitlements; (c)
securities accounts; (d) commodity contracts; and (e) commodity accounts.

     “IRB
Debt” means the debt and obligations arising out of the $19,000,000 California
Economic Development Financing Authority Variable Rate Demand Airport Facilities Revenue Bonds,
Series 1998 (Mercury Air Group, Inc. Project). 

“IRS” means the Internal Revenue Service and any Governmental Authority succeeding to
any of its principal functions under the Code.

     “Latest Projections” means: (a) on the Closing Date and thereafter until the
Administrative Agent receives new projections pursuant to Section 6.2(e), the projections
of the Obligated Parties’ financial condition, results of operations, and cash flow, in each case
for the period commencing on April 1, 2005 and ending on June 30, 2006 and delivered to the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 18

 

 

Administrative Agent prior to the Closing Date; and (b) thereafter, the projections most
recently received by the Administrative Agent pursuant to Section 6.2(e).

     “Lender” means any of the lending institutions signatory to this Agreement as
specified on the signature pages hereto or in any Assignment and Acceptance as a “Lender”, the
Administrative Agent to the extent of any Agent Advance outstanding, and the Banns any two or more of such Persons,
collectively.

     “Letter of Credit” has the meaning specified in Section 2.4(a).

     “Letter
of Credit Fee” has the meaning specified in Section
3.5.

     “Letter of Credit Fee Percentage” means with respect to any Letter of Credit, on any
date of determination, a per annum percf “Applicable Margin”, plus, during the existence of any Event of Default,
an additional 2.00% per annum.

     “Letter of Credit Issuer” means the Bank or any Affiliate of the Bank.

     “Letter-of-Credit Rights” means “letter-of-credit rights”, as such term is defined in
the UCC, and any rights to payment or performance under a letter of credit, whether or not the
beneficiary, has demanded or is entitled to demand payment or performance.

     “Letter of Credit Subfacility” means $22,500,000.

     “LIBOR Rate” means, for any Interest Period, with respect to LIBOR Rate Loans, the
rate of interest per annum determined pursuant to the following formula:

	 	 	 
	LIBOR Rate =

	 	Offshore Base Rate
	 	 	 
	 

	 	1.00 — Eurodollar Reserve Percentage

     Where,

“Eurodollar Reserve Percentage” means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the next
1/8th of 1.00%) in effect on such day applicable to member banks under regulations
issued from time to time by the Federal Reserve Board for determining the maximum
reserve requirement (including any emergency, supplemental, or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). The LIBOR Rate for each outstanding LIBOR Rate Loan
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.

“Offshore Base Rate” means the rate per annum appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 19

 

 

If for any reason such rate is not available, the Offshore Base Rate shall be, for
any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates. If for any reason none of the foregoing
rates is available, the Offshore Base Rate shall be, for any Interest Period, the
rate per annum determined by the Administrative Agent as the rate of interest at
which Dollar deposits in the approximate amount of the LIBOR Rate Loan comprising
part of such Borrowing would be offered by the Bank’s London Branch to major banks
in the offshore Dollar market at their request at or about 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period.

     “LIBOR Rate Loans” means, collectively, the LIBOR Rate Revolving Loans.

     “LIBOR Rate Revolving Loan” means any portion of the Revolving Loans during any period
in which such portion bears interest based on the LIBOR Rate.

     “Lien” means: (a) any interest in property securing an obligation owed to, or a claim
by, a Person other than the owner of the property, whether such interest is based on the common
law, statute, or contract, and including a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease, consignment, or
bailment for security purposes; (b) to the extent not included under clause (a) preceding,
any reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction,
lease, or other title exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.

     “Loan Account” means the loan account of the Borrowers, which account shall be
maintained by the Administrative Agent.

     “Loan Documents” means, collectively, this Agreement, the Mortgages, the Guaranty
Agreements, agreements providing for Bank Products, and any other agreements, instruments, and
documents heretofore, now, or hereafter evidencing, securing, guaranteeing, or otherwise relating
to the Obligations, the Collateral, or any other aspect of the transactions contemplated by this
Agreement.

     “Loans” means, collectively, all loans and advances provided for in Article 2.

     “Majority Lenders” means, at any time, Lenders whose Pro Rata Shares aggregate more
than 50.0% of the Commitments, provided, that the Commitment of any Defaulting Lender and
such Defaulting Lender’s right to vote on any issue shall be excluded for the purpose of making any
determination of Majority Lenders but not for the purpose of determining the number of Lenders
required to comprise the Majority Lenders.

     AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 20

 

 

     “Management Agreement” means: (a) with respect to any corporation, its bylaws; (b)
with respect to any limited liability company or other similar entity, its operating agreement; (c)
with respect to any limited partnership, its partnership agreement; and (d) with respect to any
other entity, any agreement or other document similar in nature to any of the foregoing.

     “Margin Stock” means “margin stock” as such term is defined in Regulation T, U, or X
of the Federal Reserve Board.

     “Material Adverse Effect” means: (a) a material adverse change in, or a material
adverse effect upon, (i) the Collateral or (ii) the operations, business, properties, prospects, or
condition (financial or otherwise) of any one of the four Critical Borrowers or the remaining
Obligated Parties, taken as a whole; (b) a material impairment of the ability of any Obligated
Party or any Affiliate of any Obligated Party to perform 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 Obligated Party or any Affiliate of any Obligated Party of any Loan
Document to which it is a party.

     “Maximum Rate” means, at any time, the highest rate of interest the Lenders may
legally contract for, charge, or receive in respect of the Obligations as allowed by any
Requirement of Law.

     “Maximum Revolver Amount” means $45,000,000.

     “Mortgage” means and includes any mortgage, deed of trust, deed to secure debt,
assignment, or other instrument executed and delivered by any Obligated Party to or for the benefit
of the Administrative Agent by which the Administrative Agent, for the benefit of the Credit
Providers, acquires a Lien on any Real Estate of such Obligated Party or a collateral assignment of
such Obligated Party’s interest under a lease of Real Estate, and all amendments, modifications,
and supplements thereto, and “Mortgages” means two or more of such mortgages, deeds of
trust, deeds to secure debt, assignments, and other instruments, as the context requires.

     “Multi-employer Plan” means a “multi-employer plan” as defined in Section 4001(a)(3)
of ERISA that is or was at any time during the current calendar year or the immediately preceding
six calendar years contributed to by an Obligated Party or any ERISA Affiliate.

     “Negative Pledge” means any agreement, contract, or other arrangement whereby any
Obligated Party is prohibited from, or would otherwise be in default as a result of, creating,
assuming, incurring, or suffering to exist, directly or indirectly, any Lien on any of its assets
in favor of the Administrative Agent under the Loan Documents.

     “Net Amount of Eligible Accounts” means, at any time, the gross amount of Eligible
Accounts, and less returns, discounts, claims, credits, allowances, accrued rebates,
offsets, deductions, counterclaims, written disputes, and other defenses of any nature at any time
issued, owing, granted, outstanding, available, or claimed.

     “Net Amount of Eligible Foreign Accounts” means, at any time, the gross amount of
Eligible Foreign Accounts, and less returns, discounts, claims, credits, allowances,
accrued

     AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 21

 

 

rebates, offsets, deductions, counterclaims, written disputes, and other defenses of any
nature at any time issued, owing, granted, outstanding, available, or claimed

     “Non-Consenting Lender” has the meaning specified in Section 13.1(e).

     “Non-Ratable Loan” and “Non-Ratable Loans” have the meanings specified in
Section 2.2(i).

     “Notice of Borrowing” has the meaning specified in Section 2.2(c).

     “Notice of Continuation/Conversion” has the meaning specified in Section
3.2(b).

     “Obligated Party” means each of the Borrowers and the Guarantors, individually, and
“Obligated Parties” means two or more of such Persons, collectively.

     “Obligations” means all present and future loans, advances, liabilities, obligations,
covenants, duties, and debts owing the Obligated Parties, or any of them, to the Administrative
Agent, the Bank, the Letter of Credit Issuer, each Indemnified Person, and the Lenders, arising
under or pursuant to this Agreement or any of the other Loan Documents, including the Guaranty
Agreements and Existing Letters of Credit, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of a letter of credit,
acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or guarantor, and including
all principal, interest, charges, expenses, fees, attorneys’ fees (including Attorney Costs),
filing fees and any other sums chargeable to any Obligated Party hereunder or under any of the
other Loan Documents. “Obligations” includes, without limitation, (a) all debts, liabilities, and
obligations owing by the Obligated Parties now or hereafter arising from or in connection with the
Letters of Credit and (b) all debts, liabilities and obligations owing by the Obligated Parties now
or hereafter arising from or in connection with Bank Products.

     “Organization Certificate” means: (a) with respect to any corporation, its articles
or certificate of incorporation; (b) with respect to any limited liability company or other similar
entity, its certificate of formation or organization; (c) with respect to any limited partnership,
its certificate of limited partnership; and (d) with respect to any other entity, any certificate
or other document similar in nature to any of the foregoing.

     “Original Loan Agreement” has the meaning specified in Recital A of this
Agreement.

     “Other Information” has the meaning specified in Section 15.8(e) in this
Agreement.

     “Other Taxes” means any present or future stamp or documentary taxes or any other
excise or property taxes, charges, or similar levies (excluding, in the case of each Lender and the
Administrative Agent, such taxes (including income taxes or franchise taxes) as are imposed on or
measured by each Lender’s or the Administrative Agent’s gross or net income) that arise from any
payment made hereunder or from the execution, delivery, or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.

     “Parent” means Mercury Air Group, Inc., a Delaware corporation.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 22

 

 

     “Parent Guaranty Agreement” means that certain Guaranty Agreement, dated concurrently
herewith, duly executed by the Parent in favor of the Administrative Agent, for the benefit of the
Credit Providers, as such agreement may be amended, restated, or otherwise modified and in effect
from time to time.

     “Participant” means any commercial bank, financial institution, or other Person that
is not an Affiliate of the Obligated Parties who shall have been granted the right by any Lender to
participate in the financing provided by such Lender under this Agreement, and who shall have
entered into a participation agreement in form and substance satisfactory to such Lender.

     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Pub. L. No. 107-56, 115 Stat. 272
(Oct. 26, 2001)), as amended.

     “PBGC” means the Pension Benefit Guaranty Corporation or any Governmental Authority
succeeding to the functions thereof.

     “Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA that any Obligated Party or any ERISA Affiliate sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a Multi-employer Plan
has made contributions at any time during the immediately preceding five plan years.

     “Permitted Affiliate Transactions” means those Accounts which have been created in an
arms-length transaction and in the ordinary course of business by and between any Borrower and any
of Betty Ward, Pacific Air Cargo, Inc., Mariah or Associated Energy Group.

     “Permitted Investment” means any Investment made by an Obligated Party at a time when
no Default or Event of Default exists or would result therefrom consisting of: (a) Investments in
direct obligations of the U.S., or any agency thereof, or obligations guaranteed by the U.S.,
provided that such obligations mature within one year from the date of acquisition thereof;
(b) Investments in certificates of deposit maturing within one year from the date of investment,
bankers’ acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the laws of the U.S. or any state
thereof having capital and surplus aggregating at least One Hundred Million Dollars ($100,000,000);
(c) Investments in commercial paper given a rating of “A2” or better by Standard & Poor’s
Corporation or “P2” or better by Moody’s Investors Service, Inc. and maturing not more than 90 days
from the date of creation thereof; (d) Investments in Hedge Agreements entered into for the purpose
of limiting the amount of interest payable under this Agreement; (e) Investments in mutual funds
substantially all of the assets of which are comprised of securities of the types described in
clause (a), clause (b), and clause (c) preceding; (f) Investments by any
Obligated Party in any Borrower; (g) Investments in an aggregate amount of not greater than
$1,000,000 used for the repurchase of any Borrower’s stock solely in connection with a
Recapitalization; and (h) existing Investments listed on Schedule 1.1(B).

     “Permitted Liens” means:

          (a) the Agent’s Liens;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 23

 

 

          (b) Liens, if any, that are described on Schedule 1.1(C) and Liens that secure
Debt permitted pursuant to clause (c) of Section 8.12, provided that
any Liens securing refunded, renewed, or extended Debt pursuant to such clause (c)
shall not attach to any assets other than those assets securing the Debt being refunded,
renewed, or extended;

          (c) Liens for (i) taxes, fees, assessments, or other charges of a Governmental
Authority that are not delinquent, and (ii) taxes, fees, assessments, or other charges of a
Governmental Authority in an amount not in excess of $375,000, provided that the
payment of such taxes, fees, assessments, or other charges of a Governmental Authority
referenced in this clause (ii) that are due and payable is being contested in good
faith and by appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established in accordance with GAAP on the applicable Obligated Party’s
books and records and a stay of enforcement of any such Lien is in effect;

          (d) Liens consisting of deposits made in the ordinary course of business in connection
with, or to secure payment of, obligations under worker’s compensation, unemployment
insurance, social security, and other similar laws, or to secure the performance of bids,
tenders, or contracts (other than for the repayment of Debt) or to secure indemnity,
performance, or other similar bonds for the performance of bids, tenders, or contracts
(other than for the repayment of Debt) or to secure statutory obligations (other than Liens
arising under ERISA or Environmental Liens) or surety or appeal bonds, or to secure
indemnity, performance, or other similar bonds;

          (e) Liens securing the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords, and other similar Persons, provided that if any such Lien
arises from the nonpayment of such claims or demands when due, such claims or demands do not
exceed $375,000 in the aggregate;

          (f) Liens constituting encumbrances in the nature of reservations, exceptions,
encroachments, easements, rights of way, covenants running with the land, and other similar
title exceptions or encumbrances affecting any Real Estate, provided that any such
Liens do not in the aggregate materially interfere with the use of such Real Estate in the
ordinary conduct of an Obligated Party’s business;

          (g) Liens that constitute purchase money Liens and secure Debt permitted under
clause (c) of Section 8.12 (including the lessors’ interests under Capital
Leases permitted under clause (c) of Section 8.12), but only to the extent
such Liens attach only to the Equipment acquired by the incurrence of such Capital Leases
and purchase money secured Debt;

          (h) Liens granted in connection with Permitted Subordinated Debt and subject to a
subordination agreement in form and substance satisfactory to the Administrative Agent in
its sole discretion;

          (i) Liens (i) arising from rights of setoff, but excluding any requirement for
provision of cash collateral, in favor of the Bank arising from any agreement entered into
in connection with any Obligated Party obtaining Bank Products from the Bank and

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 24

 

 

(ii) arising in favor of the Letter of Credit Issuer under the applicable application
and reimbursement agreement delivered to the Letter of Credit Issuer in connection with each
Letter of Credit; and

          (j) Liens arising from judgments and attachments in connection with court proceedings,
provided that: (i) the attachment or enforcement of such Liens would not otherwise
result in an Event of Default hereunder; (ii) such Liens are being contested in good faith
by appropriate proceedings diligently pursued; (iii) adequate financial reserves have been
established on the applicable Obligated Party’s books and records in accordance with GAAP;
(iv) no material Collateral is subject to a material risk of loss or forfeiture; (v) the
claims in respect of such Liens are fully covered by insurance (subject to ordinary and
customary deductibles); and (vi) a stay of execution pending appeal or proceeding for review
is in effect;

provided that (i) none of such Liens listed in clause (b) through clause
(j) preceding may attach to any Accounts of a Borrower, and (ii) none of such Liens listed in
clause (b) through clause (j) preceding, other than such Liens of a type and to the
extent provided by clause (e) preceding, may attach to any Inventory owned by a Borrower.

     “Permitted Subordinated Debt” means debt subordinated on terms and with documentation
acceptable to Administrative Agent in its sole discretion.

     “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, association, corporation, Governmental
Authority, or any other entity.

     “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) that any
Obligated Party sponsors or maintains or to which any Obligated Party makes, is making, or is
obligated to make contributions and includes any Pension Plan.

     “Platform” has the meaning specified in Section 15.8(e) in this Agreement.

     “Pro Rata Share” means, with respect to a Lender, a fraction (expressed as a
percentage), the numerator of which is the amount of such Lender’s Commitment and the denominator
of which is the sum of the amounts of all of the Lenders’ Commitments, or if no Commitments are
outstanding, a fraction (expressed as a percentage), the numerator of which is the amount of Loans
owed to such Lender and the denominator of which is the aggregate amount of the Loans owed to all
Lenders, in each case giving effect to a Lender’s participation in Non-Ratable Loans and Agent
Advances.

     “Proprietary Rights” means licenses, franchises, permits, patents, patent rights,
copyrights, works that are the subject matter of copyrights, trademarks, service marks, trade
names, trade styles, patent applications, copyright applications, trademark and service mark
applications, and licenses and rights related to any of the foregoing, and any other rights under
any of the foregoing, extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and any rights to sue for past, present and future
infringement of any of the foregoing. With respect to the Obligated Parties, “Proprietary
Rights” includes, without limitation, all of the items listed on Schedule 7.11.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 25

 

 

     “Real Estate” means, with respect to any Person, such Person’s now or hereafter owned
or leased estates in real property (as applicable), including fees, leaseholds, and future
interests, together with such Person’s now or hereafter owned or leased interests in the
improvements thereon, the fixtures attached thereto, and the easements appurtenant thereto.

     “Recapitalization” of a Person means a material change in the capital structure of
such Person resulting in the stock of such Person no longer being traded on any stock exchange or
over-the-counter market.

     “Release” means a release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching, or migration of a Contaminant into the indoor or outdoor
environment or into or out of any Real Estate or other property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater, or Real Estate or other
property.

     “Report” has the meaning specified in Section 14.18(a).

     “Reportable Event” means, any of the events set forth in Section 4043(b) of ERISA or
the regulations thereunder, other than any such event for which the 30 day notice requirement under
ERISA has been waived in regulations issued by the PBGC.

     “Required Lenders” means, at any time, Lenders whose Pro Rata Shares aggregate more
than 66?% of the Commitments, provided, that the Commitment of any Defaulting Lender and
such Defaulting Lender’s right to vote on any issue shall be excluded for the purpose of making any
determination of Required Lenders but not for the purpose of determining the number of Lenders
required to comprise the Required Lenders.

     “Requirement of Law” means, as to any Person, any law (statutory or common), treaty,
rule, or regulation or determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which the Person or any of
its property is subject.

     “Reserves” means any and all reserves that the Administrative Agent deems necessary in
its sole discretion to maintain with respect to the Collateral or any Borrower that limit the
availability of Borrowings hereunder or that represent amounts the Administrative Agent or any
Lender may be obligated to pay in the future on behalf of an Obligated Party (including (a) Bank
Product Reserves, (b) reserves for accrued, unpaid interest on the Obligations, (c) reserves for
rent at the chief executive office of an Obligated Party, except to the extent that either (x) the
Administrative Agent determines that such reserves are not necessary or (y) a landlord waiver
acceptable to the Administrative Agent has been entered into, (d) Environmental Compliance
Reserves, (e) reserves for customs charges and shipping charges relating to any Inventory in
transit, (f) reserves for warehousemen’s or bailees’ charges, (g) reserves for taxes, fees,
assessments, and other governmental charges, and (h) a Dilution Reserve.

     “Responsible Officer” means, with respect to any Obligated Party, the chief executive
officer, the president, the chief financial officer, the treasurer, the director of finance, any
vice president, or any other officer having substantially the same authority and responsibility as
any of the foregoing.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 26

 

 

     “Revolving Loans” has the meaning specified in Section 2.2(a) and includes
each Agent Advance and Non-Ratable Loan.

     “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204, 116
Stat. 745).

     “Settlement” has the meaning specified in Section 14.15(a)(i).

     “Settlement Date” has the meaning specified in Section 14.15(a)(i).

     “Software” means “software”, as such term is defined in the UCC, other than software
embedded in any category of Goods, including all computer programs and all supporting information
provided in connection with a transaction related to any program.

     “Solvent” means, when used with respect to any Person, that at the time of
determination:

          (a) the assets of such Person, at a fair valuation, are in excess of the total amount
of its debts (including contingent liabilities);

          (b) the present fair saleable value of its assets is greater than its probable
liability on its existing debts as such debts become absolute and matured;

          (c) it is then able and expects to be able to pay its debts (including contingent debts
and other commitments) as they mature; and

          (d) it has capital sufficient to carry on its business as conducted and as proposed to
be conducted.

For purposes of determining whether a Person is Solvent, the amount of any contingent liability
shall be computed as the amount that, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual or matured
liability.

     “Stated Termination Date” means September 6, 2007.

     “Subsidiary” means, with respect to any Person (the “subject Person”), any
corporation, association, partnership, limited liability company, joint venture, or other business
entity of which more than 50.0% of the voting Capital Stock, is owned or controlled directly or
indirectly by the subject Person, or one or more of the Subsidiaries of the subject Person, or a
combination thereof. Unless the context otherwise clearly requires, references herein to a
“Subsidiary” refer to a Subsidiary of an Obligated Party.

     “Subsidiary Guaranty Agreement” means each Guaranty Agreement, dated concurrently
herewith, duly executed by any Obligated Party, other than the Parent, in favor of the
Administrative Agent, for the benefit of the Credit Providers, as such agreement may be amended,
restated, or otherwise modified and in effect from time to time, and “Subsidiary Guaranty
Agreements” shall mean all such Subsidiary Guaranty Agreements, collectively.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 27

 

 

     “Supporting Cash Deposit” has the meaning specified in Section 2.4(g).

     “Supporting Letter of Credit” has the meaning specified in Section 2.4(g).

     “Supporting Obligations” means “supporting obligations”, as such term is defined in
the UCC, including letters of credit and guaranties issued in support of Accounts, Chattel Paper,
Documents, General Intangibles, Instruments, or Investment Property.

     “Suppressed Unused Availability” means the amount by which clause (b) of the
definition of Borrowing Base exceeds clause (a).

     “Taxes” means any and all present or future taxes, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, such taxes (including income taxes or franchise taxes) as are
imposed on or measured by the Administrative Agent’s or such Lender’s gross or net income in any
jurisdiction (whether federal, state, or local and including any political subdivision thereof)
under the laws of which the Administrative Agent or such Lender, as the case may be, is organized
or maintains a lending office.

     “Termination Date” means the earliest to occur of (a) the Stated Termination Date, (b)
the date the Commitments are terminated (i) by the Borrowers pursuant to Section 4.2 or
(ii) pursuant to Section 11.2, and (c) the date this Agreement is otherwise terminated for
any reason whatsoever pursuant to the terms of this Agreement.

     “UCC” means the Uniform Commercial Code (or any successor statute), as in effect from
time to time, of the State of California or of any other state the laws of which are required as a
result thereof to be applied in connection with the issue of perfection of security interests;
provided that to the extent that the UCC is used to define any term herein or in any other
documents and such term is defined differently in different Articles or Divisions of the UCC, the
definition of such term as contained in Article or Division 9 shall govern.

     “Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.

     “Unused Availability” means, at any time, the Borrowing Base, minus the
Aggregate Revolver Outstandings.

     “Unused Letter of Credit Subfacility” means an amount equal to the Letter of Credit
Subfacility, minus the sum of (a) the aggregate undrawn amount of all outstanding Letters
of Credit, plus, without duplication, (b) the aggregate unpaid reimbursement obligations
with respect to all Letters of Credit.

     “Unused Line Fee” has the meaning specified in Section 3.4.

     “Unused Line Fee Percentage” has the meaning set forth in the definition of
“Applicable Margin”.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 28

 

 

     “U.S.” means the United States of America.

     “Waived” means waived in writing by the Administrative Agent in accordance with this
Agreement and the other Loan Documents.

     “Wholly-Owned Subsidiary” means, with respect to any Person (the “subject Person”), a
Subsidiary all of the issued and outstanding Capital Stock (other than directors’ qualifying
shares) of which are owned by the subject Person or one or more of the subject Person’s other
Wholly-Owned Subsidiaries or by the subject Person and one or more of the subject Person’s
Wholly-Owned Subsidiaries.

     Section 1.2 Accounting Terms. Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given to such term in
accordance with GAAP, and all financial computations in this Agreement shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP as consistently applied and using
the same method for inventory valuation as used in the preparation of the Financial Statements. If
at any time any change in GAAP would affect the computation of any financial covenant or
requirement set forth in any Loan Document, and either the Obligated Parties or the Majority
Lenders shall request, the Administrative Agent, the Lenders, and the Obligated Parties shall
negotiate in good faith to amend such covenant or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Majority Lenders);
provided that, until so amended, (a) such covenant or requirement shall continue to be
determined in accordance with GAAP prior to such change and (b) the Obligated Parties shall provide
to the Administrative Agent, with sufficient copies for distribution by the Administrative Agent to
each 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.

     Section 1.3 Interpretive Provisions.

          (a) The meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms. Terms used herein that are defined in the UCC and are not
otherwise defined herein have the meanings specified therefor in the UCC.

          (b) The words “hereof,” “herein,” “hereunder,” and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement. Section,
Schedule, and Exhibit references are to this Agreement unless otherwise specified. The term
“documents” includes any and all instruments, documents, agreements, certificates,
indentures, notices, and other writings, however evidenced. The term “including” is not
limiting and means “including, without limitation” or “including, but not limited to”, as
the context requires. 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”. The word “or”
is not exclusive.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 29

 

 

          (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) Unless otherwise expressly provided herein (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all subsequent
amendments, restatements, and other modifications thereto, but only to the extent such
amendments, restatements, and other modifications are not prohibited by the terms of any
Loan Document, and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending, replacing,
supplementing, or interpreting the statute or regulation.

          (e) The captions and headings of this Agreement and other Loan Documents are for
convenience of reference only and shall not affect the interpretation of this Agreement and
the other Loan Documents.

          (f) This Agreement and the other Loan Documents may use several different limitations,
tests, or measurements to regulate the same or similar matters. All such limitations,
tests, and measurements are cumulative and shall each be performed in accordance with their
terms.

          (g) For purposes of Section 11.1, a breach of a financial covenant contained in
Section 8.21 or Section 8.22 shall be deemed to have occurred as of any date
of determination thereof by the Administrative Agent or as of the last day of any specified
measuring period, regardless of when the Financial Statements reflecting such breach are
delivered to the Administrative Agent.

     Section 1.4 No Strict Construction. This Agreement and the other Loan Documents are
the result of negotiations among, and have been reviewed by counsel to, the Administrative Agent,
each Lender, and the Obligated Parties and are the products of all parties. Accordingly, this
Agreement and the other Loan Documents shall not be construed against the Administrative Agent, the
Lenders, or the Obligated Parties merely because of their respective involvement in their
preparation.

ARTICLE 2

Loans and Letters of Credit

     Section 2.1 Credit Facility. Subject to the terms and conditions of this Agreement,
the Lenders agree to make available a credit facility for use by any one or more of the Borrowers
from time to time during the term of this Agreement. Such credit facility shall be composed of a
revolving credit facility consisting of Revolving Loans and Letters of Credit as described in
Section 2.2 and Section 2.4.

     Section 2.2 Revolving Loans.

          (a) Amounts. Subject to the terms and conditions of this Agreement, each
Lender severally, but not jointly, agrees, upon a Borrower’s request from time to time on

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 30

 

 

any Business Day during the period from the Closing Date to the Termination Date, to
make revolving loans (the “Revolving Loans”) to the Borrowers in amounts not to
exceed such Lender’s Pro Rata Share of the Commitments. The Lenders, however, in their
unanimous discretion, may elect to make Revolving Loans that would cause the Aggregate
Revolver Outstandings to exceed the Borrowing Base on one or more occasions, but if they do
so, neither the Administrative Agent nor the Lenders shall be deemed thereby to have changed
the limits of the Borrowing Base or to be obligated to exceed such limits on any other
occasion. If any requested Revolving Loan exceeds the Unused Availability then the Lenders
may refuse to make or may otherwise restrict the making of such Revolving Loan, subject to
the Administrative Agent’s authority, in its sole discretion, to make Agent Advances
pursuant to the terms of Section 2.2(j).

          (b) [Reserved.]

          (c) Procedure for Borrowing.

               (i) Each Borrowing of Revolving Loans shall be made upon a Borrower’s
irrevocable written notice delivered to the Administrative Agent in the form of a
notice of borrowing in the form of Exhibit D or such other form as may be
acceptable to the Administrative Agent in its sole discretion (any such notice being
referred to herein as a “Notice of Borrowing”), which must be received by
the Administrative Agent prior to 1:30 p.m. (Pasadena, California time) (y) three
Business Days prior to the requested Funding Date, in the case of LIBOR Rate
Revolving Loans or (z) on the requested Funding Date, in the case of Base Rate
Revolving Loans, specifying:

                    (A) the amount of the Borrowing, which in the case of LIBOR Rate
Revolving Loans shall be in an amount that is not less than One Million
Dollars ($1,000,000) or an integral multiple of One Million Dollars
($1,000,000) in excess thereof;

                    (B) the requested Funding Date, which must be a Business Day;

                    (C) whether the Revolving Loans requested are to be Base Rate Revolving
Loans or LIBOR Rate Revolving Loans; provided that if such Borrower
fails to specify whether any Revolving Loans are to be Base Rate Revolving
Loans or LIBOR Rate Revolving Loans, such request shall be deemed a request
for Base Rate Revolving Loans; and

                    (D) if the requested Revolving Loans are to be LIBOR Rate Revolving
Loans, the duration of the Interest Period; provided that if such
Borrower fails to select the duration of the Interest Period with respect to
any requested LIBOR Rate Revolving Loans, such Borrower shall be deemed to
have requested such Revolving Loans be made as LIBOR Rate Revolving Loans
with an Interest Period of one month in duration;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 31

 

 

provided that with respect to the Borrowing to be made on the Closing Date,
such Borrowing will consist of Base Rate Revolving Loans only.

               (ii) With respect to any request for Base Rate Revolving Loans, in lieu of
delivering a Notice of Borrowing, a Borrower may give the Administrative Agent
telephonic notice of such request for advances to the Funding Account not later than
the required time specified in clause (i) preceding. The Administrative
Agent at all times shall be entitled to rely on such telephonic notice in making any
such Revolving Loans, regardless of whether any written confirmation is received by
the Administrative Agent.

               (iii) Whenever checks or other items are presented to the Bank for payment
against the Funding Account or any other Deposit Account maintained by a Borrower
with the Bank in an amount greater than the then available balance in the Funding
Account or such other Deposit Account, such presentation may, at the election of the
Administrative Agent in its sole discretion, be deemed to be a request by the
Borrowers for a Base Rate Revolving Loan on the date of such presentation in an
amount, subject to clause (i)(A) preceding, sufficient to cover all such
items presented in the Funding Account or such other Deposit Account on such date.

               (iv) The Borrowers shall have no right to request LIBOR Rate Revolving Loans
during the existence of any Default or Event of Default.

          (d) Disbursement. On the Closing Date, the Borrowers shall deliver to the
Administrative Agent a notice setting forth the deposit account maintained with the Bank
(the “Funding Account”) to which the Administrative Agent is authorized by the
Borrowers to transfer the proceeds of the Revolving Loans requested hereunder. Each of the
Borrowers agrees that the Funding Account may be established in the name of any other
Borrower, and hereby agrees that the Funding Account has been established for the benefit of
all of the Borrowers for receipt of the proceeds of Revolving Loans hereunder. Each
Borrower hereby appoints each other Borrower as its agent with respect to receipt of the
proceeds of Revolving Loans in the Funding Account as contemplated herein. The Borrowers
may designate a replacement Funding Account from time to time by written notice to the
Administrative Agent. Any designation by the Borrowers of the Funding Account must be
reasonably acceptable to the Administrative Agent.

          (e) Reliance Upon Authority; No Liability. The Administrative Agent is
entitled to rely conclusively on any individual’s request for Revolving Loans on behalf of a
Borrower, as long as the proceeds thereof are to be transferred to the Funding Account. The
Administrative Agent has no duty to verify the identity of any individual representing
himself or herself as a person authorized by any Borrower to make such requests on its
behalf. The Administrative Agent shall not incur any liability to the Borrowers as a result
of acting upon any notice referred to in Section 2.2(c) and Section 2.2(d),
that the Administrative Agent reasonably believes to have been given by an officer or other
person duly authorized by a Borrower to request Revolving Loans on its behalf or for
otherwise acting under this Section 2.2. The crediting of Revolving

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 32

 

 

Loans to the Funding Account, or wire transfer to such Person as a Borrower shall
direct, shall conclusively establish the obligation of the Borrowers to repay such Revolving
Loans as provided herein.

          (f) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in lieu
thereof) made pursuant to Section 2.2(c) shall be irrevocable and the Borrowers
shall be bound to borrow the funds requested therein in accordance therewith.

          (g) The Administrative Agent’s Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof), the Administrative Agent shall elect in
its discretion to have the terms of Section 2.2(h), Section 2.2(i), or
Section 2.2(j), if applicable, apply to such requested Borrowing. If the Bank
declines in its sole discretion to make a Non-Ratable Loan pursuant to Section
2.2(i), the terms of Section 2.2(h) shall apply to the requested Borrowing
unless such requested Borrowing is to be made by the Administrative Agent as an Agent
Advance pursuant to Section 2.2(j).

          (h) Making of Revolving Loans. If the Administrative Agent elects to have the
terms of this Section 2.2(h) apply to a requested Borrowing, then promptly after
receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the Administrative
Agent shall notify the Lenders by telecopy, telephone, or e-mail of the requested Borrowing.
Each Lender shall transfer its Pro Rata Share of the requested Borrowing to the
Administrative Agent in immediately available funds, to the account from time to time
designated by the Administrative Agent, not later than 12:00 noon (Pasadena, California
time) on the applicable Funding Date. After the Administrative Agent’s receipt of all
proceeds of such requested Borrowing, the Administrative Agent shall make the proceeds of
such requested Borrowing available to the applicable Borrower on the applicable Funding Date
by transferring same day funds to the Funding Account. Unless the Lenders in their
unanimous discretion consent otherwise, no Borrowing under this clause (h) shall be
permitted if the requested Borrowing exceeds the Unused Availability on the applicable
Funding Date prior to giving effect to such requested Borrowing.

          (i) Making of Non-Ratable Loans. If the Administrative Agent elects, with the
consent of the Bank, to have the terms of this Section 2.2(i) apply to a requested
Borrowing, the Bank shall make a Revolving Loan in the amount of such requested Borrowing
available to the Borrowers on the applicable Funding Date by transferring same day funds to
the Funding Account. Each Revolving Loan made solely by the Bank pursuant to this
Section 2.2(i) is referred to hereinafter as a “Non-Ratable Loan,” and such
Revolving Loans are collectively referred to as the “Non-Ratable Loans.” Each
Non-Ratable Loan shall be subject to all the terms and conditions applicable to other
Revolving Loans except that all payments of principal and interest thereon shall be payable
to the Bank solely for its own account. The Administrative Agent shall not request the Bank
to make any Non-Ratable Loan if (A) the Administrative Agent has received written notice
from any Lender that one or more of the applicable conditions precedent set forth in
Article 9 will not be satisfied on the requested Funding Date for the applicable
Borrowing or (B) the requested Borrowing exceeds the Unused Availability on the applicable
Funding Date prior to giving effect to such requested Borrowing. The

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 33

 

 

Non-Ratable Loans shall be secured by the Agent’s Liens in and to the Collateral and
shall constitute Base Rate Revolving Loans and Obligations hereunder.

          (j) Agent Advances. Subject to the limitations set forth below, the
Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in
the Administrative Agent’s sole discretion, after the occurrence of a Default or an Event of
Default or at any time that any of the other conditions precedent set forth in Article
9 have not been satisfied, to make Base Rate Revolving Loans to the Borrowers or any
Borrower on behalf of the Lenders, in an aggregate amount outstanding at any time not to
exceed ten percent (10%) of the Borrowing Base at such time, that the Administrative Agent,
in its reasonable business judgment, deems necessary or desirable: (i) to preserve or
protect the Collateral, or any portion thereof; (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations (including through the
Borrowers using any proceeds of such Revolving Loans to pay payroll and associated tax
obligations); or (iii) to pay any other amount chargeable to the Borrowers pursuant to the
terms of this Agreement, including costs, fees, and expenses as described in Section
15.7 (any of such advances are herein referred to as “Agent Advances”);
provided that after giving effect to the making of any Agent Advance, the Aggregate
Revolver Outstandings shall not exceed the Maximum Revolver Amount. The Required Lenders
may at any time revoke the Administrative Agent’s authorization to make Agent Advances. Any
such revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof. The Agent Advances shall be secured by the Agent’s
Liens in and to the Collateral and shall constitute Base Rate Revolving Loans and
Obligations hereunder.

     Section 2.3  [Reserved.]

     Section 2.4  Letters of Credit.

          (a) Agreement to Cause to Issue. Subject to the terms and conditions of this
Agreement, the Administrative Agent agrees to cause the Letter of Credit Issuer to issue for
the account of any of the Borrowers (whether one or more) one or more commercial/documentary
and standby letters of credit (each a “Letter of Credit” and collectively, the
“Letters of Credit”) from time to time during the term of this Agreement.

          (b) Amounts; Outside Expiration Date. The Administrative Agent shall not cause
to be issued any Letter of Credit at any time if: (i) the maximum face amount of the
requested Letter of Credit is greater than the Unused Letter of Credit Subfacility at such
time; (ii) the maximum undrawn amount of the requested Letter of Credit and all commissions,
fees, and charges due from such Borrower in connection with the opening thereof exceeds the
Unused Availability prior to giving effect to issuance of such requested Letter of Credit;
(iii) such Letter of Credit has an expiration date later than 30 days prior to the Stated
Termination Date; or (iv) such Letter of Credit has an expiration date later than twelve
calendar months from the date of issuance for standby letters of credit and six calendar
months from the date of issuance for commercial/documentary letters of credit,
provided that any Letter of Credit issued hereunder may, subject to this clause
(iv) and the other provisions of this Section 2.4,

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 34

 

 

include an “evergreen” or automatic renewal provision of the type referenced in
Section 2.4(d)(iii) without contravening the requirement contained in this
Section 2.4(b).

          (c) Other Conditions. In addition to being subject to the satisfaction of the
applicable conditions precedent contained in Article 9, the obligation of the
Administrative Agent to cause any Letter of Credit to be issued is subject to the following
conditions precedent having been satisfied in a manner satisfactory to the Administrative
Agent and the Letter of Credit Issuer:

               (i) the Borrowers shall have delivered to the Letter of Credit Issuer, at such
times and in such manner as the Letter of Credit Issuer may prescribe, an
application in form and substance satisfactory to the Letter of Credit Issuer and
reasonably satisfactory to the Administrative Agent for the issuance of the Letter
of Credit and such other documents as may be required pursuant to the terms thereof,
and the form, terms, and purpose of the proposed Letter of Credit shall be
reasonably satisfactory to the Administrative Agent and the Letter of Credit Issuer
(provided that in the event any term of such application or any other
document is inconsistent with the terms of this Agreement and the Letter of Credit
Issuer is either the same Person as the Administrative Agent or any Lender, then the
terms of this Agreement shall be controlling); and

               (ii) as of the date of issuance, no order of any court, arbitrator, or
Governmental Authority shall purport by its terms to enjoin or restrain money center
banks generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit, and no law, rule, or regulation applicable to money
center banks generally and no request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over money center banks
generally shall prohibit, or request that the Letter of Credit Issuer refrain from,
the issuance of letters of credit generally or the issuance of such Letter of
Credit.

          (d) Issuance of Letters of Credit.

               (i) Request for Issuance. If any Borrower wishes to cause the issuance
of a Letter of Credit, it shall notify the Administrative Agent and the Letter of
Credit Issuer in writing of such request for issuance at least three Business Days
prior to the proposed issuance date. Such notice shall be irrevocable and must
specify the original face amount of the Letter of Credit requested, the Business Day
of issuance of such requested Letter of Credit, whether such Letter of Credit may be
drawn in a single or in partial draws, the Business Day on which the requested
Letter of Credit is to expire, the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit. The applicable
Borrower shall attach to such notice the proposed form of the Letter of Credit.

               (ii) Responsibilities of the Administrative Agent; Issuance. As of the
Business Day immediately preceding the requested issuance date of the Letter of

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Credit set forth in the notice from a Borrower pursuant to Section
2.4(d)(i), the Administrative Agent shall determine (A) the amount of the Unused
Letter of Credit Subfacility, and (B) the Unused Availability. If the face amount
of the requested Letter of Credit is not greater than the Unused Letter of Credit
Subfacility (prior to giving effect to issuance of such requested Letter of Credit)
and the amount of such requested Letter of Credit and all commissions, fees, and
charges due from the Borrower in connection with the opening thereof do not exceed
the Unused Availability (prior to giving effect to issuance of such requested Letter
of Credit), the Administrative Agent shall cause the Letter of Credit Issuer to
issue the requested Letter of Credit on the requested issuance date if the other
conditions hereof and of the application for such requested Letter of Credit are
met.

               (iii) Extensions and Amendments. The Administrative Agent shall not be
obligated to cause the Letter of Credit Issuer to extend, renew, or amend any Letter
of Credit issued pursuant hereto unless the requirements of this Section 2.4
are met as though a new Letter of Credit were being requested and issued. With
respect to any Letter of Credit that contains any “evergreen” or automatic renewal
provision, each Lender shall be deemed to have consented to any such extension or
renewal unless such Lender shall have provided to the Administrative Agent written
notice that such Lender declines to consent to any such extension or renewal at
least 30 days prior to the date on which the Letter of Credit Issuer is entitled to
decline to extend or renew such Letter of Credit; provided that,
notwithstanding the foregoing, if all of the requirements of this Section
2.4 are met and no Default or Event of Default exists, no Lender may decline to
consent to any such extension or renewal.

          (e) Payments Pursuant to Letters of Credit. The Borrowers agree to reimburse
the Letter of Credit Issuer immediately for any draw under any Letter of Credit and to pay
the Letter of Credit Issuer the amount of all other charges and fees payable to the Letter
of Credit Issuer under or in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense, or other right that any Borrower may have at any
time against the Letter of Credit Issuer or any other Person. Each drawing under any Letter
of Credit shall constitute a request by the Borrower for whose account such Letter of Credit
was issued for a Borrowing of a Base Rate Revolving Loan in the amount of such drawing. The
Funding Date with respect to such Borrowing shall be the date of such drawing.

          (f) Indemnification; Exoneration; Power of Attorney.

               (i) Indemnification. In addition to amounts payable as elsewhere
provided in this Section 2.4, each Borrower agrees to protect, indemnify,
pay, and save the Lenders, the Administrative Agent, and the Letter of Credit Issuer
harmless from and against any and all claims, demands, liabilities, damages, losses,
costs, charges, and expenses (including reasonable attorneys’ fees and Attorney
Costs) that any Lender, the Administrative Agent, or the Letter of Credit Issuer may
incur or be subject to as a consequence, direct or indirect, of the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 36

 

 

issuance of any Letter of Credit. The foregoing indemnity shall not apply to
the Letter of Credit Issuer to the extent of any wrongful honor or dishonor of a
drawing against any Letter of Credit. The Borrowers’ obligations under this
Section 2.4(f) shall survive payment of all other Obligations.

               (ii) Assumption of Risk by the Borrowers. As among the Borrowers, the
Lenders, the Administrative Agent, and the Letter of Credit Issuer, the Borrowers
assume all risks of the acts and omissions of, or misuse of any of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In furtherance
and not in limitation of the foregoing, the Lenders, the Administrative Agent, and
the Letter of Credit Issuer shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness, or legal effect of any document submitted by any
Person in connection with the application for and issuance of and presentation of
drafts with respect to any of the Letters of Credit, even if it should prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged; (B)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to draw upon such Letter of
Credit, except to the extent that such failure is due to the gross negligence or
willful misconduct of the Administrative Agent; (D) errors, omissions,
interruptions, or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, or otherwise, whether or not they be in cipher; (E) errors
in interpretation of technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof; (G) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter of Credit; (H) any
consequences arising from causes beyond the control of the Lenders, the
Administrative Agent, or the Letter of Credit Issuer, including any act or omission,
whether rightful or wrongful, of any present or future de jure or
de facto Governmental Authority; or (I) the Letter of Credit
Issuer’s honor of a draw for which the draw or any certificate fails to comply in
any respect with the terms of the Letter of Credit. None of the foregoing shall
affect, impair, or prevent the vesting of any rights or powers of the Administrative
Agent, any Lender, or, subject to Section 2.4(f)(iv), the Letter of Credit
Issuer under this Section 2.4(f).

               (iii) Exoneration. Without limiting the foregoing, no action or
omission whatsoever by the Administrative Agent, any Lender, or the Letter of Credit
Issuer under or in connection with any of the Letters of Credit or any related
matters shall result in any liability of the Administrative Agent, any Lender, or
the Letter of Credit Issuer to any Borrower, or relieve any Borrower of any of its
obligations hereunder to any such Person, except to the extent that such action or
omission is due to the gross negligence or willful misconduct of the Administrative
Agent.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 37

 

 

               (iv) Rights Against the Letter of Credit Issuer. Nothing contained in
this Section 2.4(f) is intended to limit any Borrower’s rights, if any, with
respect to the Letter of Credit Issuer that arise as a result of the letter of
credit application and related documents executed by and between such Borrower and
the Letter of Credit Issuer.

               (v) Account Party. Each Borrower hereby authorizes and directs the
Letter of Credit Issuer to name any Borrower as the “Account Party” in any Letter of
Credit and to deliver to the Administrative Agent all instruments, documents, and
other writings and property received by the Letter of Credit Issuer pursuant to each
such Letter of Credit, and to accept and rely upon the Administrative Agent’s
instructions and agreements with respect to all matters arising in connection with
each such Letter of Credit or the application therefor.

          (g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the
provisions of Section 2.4(b) and Section 12.1, any Letter of Credit is
outstanding upon the termination of this Agreement, then upon such termination the Borrowers
shall deposit with the Administrative Agent, for the benefit of the Administrative Agent,
the Letter of Credit Issuer, and the Lenders, with respect to each such Letter of Credit
then outstanding, either: (i) a standby letter of credit (a “Supporting Letter of
Credit”) in form and substance satisfactory to the Administrative Agent, issued by an
issuer satisfactory to the Administrative Agent in its sole discretion in an amount equal to
105% of the undrawn face amount of such Letter of Credit, plus any fees and expenses
associated with such Letter of Credit, under which Supporting Letter of Credit the
Administrative Agent is entitled to draw amounts necessary to reimburse the Administrative
Agent, the Letter of Credit Issuer, and the Lenders for payments to be made by the
Administrative Agent, the Letter of Credit Issuer, and the Lenders under such Letter of
Credit and any fees and expenses associated with such Letter of Credit; or (ii) cash (a
“Supporting Cash Deposit”) in an amount equal to 105% of the undrawn face amount of
such Letter of Credit, plus any fees and expenses associated with such Letter of
Credit. Such Supporting Letter of Credit or Supporting Cash Deposit shall be held by the
Administrative Agent, for the benefit of the Administrative Agent, the Letter of Credit
Issuer, and the Lenders, as credit support or security for, and to provide for the payment
of, the aggregate undrawn amount of such Letters of Credit remaining outstanding.

          (h) Existing Letters of Credit. The Borrowers, the Lenders, and the
Administrative Agent agree that the Existing Letters of Credit shall be deemed to be Letters
of Credit issued hereunder for all purposes of this Agreement as if each of such Existing
Letter of Credit were issued on the Closing Date, and the Letter of Credit Issuer shall be
entitled to all of the benefits as Letter of Credit Issuer and to all of the obligations of
the Borrowers and the Lenders with respect thereto under this Agreement.

     Section 2.5 Bank Products. Any Obligated Party may obtain Bank Products from the Bank
or any of the Bank’s Affiliates, although no Obligated Party is required to do so. To the extent
Bank Products are provided by an Affiliate of the Bank, the Obligated Parties agree to indemnify
and hold the Administrative Agent and the Bank harmless from any and all costs and obligations now
or hereafter incurred by any of the Credit Providers that arise from any

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 38

 

 

indemnity given by the Bank to its Affiliates related to such Bank Products; provided,
however, nothing contained herein is intended to limit any Obligated Party’s rights, with
respect to the Bank or its Affiliates, if any, that arise as a result of the execution of documents
by and between such Obligated Party and the Bank or its Affiliates that relate to Bank Products.
The agreement contained in this Section 2.5 shall survive termination of this Agreement.
Each Obligated Party acknowledges and agrees that the obtaining of Bank Products from the Bank or
its Affiliates (a) is in the sole and absolute discretion of the Bank or its Affiliates, and (b) is
subject to all rules and regulations of the Bank or its Affiliates.

ARTICLE 3

INTEREST AND FEES

     Section 3.1 Interest.

          (a) Interest Rates. All outstanding Obligations shall bear interest on the
unpaid principal amount thereof (including, to the extent permitted by law, on accrued
interest thereon not paid when due) from the date made or incurred until paid in full in
cash or cash equivalent at a rate determined by reference to the Base Rate or the LIBOR
Rate, as applicable, plus the Applicable Margin as set forth below, but not to
exceed the Maximum Rate. If at any time Loans are outstanding with respect to which a
Borrower has not delivered to the Administrative Agent a notice specifying the basis for
determining the interest rate applicable thereto in accordance herewith, such Loans shall be
Base Rate Loans and bear interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the Administrative Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided herein, the
outstanding Obligations shall bear interest as follows:

               (i) for all Base Rate Loans and other Obligations (other than LIBOR Rate Loans)
at a fluctuating per annum rate equal to the lesser of (A) the Base Rate,
plus the Applicable Margin or (B) the Maximum Rate; and

               (ii) for all LIBOR Rate Loans at a per annum rate equal to the lesser of (A)
the LIBOR Rate, plus the Applicable Margin or (B) the Maximum Rate.

Each change in the Base Rate shall be reflected in the interest rate described in clause
(i) preceding as of the effective date of such change. Subject to Section 3.3,
all interest charges on the Obligations shall be computed on the basis of a year of 360 days
and actual days elapsed (which results in more interest being paid than if computed on the
basis of a 365 day year).

          (b) Interest Payments. The Borrowers shall pay to the Administrative Agent,
for the benefit of the Lenders, accrued interest in arrears on each Interest Payment Date,
as applicable.

          (c) Default Rate. During the existence of any Default or Event of Default if
the Administrative Agent or the Majority Lenders in their discretion so elect, the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 39

 

 

Obligations shall, subject to Section 3.3, bear interest at a rate per annum
equal to the lesser of (i) the Default Rate applicable thereto or (ii) the Maximum Rate.

          (d) Interest Periods. After giving effect to any Borrowing of any LIBOR Rate
Loan, there may not be more than four (4) different Interest Periods in effect hereunder.

     Section 3.2 Continuation and Conversion Elections.

          (a) A Borrower may upon irrevocable written notice to the Administrative Agent in
accordance with Section 3.2(b):

               (i) provided that Borrowing of LIBOR Rate Loans is permitted pursuant to
Section 2.2, elect, as of any Business Day, in the case of Base Rate Loans
to convert any such Base Rate Loans (or any part thereof in an amount not less than
One Million Dollars ($1,000,000), or that is in an integral multiple of One Million
Dollars ($1,000,000) in excess thereof) into LIBOR Rate Loans;

               (ii) provided that Borrowing of LIBOR Rate Loans is permitted pursuant to
Section 2.2, elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Rate Loans having Interest Periods expiring on such day (or any
part thereof) in an amount not less than One Million Dollars ($1,000,000), or that
is in an integral multiple of One Million Dollars ($1,000,000) in excess thereof as
LIBOR Rate Loans; or

               (iii) elect, as of any Business Day subject to Section 5.4, in the case
of LIBOR Rate Loans to convert any such LIBOR Rate Loans (or any part thereof not
being continued pursuant to clause (ii) preceding) into Base Rate Loans;

provided that if at any time the aggregate amount of LIBOR Rate Loans in respect of
any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less
than One Million Dollars ($1,000,000), such LIBOR Rate Loans shall automatically convert
into Base Rate Loans; provided, further, that if the notice shall fail to
specify the duration of the Interest Period of any LIBOR Rate Loan to result from any such
continuation or conversion, such Interest Period shall be one month in duration.

          (b) For any continuation or conversion pursuant to clause (a) preceding, the
Borrowers shall deliver a notice of continuation/conversion in the form of Exhibit E
or such other form as may be acceptable to the Administrative Agent in its sole discretion
(any such notice being referred to herein as a “Notice of Continuation/Conversion”)
to the Administrative Agent not later than 12 noon (Pasadena, California time) at least
three Business Days in advance of the Continuation/Conversion Date specifying:

               (i) the proposed Continuation/Conversion Date;

               (ii) the aggregate amount of such Loans to be continued or converted and, if
continuing LIBOR Rate Loans, the specific Loans (or portions thereof) to be
continued or converted;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 40

 

 

               (iii) the type of Loans resulting from the proposed continuation or conversion;
and

               (iv) the duration of any requested Interest Period, provided,
however, the Borrowers may not select an Interest Period that ends after the
Stated Termination Date.

          (c) If upon the expiration of any Interest Period applicable to LIBOR Rate Loans, the
Borrowers have failed to timely select a new Interest Period to be applicable to such LIBOR
Rate Loans, the Borrowers shall be deemed to have elected to convert such LIBOR Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest Period.

          (d) On or before the deadline set forth in clause (b) preceding, in lieu of
delivering a Notice of Continuation/Conversion, the Borrowers may give the Administrative
Agent telephonic notice of any request for a continuation or conversion. The Administrative
Agent shall be entitled to rely on such telephonic notice in continuing or converting such
Loans, regardless of whether any written confirmation is received.

          (e) The Administrative Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All continuations and conversions shall be made ratably
according to the respective outstanding principal amounts of the Loans held by each Lender
with respect to which such notice was given.

          (f) After giving effect to any continuation or conversion of any LIBOR Rate Loan, there
may not be more than four (4) different Interest Periods in effect hereunder.

          (g) The Borrowers shall have no right to convert any Base Rate Loans into LIBOR Rate
Loans or to continue any LIBOR Rate Loans as LIBOR Rate Loans during the existence of any
Default or Event of Default.

     Section 3.3 Maximum Interest Rate. In no event shall any Interest Rate provided for
in this Agreement exceed the Maximum Rate. If any Interest Rate, absent the limitation set forth
in this Section 3.3, would otherwise exceed the Maximum Rate, then such Interest Rate shall
be the Maximum Rate, and, if in the future, such Interest Rate would otherwise be less than the
Maximum Rate, then such Interest Rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest that would have been paid if the
Interest Rate had not been limited to the Maximum Rate. In the event that, upon payment in full of
the Obligations, the total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest that would, but for this Section 3.3, have been
charged, paid, or accrued if the Interest Rate otherwise set forth in this Agreement had at all
times been in effect, then the Borrowers shall, to the extent permitted by applicable law, pay the
Administrative Agent, for the account of the Lenders, an amount equal to the excess of: (a) the
lesser of (i) the amount of interest that would have been charged, paid, or accrued if the Maximum
Rate had, at all times, been in effect or (ii) the amount of interest that would have been charged,
paid, or accrued had the Interest Rate otherwise set forth in this Agreement, at all times, been in
effect; over (b) the amount of interest actually charged, paid, or accrued under this

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 41

 

 

Agreement. If a court of competent jurisdiction determines that the Administrative Agent
and/or any Lender has charged, received, or demanded interest and other charges hereunder in excess
of the Maximum Rate, such excess shall be deemed charged, received, or demanded on account of, and
shall automatically be applied to reduce, the Obligations other than interest, in the inverse order
of maturity, and if there are no Obligations outstanding, the Administrative Agent and/or such
Lender shall refund to the Borrowers (as applicable) such excess.

     Section 3.4 Unused Line Fee. Subject to Section 3.3, until the Revolving
Loans have been paid in full and this Agreement and the Commitments are terminated, the Borrowers
agree to pay to the Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, on the first day of each calendar month and on the Termination Date, an
unused line fee (the “Unused Line Fee”) equal to the Unused Line Fee Percentage per annum,
multiplied by the amount by which the Maximum Revolver Amount exceeded the sum of the
average daily outstanding amount of the Revolving Loans and the average daily undrawn face amount
of all outstanding Letters of Credit during the immediately preceding calendar month or shorter
period if calculated for the first calendar month following the Closing Date or on the Termination
Date. Subject to Section 3.3, the Unused Line Fee shall be computed on the basis of a 360
day year for the actual number of days elapsed. For purposes of calculating the Unused Line Fee
pursuant to this Section 3.4, any payment received by the Administrative Agent (if received
prior to 12:00 noon (Pasadena, California time)) shall be deemed to be credited to the Borrowers’
Loan Account on the Business Day such payment is received by the Administrative Agent.

     Section 3.5 Letter of Credit Fees and Expenses.

          (a) Subject to Section 3.3, the Borrowers agree to pay to the Administrative
Agent, for the account of the Lenders in accordance with their respective Pro Rata Shares a
fee (the “Letter of Credit Fee”) equal to the Letter of Credit Fee Percentage,
multiplied by the average undrawn face amount of each Letter of Credit issued and
outstanding hereunder. The Letter of Credit Fee shall be computed (i) on the basis of a 360
day year for the actual number of days elapsed and (ii) payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit was issued and/or in
which a Letter of Credit remained outstanding and on the Termination Date.

          (b) Subject to Section 3.3, the Borrowers agree to pay to the Letter of Credit
Issuer, for its sole benefit, (i) all out-of-pocket costs, fees, and expenses incurred by
the Letter of Credit Issuer in connection with the application for, processing, issuance,
renewal, extension, or amendment of any Letter of Credit and (ii) a “fronting fee” in an
amount equal to 0.125% of the face amount of such Letter of Credit on the date of issuance,
renewal, or extension of each Letter of Credit.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 42

 

 

ARTICLE 4

PRINCIPAL PAYMENTS AND PREPAYMENTS

     Section 4.1 Repayment.

          (a) Revolving Loans. The Borrowers shall repay the outstanding principal
balance of the Revolving Loans, together with all other non-contingent Obligations,
including all accrued and unpaid interest thereon, on the Termination Date (or with respect
to any Bank Products, any applicable earlier date). The Borrowers may prepay the Revolving
Loans, in whole or in part, at any time and from time to time and, subject to the terms of
this Agreement, reborrow prior to the Termination Date. In addition, and without limiting
the generality of the foregoing, the Borrowers shall immediately pay to the Administrative
Agent, for the account of the Lenders, the amount, if any and without duplication, by which
the Aggregate Revolver Outstandings exceed the lesser of the Borrowing Base or the Maximum
Revolver Amount.

          (b) [Reserved.]

          (c) Payments. All payments to be made by the Borrowers with respect to the
Loans shall be made without setoff, recoupment, or counterclaim. Unless otherwise expressly
provided herein, all payments by the Borrowers shall be made to the Administrative Agent,
for the account of the Lenders, to the account designated by the Administrative Agent and
shall be made in Dollars and in immediately available funds, no later than 12:00 noon
(Pasadena, California time) on the date specified herein. Any payment received by the
Administrative Agent after such time shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue.

     Section 4.2 Termination of Credit Facility. The Borrowers may terminate this
Agreement upon at least ten Business Days prior written notice thereof to the Administrative Agent,
upon (a) the payment in full of all outstanding Revolving Loans, together with accrued and unpaid
interest thereon, and the cancellation and return of all outstanding Letters of Credit (or
alternatively with respect to each such Letter of Credit, the furnishing to the Administrative
Agent of either a Supporting Cash Deposit or a Supporting Letter of Credit as required by
Section 2.4(g)), (b) the payment of the Early Termination Fee defined in the following
sentence, and (c) the payment in full of all reimbursable expenses and other Obligations (including
any amount due under Section 5.4) together with accrued and unpaid interest thereon.
Subject to Section 3.3, if this Agreement is terminated at any time prior to the Stated
Termination Date, whether pursuant to this Section or pursuant to Section 11.2, the
Borrowers shall pay to the Administrative Agent, for the account of the Lenders, an early
termination fee (the “Early Termination Fee”) determined in accordance with the following
table:

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 43

 

 

	 	 	 
	Period during which early termination occurs	 	Early Termination Fee
	Prior to the first Anniversary Date

	 	1.00% of the Maximum Revolver Amount
	 
	 	 
	On or after the first Anniversary Date, but
prior to the Stated Termination Date

	 	.50% of the Maximum Revolver Amount

Notwithstanding the foregoing, no such Early Termination Fee shall be payable in the event this
Agreement is terminated in connection with refinancing of the Obligations in connection with either
of the following two transactions: (i) a transaction in which the Bank or any of its Affiliates
arranges replacement financing or (ii) a transaction involving replacement financing with a third
party in connection with a Recapitalization in which the Bank and its Affiliates are first granted
a right of first refusal, on substantially the same terms and conditions as given to the third
party, to provide such replacement financing, and (x) the Bank or its Affiliates fails to notify
the Borrowers within 45 days of receipt of a financing proposal from the Borrowers with respect to
such third party offer that it will provide such replacement financing, or (y) the Bank or its
Affiliates does not close a replacement financing within ninety days of receipt of a financing
proposal from the Borrowers with respect to such third party offer; provided, however, that the
replacement financing with such third party must close within six months of notification by the
Borrowers to the Bank of the proposed financing from such third party. The Maximum Revolver Amount
shall not be reduced except in connection with termination of the Commitments and payment in full
of all Obligations as provided by this Section 4.2 or as otherwise provided in Section
11.2.

     Section 4.3 Mandatory Prepayment of the Loans. Without limiting Section 4.1,
each of the Borrowers agrees to make a prepayment with respect to the outstanding Loans and other
Obligations as follows:

          (a) On any Business Day, if the Aggregate Revolver Outstandings exceed the Borrowing
Base, the Borrowers shall immediately pay to the Administrative Agent, for the account of
the Lenders, the amount (if any) of such excess for application to the principal amount of
the Revolving Loans.

          (b) During a Dominion Period, all cash proceeds received by any Borrower from the
Disposition or sale of Inventory or collection of Accounts in the ordinary course of
business shall be applied to repayment of the Obligations on the Business Day received as
specified in Section 4.6(c).

          (c) The Borrowers shall pay to the Administrative Agent, for the account of the
Lenders, on the date of any Disposition of any property, excluding proceeds received from
any Disposition pursuant to clause (b) of Section 8.9 that are to be
reinvested in replacement assets by the applicable Obligated Party within 120 days of
receipt and proceeds received pursuant to clause (b) preceding, all net cash
proceeds received by any Obligated Party in connection with such Disposition, for
application to the Obligations as provided in Section 4.6(c); provided that
any proceeds that are to be reinvested as provided herein shall be paid to the
Administrative Agent, for the account of the Lenders, on the date received for application
to the Revolving Loans as provided in Section 4.6(c).

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 44

 

 

As used in this Section 4.3(c), “net cash proceeds” means the proceeds of any
applicable Disposition, minus (i) commissions and other reasonable and customary
transaction costs, fees, and expenses properly attributable to such transaction and payable
by such Obligated Party in connection therewith (in each case, paid to non-Affiliates), (ii)
transfer taxes, (iii) amounts payable to holders of Liens (to the extent such Liens
constitute Permitted Liens hereunder), if any, and (iv) an appropriate reserve for income
taxes in accordance with GAAP in connection therewith. 

     (d) During a Dominion Period, all cash payments or other cash proceeds received by any
Obligated Party constituting proceeds of a Distribution, loan, or other advance (other than
a Distribution, loan or advance by an Obligated Party to an Obligated Party) to such
Obligated Party, excluding proceeds of Revolving Loans, such proceeds that are proceeds of a
loan or advance from one Borrower to another Obligated Party, and other than such proceeds
which are proceeds of a loan or advance permitted under clause (c) through
clause (h) of Section 8.12, shall be paid to the Administrative Agent,
promptly upon such receipt, for application to the Obligations as specified in Section
4.6(c).

     (e) During a Dominion Period, upon any issuance of any Capital Stock of any Obligated
Party, no later than two Business Days after such issuance, the Borrowers shall make a
prepayment in an amount equal to the proceeds of such issuance, net of underwriting
discounts, commissions, and other reasonable and customary transaction costs, fees, and
expenses properly attributable to such transaction and payable by such Obligated Party in
connection therewith (in each case paid to Persons who are not Affiliates of any Obligated
Party) for application to the Obligations in accordance with Section 4.6(c).

No provision contained in this Section 4.3 shall constitute a consent to an asset
disposition that is otherwise not permitted by the terms of this Agreement.

     Section 4.4 LIBOR Rate Loan Prepayments. In connection with any prepayment, if any
LIBOR Rate Loans are prepaid prior to the expiration date of the Interest Period applicable thereto
(including any such prepayment in connection with the initial syndication of the credit facility
provided for herein), the Borrowers shall pay to the Administrative Agent, for the benefit of the
Lenders, the amounts described in Section 5.4, provided that the Borrowers shall
not otherwise be required to pay the amounts described in Section 5.4 in connection with
any Lender’s entering into an Assignment and Acceptance after such initial syndication.

     Section 4.5 Payments as Revolving Loans. At the election of the Administrative Agent,
all payments of principal, interest, reimbursement obligations in connection with Letters of
Credit, fees, premiums, reimbursable expenses (including all reimbursement for expenses pursuant to
Section 15.7), other sums payable under the Loan Documents, and any and all amounts equal
to the excess of checks and other items presented to the Bank for payment against the Funding
Account or any other Deposit Account maintained by a Borrower with the Bank in an amount greater
than the then available balance in such Deposit Account may be paid with the proceeds of Revolving
Loans made hereunder whether made following a request for such purpose by the Borrowers pursuant to
Section 2.2 or pursuant to a deemed request as provided in

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this Section 4.5. The Borrowers hereby irrevocably authorize the Administrative Agent
to charge the Loan Account for the purpose of paying all amounts from time to time due under the
Loan Documents (including as described in this Section 4.5) and agree that all such amounts
charged shall constitute Revolving Loans (including Non-Ratable Loans and Agent Advances) and that
all such Revolving Loans shall be deemed to have been requested pursuant to Section 2.2.

Section 4.6 Apportionment, Application, and Reversal of Payments.

     (a) Principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments relate held
by each Lender) and payments of the fees shall, as applicable, be apportioned ratably among
the Lenders, except for fees payable solely to the Administrative Agent, the Bank, and the
Letter of Credit Issuer and except as provided in Section 13.1(d).

     (b) Except as provided otherwise in this Agreement, all payments shall be remitted to
the Administrative Agent and all such payments not relating to principal or interest of
specific Loans, or not constituting payment of specific fees, and all proceeds of any
Obligated Party’s Accounts or any other Collateral received by the Administrative Agent,
shall be applied, ratably, subject to the other provisions of this Agreement, FIRST,
to pay any fees, indemnities, or expense reimbursements, then due to the Administrative
Agent from any Obligated Party, SECOND, to pay any fees, indemnities, or expense
reimbursements then due to any of the Credit Providers other than the Administrative Agent
from any Obligated Party, THIRD, to pay interest then due in respect of the Loans,
including Non-Ratable Loans and Agent Advances, FOURTH, to pay or prepay principal
of the Non-Ratable Loans and the Agent Advances, FIFTH, to pay or prepay principal
of the Revolving Loans (other than the Non-Ratable Loans and the Agent Advances) and unpaid
reimbursement obligations in respect of Letters of Credit, SIXTH, to pay an amount
to the Administrative Agent equal to 105% of the aggregate undrawn face amount of all
outstanding Letters of Credit and the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit, to be held as cash collateral for such
Obligations, and SEVENTH, to the payment of any other Obligation including any
amounts relating to Bank Products due to the Administrative Agent or the Bank by the
Obligated Parties. Subject to items “first” through “seventh” preceding,
the Administrative Agent and the Lenders shall have the continuing and exclusive right to
apply and reverse and reapply any and all such proceeds and payments to any portion of the
Obligations.

     (c) Payments received pursuant to Section 4.3(b), Section 4.3(d), and
Section 4.3(e) shall be applied, ratably, subject to the other provisions of this
Agreement, in the order of priority set forth for items “first” through
“fifth” of clause (b) preceding at any time other than during the existence
of a Default or an Event of Default, and during the existence of any Default or Event of
Default, as specified in clause (b) preceding.

     (d) Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by a Borrower, or unless an Event of Default is in existence, neither the
Administrative Agent nor any Lender shall apply any payment that it receives to any

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 46

 

 

LIBOR Rate Loan, except (i) on the expiration date of the Interest Period applicable to
any such LIBOR Rate Loan or (ii) in the event, and only to the extent, that there are no
outstanding Base Rate Loans and, in any such event, the Borrowers shall pay the LIBOR
breakage losses in accordance with Section 5.4.

     Section 4.7 Indemnity for Returned Payments. If after receipt of any payment that is
applied to the payment of all or any part of the Obligations, any Credit Provider is for any reason
compelled to surrender such payment or proceeds to any Person because such payment or application
of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the
Obligations or part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not been received by such
Credit Provider and the Borrowers shall be liable to pay to the Administrative Agent for the
benefit of the Credit Providers, and each Borrower hereby indemnifies the Credit Providers and
holds the Credit Providers harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 4.7 shall be and remain effective notwithstanding any release of
Collateral or guarantors, cancellation or return of Loan Documents, or other contrary action that
may have been taken by any Credit Provider in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to the Credit Providers’
rights under this Agreement and the other Loan Documents and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 4.7 shall survive the termination of this Agreement.

     Section 4.8 The Administrative Agent’s and the Lenders’ Books and Records; Monthly
Statements. The Administrative Agent shall record the principal amount of the Loans, the
undrawn face amount of all outstanding Letters of Credit, and the aggregate amount of unpaid
reimbursement obligations outstanding with respect to the Letters of Credit from time to time on
its books. In addition, each Lender may note the date and amount of each payment or prepayment of
principal of such Lender’s Loans in its books and records. Failure by the Administrative Agent or
any Lender to make any such notation shall not affect the obligations of the Borrowers with respect
to the Loans or the Letters of Credit. The Borrowers agree that the Administrative Agent’s and
each Lender’s books and records showing the Obligations and the transactions pursuant to this
Agreement and the other Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute presumptive proof thereof, irrespective of whether any Obligation
is also evidenced by a promissory note or other instrument. The Administrative Agent will provide
to the Borrowers a monthly statement of Loans, payments, and other transactions pursuant to this
Agreement. Such statement shall be deemed correct, accurate, and binding on the Borrowers and an
account stated (except for reversals and reapplications of payments made as provided in Section
4.6 and corrections of errors discovered by the Administrative Agent), unless a Borrower
notifies the Administrative Agent in writing to the contrary within 30 days after such statement is
rendered. In the event a timely written notice of objections is given by a Borrower, only the
items to which exception is expressly made will be considered to be disputed by the Borrowers.

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ARTICLE 5

TAXES, YIELD PROTECTION AND ILLEGALITY

Section 5.1 Taxes.

     (a) Any and all payments by the Borrowers, or any of them, to the Administrative Agent
or any Lender under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, subject to
Section 14.10(c), the Borrowers shall pay all Other Taxes.

     (b) The Borrowers agree to indemnify and hold harmless the Administrative Agent and
each Lender for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 5.1) paid by the
Administrative Agent or any Lender and any liability (including penalties, interest,
additions to tax, and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Administrative Agent or any
Lender makes written demand therefor.

     (c) If the Borrowers are required by law to deduct or withhold any Taxes or Other Taxes
from or in respect of any sum payable hereunder to the Administrative Agent or any Lender,
then:

     (i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including, without limitation, deductions and
withholdings applicable to additional sums payable under this Section 5.1)
the Administrative Agent or such Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions or withholdings been
made;

     (ii) the Borrowers shall make such deductions and withholdings;

     (iii) the Borrowers shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with any applicable
Requirement of Law; and

     (iv) the Borrowers shall also pay to the Administrative Agent, for the account
of each Lender, or each Lender at the time interest is paid, all additional amounts
that the respective Lender specifies as necessary to preserve the after-tax yield
such Lender would have received if such Taxes or Other Taxes had not been imposed.

     (d) Upon the Administrative Agent’s request therefor, within 30 days after the date of
any payment by the Borrowers of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Administrative Agent.

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     (e) If the Borrowers are required to pay additional amounts to any Lender pursuant to
Section 5.1(c), then such Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrowers that may thereafter accrue, if such
change in the judgment of such Lender is not otherwise disadvantageous to such Lender.

Section 5.2 Illegality.

     (a) If any Lender determines that the introduction of any Requirement of Law, or any
change in any Requirement of Law, or in the interpretation or administration of any
Requirement of Law, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for such Lender or its applicable lending office
to make LIBOR Rate Loans, then, on notice thereof by such Lender to the Borrowers through
the Administrative Agent, any obligation of such Lender to make LIBOR Rate Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist.

     (b) If a Lender determines that it is unlawful to maintain any LIBOR Rate Loan, the
Borrowers shall, upon receipt of notice of such fact and demand from such Lender (with a
copy to the Administrative Agent), prepay in full such LIBOR Rate Loans of such Lender then
outstanding, together with accrued and unpaid interest thereon and amounts required under
Section 5.4, either on the last day of the Interest Period thereof, if such Lender
may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such LIBOR Rate Loans. If the Borrowers are
required to so prepay any LIBOR Rate Loans, then concurrently with such prepayment, the
Borrowers shall borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan. Each Lender agrees to designate a different lending office if such designation
will avoid the need for such notice and will not, in the reasonable judgment of such Lender,
otherwise be materially disadvantageous to such Lender.

Section 5.3 Increased Costs and Reduction of Return.

     (a) If any Lender determines that due to either (i) the introduction of or any change
in the interpretation of any law or regulation or (ii) the compliance by such Lender with
any guideline or request from any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in the cost to such Lender of
agreeing to make or making, funding, or maintaining any LIBOR Rate Loans, then the Borrowers
shall be liable for, and shall from time to time, within three Business Days of demand by
such Lender (with a copy of such demand to be sent to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.

     (b) If any Lender shall have determined that (i) the introduction of any Capital
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any

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change in the interpretation or administration of any Capital Adequacy Regulation by
any central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by such Lender or any corporation or
other entity controlling such Lender and (taking into consideration such Lender’s or such
corporation’s or other entity’s policies with respect to capital adequacy and such Lender’s
desired return on capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits, or obligations under this Agreement, then,
within three Business Days of demand by such Lender (with a copy of such demand to be sent
to the Administrative Agent), the Borrowers shall pay to such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such Lender for such
increase.

     (c) Each Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost, the affected
Lender shall, to the extent not inconsistent with such Lender’s internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses incurred by it
and payable to it by the Borrowers pursuant to this Section 5.3.

     Section 5.4 Funding Losses. The Borrowers shall reimburse each Lender and hold each
Lender harmless from any loss or expense that such Lender may sustain or incur as a consequence of:

     (a) the failure of the Borrowers to make on a timely basis any payment of principal of
any LIBOR Rate Loan;

     (b) except as permitted by Section 5.5, the failure of the Borrowers to: (i)
borrow any requested LIBOR Rate Loan; (ii) continue any LIBOR Rate Loan; or (iii) convert a
Base Rate Loan to a LIBOR Rate Loan after any Borrower has given (or is deemed to have
given) a Notice of Borrowing, a Notice of Continuation/Conversion, or any telephonic notice
in lieu thereof with respect thereto; or

     (c) the prepayment or other payment (including after acceleration thereof) of any LIBOR
Rate Loans on a day that is not the last day of the relevant Interest Period;

including any such loss of anticipated profit and any loss or expense arising from the liquidation
or reemployment of funds obtained by such Lender to maintain its LIBOR Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. The Borrowers shall also
pay any customary administrative fees, including a processing fee (the processing fee is currently
Three Hundred Fifty Dollars ($350) but is subject to change from time to time by the Administrative
Agent without notice), charged by the Administrative Agent or any Lender in connection with the
foregoing.

     Section 5.5 Inability to Determine Rates. If the Administrative Agent determines that
for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any
requested Interest Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR

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Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrowers and each Lender. Thereafter, the obligation of the
Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspended until the Administrative
Agent revokes such notice in writing. Upon receipt of a notice pursuant to the first sentence of
this Section 5.5, the Borrowers may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by any of them. If the Borrowers do not revoke any such
Notice of Borrowing or Notice of Continuation/Conversion, the Lenders shall make, convert, or
continue the Loans, as proposed by the Borrowers, in the amount specified in the applicable notice
submitted by a Borrower, but such Loans shall be made, converted, or continued as Base Rate Loans
instead of LIBOR Rate Loans.

     Section 5.6 Certificate of the Affected Lender. If any Lender claims reimbursement or
compensation under this Article 5, the affected Lender shall determine the amount thereof
and shall deliver to the Borrowers (with a copy to the Administrative Agent) a certificate setting
forth in reasonable detail the amount payable to the affected Lender, and such certificate shall be
conclusive and binding on such Lender and the Borrowers in the absence of manifest error.

     Section 5.7 Replacement of Affected Lender. Within 30 days after receipt by the
Borrowers of written notice and demand from any Lender for any payment under the terms of
Section 5.1 or Section 5.3 then, subject to this Section 5.7, the Borrowers
may, at their option, notify the Administrative Agent and such Lender (the “Affected
Lender”) of their intention to obtain, at the Borrowers’ sole expense, a replacement Lender
(“Replacement Lender”) to purchase the Affected Lender’s Loans, Commitment, and obligations
under the Loan Documents. Subject to this Section 5.7, the Borrowers shall, within 30 days
following the delivery of such notice from the Borrowers, cause the Replacement Lender to purchase
(and the Affected Lender hereby agrees to sell and convey to such Replacement Lender) the Loans and
other obligations of the Affected Lender and assume the Affected Lender’s Commitment and
obligations hereunder in accordance with the terms of an Assignment and Acceptance for cash in an
aggregate amount equal to the aggregate unpaid principal of the Loans and other Obligations held by
such Affected Lender, all unpaid interest and fees accrued thereon or with respect thereto, and all
other Obligations owed to such Affected Lender, including amounts owed under Section 5.1 or
Section 5.3 (but excluding any amount pursuant to Section 4.2). Notwithstanding
the foregoing, (a) the Borrowers shall continue to be obligated to pay to the Affected Lender in
full all amounts then demanded and due under Section 5.1 or Section 5.3 in
accordance with the terms of this Agreement, (b) neither the Administrative Agent nor any Lender
shall have any obligation to find a Replacement Lender, (c) the Replacement Lender must be
acceptable to the Administrative Agent in its reasonable discretion, and (d) the Bank may not be
replaced under this Section 5.7 without its consent. If the Borrowers elect to replace any
Affected Lender, the Borrowers must replace all Affected Lenders as set forth in this Section
5.7, each such replacement to occur within a reasonable period of time not to exceed 60 days
from the date the first such Affected Lender requested any payment under Section 5.1 or
Section 5.3.

     Section 5.8 Survival. The agreements and obligations of the Borrowers in this
Article 5 shall survive the payment of all other Obligations.

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ARTICLE 6

BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

     Section 6.1 Books and Records. The Obligated Parties shall maintain, and shall cause
each of their Subsidiaries to maintain, at all times, correct and complete books, records, and
accounts in which full, true, complete, correct, and timely entries are made of such Person’s
transactions in accordance with GAAP consistently applied. The Obligated Parties shall reflect,
and shall cause each of their Subsidiaries to reflect, by means of appropriate entries, in such
accounts and in all Financial Statements proper liabilities and reserves for all taxes and proper
provision for depreciation and amortization of property and bad debts, all in accordance with GAAP.
The Obligated Parties shall maintain at all times books and records pertaining to the Collateral
in such detail, form, and scope as the Administrative Agent shall reasonably require, including,
but not limited to, timely records of (a) all payments received and all credits and extensions
granted with respect to the Accounts, (b) the return, rejection, repossession, stoppage in transit,
loss, damage, or destruction of any Inventory, and (c) all other dealings affecting the Collateral.

     Section 6.2 Financial and Other Information. The Obligated Parties shall promptly
furnish to the Administrative Agent, all such information regarding the Obligated Parties’ and each
of their Subsidiaries’ financial and business affairs as the Administrative Agent or any Lender
(through the Administrative Agent) may reasonably request. Without limiting the foregoing, the
Obligated Parties will furnish, or cause to be furnished, to the Administrative Agent the
following, with sufficient copies for distribution by the Administrative Agent to each Lender, in
such detail as the Administrative Agent or the Lenders (through the Administrative Agent) shall
request.

     (a) The Obligated Parties will furnish, or cause to be furnished, as soon as available,
but in any event not later than 90 days after the close of each Fiscal Year of the Parent,
consolidated audited, and consolidating unaudited, balance sheets and statements of income,
cash flow, and stockholders’ equity for the Parent and its Subsidiaries for such Fiscal
Year, and the accompanying notes thereto, setting forth in each case in comparative form
figures for the previous Fiscal Year, all in reasonable detail, fairly presenting the
financial position and the results of operations of the Parent and its Subsidiaries on a
consolidated basis as at the date thereof and for the Fiscal Year then ended, and prepared
in accordance with GAAP. Such Financial Statements shall be examined in accordance with
generally accepted auditing standards by and, in the case of such Financial Statements
prepared on a consolidated basis, accompanied by a report thereon unqualified in any respect
of, independent certified public accountants of national standing selected by the Parent.
The Obligated Parties hereby authorize the Administrative Agent to communicate directly with
the Obligated Parties’ certified public accountants and, by this provision, authorizes such
accountants to disclose to the Administrative Agent any and all financial statements and
other supporting financial documents and schedules relating to the Obligated Parties and to
discuss directly with the Administrative Agent the finances and affairs of the Obligated
Parties.

     (b) The Obligated Parties will furnish or cause to be furnished,

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AND RESTATED LOAN AND SECURITY AGREEMENT — Page 52

 

 

     (i) as soon as available, but in any event not later than 45 days after the end
of each Fiscal Quarter, other than a Fiscal Quarter that is a year end, an unaudited
balance sheet, income statement, and statement of cash flow for the Parent and its
Subsidiaries prepared on a consolidated and a consolidating basis for the period
from the beginning of the current Fiscal Year to the end of such Fiscal Quarter, all
in reasonable detail and fairly presenting the financial position and results of
operations of the Parent and its Subsidiaries as at the date thereof and for such
period, and, in each case, in comparable form, figures for the corresponding period
in the prior Fiscal Year, and in the Latest Projections, and prepared in accordance
with GAAP applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 6.2(a) and

     (ii) as soon as available, but in any event not later than 30 days after the
end of each Fiscal Period that is not the end of a Fiscal Quarter, an unaudited
balance sheet, income statement, and statement of capital expenditures for the
Parent and its Subsidiaries prepared on a consolidated and a consolidating basis for
the period from the beginning of the current Fiscal Year to the end of such Fiscal
Period, all in reasonable detail and fairly presenting the financial position and
results of operations of the Parent and its Subsidiaries as at the date thereof and
for such period, and, in each case, in comparable form, figures for the
corresponding period in the prior Fiscal Year and, with respect to the income
statement, comparisons to the Latest Projections, and prepared in accordance with
GAAP applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 6.2(a).

The Parent shall certify by a certificate signed by a Responsible Officer that all such
Financial Statements have been prepared in accordance with GAAP (other than for presentation
of footnotes and subject to normal year-end audit adjustments) applied consistently with the
audited Financial Statements required to be delivered pursuant to Section 6.2(a) and
present fairly, subject to normal year-end adjustments, the financial position of the Parent
and its Subsidiaries as at the dates thereof and their results of operations for the periods
then ended.

     (c) The Obligated Parties will cause to be furnished, with each of the Financial
Statements delivered pursuant to Section 6.2(a), a certificate of the independent
certified public accountants that audited such Financial Statements to the effect that such
accountants have reviewed and are familiar with this Agreement and that, in auditing such
Financial Statements, they did not become aware of any fact or condition that then
constituted a Default or Event of Default with respect to a financial covenant set forth in
Section 8.21 or Section 8.22, except for those, if any, described in
reasonable detail in such certificate.

     (d) The Obligated Parties will furnish or cause to be furnished, with each of the
Financial Statements delivered pursuant to Section 6.2(a), and with each of the
Financial Statements delivered pursuant to Section 6.2(b)(i) and Section
6.2(b)(ii), and regardless of whether the Obligated Parties are required at such time to
meet the financial covenant set forth in Section 8.21, a certificate of a
Responsible Officer of the Parent in

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 53

 

 

the form of Exhibit C (a “Compliance Certificate”), or another form
acceptable to the Administrative Agent in its discretion, (i) setting forth in reasonable
detail the calculations required to establish compliance with the covenants set forth in
Section 8.21 and Section 8.22 during the period covered by such Financial
Statements and as at the end thereof and (ii) except as explained in reasonable detail in
such certificate, (A) stating that all of the representations and warranties of the
Obligated Parties contained in this Agreement and the other Loan Documents are correct and
complete in all material respects as at the date of such certificate as if made at such
time, except for those that speak as of a particular date, (B) stating that the Obligated
Parties are, at the date of such certificate, in compliance in all material respects with
all of their respective covenants and agreements in this Agreement and the other Loan
Documents, (C) stating that no Default or Event of Default then exists or existed during the
period covered by such Financial Statements, (D) describing and analyzing in reasonable
detail all material trends, changes, and developments in such Financial Statements, (E)
explaining the variances of the figures in the Latest Projections and corresponding
Financial Statements for the prior Fiscal Year, and (F) certifying, to the Obligated
Parties’ knowledge, that the amount of the Unused Availability during the period covered by
such certificate did not fall to an amount that would give rise to a Dominion Event or
result in testing of the covenant set forth in Section 8.21, or if the Unused
Availability fell to any such amount, the first date on which such event occurred. If such
certificate discloses that a representation or warranty is not correct or complete, or that
a covenant has not been complied with, or that a Default or Event of Default existed or
exists, such certificate shall set forth what action the Obligated Parties have taken or
propose to take with respect thereto.

     (e) The Obligated Parties will furnish, or cause to be furnished, no sooner than 60
days but not less than 30 days prior to the beginning of each Fiscal Year of the Parent,
annual forecasts prepared by the Parent (to include forecasted consolidated and
consolidating balance sheets, income statements, statements of cash flow, and Borrowing Base
and Unused Availability projections) for the Parent and its Subsidiaries as at the end of
and for each Fiscal Period of such Fiscal Year.

     (f) The Obligated Parties will furnish, or cause to be furnished, within three Business
Days after filing with the PBGC and the IRS or any other Governmental Authority, a copy of
each annual report or other filing filed with respect to each Plan of any Obligated Party.

     (g) The Obligated Parties will furnish, or cause to be furnished, within three Business
Days after filing thereof, copies of (i) all reports, if any, or other documents filed by
the Parent or any of its Subsidiaries with the Securities and Exchange Commission under the
Exchange Act or any other similar Governmental Authority pursuant to any Requirement of Law,
(ii) all reports, notices, or statements sent or received by the Parent or any of its
Subsidiaries to or from the holders of any Capital Stock of the Parent or any of its
Subsidiaries (other than routine non-material correspondence sent by any holder of the
Parent’s or any of its Subsidiaries’ Capital Stock to the Parent or such Subsidiary) or of
any Debt of the Parent or any of its Subsidiaries registered under the Securities Act of
1933 or to or from the trustee under

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 54

 

 

any indenture under which the same is issued, and (iii) all filings made by any
Obligated Party, and any of their respective principal executive officers and principal
financial officers (or individuals performing similar functions) under the Sarbanes-Oxley
Act.

     (h) The Obligated Parties will furnish, or cause to be furnished, as soon as available,
but in any event not later than fifteen days after the Parent’s or any of its Subsidiaries’
receipt thereof, a copy of all management reports and management letters prepared by any
independent certified public accountants of the Parent or any of its Subsidiaries and
submitted by such independent certified public accountants to the board of directors (or the
audit committee of the board of directors) of the Parent or any of its Subsidiaries.

     (i) The Obligated Parties will furnish, or cause to be furnished, concurrently with
distribution thereof to the primary recipients, copies of any and all proxy statements,
financial statements, and reports that any Obligated Party makes available to the owners of
its Capital Stock or to any holder of any Debt of any Obligated Party.

     (j) If requested by the Administrative Agent, the Obligated Parties will furnish, or
cause to be furnished, promptly after filing with the IRS or any other Governmental
Authority, a copy of each tax return filed by the Parent or any of its Subsidiaries.

     (k) The Obligated Parties will furnish, or cause to be furnished,

     (i) with respect to each Borrower, as soon as available, but in any event
within twenty (20) days after the end of each Fiscal Period of the Parent as of the
end of such Fiscal Period, and at such other times as may be requested by the
Administrative Agent, a Borrowing Base Certificate and supporting information in
connection therewith;

     (ii) with respect to Mercfuel, Inc., within thirty-two (32) days after the end
of each Fiscal Period of the Parent, and with respect to the two week period
following the end of such Fiscal Period, a roll-forward of Accounts, an updated
aging of Accounts, an updated detail of accrued Accounts for services performed
prior to the then current aging but that have been invoiced after such aging and are
not otherwise included in such aging (containing such information as the
Administrative Agent may request), and supporting information in connection
therewith;

     (iii) concurrently with the information delivered pursuant to clauses
6.2(k)(i) and (k)(ii) above, a schedule (in form satisfactory to the
Administrative Agent) of Accounts created, credits given, cash collected, and other
adjustments made to Accounts as of the last day of such reporting period;

     (iv) with respect to each Borrower, as requested by the Administrative Agent,
on a weekly basis no later than Monday, for the prior week period, a flash report in
form and with such information as the Administrative Agent may

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request, including, but not limited to, invoicing information and volumes for
Accounts;

     (v) with respect to each Borrower, within twenty (20) days of the end of each
Fiscal Period, or more frequently if requested by the Administrative Agent, an aging
(in form reasonably satisfactory to the Administrative Agent) of each Borrower’s
Accounts as of the last day of such Fiscal Period, together with a reconciliation to
the corresponding Borrowing Base and to such Borrower’s general ledger;

     (vi) within twenty (20) days of the end of each Fiscal Period, or more
frequently if requested by the Administrative Agent, an aging (in form satisfactory
to the Administrative Agent) of each Obligated Party’s accounts payable as of the
last day of such Fiscal Period together with a reconciliation to the corresponding
general ledger of such Obligated Party;

     (vii) within twenty (20) days of the end of each Fiscal Period, or more
frequently if requested by the Administrative Agent, a detailed calculation (in form
satisfactory to the Administrative Agent) of Eligible Accounts and Eligible Foreign
Accounts as of the last day of such Fiscal Period;

     (viii) upon request by the Administrative Agent, within five Business Days of
such request, copies of invoices, customer statements, credit memos, remittance
advices and reports, deposit slips, and shipping and delivery documents with respect
to each Borrower’s Accounts and Inventory, and purchase orders and invoices with
respect to any Equipment acquired by any Borrower;

     (ix) upon request by the Administrative Agent, within five Business Days of
such request, a statement of the balance of each of the Intercompany Accounts; and

     (x) within five Business Days, such other reports with respect to the
Collateral as the Administrative Agent may reasonably request.

With the delivery of each of the foregoing, the Obligated Parties shall furnish a
certificate executed by a Responsible Officer of the Borrowers certifying as to the accuracy
and completeness of the foregoing. If any of any Borrower’s records or reports with respect
to the Collateral are prepared by an accounting service or other agent, such Borrower hereby
authorizes such service or agent to deliver such records, reports, and related documents to
the Administrative Agent, for distribution to the Lenders.

     (l) The Obligated Parties will provide the Administrative Agent the information
required by Section 8.7(b).

     (m) Within 30 days following the date franchise taxes are due, the Obligated Parties
will provide to the Administrative Agent a written report setting forth the status,
including with respect to good standing, of each of the Obligated Parties in its respective
jurisdiction of formation, and, within ten days following a request therefor, the Obligated

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Parties will provide to the Administrative Agent a certificate of the applicable
Governmental Authority evidencing each Obligated Party’s good standing in its jurisdiction
of formation, incorporation, or organization, as applicable.

     (n) The Obligated Parties will furnish, or cause to be furnished, such additional
information as the Administrative Agent and/or any Lender (through the Administrative Agent)
may from time to time reasonably request regarding the financial and business affairs of the
Parent or any Subsidiary of the Parent.

     (o) The Obligated Parties will furnish, or cause to be furnished, with each of the
Financial Statements delivered pursuant to Section 6.2(b), a description of each
commercial tort claim acquired by any Obligated Party during the period covered by such
Financial Statements.

     (p) The Obligated Parties will furnish, within one hundred twenty (120) days following
the end of each calendar year, the annual financial statements for Cielos de Peru; provided
that, notwithstanding anything to the contrary contained herein, the failure of the
Obligated Parties to deliver any such financial statements shall not result in an Event of
Default but shall entitle the Administrative Agent to reduce the concentration limits for
Accounts owing by Cielos de Peru or make such Accounts ineligible.

     Section 6.3 Notices. The Obligated Parties shall notify the Administrative Agent in
writing of the following matters at the following times:

     (a) immediately after a Responsible Officer’s becoming aware of any Default or Event of
Default;

     (b) within five Business Days after a Responsible Officer’s becoming aware of the
assertion by the holder of any Capital Stock of the Parent or any Subsidiary of the Parent
or the holder of any Debt of the Parent or any Subsidiary of the Parent in excess of
$500,000 that a default exists with respect thereto or that any such Person is not in
compliance with the terms thereof, or the written threat or commencement by such holder of
any enforcement action because of such asserted default or non-compliance;

     (c) within five Business Days after a Responsible Officer’s becoming aware of any
pending or threatened (in writing) action, suit, proceeding, or counterclaim by any Person,
or any pending or threatened (in writing) investigation by a Governmental Authority, that
could reasonably be expected to result in, or has resulted in, liability in excess of
$500,000 or otherwise could reasonably be expected to have, or has resulted in, a Material
Adverse Effect;

     (d) within five Business Days after a Responsible Officer’s becoming aware of any
pending or threatened (in writing) strike, work stoppage, unfair labor practice claim or
other similar labor dispute affecting any Obligated Party that could reasonably be expected
to result in, or has resulted in, liability in excess of $500,000 or otherwise could
reasonably be expected to have, or has resulted in, a Material Adverse Effect;

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     (e) within five Business Days after a Responsible Officer’s becoming aware of any
violation of any Requirement of Law affecting any Obligated Party that reasonably could be
expected to result in, or has resulted in, liability in excess of $500,000 or otherwise
could reasonably be expected to have, or has resulted in, a Material Adverse Effect;

     (f) within five Business Days after (i) a Responsible Officer’s receipt of any written
notice of any violation by any Obligated Party of any Environmental Law or (ii) a
Responsible Officer’s obtaining knowledge that any Governmental Authority has asserted that
any Obligated Party is not in compliance with any Environmental Law or that any Governmental
Authority is investigating any Obligated Party’s compliance therewith, that in any event
under clause (i) or clause (ii) preceding could reasonably be expected to
result in, or has resulted in, liability in excess of $500,000 or otherwise could reasonably
be expected to have, or has resulted in, a Material Adverse Effect;

     (g) within five Business Days after a Responsible Officer’s receipt of any written
notice from any Governmental Authority or other Person or otherwise obtaining knowledge that
any Obligated Party is or may be liable to any Person as a result of the Release or
threatened Release of any Contaminant or that any Obligated Party is subject to
investigation by any Governmental Authority evaluating whether any remedial action is needed
to respond to the Release or threatened Release of any Contaminant that, in either case,
could reasonably be expected to result in, or has resulted in, liability in excess of
$500,000 or otherwise could reasonably be expected to have, or has resulted in, a Material
Adverse Effect;

     (h) within five Business Days after a Responsible Officer’s receipt of any written
notice of the imposition of any Environmental Lien against any property of any Obligated
Party;

     (i) not less than 30 days prior to any change in any Obligated Party’s: (i) name as it
appears in the jurisdiction of its formation, incorporation, or organization; (ii) type of
entity; (iii) organizational identification number, (iv) locations of Collateral; or (v)
trade names under which such Obligated Party will sell Inventory or create Accounts, or to
which instruments in payment of Accounts may be made payable;

     (j) within three Business Days after any Responsible Officer knows or has reason to
know, (i) that an ERISA Event or a prohibited transaction (as defined in Sections 406 of
ERISA and 4975 of the Code) has occurred, or (ii) that any action has been taken or
threatened (in writing) by the IRS, the DOL, or the PBGC with respect to any such ERISA
Event or prohibited transaction;

     (k) upon the Administrative Agent’s request, or, in the event that such filing reflects
a significant change with respect to the matters covered thereby, within three Business Days
after the filing thereof with the PBGC, the DOL, or the IRS, as applicable, copies of the
following: (i) each annual report (form 5500 series), including Schedule B thereto, filed
with the PBGC, the DOL, or the IRS with respect to each Plan; (ii) a copy of each funding
waiver request filed with the PBGC, the DOL, or the IRS with respect to

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any Plan and all communications received by any Obligated Party or any ERISA Affiliate
from the PBGC, the DOL, or the IRS with respect to such request; and (iii) a copy of each
other filing or notice filed with the PBGC, the DOL, or the IRS, with respect to each Plan
by any Obligated Party or any ERISA Affiliate;

     (l) upon request from the Administrative Agent, copies of each actuarial report for any
Plan or Multi-employer Plan and annual report for any Multi-employer Plan, and within three
Business Days after receipt thereof by any Obligated Party or any ERISA Affiliate, copies of
the following: (i) any notices of the PBGC’s intention to terminate a Plan or to have a
trustee appointed to administer such Plan; (ii) any favorable or unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code;
or (iii) any notice from a Multi-employer Plan regarding the imposition of withdrawal
liability;

     (m) within five Business Days after the occurrence thereof: (i) any changes in the
benefits of any existing Plan that increase any Obligated Party’s annual costs with respect
thereto by an amount in excess of $500,000, or the establishment of any new Plan or the
commencement of contributions to any Plan to which any Obligated Party or any ERISA
Affiliate was not previously contributing; or (ii) any failure by any Obligated Party or any
ERISA Affiliate to make a required installment or any other required payment to any Plan in
excess of $250,000 under Section 412 of the Code on or before the due date for such
installment or payment;

     (n) within five Business Days after any Responsible Officer or any ERISA Affiliate
knows or has reason to know that any of the following events has occurred or will occur: (i)
a Multi-employer Plan has been or will be terminated; (ii) the administrator or plan sponsor
of a Multi-employer Plan intends to terminate a Multi-employer Plan; or (iii) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to terminate a
Multi-employer Plan;

     (o) within five Business Days after commencement of any proceedings contesting any tax,
fee, assessment, or other governmental charge in excess of $500,000;

     (p) within five Business Days after any Responsible Officer becomes aware that any
material assumption on which the Obligated Parties prepared and presented the Latest
Projections is no longer valid;

     (q) with each of the financial statements required to be delivered pursuant to
Section 6.2(b), a listing of (i) each Deposit Account opened by any Obligated Party
and (ii) any Proprietary Rights registered with the United States Patent and Trademark
Office or the United States Copyright Office, in the preceding Fiscal Quarter;

     (r) within five Business Days after the occurrence thereof, any loss, damage, or
destruction to the Collateral, whether due to any casualty, condemnation, or other reason,
having a value in excess of $500,000, whether or not covered by insurance;

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     (s) within five Business Days after any Responsible Officer becomes aware of: (i) any
Lien (other than Permitted Liens) against any of the Collateral; or (ii) any claim in excess
of $500,000 made or asserted in writing against any of the Collateral; and

     (t) within five Business Days after a Responsible Officer’s becoming aware of any event
or circumstance not covered by clause (a) through clause (s) preceding that
could reasonably be expected to have, or has resulted in, a Material Adverse Effect.

Each notice given under this Section 6.3 shall describe the subject matter thereof in
reasonable detail, and shall set forth the action that any Obligated Party or any ERISA Affiliate,
as applicable, has taken or proposes to take with respect thereto.

ARTICLE 7

GENERAL WARRANTIES AND REPRESENTATIONS

     Each Obligated Party warrants and represents to the Administrative Agent and the other Credit
Providers as follows:

     Section 7.1 Authorization, Validity, and Enforceability of the Loan Documents. Each
Obligated Party has the power and authority to execute, deliver, and perform the Loan Documents to
which it is a party, to incur the indebtedness, liabilities, and obligations it has agreed to
undertake under the Loan Documents, and to grant the Agent’s Liens. Each Obligated Party has taken
all necessary action (including obtaining approval of the owners of its Capital Stock or any other
Person required to provide approval or consent, if necessary) to authorize its execution, delivery,
and performance of the Loan Documents to which it is a party. The Loan Documents to which each
Obligated Party is a party have been duly executed and delivered by such Obligated Party, and
constitute the legal, valid, and binding obligations of such Obligated Party, enforceable against
it in accordance with their respective terms without defense, setoff, or counterclaim except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and to the effect of general principles of equity whether applied
by a court of law or equity. Each Obligated Party’s execution, delivery, and performance of the
Loan Documents to which it is a party do not and will not conflict with, or constitute a violation
or breach of, or constitute a default under, or result in or require the creation or imposition of
any Lien upon the property of any Obligated Party by reason of the terms of (a) any contract,
mortgage, Lien, lease, agreement, indenture, document, or instrument to which such Obligated Party
is a party or that is binding upon it, other than those Liens created in favor of the
Administrative Agent, on behalf of itself and the Lenders pursuant to the Loan Documents, (b) any
Requirement of Law applicable to such Obligated Party, or (c) the Organization Certificate or
Management Agreement of such Obligated Party.

     Section 7.2 Validity and Priority of Security Interest. The provisions of the Loan
Documents create legal and valid Liens on the Collateral in favor of the Administrative Agent, for
the benefit of the Administrative Agent and the Credit Providers, and such Liens: (a) constitute
perfected and continuing Liens on the Collateral, securing the Obligations; (b) are enforceable
against the applicable Obligated Party and all third parties; and (c) have priority over all other
Liens on the Collateral except for those Liens identified in clause (b) through clause
(j)

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of the definition of Permitted Liens (but only to the extent any such Permitted Liens would
have priority over the Agent’s Liens pursuant to any Requirement of Law) and Liens perfected only
by possession (including possession of any certificate of title) to the extent the Administrative
Agent has not obtained or does not maintain possession of such Collateral.

     Section 7.3 Organization, Authority, and Good Standing. Except as set forth in
Schedule 7.3, each of the Obligated Parties,

     (a) is a corporation, limited liability company, partnership, limited partnership, or
other business entity duly and properly formed, incorporated, or organized and validly
existing under Requirements of Law of the jurisdiction of its formation, incorporation, or
organization as set forth in Schedule 7.3, and such jurisdiction is the only
jurisdiction under which it is formed, incorporated, or organized,

     (b) has all requisite power and authority to conduct its business in each jurisdiction
in which it conducts business and to own its property, and

     (c) to the extent applicable, is qualified and in good standing under the Requirements
of Law of (i) its jurisdiction of formation, incorporation, or organization and (ii) each
other jurisdiction in which qualification is necessary in order for it to own or lease its
property and conduct its business.

     Section 7.4 Capitalization and Subsidiaries. As of the Closing Date, Schedule
7.4 sets forth: (a) a correct and complete list of the relationship of the Obligated Parties
and all of their respective Subsidiaries; (b) the location of the chief executive office of each of
the Obligated Parties; (c) a true and complete listing of each class of the Capital Stock of each
of the Obligated Parties, of which all of such issued shares are validly issued, outstanding, fully
paid and non-assessable, and owned beneficially and of record (excluding the Capital Stock of the
Parent) by the Persons identified in Schedule 7.4; (d) the type of entity of each of the
Obligated Parties; and (e) the employer or taxpayer identification number of each of the Obligated
Parties and the organizational identification number issued by each of the Obligated Parties’
jurisdiction of formation, incorporation, or organization (or a statement that no such number has
been issued). Each Obligated Party has only one state of formation, incorporation, or
organization.

     Section 7.5 Corporate Name; Prior Transactions. As of the Closing Date, Schedule
7.5 sets forth a correct and complete list of the name of each Obligated Party as it appears in
official filings in the jurisdiction of its formation, organization, or incorporation. Except as
set forth in Schedule 7.5, no Obligated Party has, during the past five years, been known
by or used any other corporate or fictitious name, or been a party to any merger or consolidation,
or acquired all or substantially all of the assets of any Person, or acquired any of its property
outside of the ordinary course of business.

Section 7.6 Financial Statements and Projections.

     (a) The Obligated Parties have delivered to the Administrative Agent and the Lenders
the unaudited financial statements for the Parent and its Subsidiaries for the Fiscal Period
ended July 31, 2005. The Obligated Parties have also delivered to the Administrative Agent
and the Lenders the unaudited balance sheet and related statements

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of income and cash flow for the Parent and its Subsidiaries on a consolidated basis as
of March 31, 2005. All such financial statements have been prepared in accordance with GAAP
and fairly present the financial position of the Parent and its Subsidiaries as at the dates
thereof and their results of operations for the periods then ended.

     (b) The Latest Projections when submitted to the Administrative Agent as required
herein represent the Obligated Parties’ good faith estimate of the future financial
performance of the Borrowers for the periods set forth therein. The Latest Projections have
been prepared on the basis of the assumptions set forth therein, which the Obligated Parties
believe are fair and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Administrative Agent.

     Section 7.7 Solvency. As of the Closing Date, prior to and after giving effect to all
of the transactions to occur on the Closing Date (including the Borrowings to be made on the
Closing Date), each of the Obligated Parties is Solvent.

     Section 7.8 Debt. As of the Closing Date, after giving effect to the Borrowings to be
made on the Closing Date, the Obligated Parties and their Subsidiaries have no Debt, except (a) the
Obligations and (b) Debt permitted pursuant to Section 8.12.

     Section 7.9 Distributions. As of the Closing Date, no Distribution has been declared,
paid, or made upon or in respect of any Capital Stock of the Parent since June 30, 2005, other than
Distributions declared in connection with the reverse stock split referenced in, and to be
accomplished in accordance with, the proxy statement filed with the Securities and Exchange
Commission and submitted to the stockholders of Parent on or about August 12, 2005.

     Section 7.10 Real Estate; Leases. As of the Closing Date, Schedule 7.10 sets
forth a correct and complete list of all Real Estate owned by each Obligated Party, all leases and
subleases of real or personal property by each Obligated Party as lessee or sublessee (other than
leases of personal property as to which such Obligated Party is lessee or sublessee for which the
value of such personal property under any such lease in the aggregate is less than $50,000), and
all leases and subleases of real or personal property by each Obligated Party as lessor, or
sublessor. Each of such leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and no default by any party to any such lease or sublease exists.
Each Obligated Party has good and indefeasible title in fee simple to the Real Estate identified in
Schedule 7.10 as “owned” by such Obligated Party, or valid leasehold interests in all Real
Estate identified in Schedule 7.10 as “leased” by such Obligated Party, and each Obligated
Party has good, indefeasible, and merchantable title to all of its other property reflected on the
July 31, 2005 Financial Statements of the Parent and its Subsidiaries delivered to the
Administrative Agent and the Lenders, except as disposed of in the ordinary course of business
since the date thereof, free of all Liens except Permitted Liens.

     Section 7.11 Proprietary Rights. As of the Closing Date: (a) Schedule 7.11
sets forth a correct and complete list of all of each Obligated Party’s registered patents,
trademarks, copyrights, and other material Proprietary Rights; (b) none of the Proprietary Rights
listed in Schedule 7.11 is subject to any licensing agreement or similar arrangement except
as set forth in Schedule 7.11; (c) the Proprietary Rights listed in Schedule 7.11
constitute all of the property of

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such type necessary to the current and anticipated future conduct of the Obligated Parties’
business; (d) to the best of each Obligated Party’s knowledge, none of the Proprietary Rights
listed in Schedule 7.11 infringes upon or conflicts with any rights held by any other
Person; and (e) no claim or litigation regarding any of the foregoing is pending or threatened (in
writing).

     Section 7.12 Trade Names. All trade names or styles under which any Obligated Party
will sell Inventory or create Accounts, or to which instruments in payment of Accounts may be made
payable, are listed in Schedule 7.12.

     Section 7.13 Litigation. As of the Closing Date, except as set forth in Schedule
7.13, there is no pending or threatened (in writing), action, suit, proceeding, or counterclaim
by any Person, or investigation by any Governmental Authority, or any basis for any of the
foregoing, that could reasonably be expected to have a Material Adverse Effect.

     Section 7.14 Labor Matters. Except as set forth on Schedule 7.14, as of the
Closing Date (a) there is no collective bargaining agreement or other labor contract covering
employees of any Obligated Party, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective bargaining unit of
employees of any Obligated Party or for any similar purpose, and (d) there is no pending or (to the
best of any Obligated Party’s knowledge) threatened, strike, work stoppage, material unfair labor
practice claim, or other material labor dispute against or affecting any Obligated Party or its
employees.

     Section 7.15 Environmental Law. As of the Closing Date, except as otherwise set forth
in Schedule 7.15:

     (a) Each Obligated Party is in compliance in all material respects with all applicable
Environmental Laws, and neither any Obligated Party nor any of their respective presently or
previously owned Real Estate or presently conducted or prior operations, is subject to any
enforcement order from, or liability agreement with, any Governmental Authority or private
Person respecting (i) compliance with any Environmental Law or (ii) any potential
liabilities and costs or remedial action arising from a Release or threatened Release of a
Contaminant.

     (b) Each Obligated Party has obtained all permits necessary for its current operations
under applicable Environmental Law, and all such permits are in good standing, and each
Obligated Party is in material compliance with all terms and conditions of such permits.

     (c) No Obligated Party is in violation of any Environmental Law with respect to
storage, treatment, or disposal of any hazardous waste (as defined pursuant to 40 CFR Part
261 or any equivalent Environmental Law).

     (d) No Obligated Party has received any summons, complaint, order or similar written
notice indicating that it is not currently in compliance with, or that any Governmental
Authority is investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of a
Contaminant.

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     (e) To the best of each Obligated Party’s knowledge, none of the present or past
operations of any Obligated Party is the subject of any investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to a Release or
threatened Release of a Contaminant.

     (f) To the best of each Obligated Party’s knowledge, there is not now on the Real
Estate of any Obligated Party in violation of any Environmental Law:

     (i) any underground storage tanks or surface impoundments,

     (ii) any asbestos-containing material, or

     (iii) any polychlorinated biphenyls used in hydraulic oils, electrical
transformers, or other equipment.

     (g) No Obligated Party has filed, or has had the obligation to file, any notice under
any requirement of Environmental Law reporting a spill or accidental and unpermitted Release
or discharge of a Contaminant into the environment.

     (h) No Obligated Party has entered into any pending or ongoing negotiations or any
currently effective settlement agreements with any Person (including any prior owner of such
Obligated Party’s property) imposing material obligations or liabilities on any Obligated
Party with respect to any remedial action in response to the Release of a Contaminant or
environmentally related claim.

     (i) None of the products manufactured, distributed, or sold by any Obligated Party or
any Subsidiary of any Obligated Party contains asbestos containing material.

     (j) No presently effective Environmental Lien has attached to the Real Estate owned by
any Obligated Party.

     Section 7.16 No Violation of Law. No Obligated Party is in violation of any
Requirement of Law applicable to it, which violation could reasonably be expected to have a
Material Adverse Effect. The Parent and its Subsidiaries and their respective principal executive
officers and principal financial officers (and any individuals performing similar functions) are in
compliance with any certification requirements of the Sarbanes-Oxley Act.

     Section 7.17 No Default. No Obligated Party is in default with respect to any note,
indenture, loan agreement, mortgage, lease, deed, or other agreement to which such Obligated Party
is a party or by which it is bound, which default could reasonably be expected to have a Material
Adverse Effect.

     Section 7.18 ERISA Compliance. As of the Closing Date, except as set forth in
Schedule 7.18:

     (a) each Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code, and other federal or state law;

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     (b) each Plan that is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of each Obligated
Party, nothing has occurred that would cause the loss of such qualification;

     (c) each Obligated Party and each ERISA Affiliate has made all required contributions
to any Plan subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan;

     (d) there are no pending or, to the best knowledge of any Obligated Party, threatened
(in writing) claims, actions, or lawsuits, or action by any Governmental Authority, with
respect to any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect;

     (e) there has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could reasonably be
expected to result in a Material Adverse Effect; and

     (f) (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) no Obligated Party and no ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) no Obligated Party and no ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred that, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multi-employer Plan; and (v) no Obligated Party and no ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

     Section 7.19 Taxes. Except as set forth on Schedule 7.3, each Obligated Party
has filed all federal, state, and other tax returns and reports required to be filed (or
appropriate extensions have been timely filed), and has paid all federal, state, and other taxes,
assessments, fees, and other governmental charges levied or imposed upon it or its properties,
income, or assets otherwise due and payable unless such unpaid taxes and assessments would
constitute a Permitted Lien.

     Section 7.20 Regulated Entities. No Obligated Party or Affiliate of any Obligated
Party is an “Investment Company” within the meaning of the Investment Company Act of 1940. No
Obligated Party or Affiliate of any Obligated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, any state public utilities Requirement of Law, the Federal
Power Act, the Interstate Commerce Act, or any other Requirement of Law limiting its ability to
incur indebtedness.

     Section 7.21 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be
used solely for the purposes specified in Section 8.23. No Obligated Party is engaged in
the business of buying or selling Margin Stock or extending credit for the purpose of buying or
carrying Margin Stock. Margin Stock constitutes less than 5.0% of the value of those assets of

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the Obligated Parties that are subject to any limitation on sale, pledge, or other restriction
hereunder.

     Section 7.22 No Material Adverse Change. No Material Adverse Effect has occurred
since the date of the latest Financial Statements delivered to the Administrative Agent and the
Lenders referenced in Section 7.6(a).

     Section 7.23 Full Disclosure. None of the representations or warranties made by any
Obligated Party in the Loan Documents as of the date such representations and warranties are made
or deemed made, and none of the statements contained in any exhibit, report, statement, or
certificate furnished by or on behalf of any Obligated Party in connection with the Loan Documents
(including the offering and disclosure materials delivered by or on behalf of any Obligated Party
to the Lenders prior to the Closing Date), contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not misleading as of the time
when made or delivered.

     Section 7.24 Material Agreements. As of the Closing Date, Schedule 7.24 sets
forth a complete and accurate list of all material agreements and contracts (other than the Loan
Documents) to which any Obligated Party is a party or is bound as of the Closing Date.

     Section 7.25 Bank Accounts. As of the Closing Date, Schedule 7.25 contains a
complete and accurate list of all bank accounts maintained by each Obligated Party with any bank or
other financial institution.

     Section 7.26 Commercial Tort Claims. As of the Closing Date, Schedule 7.26
contains a complete and accurate list of all commercial tort claims owned by each Obligated Party.

     Section 7.27 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or
other Person is necessary or required in connection with the execution, delivery, or performance
by, or enforcement against, any Obligated Party of any Loan Document except for those that have
been duly obtained by the Obligated Parties, copies of which have been provided to the
Administrative Agent, and for filing of financing statements and recording of Mortgages (if any).

     Section 7.28 Common Enterprise. The successful operation and condition of each of the
Obligated Parties is dependent on the continued successful performance of the functions of the
group of the Obligated Parties as a whole and the successful operation of each of the Obligated
Parties is dependent on the successful performance and operation of each other Obligated Party.
Each Obligated Party expects to derive benefit (and its board of directors or other governing body
has determined that it may reasonably be expected to derive benefit), directly and indirectly, from
successful operations of each of the other Obligated Parties. Each Obligated Party expects to
derive benefit (and the boards of directors or other governing body of each Obligated Party has
determined that it may reasonably be expected to derive benefit), directly and indirectly, from the
credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as
members of the group of companies. Each Obligated Party has determined that execution, delivery,
and performance of this Agreement and any other Loan

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 66

 

 

Documents to be executed by such Obligated Party is within its purpose, will be of direct and
indirect benefit to such Obligated Party, and is in its best interest.

ARTICLE 8

AFFIRMATIVE AND NEGATIVE COVENANTS

     Each Obligated Party covenants to the Administrative Agent and each Lender that as long as any
of the Obligations remain outstanding or this Agreement is in effect each Obligated Party will keep
and perform each of the following covenants:

     Section 8.1 Taxes and Other Obligations. Except as otherwise permitted by the terms
of this Agreement, each Obligated Party shall: (a) file when due (after giving effect to all
timely filed appropriate extensions) all tax returns and other reports that it is required to file;
(b) pay, or provide for the payment, when due, of all taxes, fees, assessments, and other
governmental charges against it or upon its property, income, and franchises, make all required
withholding and other tax deposits, and establish adequate reserves for the payment of all such
items in accordance with GAAP, and provide to the Administrative Agent and the Lenders, upon
request, satisfactory evidence of its timely compliance with the foregoing; and (c) pay when due
all Debt and claims owed to materialmen, mechanics, carriers, warehousemen, landlords, processors,
and other like Persons, and all other indebtedness, liabilities, and obligations the nonpayment of
that could result in a Lien on any of the Collateral; provided, however, so long as
such Obligated Party has notified the Administrative Agent in writing, the Obligated Party need not
pay any tax, fee, assessment, or governmental charge (i) it is contesting in good faith by
appropriate proceedings diligently pursued, (ii) as to which such Obligated Party has established
proper reserves as required under GAAP, and (iii) the nonpayment of which does not result in the
imposition of a Lien (other than a Permitted Lien).

     Section 8.2 Legal Existence and Good Standing. Except as allowed by Section
8.9, each Obligated Party shall maintain (a) its legal existence and good standing in the
jurisdiction of its formation, incorporation, or organization and (b) its qualification and good
standing in all other jurisdictions in which the failure to maintain such qualification and good
standing could reasonably be expected to have a Material Adverse Effect. No Obligated Party shall
change the jurisdiction of its formation, incorporation, or organization or change its type of
entity as identified on Schedule 7.3 without the prior written consent of the
Administrative Agent.

     Section 8.3 Compliance with Law and Agreements; Maintenance of Licenses. Each
Obligated Party shall, and shall cause each of its Subsidiaries to, comply in all material respects
with all Requirements of Law (including the Federal Fair Labor Standards Act, the Sarbanes-Oxley
Act, if applicable, and all Environmental Laws). Each Obligated Party shall, and shall cause each
of its Subsidiaries to, obtain and maintain all licenses, permits, franchises, and governmental
authorizations necessary to own its property and to conduct its business as conducted on the
Closing Date or as permitted by Section 8.16. No Obligated Party shall modify, amend, or
alter its Organization Certificate or Management Agreement other than in a manner that does not
adversely affect the rights of the Lenders or the Administrative Agent under any of the Loan
Documents. Each Obligated Party shall cause its principal executive

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 67

 

 

officers and principal financial officers (or other individuals performing similar functions)
to comply, if applicable, with all provisions of the Sarbanes-Oxley Act.

Section 8.4 Maintenance of Property; Inspection of Property.

     (a) Each Obligated Party shall (i) maintain all of its equipment and facilities
necessary and useful in the conduct of its business in good operating order and condition,
ordinary wear and tear excepted and (ii) make all necessary repairs thereto and renewals and
replacements thereof.

     (b) Each Obligated Party shall permit representatives and independent contractors of
the Administrative Agent (accompanied by any Lender that so elects with the consent of the
Administrative Agent, such consent not to be unreasonably withheld) to visit and inspect any
of such Obligated Party’s properties, to examine, audit, make extracts from or copies of and
inspect any or all of such Obligated Party’s Collateral, its corporate, financial, and
operating records, files, and books of account, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances, and accounts with its officers and
independent public accountants (provided that the Administrative Agent shall provide
the Obligated Parties the opportunity to attend and participate in such discussions with
such public accountants) at such reasonable times during normal business hours and as soon
as may be reasonably desired, upon reasonable advance notice to such Obligated Party,
provided that during the existence of any Event of Default, the Administrative Agent
(accompanied by any Lender that so elects with the consent of the Administrative Agent, such
consent not to be unreasonably withheld) may do any of the foregoing at any time without
advance notice. Each Obligated Party will deliver to the Administrative Agent any
instrument necessary for the Administrative Agent to obtain records from any service bureau
maintaining records for such Obligated Party. The Administrative Agent shall have the
right, at any time, in the applicable Obligated Party’s name, in the Administrative Agent’s
name, or in the name of a nominee of the Administrative Agent, to verify the validity,
amount, or any other matter relating to the Accounts, Inventory, or other Collateral, by
mail, telephone, or otherwise. The Obligated Parties shall reimburse the Administrative
Agent for its expense incurred in connection with any such audit, inspection, and
examination as provided in Section 15.7. The Administrative Agent may, without
expense to the Administrative Agent, use such of each Obligated Party’s respective
personnel, supplies, and Real Estate as may be necessary for maintaining or enforcing the
Agent’s Liens.

     (c) Each Obligated Party shall permit the Administrative Agent (including
representatives and independent contractors of the Administrative Agent) at any reasonable
time to enter and visit the Real Estate and any other place where any property of such
Obligated Party is located for the purposes of observing such Real Estate, taking and
removing soil or groundwater samples, and conducting tests on any part of the Real Estate,
upon giving adequate notice and arranging for a convenient time with Borrowers.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 68

 

 

Section 8.5 Insurance.

     (a) Each Obligated Party shall maintain with financially sound and reputable insurers
having a rating of at least A+ or better by Best Rating Guide (or self-insure with respect
to workers compensation, health, and other insurance (excluding insurance of the
Collateral), including deductible and loss retention provisions, compatible with the
standards set forth in this Section 8.5(a)), insurance against: (i) loss or damage
by fire (with extended coverage), theft, burglary, pilferage, and loss in transit; (ii)
public liability and third party property damage; (iii) larceny, embezzlement, or other
criminal liability; (iv) business interruption; and (v) such other hazards or of such other
types as is customary for Persons engaged in the same or similar business, in amounts, and
under policies reasonably acceptable to the Administrative Agent. Each Obligated Party
shall also maintain flood insurance for its Inventory and Equipment that is, at any time,
located in a SFHA. Without limiting the Administrative Agent’s discretion with respect to
the amount of any insurance as provided by the first sentence of this Section 8.5,
the amount of any flood insurance required by this Section 8.5 shall, at a minimum,
comply with applicable federal regulations as required by the Flood Disaster Protection Act
of 1973.

     (b) For each of the insurance policies issued as required by this Section 8.5,
that insures Collateral against loss or damage, each Obligated Party shall cause the
Administrative Agent to be named as secured party or mortgagee and loss payee, in a manner
acceptable to the Administrative Agent. Each policy of insurance shall contain (i) a clause
or endorsement requiring the insurer to give not less than ten days prior written notice to
the Administrative Agent in the event of cancellation of such policy for non-payment of
premiums and not less than thirty (30) days prior written notice to the Administrative Agent
in the event of cancellation of such policy for any other reason whatsoever and (ii) a
clause or endorsement stating that the interest of the Administrative Agent shall not be
impaired or invalidated by any act or neglect of the insured Person or the owner of any
premises for purposes more hazardous than are permitted by such policy. All premiums for
insurance required to be maintained by this Section 8.5 shall be paid by the
applicable Obligated Party when due. Certificates of insurance and, if requested by the
Administrative Agent, photocopies of the policies shall be delivered to the Administrative
Agent, in each case, with sufficient copies for distribution by the Administrative Agent to
each of the Lenders. If any Obligated Party fails to procure (or cause to be procured) such
insurance or to pay the premiums therefor when due, the Administrative Agent may, and at the
direction of the Majority Lenders shall, do so from the proceeds of Revolving Loans.

     (c) The Obligated Parties shall deliver all proceeds of any insurance policies covering
any Collateral to the Administrative Agent. If any Obligated Party fails to promptly do so
or if any Event of Default exists, the Administrative Agent may directly collect all
insurance proceeds in respect of any loss, damage, or destruction of Collateral. All
proceeds of any insurance policy covering any Collateral received by the Administrative
Agent shall be applied to the Obligations in the manner provided for in Section 4.3
as if such Collateral were the subject of a Disposition permitted pursuant to this
Agreement.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 69

 

 

     Section 8.6 Condemnation. The Obligated Parties shall deliver to the Administrative
Agent all proceeds received with respect to any Collateral that is the subject of any condemnation
or other similar proceeding. If any Obligated Party fails to promptly do so or if any Event of
Default exists, the Administrative Agent may directly collect all such proceeds. All proceeds
resulting from any condemnation or other similar proceeding received by the Administrative Agent
shall be applied to the Obligations in the manner provided for in Section 4.3 as if such
Collateral were the subject of a Disposition permitted pursuant to this Agreement.

Section 8.7 Environmental Law.

     (a) Each Obligated Party shall conduct, and shall cause each of its Subsidiaries to
conduct, its business in compliance with all Environmental Laws applicable to it, including
those relating to the generation, handling, use, storage, and disposal of any Contaminant.
Each Obligated Party shall take, and shall cause each of its Subsidiaries to take, prompt
and appropriate action to respond to any non-compliance with any Environmental Law. Each
Obligated Party shall regularly report to the Administrative Agent on any such response with
respect to any circumstance that could reasonably be expected to result in, or has resulted
in, liability in excess of $100,000 or otherwise could reasonably be expected to result in,
or has resulted in, a Material Adverse Effect.

     (b) Without limiting the generality of the foregoing, the Obligated Parties shall
submit to the Administrative Agent and the Lenders (with sufficient copies for distribution
by the Administrative Agent to the Lenders) annually, or more frequently if requested by the
Administrative Agent, commencing on the first Anniversary Date, and on each Anniversary Date
thereafter, an update of the status of each environmental compliance or liability issue
concerning any Obligated Party or any Subsidiary of an Obligated Party or any of their
respective properties or operations (whether past or present), if any, that could reasonably
be expected to result in, or has resulted in, liability in excess of $500,000 or otherwise
could reasonably be expected to result in, or has resulted in, a Material Adverse Effect.
The Administrative Agent (or any Lender through the Administrative Agent) may request, in
which case the Borrowers will promptly furnish or cause to be promptly furnished to the
Administrative Agent (with sufficient copies for distribution by the Administrative Agent to
the Lenders), copies of technical reports prepared or received by any Obligated Party or any
Subsidiary of an Obligated Party and its communications with any Governmental Authority to
determine whether such Obligated Party or Subsidiary of an Obligated Party is proceeding
reasonably to correct, cure, or contest in good faith any alleged non-compliance or
environmental liability. Each Obligated Party shall, at the Administrative Agent’s request
(or at the Majority Lenders’ request through the Administrative Agent) and at such Obligated
Party’s expense, (i) retain an independent environmental engineer acceptable to the
Administrative Agent to evaluate any site, including tests if appropriate, where the
non-compliance or alleged non-compliance with any Environmental Law has occurred and prepare
and deliver to the Administrative Agent (with sufficient copies for distribution by the
Administrative Agent to the Lenders), a report setting forth the results of such evaluation,
a proposed plan for responding to any environmental problems described

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 70

 

 

therein, and an estimate of the costs thereof and (ii) provide to the Administrative
Agent (with sufficient copies for distribution by the Administrative Agent to the Lenders),
a supplemental report of such engineer whenever the scope of the environmental problems (if
any), or the response thereto or the estimated costs thereof, shall increase in any material
respect.

     Section 8.8 Compliance with ERISA. Each Obligated Party shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code, and Requirements of Law; (b) cause each Plan that is
qualified under Section 401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan; and (e)
not engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

     Section 8.9 Mergers, Consolidations, or Sales. No Obligated Party shall enter into
any transaction of merger, reorganization, or consolidation, or transfer, sell, assign, lease, or
otherwise Dispose of all or any part of its property, or wind up, liquidate, or dissolve, or agree
to do any of the foregoing, except for: (a) sales and other Dispositions of Inventory in the
ordinary course of its business; (b) sales or other Dispositions of Equipment in the ordinary
course of business that is: (i) damaged, worn out, unserviceable, or obsolete; (ii) no longer
necessary for the proper conduct of business with a good faith estimated value not in excess of
$500,000 in any Fiscal Year of the Parent; or (iii) contemporaneously replaced with Equipment of
comparable utility, in each case in the ordinary course of business and operations of the Obligated
Parties and on a basis consistent with past practices; (c) payments of cash in the ordinary course
of business and as otherwise permitted by this Agreement; (d) the sale of stock or assets of
Mercury Air Center-Long Beach, Inc.; (e) the sale of truck inventory at Yuma, Arizona, owned by
Maytag Aircraft Corporation; and (f) subject to Section 8.10, other transactions between or
among the Obligated Parties in the ordinary course of each Obligated Party’s business consistent
with past practices; provided that, notwithstanding the foregoing or any other provision of
this Agreement, as long as no Default or Event of Default exists or would result therefrom and
provided the Parent gives the Administrative Agent prior written notice:

     (A) a Borrower (other than the Parent) may wind-up, dissolve, or liquidate if (i) its
property is transferred to another Borrower, and (ii) the Borrower acquiring such property
complies with its obligations under Section 8.25 and Section 10.2
simultaneously with such acquisition;

     (B) an Obligated Party (other than the Parent) that is not a Borrower may wind-up,
dissolve, or liquidate if (i) its property is transferred to another Obligated Party, and
(ii) the Obligated Party acquiring such property complies with its obligations under
Section 8.25 and Section 10.2 simultaneously with such acquisition;

     (C) a Borrower may merge or consolidate with another Borrower, provided that if
the Parent is a party to any such merger or consolidation, the Parent shall be the surviving
entity;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 71

 

 

     (D) an Obligated Party may transfer assets in connection with a Permitted Investment;
and

     (E) an Obligated Party that is not a Borrower may merge or consolidate with another
Obligated Party, provided that if the Parent is a party to any such merger or
consolidation, the Parent shall be the surviving entity, and a Subsidiary of an Obligated
Party that is not an Obligated Party may merge or consolidate with an Obligated Party;
provided that the Obligated Party is the survivor of any such merger or
consolidation.

The inclusion of proceeds in the definition of Collateral shall not be deemed to constitute the
Administrative Agent’s or any Lender’s consent to any sale or other Disposition of the Collateral
except as expressly permitted herein.

     Section 8.10 Distributions; Capital Change; Restricted Investments. The Parent will
not, nor will it permit any of its Subsidiaries to: (a) directly or indirectly declare or pay any
Distributions (other than (i) Distributions made in connection with the reverse stock split
referenced in, and accomplished in accordance with, the proxy statement filed with the Securities
and Exchange Commission and submitted to the stockholders of Parent on or about August 12, 2005;
(ii) Distributions in the form of dividends from Parent to its stockholders not to exceed $500,000
per year; and (iii) Distributions payable in its own Capital Stock), except that: (i) any
Subsidiary of the Parent that is an Obligated Party may make Distributions to a Borrower; (ii) any
Subsidiary of the Parent that is not an Obligated Party may make Distributions to the Parent or any
other Subsidiary of the Parent; and (iii) the Parent may accept shares of its Capital Stock in
connection with the purchase of shares of its Capital Stock issued pursuant to and in accordance
with any employee stock option plan of the Parent in existence on the Closing Date; and (b) make
any change in its capital structure that could have an adverse effect on the ability of the
Obligated Parties to perform any of their respective duties and obligations under any Loan Document
or pay the Obligations when due; or (c) make any Investment other than Permitted Investments.

     Section 8.11 Guaranties. No Obligated Party shall, make, issue, or become liable on
any Guaranty, except (a) Guaranties of the Debt allowed under Section 8.12 and (b)
endorsement in the ordinary course of business of negotiable instruments for deposit or collection.

     Section 8.12 Debt. No Obligated Party shall incur or maintain any Debt, other than:
(a) the Obligations; (b) the Debt existing on the Closing Date described in Schedule 8.12;
(c) Capital Leases of Equipment and purchase money secured Debt incurred to purchase Equipment;
provided that the aggregate amount of such Debt outstanding (including all Capital Leases
at any time outstanding) does not exceed $1,000,000 at any time; (d) Debt evidencing a refunding,
renewal, or extension of the Debt described in clause (b) and clause (c) preceding;
provided that (i) the principal amount thereof is not increased at the time of such
renewal, refinancing, refunding, or extension thereof, (ii) no Obligated Party that is not an
obligor or guarantor of such Debt as of the Closing Date shall become an obligor or guarantor
thereof, and (iii) the terms of such refunding, renewal, or extension are no less favorable to the
Obligated Parties than the original Debt; (e) non-recourse operating leases associated with new or
existing contracts with customers of the Borrowers; (f) Debt owing by an Obligated Party to another
Obligated Party for intercompany loans and advances made for working capital in the ordinary

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 72

 

 

course of business; (g) Guaranties of Debt that is permitted under this Section 8.12;
and (h) Debt incurred in connection with the financing of premiums payable with respect to
insurance policies required to be maintained by the Obligated Parties pursuant to this Agreement.

Section 8.13 Prepayment; Amendment of Debt Agreements.

     (a) No Obligated Party shall voluntarily prepay or redeem any Debt, except the
Obligations and Debt secured by a Permitted Lien if the asset securing such Debt has been
sold or otherwise disposed of in accordance with Section 8.9, so long as such Debt
is equal to or does not exceed the asset recovery proceeds.

     (b) No Obligated Party shall amend, restate, or otherwise modify any agreement,
document, or instrument evidencing any Debt except to the extent such Debt would otherwise
be permitted pursuant to Section 8.12.

     Section 8.14 Transactions with Affiliates. Except as otherwise provided in
Section 8.10, Section 8.11, Section 8.12, and this Section 8.14,
during the term of this Agreement, no Obligated Party shall sell, transfer, distribute, or pay any
money or property, including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any Affiliate that is not a
Borrower, other than payments to Maytag Aircraft Corporation, a Cayman corporation, in an amount
not to exceed $750,000 per month for payroll purposes under then existing government contracts
entered into by Maytag Aircraft Corporation, a Colorado corporation, or lend or advance money or
property to any Affiliate that is not a Borrower, other than loans to Affiliates not to exceed
$1,000,000 in the aggregate outstanding at any one time for all such loans, or invest in (by
capital contribution or otherwise) or purchase or repurchase any Capital Stock or indebtedness, or
any property, of any Affiliate that is not a Borrower, or become liable on any Guaranty of the
indebtedness, liabilities, dividends, or other obligations of any Affiliate that is not a Borrower.
Notwithstanding the foregoing, if no Default or Event of Default is in existence or would result
therefrom, an Obligated Party may engage in transactions with an Affiliate that is not a Borrower
in the ordinary course of such Obligated Party’s business consistent with past practices in amounts
and upon terms fully disclosed to the Administrative Agent and the Lenders and no less favorable to
such Obligated Party than would be obtained in a comparable arm’s-length transaction with a third
party who is not an Affiliate.

     Section 8.15 Investment Banking and Finder’s Fees. No Obligated Party shall pay or
agree to pay, or reimburse any other party with respect to, any investment banking or similar or
related fee, underwriter’s fee, finder’s fee, or broker’s fee to any Person in connection with this
Agreement. The Obligated Parties shall defend and indemnify the Administrative Agent and the
Lenders against and hold them harmless from (a) all claims of any Person that any Obligated Party
is obligated to pay any such fees and (b) all costs and expenses (including reasonable attorneys’
fees and Attorney Costs) incurred by the Administrative Agent and/or any Lender in connection
therewith.

     Section 8.16 Business Conducted. The Obligated Parties shall not engage, directly, in
any line of business other than the lines of business in which the Obligated Parties are engaged on
the Closing Date and those reasonably similar, related, in the same business segment, or

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incidental thereto.

Section 8.17 Liens.

     (a) No Obligated Party shall create, incur, assume, or permit to exist, and will defend
the Collateral against, and take such other action as is necessary to remove, any Lien on
any property now owned or hereafter acquired by it, except Permitted Liens. Each Obligated
Party will defend the right, title, and interest of the Administrative Agent in and to any
of such Obligated Party’s rights under the Collateral against the claims and demands of all
Persons whomsoever. Each Obligated Party will advise the Administrative Agent promptly, in
reasonable detail, (i) of any Lien (other than Permitted Liens) or claim made or asserted
against any of the Collateral and (ii) of the occurrence of any other event with respect to
the Collateral that could reasonably be expected to have, or has resulted in, a Material
Adverse Effect.

     (b) Other than as set forth in this Agreement and in connection with the creation or
incurrence of any Debt under Section 8.12(c), no Obligated Party will enter into or
become subject to any Negative Pledge; provided that any Negative Pledge entered
into or existing in connection with the creation of Debt under Section 8.12(c) shall
be limited to the purchase money Lien securing such Debt and will not apply to the Agent’s
Liens.

     Section 8.18 Sale and Leaseback Transactions. No Obligated Party shall, directly or
indirectly, enter into any arrangement with any Person providing for such Obligated Party to lease
or rent property that such Obligated Party has sold or will sell or otherwise transfer to such
Person.

     Section 8.19 New Subsidiaries; Addition of Subsidiaries as Borrowers. No Obligated
Party shall, directly or indirectly, organize, create, acquire, or permit to exist any Subsidiary
other than (a) those listed on Schedule 7.4 and (b) subject to Section 8.25 and
Section 15.21, other Subsidiaries created or acquired after the Closing Date,
provided that such creation or acquisition does not result in the occurrence of a Default
or an Event of Default hereunder.

     Section 8.20 Fiscal Year. Each Obligated Party (other than the Parent) shall cause
the last day of its Fiscal Year to be the same as the Parent’s. The Parent shall not change the
last day of its Fiscal Year, which is, as of the Closing Date, June 30 of each calendar year.

     Section 8.21 Fixed Charge Coverage Ratio. During a Covenant Testing Period, the
Obligated Parties shall not permit the Fixed Charge Coverage Ratio of the Parent and its
Subsidiaries as at the end of any Fiscal Period, and calculated for the immediately preceding
twelve Fiscal Periods, to be less than the corresponding ratio set forth below opposite the
applicable Fiscal Period ending:

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 74

 

 

	 	 	 
	Fiscal Period Ending	 	Minimum Fixed Charge Coverage Ratio
	June 30, 2005

	 	.7 to 1.0
	July 31, 2005

	 	.7 to 1.0
	August 31, 2005

	 	.7 to 1.0
	September 30, 2005

	 	.6 to 1.0
	October 31, 2005

	 	.6 to 1.0
	November 30, 2005

	 	.6 to 1.0
	December 31, 2005

	 	.6 to 1.0
	January 31, 2006

	 	.6 to 1.0
	February 28, 2006

	 	.6 to 1.0
	March 31, 2006

	 	.7 to 1.0
	April 30, 2006

	 	.7 to 1.0
	May 31, 2006

	 	.8 to 1.0
	June 30, 2006 and each Fiscal Period
ending thereafter

	 	1.0 to 1.0

     Section 8.22 Capital Expenditures. Except for Capital Expenditures incurred in
connection with, and limited in an amount equal to, the insurance proceeds delivered to the
Administrative Agent in accordance with Section 8.5(c), the Obligated Parties shall not
make or incur any Capital Expenditure if, after giving effect thereto, the aggregate amount of all
Capital Expenditures by the Obligated Parties, on a consolidated basis, would exceed $3,500,000
during any Fiscal Year.

     Section 8.23 Use of Proceeds. The Borrowers shall use the proceeds of the Loans: (a)
to pay costs and expenses incurred in connection with the closing of this Agreement and the
transactions contemplated hereby; (b) to pay interest, costs, and expenses incurred in connection
with this Agreement; (c) to issue Letters of Credit and to repay reimbursement obligations related
thereto; and (d) to finance ongoing general working capital needs and Capital Expenditures (in each
case, not otherwise prohibited by this Agreement) of the Obligated Parties in the ordinary course
of business, and shall not use any portion of the Revolving Loan proceeds,

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directly or indirectly: (x) to the extent the Borrowers are subject to the Sarbanes-Oxley
Act, to fund a personal loan to or for the benefit of a director or executive officer of any
Obligated Party or for any purpose that is prohibited by the Sarbanes-Oxley Act; (y) to buy or
carry any Margin Stock, to repay or otherwise refinance indebtedness of the Borrowers or others
incurred to buy or carry any Margin Stock, to extend credit for the purpose of buying or carrying
any Margin Stock, or to acquire any security in any transaction that is subject to Sections 13 or
14 of the Exchange Act except for acquisition of common stock in connection with the reverse stock
split referenced in the proxy statement filed with the Securities and Exchange Commission and
submitted to the stockholders of Parent on or about August 12, 2005; or (z) for any purpose that is
prohibited by any Requirement of Law.

     Section 8.24 Bank as Depository. Each Obligated Party shall maintain the Bank as its
principal depository, including for the maintenance of operating, administrative, cash management,
collection activity, and other deposit accounts for the conduct of its business.

     Section 8.25 Guaranties of the Obligations. Each Obligated Party, including any
Person that becomes a Borrower or a Guarantor after the Closing Date pursuant to the terms of this
Agreement, shall guarantee payment and performance of the Obligations pursuant to a Guaranty
Agreement in form and substances satisfactory to the Administrative Agent and each Lender, and duly
executed by each such Obligated Party.

     Section 8.26 Government Contracts. Upon the request by Administrative Agent therefor,
and in connection with any Account owed by the government of the U.S., or any department, agency,
public corporation, or other instrumentality thereof, each Obligated Party shall take all steps
necessary to comply with the Federal Assignment of Claims Act of 1940, as amended, and all other
steps necessary to perfect the Agent’s Liens therein.

     Section 8.27 Additional Collateral; Further Assurances.

     (a) Subject to Requirements of Law, each Obligated Party shall cause, unless the
Majority Lenders otherwise consent, each Subsidiary of the Parent other than those
Subsidiaries listed on Schedule 8.27, and any Subsidiary that is not organized under
Requirements of Law of the U.S. or any state thereof, to become a Borrower and a Guarantor,
or a Guarantor (but not a Borrower).

     (b) Upon request of the Administrative Agent, each Obligated Party shall (i) grant
Liens to the Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, pursuant to such agreements, certificates, documents, and instruments as the
Administrative Agent may reasonably deem necessary and deliver such property, agreements,
certificates, documents, and instruments as the Administrative Agent may request to perfect
the Liens of the Administrative Agent in any property of such Obligated Party that
constitutes Collateral, (ii) execute a Guaranty Agreement as required by Section
8.25, and (iii) in connection with the foregoing requirements, or either of them,
deliver to the Administrative Agent all items of the type required by Section 9.1
(as applicable). Upon execution and delivery of such Loan Documents and other agreements,
certificates, documents, and instruments, each such Person shall automatically become a
Borrower and a Guarantor, or a Guarantor (but not a Borrower),

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as applicable, hereunder and thereupon shall have all of the rights, benefits, duties,
and obligations, in such capacity under the Loan Documents.

     (c) Without limiting the foregoing, each Obligated Party shall, and shall cause each of
the Parent’s Subsidiaries that is required to become an Obligated Party pursuant to the
terms of this Agreement to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents and agreements, and shall take or cause to be taken
such actions as the Administrative Agent may, from time to time, reasonably request to carry
out the terms and conditions of this Agreement and the other Loan Documents.

ARTICLE 9

CONDITIONS OF LENDING

     Section 9.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing Date, and the
obligation of the Administrative Agent to cause the Letter of Credit Issuer to issue any Letter of
Credit on the Closing Date, is subject to the following conditions precedent having been satisfied
in a manner satisfactory to the Administrative Agent and each Lender.

     (a) This Agreement shall have been executed and delivered by each party hereto;

     (b) The Administrative Agent shall have received each of the following from each
Obligated Party, all of which shall be satisfactory in form and substance to the
Administrative Agent and the Lenders:

     (i) copies of the Organization Certificate of such Obligated Party, with all
amendments thereto, each certified by the appropriate Governmental Authority of the
jurisdiction of such Obligated Party’s formation, incorporation, or organization (as
applicable) certified by the secretary, general partner, or comparable authorized
representative of such Obligated Party as being true, correct, complete, and in
effect on the Closing Date;

     (ii) copies of the Management Agreement of such Obligated Party certified by
the secretary, general partner, or comparable authorized representative of such
Obligated Party as being true, correct, complete, and in effect on the Closing Date;

     (iii) copies of duly approved Resolutions authorizing the execution and
delivery of the Loan Documents to which such Obligated Party is a party, and, with
respect to the Borrowers, authorizing the Borrowings, certified by the secretary,
general partner, or comparable authorized representative of such Obligated Party as
being true, correct, complete, and in effect on the Closing Date;

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     (iv) a certificate evidencing the existence of such Obligated Party, and
certificates evidencing the good standing and tax status of such Obligated Party in
the jurisdiction of its organization and in each other jurisdiction in which it is
required to be qualified as a foreign business entity to transact its business as
presently conducted; and

     (v) a certificate of incumbency and specimen signatures with respect to each
individual authorized to execute and deliver this Agreement and the other Loan
Documents on behalf of such Obligated Party, and any other individual executing any
document, certificate, or instrument to be delivered in connection with this
Agreement and the other Loan Documents and, in the case of each Borrower, to request
Borrowings;

     (c) The Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent, each of the following:

     (i) with respect to any Letter of Credit to be issued, and with respect to each
Existing Letter of Credit, all documentation required by Section 2.4, duly
executed by a Responsible Officer of the applicable Borrower;

     (ii) a Guaranty Agreement duly executed and delivered by each Obligated Party
as required pursuant to Section 8.25;

     (iii) a certificate of the Obligated Parties executed by a Responsible Officer
of each Obligated Party:

     (A) specifying the account of the Borrowers that is the Funding
Account; and

     (B) certifying to such other factual matters as may be reasonably
requested by the Administrative Agent or any Lender;

     (iv) each Deposit Account Control Agreement required to be provided pursuant to
Section 10.2(g);

     (v) a Deposit Account Control Agreement with respect to the Clearing Account;

     (vi) a Mortgage with respect to 6145 Lehman Drive, Colorado Springs, Colorado,
subject only to that certain mortgage in favor of U.S. Bank, together with a
commitment for an ALTA policy of title insurance for the fair market value of such
property without any exceptions except as may be acceptable to Administrative Agent;

     (vii) each Collateral Waiver Agreement required to be provided pursuant to
Section 10.2(c);

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     (viii) acknowledgment copies of proper UCC financing statements with respect to
the Collateral, duly authorized by the Obligated Parties, filed on or before the
Closing Date in all jurisdictions that the Administrative Agent may deem necessary
or desirable in order to perfect the Agent’s Liens or, at the Administrative Agent’s
option, such other evidence satisfactory to the Administrative Agent of the filing
of such financing statements;

     (ix) UCC-3 financing statements and such other instruments, in form and
substance satisfactory to the Administrative Agent, as shall be necessary to
terminate all existing UCC filings on the Property of the Obligated Parties that are
not Permitted Liens, and satisfactory evidence that the Administrative Agent has a
valid, exclusive (except for Permitted Liens), and perfected first priority (except
for Permitted Liens that according to the terms of this Agreement are permitted to
have priority over the Agent’s Liens) Lien as of the Closing Date in the Collateral
as security for the Obligations, to the extent any such Liens may be perfected under
the UCC (but excluding any Liens perfected solely by possession, but only to the
extent the Administrative Agent has not requested possession of such Collateral), in
each case in form and substance satisfactory to the Administrative Agent;
provided that upon the Administrative Agent’s request, the Obligated Parties
shall provide any additional agreement, document, instrument, certificate, or other
item relating to any other Collateral as may be required for perfection under any
Requirement of Law;

     (x) a Borrowing Base Certificate that is equivalent to that which would
otherwise be required under Sections 6.2(k)(i) and (ii);

     (xi) evidence, in form, scope, and substance satisfactory to the Administrative
Agent, of all insurance coverage, with appropriate loss payable endorsements, as
required by this Agreement;

     (xii) satisfactory evidence that all filings, consents, or approvals with or of
the owners of any Capital Stock of any Obligated Party, any Governmental Authority,
or any other third party have been made or obtained, as applicable;

     (xiii) a pledge agreement, in form and substance satisfactory to the
Administrative Agent in its sole discretion, executed by each Obligated Party with
regard to the stock or other membership ownership of such Obligated Party in its
respective Subsidiaries in such percentages as the Administrative Agent may
determine in its sole discretion, accompanied by (a) the original stock certificate,
or certificate of membership, for any such certificated interest, and (b) an
assignment separate from certificate executed in blank; and

     (xiv) such other agreements, certificates, documents, and instruments as the
Administrative Agent or any Lender may reasonably request;

     (d) The Administrative Agent shall have received signed opinions of counsel for the
Obligated Parties, opining as to such matters in connection with the transactions

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contemplated by this Agreement as the Administrative Agent may request, each such
opinion to be in form, scope, and substance satisfactory to the Administrative Agent, the
Lenders, and their respective counsel;

     (e) After giving effect to all Borrowings on the Closing Date and payment of all fees
and expenses due hereunder, and with all of the Borrowers’ indebtedness, liabilities, and
obligations current, the Unused Availability shall not be less than $8,500,000;

     (f) All representations and warranties made hereunder and in the other Loan Documents
shall be true and correct;

     (g) The Borrowers shall have paid all fees and expenses of the Administrative Agent and
the Attorney Costs incurred in connection with any of the Loan Documents and the
transactions contemplated thereby to the extent invoiced (or shall have made provision for
the direct payment thereof out of the proceeds of any Borrowing to be funded on the Closing
Date);

     (h) No Default or Event of Default shall exist or would exist after giving effect to
the Borrowings to be made on the Closing Date;

     (i) The Administrative Agent and the Lenders shall have had an opportunity to examine
the books of account and other records and files of the Obligated Parties and to make copies
thereof, to inspect each of the locations where any Obligated Party maintains any Inventory,
to review each of the material licenses of any Obligated Party and the contracts referenced
in Section 7.24, and to conduct a pre-closing audit that shall include verification
of Inventory, Accounts, and the Borrowing Base, and the results of such examination and
audit shall have been satisfactory to the Administrative Agent and the Lenders in all
respects;

     (j) The Administrative Agent shall have had an opportunity to review all supplier and
customer agreements and the results of such examination and the contents of such agreements
shall have been satisfactory to the Administrative Agent in all respects;

     (k) All proceedings taken by the Obligated Parties in connection with the execution of
this Agreement, the other Loan Documents, and all documents and papers relating thereto
shall be satisfactory in form, scope, and substance to the Administrative Agent and the
Lenders; and

     (l) Without limiting the generality of the items described above, each of the Obligated
Parties and each other Person guaranteeing payment of the Obligations shall have delivered
or caused to be delivered to the Administrative Agent (in form and substance reasonably
satisfactory to the Administrative Agent), the financial statements, instruments,
resolutions, documents, agreements, certificates, opinions, and other items required by the
Administrative Agent and the Lenders.

The acceptance by the Borrowers of any Loans made or Letters of Credit issued on the Closing Date
shall be deemed to be a representation and warranty made by each of the Obligated Parties

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to the effect that all of the conditions precedent to the making of such Loans or issuance of such
Letters of Credit have been satisfied, with the same effect as delivery to the Administrative Agent
and the Lenders of a certificate signed by a Responsible Officer of each of the Obligated Parties,
dated the Closing Date, to such effect. Execution and delivery to the Administrative Agent by a
Lender of a counterpart of this Agreement shall be deemed confirmation by such Lender that: (1)
all conditions precedent in this Section 9.1 have been fulfilled to the satisfaction of
such Lender; (2) the decision of such Lender to execute and deliver to the Administrative Agent an
executed counterpart of this Agreement was made by such Lender independently and without reliance
on the Administrative Agent or any other Lender as to the satisfaction of any condition precedent
set forth in this Section 9.1; and (3) all documents sent to such Lender for approval,
consent, or satisfaction were acceptable to such Lender.

     Section 9.2 Conditions Precedent to Each Loan. The obligation of the Lenders to make
each Loan, including the initial Loans on the Closing Date, and the obligation of the
Administrative Agent to cause the Letter of Credit Issuer to issue any Letter of Credit shall be
subject to the further conditions precedent that on and as of the date of any such Borrowing the
following statements shall be true, and the request or deemed request by the Borrowers of any
Borrowing shall be deemed to be a statement by each of the Obligated Parties to the effect set
forth in clause (a), clause (b), and clause (c) following with the same
effect as the delivery to the Administrative Agent of a certificate signed by a Responsible Officer
of each of the Obligated Parties, dated the date of such extension of credit, stating that:

     (a) the representations and warranties contained in this Agreement and the other Loan
Documents are correct in all material respects on and as of the date of such Borrowing as
though made on and as of such date, other than any such representation or warranty that
relates to a specified prior date and except to the extent the Administrative Agent and the
Lenders have been notified in writing by the Obligated Parties that any representation or
warranty is not correct and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty;

     (b) no event or circumstance exists, or would result from such Borrowing, that
constitutes a Default or an Event of Default;

     (c) no event or circumstance exists, or would result from such Borrowing, that has had,
or could reasonably be expected to have, a Material Adverse Effect; and

     (d) the proposed Borrowing does not exceed the Unused Availability prior to giving
effect to such Borrowing;

provided that the foregoing conditions precedent are not conditions to any Lender
participating in or reimbursing the Bank or the Administrative Agent for such Lender’s Pro Rata
Share of any Non-Ratable Loan or Agent Advance made in accordance with the provisions of
Section 2.2(i) and Section 2.2(j).

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ARTICLE 10

SECURITY

     Section 10.1 Grant of Lien. As security for the Obligations, each Obligated Party
hereby grants to the Administrative Agent, for the benefit of the Credit Providers, a continuing
security interest in, lien on, pledge of, collateral assignment of, and right of setoff against,
all of the following property and assets of such Obligated Party, whether now owned or existing or
hereafter acquired or arising, regardless of where located:

     (a) Accounts;

     (b) Inventory;

     (c) contract rights and rights under leases of real and personal property whether as
lessor or lessee (including any option to purchase thereunder);

     (d) Chattel Paper;

     (e) Documents;

     (f) Instruments;

     (g) Supporting Obligations and Letter-of-Credit Rights;

     (h) General Intangibles (including payment intangibles and Software);

     (i) Goods;

     (j) Equipment;

     (k) Investment Property;

     (l) money, cash, and cash equivalents;

     (m) Deposit Accounts, credits, and balances with and other claims against any financial
institution with which such Obligated Party maintains deposits, including any Clearing
Accounts;

     (n) books, records, and other property related to or referring to any of the foregoing,
including account ledgers, data processing records, computer software, and other property
and General Intangibles at any time evidencing or relating to any of the foregoing;

     (o) the commercial tort claims described in Schedule 7.26 and from time to time
disclosed to the Administrative Agent pursuant to Section 6.2(o); and

     (p) any and all accessions and additions to, substitutions for, and replacements,
products, and proceeds of any of the foregoing, including, but not limited

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to, proceeds of any insurance policies, claims against third parties, and condemnation
or requisition payments with respect to all or any of the foregoing.

All of the foregoing, and all other property of the Obligated Parties in which the Administrative
Agent or any Lender may at any time be granted a Lien as collateral for the Obligations, is herein
collectively referred to as the “Collateral”.

     Section 10.2 Perfection and Protection of Security Interest.

     (a) Actions By the Obligated Parties. Each Obligated Party shall, at the
expense of the Borrowers, perform all steps requested by the Administrative Agent at any
time to perfect, maintain, protect, and enforce the Agent’s Liens, including, as applicable:
(i) executing, delivering, and filing and recording of the Mortgage(s), the Copyright
Security Agreements, the Patent Security Agreements, and the Trademark Security Agreements
and authorizing the filing of financing or continuation statements, and amendments thereof,
in form and substance reasonably satisfactory to the Administrative Agent; (ii) delivering
to the Administrative Agent warehouse receipts covering any portion of the Collateral
located in warehouses and for which warehouse receipts are issued and, certificates of title
covering any portion of the Collateral for which certificates of title have been issued
indicating the Administrative Agent as the lienholder thereon; (iii) at any time during the
existence of an Event of Default, transferring Inventory to warehouses or other locations
designated by the Administrative Agent; (iv) placing notations on such Obligated Party’s
books of account to disclose the Agent’s Liens; and (v) taking such other steps as are
deemed necessary or desirable by the Administrative Agent to maintain and protect the
Agent’s Liens.

     (b) Delivery of Collateral. Upon the Administrative Agent’s request, each
Obligated Party shall promptly deliver to the Administrative Agent all Collateral consisting
of negotiable Documents, certificated securities (accompanied by stock powers executed in
blank), Chattel Paper, and Instruments.

     (c) Landlords and Bailees. Each Obligated Party will use its best efforts in
good faith to provide to the Administrative Agent, upon the Administrative Agent’s request,
an executed Collateral Waiver Agreement (i) from each landlord of leased Real Estate on
which any Collateral is located and (ii) from each Person that is not an Obligated Party and
is in possession of any Collateral. In the event that any Collateral Waiver Agreement
requested by the Administrative Agent pursuant to this Section 10.2(c) is not
provided, in lieu of such delivery, the Administrative Agent may, in its discretion,
establish a Reserve with respect to any Collateral located on any leased Real Estate or in
the possession of any third party that is not an Obligated Party for which the
Administrative Agent has not received such executed Collateral Waiver Agreement, and/or
exclude such Collateral from the determination of the Borrowing Base.

     (d) Control Agreements. Upon the Administrative Agent’s request, each
Obligated Party shall obtain authenticated control agreements from each issuer of
uncertificated securities, securities intermediary, or commodities intermediary issuing or
holding any financial assets or commodities to or for such Obligated Party.

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     (e) Letter of Credit Agreements. If any Obligated Party is or becomes the
beneficiary of any letter of credit arising from the sale or other disposition of
Collateral, such Obligated Party shall promptly notify the Administrative Agent thereof and,
upon the Administrative Agent’s request, enter into a tri-party agreement (in form and
substance reasonably satisfactory to the Administrative Agent) with the Administrative Agent
and the issuer and/or the confirmation bank with respect to all Letter-of-Credit Rights
thereunder assigning such Letter-of-Credit Rights to the Administrative Agent and directing
all payments thereunder to a Clearing Account.

     (f) Electronic Chattel Paper. In accordance with the UCC (or other applicable
Requirement of Law) and to the extent requested by the Administrative Agent, each Obligated
Party shall take all steps reasonably necessary to grant the Administrative Agent control of
all of such Obligated Party’s electronic chattel paper and all “transferable records” as
defined in the Uniform Electronic Transactions Act.

     (g) Deposit Accounts. In accordance with the UCC (or other applicable
Requirement of Law) and to the extent requested by the Administrative Agent, each Obligated
Party shall take all steps reasonably necessary to grant the Administrative Agent control of
all of such Obligated Party’s Deposit Accounts, including delivery of such Deposit Account
Control Agreements as the Administrative Agent may request.

     (h) Financing Statements. Each Obligated Party hereby irrevocably authorizes
the Administrative Agent at any time and from time to time to file in, transmit to, or
communicate with any filing office any financing statements and amendments thereto that (i)
indicate the Collateral (A) as “all assets”, or words of similar import, of such Obligated
Party, or words of similar effect, regardless of whether any particular asset included in
the Collateral falls within the scope of Article 9 of the UCC, or (B) as being of an equal
or lesser scope or with greater detail and (ii) contain any other information required by
Part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including (A) whether such Obligated Party is an
organization, the type of organization, any organization identification number issued to
such Obligated Party, and any employer or taxpayer identification number issued to such
Grantor and (B) in the case of a financing statement filed as a fixture filing or indicating
any Collateral as as-extracted collateral or timber to be cut, a sufficient description of
real property to which such Collateral relates. Each Obligated Party agrees to furnish any
such information to the Administrative Agent promptly upon request. Each Obligated Party
also ratifies its authorization for the Administrative Agent to file any like financing
statements or amendments thereto if filed prior to the date hereof.

     (i) Commercial Tort Claims. With respect to each commercial tort claim
required to be disclosed by Section 6.2(o), unless otherwise consented to by the
Administrative Agent, the applicable Obligated Party shall enter into documentation
satisfactory to the Administrative Agent to grant to the Administrative Agent a first
priority perfected Lien in such commercial tort claim.

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     (j) Confirmations. From time to time, each Obligated Party shall, upon the
Administrative Agent’s request, execute and deliver confirmatory written instruments
pledging to the Administrative Agent, for the benefit of the Credit Providers, the
Collateral, but such Obligated Party’s failure to do so shall not affect or limit any
security interest or any other rights of the Administrative Agent or any other Credit
Provider in and to the Collateral with respect to such Obligated Party. As long as this
Agreement is in effect and until all Obligations have been fully satisfied, the Agent’s
Liens shall continue in full force and effect in all Collateral (whether or not deemed
eligible for the purpose of calculating the Unused Availability or as the basis for any
advance, loan, extension of credit, or other financial accommodation).

     (k) Terminations and Amendments Not Authorized. Each Obligated Party
acknowledges that it is not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement filed by the Administrative
Agent in connection with this Agreement or any other Loan Document without the prior written
consent of the Administrative Agent and agrees that it will not do so without the prior
written consent of the Administrative Agent, subject to such Obligated Party’s rights under
Section 9-509(d)(2) of the UCC.

     Section 10.3 Location of Collateral. Each Obligated Party represents and warrants to
the Administrative Agent and the Lenders that, as of the Closing Date, Schedule 10.3
contains a correct and complete list of: (a) the location of such Obligated Party’s chief
executive office; (b) each location of its books and records; (c) each location and address where
any Collateral is held; (d) with respect to each location referenced in clause (c)
preceding where any Collateral is held by a representative, agent, warehouseman, or bailee, the
name and address of such representative, agent, warehouseman, or bailee and the cost of such
Inventory at such location. Each Obligated Party covenants and agrees that it will not maintain
any Collateral at any location other than those locations listed for such Obligated Party in
Schedule 10.3, otherwise change or add to any of the locations listed for such Obligated
Party in Schedule 10.3, or change the location of its chief executive office from the
location identified in Schedule 10.3 unless, in any such case, it gives the Administrative
Agent at least 30 days prior written notice thereof and authorizes the filing of any and all
financing statements and executes any other documents that the Administrative Agent reasonably
requests in connection therewith.

     Section 10.4 Reserved.

     Section 10.5 Accounts.

     (a) Representations. Each Obligated Party hereby represents and warrants, with
respect to its Accounts, that: (i) each existing Account represents, and each future Account
will represent, a bona fide sale or lease and delivery of goods by such
Obligated Party, or rendition of services by such Obligated Party, in the ordinary course of
such Obligated Party’s business; (ii) each existing Account is, and each future Account will
be, for a liquidated amount payable by the Account Debtor thereon on the terms set forth in
the invoice therefor or in the schedule thereof delivered to the Administrative Agent,
without any offset, deduction, defense, or counterclaim except those known to such Obligated
Party and disclosed to the Administrative Agent pursuant to this Agreement;

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(iii) no payment will be received with respect to any Account, and no credit, discount,
or extension, or any agreement therefor, will be granted on any Account, except as reported
to the Administrative Agent in Borrowing Base Certificates delivered in accordance with this
Agreement; (iv) each copy of an invoice delivered to the Administrative Agent by such
Obligated Party will be a genuine copy of the original invoice sent to the Account Debtor
named therein; and (v) all goods described in any invoice representing a sale of goods will
have been delivered to the Account Debtor and all services of such Obligated Party described
in each invoice will have been performed.

     (b) Dating Terms. No Obligated Party will re-date any invoice or sale or make
sales on extended dating beyond that customary in such Obligated Party’s business or extend
or modify any Account. If any Obligated Party becomes aware of any matter adversely
affecting the collectibility of any Account or the Account Debtor therefor, including
information regarding the Account Debtor’s creditworthiness, such Obligated Party will
exclude such Account from Eligible Accounts and Eligible Foreign Accounts and, with respect
to any such Account Debtor that is obligated on Accounts owing to any Obligated Party, in an
aggregate amount greater than $100,000, promptly so advise the Administrative Agent.

     (c) Notes and Instruments. Without the Administrative Agent’s prior written
consent, no Obligated Party will accept any note or other instrument (except a check or
other instrument for the immediate payment of money) with respect to any Account.

     (d) Disputes and Claims. Each Obligated Party shall notify the Administrative
Agent promptly of all disputes and claims in excess of $100,000 with any Account Debtor, and
agrees to settle, contest, or adjust such dispute or claim at no expense to the
Administrative Agent or any other Credit Provider. No discount, credit, or allowance shall
be granted to any such Account Debtor without the Administrative Agent’s prior written
consent, except for discounts, credits, and allowances made or given in the ordinary course
of the applicable Obligated Party’s business when no Event of Default exists. Upon the
Administrative Agent’s request, each Obligated Party shall send the Administrative Agent a
copy of credit memoranda. Notwithstanding the foregoing, each Obligated Party that is a
Borrower shall promptly report that credit on Borrowing Base Certificates submitted by the
Obligated Parties. The Administrative Agent may at all times when an Event of Default
exists, settle or adjust disputes and claims directly with Account Debtors for amounts and
upon terms that the Administrative Agent shall consider advisable and, in all cases, the
Administrative Agent will credit the Loan Account with the net amounts received by the
Administrative Agent in payment of any Accounts.

     Section 10.6 Collection of Accounts; Payments.

     (a) Lockboxes. During a Dominion Period, the Obligated Parties shall maintain
one or more lockbox services for collection of Accounts and proceeds of other Collateral,
each for deposit to a Clearing Account. Each Obligated Party shall instruct all of its
Account Debtors, other than those Account Debtors listed on Schedule 10.6(a) to make
all payments directly to an address established for such lockbox services. All

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collections received in any lockbox maintained for any Obligated Party, and all
collections received directly by the Administrative Agent, shall, following a Dominion
Event, be subject to the Agent’s sole control and withdrawals by the applicable Obligated
Party shall not be permitted.

     (b) Collections. If, during a Dominion Period, notwithstanding instructions
from each Obligated Party delivered to Account Debtors pursuant to clause (a)
preceding, an Obligated Party receives any proceeds of Accounts or other Collateral,
including any payment from an Account Debtor listed on Schedule 10.6(a), it shall
make such collection and receive all such payments and receipts as the Administrative
Agent’s trustee and, within one Business Day of receipt thereof, deposit all such payments
and receipts in their original form, duly endorsed in blank (if applicable) into a Clearing
Account or deliver such payments and receipts to the Administrative Agent in their original
form, duly endorsed in blank (if applicable), as the Administrative Agent may direct.
Following a Dominion Event, all collections received directly by any Obligated Party or the
Administrative Agent, and all funds in any Clearing Account or other account to which such
collections are deposited shall be subject to the Administrative Agent’s sole control, and
withdrawals by any Obligated Party shall not be permitted.

     (c) Accounts. Each lockbox and Clearing Account of any Obligated Party shall
be established with the Bank. No Obligated Party shall maintain any lockbox or Deposit
Account except with the Bank or subject to a Deposit Account Control Agreement.

     (d) Cash Sales. If sales of Inventory are made or services are rendered for
cash, the applicable Obligated Party shall, within one Business Day of receipt, deliver to
the Administrative Agent or deposit into a Clearing Account the cash that such Obligated
Party receives.

     (e) Payments. During a Dominion Period, all payments received by the
Administrative Agent at a bank account designated by it will be the Agent’s sole property
for its benefit and the benefit of the Credit Providers and will be credited to the Loan
Account (conditional upon final collection) as required by Section 4.3(b);
provided that, except during the existence of an Event of Default, such payments
shall be deemed to be credited to the Loan Account immediately upon receipt for purposes of
(i) determining the Unused Availability, (ii) calculating the Unused Line Fee, and (iii)
calculating the amount of interest accrued thereon solely for purposes of determining the
amount of interest to be distributed by the Administrative Agent to the Lenders (but not the
amount of interest payable by the Borrowers). During the existence of any Event of Default,
the Administrative Agent may, in its sole discretion, require that only payments
representing final collections be credited to the Loan Account for the purposes set forth in
clause (i), clause (ii), and clause (iii) preceding.

     Section 10.7 Inventory; Perpetual Inventory. Each Obligated Party represents and
warrants and agrees that all of the Inventory owned by such Obligated Party is and will be held for
sale or lease, or is to be furnished in connection with the rendition of services, in the ordinary
course of such Obligated Party’s business, and is and will be fit for such purposes. Each

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Obligated Party will keep its Inventory in good and marketable condition, except for damaged,
obsolete or defective goods arising in the ordinary course of such Obligated Party’s business. No
Obligated Party will, without the prior written consent of the Administrative Agent, acquire or
accept any Inventory on consignment or approval. Each Obligated Party agrees that all Inventory
produced by such Obligated Party in the U.S. will be produced in accordance with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations, and orders thereunder. Each
Obligated Party will conduct a physical count of its Inventory at least once per Fiscal Year and,
during the existence of an Event of Default, at such other times as the Administrative Agent
requests. Each Obligated Party will maintain a perpetual inventory reporting system at all times.
Upon the request therefor by the Administrative Agent, each Obligated Party, at its own expense,
shall deliver to the Administrative Agent the results of each physical verification, if any, which
such Obligated Party may in its discretion have made, or caused any other Person to have made on
its behalf, of all or any portion of its Inventory. No Obligated Party will, without the
Administrative Agent’s written consent, sell any Inventory on a bill-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or return basis.

     Section 10.8 Equipment.

     (a) Changes to Equipment. Each Obligated Party shall promptly inform the
Administrative Agent of any material additions to or deletions from such Obligated Party’s
Equipment. No Obligated Party will permit any of its Equipment to become a fixture with
respect to Real Estate or to become an accession with respect to other personal property
with respect to which Real Estate or personal property the Administrative Agent does not
have a Lien. No Obligated Party will, without the Administrative Agent’s prior written
consent, alter or remove any identifying symbol or number on any of such Obligated Party’s
Equipment constituting Collateral.

     (b) Except as set forth in Section 8.9, no Obligated Party shall, without the
Administrative Agent’s prior wpritten consent, sell, license, lease as a lessor, or otherwise
dispose of any of such Obligated Party’s Equipment.

Section 10.9 [Reserved.]

     Section 10.10 Documents, Instruments, and Chattel Paper. Each Obligated Party
represents and warrants that (a) all Documents, Instruments, and Chattel Paper describing,
evidencing, or constituting Collateral, and all signatures and endorsements thereon, are and will
be complete, valid, and genuine, and (b) all goods evidenced by Documents, Instruments,
Letter-of-Credit Rights, and Chattel Paper are and will be owned by the applicable Obligated Party,
free and clear of all Liens other than Permitted Liens. If any Obligated Party retains possession
of any Chattel Paper or Instruments, such Chattel Paper and Instruments shall be marked with the
following legend: “This writing and the obligations evidenced or served hereby are subject to the
security interest of Bank of America, N.A., as Administrative Agent, for the benefit of the
Administrative Agent and the Credit Providers pursuant to that certain Loan and Security Agreement,
dated as of September 7, 2005, among Mercury Air Group, Inc., a Delaware corporation and certain of
its affiliates, the Administrative Agent, and the lending institutions party thereto.”

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     Section 10.11 Right to Cure. The Administrative Agent may, in its discretion, and
shall, at the direction of the Majority Lenders, pay any amount or do any act required of any
Obligated Party hereunder or under any other Loan Document in order to preserve, protect, maintain,
or enforce the Obligations, the Collateral, or the Agent’s Liens, and that any Obligated Party
fails to pay or do, including payment of any judgment against any Obligated Party, any insurance
premium, any warehouse charge, any finishing or processing charge, any landlord’s, bailee’s or
consignee’s claim, and any other Lien upon or with respect to the Collateral. All payments that
the Administrative Agent makes under this Section 10.11 and all out-of-pocket costs and
expenses that the Administrative Agent pays or incurs in connection with any action taken by it
hereunder shall be payable by the Borrowers in accordance with Section 15.7 and shall be
charged to the Borrowers’ Loan Account as a Revolving Loan. Any payment made or other action taken
by the Administrative Agent under this Section 10.11 shall be without prejudice to any
right to assert an Event of Default hereunder and to proceed thereafter as herein provided.

     Section 10.12 Power of Attorney.

     (a) Each Obligated Party hereby appoints the Administrative Agent and the
Administrative Agent’s designee as such Obligated Party’s attorney, with power: (i) to
endorse or sign such Obligated Party’s name on any checks, notes, acceptances, money orders,
or other forms of payment or security that come into the Administrative Agent’s or any
Lender’s possession; (ii) to sign such Obligated Party’s name on any invoice, bill of
lading, warehouse receipt, or other negotiable or non-negotiable Document constituting
Collateral, on drafts against customers, on assignments of Accounts, on notices of
assignment, financing statements and other public records and to file any such financing
statements by electronic means with or without a signature as authorized or required by
applicable law or filing procedure; (iii) during the existence of any Event of Default, to
notify the post office authorities to change the address for delivery of such Obligated
Party’s mail to an address designated by the Administrative Agent and to receive, open, and
dispose of all mail addressed to such Obligated Party; (iv) to send requests for
verification of Accounts to customers or Account Debtors; (v) during the existence of any
Event of Default, to complete in such Obligated Party’s name or the Administrative Agent’s
name, any order, sale, or transaction, obtain the necessary Documents in connection
therewith, and collect the proceeds thereof; (vi) to clear Inventory through customs in such
Obligated Party’s name, the Administrative Agent’s name, or the name of the Administrative
Agent’s designee, and to sign and deliver to customs officials powers of attorney in such
Obligated Party’s name for such purpose; (vii) to the extent, if any, that such Obligated
Party’s authorization given in Section 10.2(h) is not sufficient, and without
otherwise limiting such authorization, to file such financing statements with respect to
this Agreement, with or without such Obligated Party’s signature, as the Administrative
Agent may deem appropriate and to execute in such Obligated Party’s name such financing
statements and amendments thereto and continuation statements that may require such
Obligated Party’s signature; and (viii) to do all things necessary to carry out the terms of
this Agreement.

     (b) Each Obligated Party hereby appoints the Administrative Agent and the
Administrative Agent’s designee as such Obligated Party’s attorney, with power during the
existence of any Event of Default: (i) to endorse such Obligated Party’s name on all

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applications, documents, papers, and instruments necessary or reasonably desirable for
the Administrative Agent in the use of such Obligated Party’s Proprietary Rights; (ii)
during the existence of any Event of Default, to grant or issue any exclusive or
non-exclusive license under such Obligated Party’s Proprietary Rights to any Person; and
(iii) during the existence of any Event of Default, to assign, convey, or otherwise transfer
title in or Dispose of any of such Obligated Party’s Proprietary rights to any Person.

     (c) Each Obligated Party ratifies and approves all acts of such attorney pursuant to
this Section 10.12. Neither the Administrative Agent, any other Credit Provider,
nor any of their respective attorneys will be liable for any acts or omissions or for any
error of judgment or mistake of fact or law except for their gross negligence or willful
misconduct. The powers set forth in this Section 10.12, being coupled with an
interest, are irrevocable until this Agreement has been terminated and the Obligations have
been fully and irrevocably satisfied.

     Section 10.13 The Administrative Agent’s and the Lenders’ Rights, Duties, and
Liabilities.

     (a) The Obligated Parties’ Liability for the Collateral. Each Obligated Party
assumes all responsibility and liability arising from or relating to the use, sale, license,
or other disposition of the Collateral. The Obligations shall not be affected by any
failure of the Administrative Agent or any other Credit Provider to take any steps to
perfect the Agent’s Liens or to collect or realize upon the Collateral, nor shall loss of or
damage to the Collateral release any Obligated Party from any of the Obligations. During
the existence of any Event of Default, the Administrative Agent may (but shall not be
required to), and at the direction of the Majority Lenders shall, without notice to or
consent from any Obligated Party, sue upon or otherwise collect, extend the time for payment
of, modify or amend the terms of, compromise or settle for cash, credit, or otherwise upon
any terms, grant other indulgences, extensions, renewals, compositions, or releases, and
take or omit to take any other action with respect to the Collateral, any security therefor,
any agreement relating thereto, any insurance applicable thereto, or any Person liable
directly or indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of any Obligated Party for the Obligations or under this
Agreement or any other agreement now or hereafter existing between the Administrative Agent
and/or any other Credit Provider and such Obligated Party.

     (b) The Obligated Parties’ Liability Under Contracts and Licenses. It is
expressly agreed by each Obligated Party that, anything herein to the contrary
notwithstanding, such Obligated Party shall remain liable under each of its contracts and
each of its licenses to observe and perform all the conditions and obligations to be
observed and performed by it thereunder. Neither the Administrative Agent nor any other
Credit Provider shall have any obligation or liability under any contract or license by
reason of or arising out of this Agreement or the granting herein of a Lien thereon or the
receipt by the Administrative Agent or any other Credit Provider of any payment relating to
any contract or license pursuant hereto. Neither the Administrative Agent nor any other
Credit Provider shall be required or obligated in any manner to perform or fulfill any of
the obligations of any Obligated Party under or pursuant to any contract or

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license, or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any performance by any party
under any contract or license, or to present or file any claims, or to take any action to
collect or enforce any performance or the payment of any amounts that may have been assigned
to it or to which it may be entitled at any time or times.

     (c) Notification of Account Debtors. Without limiting Section 11.2, at
any time during the existence of an Event of Default (or if any rights of setoff (other than
setoffs against an Account arising under the contract giving rise to the same Account) or
contra accounts may be asserted with respect to the following), the Administrative Agent
may, without prior notice to any Obligated Party, and upon the request of the Administrative
Agent each Obligated Party shall, notify Account Debtors, and other Persons obligated on the
Collateral that the Administrative Agent has a security interest therein, and that payments
shall be made directly to the Administrative Agent, for the benefit of the Administrative
Agent and the other Credit Providers. Once any such notice has been given to any Account
Debtor or other Person obligated on the Collateral, no Obligated Party shall give any
contrary instructions to such Account Debtor or other Person without the Administrative
Agent’s prior written consent.

     (d) Information Regarding Accounts and Account Debtors. The Administrative
Agent may at any time in the Administrative Agent’s own name, in the name of any Obligated
Party, or in the name of the Administrative Agent’s nominee or designee, communicate with
each Obligated Party’s Account Debtors, parties to contracts, and obligors in respect of
Instruments to verify with such Persons, to the Administrative Agent’s satisfaction, the
existence, amount, and terms of Accounts, payment intangibles, Instruments, or Chattel
Paper. If an Event of Default exists, each Obligated Party, at its own expense, shall cause
the independent certified public accountants then engaged by such Obligated Party to prepare
and deliver to the Administrative Agent (with sufficient copies for distribution to each
Lender) at any time and from time to time promptly upon the Administrative Agent’s request
the following reports with respect to such Obligated Party: (i) a reconciliation of all
Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification
of such Accounts as the Administrative Agent may request.

     (e) No Obligation of the Administrative Agent. Notwithstanding anything in
this Agreement to the contrary, each Obligated Party agrees that the Administrative Agent
shall have no obligation to take any steps necessary to preserve rights in the Proprietary
Rights of any Obligated Party against any other Person, provided that the
Administrative Agent may do so at its option during the existence of any Event of Default in
accordance with Section 10.14(f).

     Section 10.14 Patent, Trademark, and Copyright Collateral.

     (a) Representations. This Agreement is effective to create a valid and
continuing Lien on and, upon filing of appropriate financing statements pursuant to the UCC,
perfected Liens in favor of the Administrative Agent, on the Proprietary Rights of each
Obligated Party and such perfected Liens are enforceable as against any and all

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creditors of such Obligated Party. Upon filing of all such appropriate financing
statements pursuant to the UCC, all action necessary to protect and perfect the Agent’s Lien
on each Obligated Party’s Proprietary Rights under Requirement of Law shall have been duly
taken. Upon filing any Copyright Security Agreement, Patent Security Agreement, or
Trademark Security Agreement with the United States Copyright Office or Unites States Patent
and Trademark Office, as applicable, the Agent’s Liens will be enforceable against any
purchaser of the Proprietary Rights covered thereby.

     (b) Notices to the Administrative Agent. Each Obligated Party shall notify the
Administrative Agent promptly upon such Obligated Party obtaining knowledge that any
application or registration relating to any patent, trademark, or copyright (now or
hereafter existing) may become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States Copyright
Office, or any court) regarding such Obligated Party’s ownership of any patent, trademark,
or copyright, its right to register the same, or to keep and maintain the same.

     (c) Additional Agreements. In no event shall any Obligated Party, either
directly or through any agent, employee, licensee, or designee, file an application for the
registration of any patent, trademark, or copyright with the United States Patent and
Trademark Office, the United States Copyright Office, or any similar Governmental Authority,
or enter into any new license as licensor with respect to any patent, trademark, or
copyright, without giving the Administrative Agent prior written notice thereof, and, upon
request of the Administrative Agent, such Obligated Party shall execute and deliver any and
all Patent Security Agreements, Copyright Security Agreements, or Trademark Security
Agreements as the Administrative Agent may request to evidence the Agent’s Liens on such
patent, trademark, or copyright, and the General Intangibles of such Obligated Party
relating thereto or represented thereby.

     (d) Further Actions. Each Obligated Party shall take all actions necessary or
requested by the Administrative Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of such Obligated Party’s
material Proprietary Rights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and opposition
and interference and cancellation proceedings.

     (e) Notices of Infringement. In the event that any of the Proprietary Rights
that are Collateral are infringed upon, or misappropriated or diluted by a third party, each
Obligated Party shall notify the Administrative Agent promptly after such Obligated Party
learns thereof. Each Obligated Party shall, unless it shall reasonably determine that such
Proprietary Rights that are Collateral are in no way material to the conduct of its business
or operations, promptly sue for infringement, misappropriation, or dilution and to recover
any and all damages for such infringement, misappropriation, or dilution, and shall take
such other actions as the Administrative Agent shall deem appropriate under the
circumstances to protect such Proprietary Rights that are Collateral.

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     (f) Suits by the Administrative Agent. Without limiting Section 11.2,
during the existence of any Event of Default, the Administrative Agent shall have the right,
but shall not be obligated, to bring suit in its own name to enforce the Proprietary Rights
and, if the Administrative Agent shall commence any such suit, each Obligated Party shall,
at the request of the Administrative Agent, do any and all lawful acts and execute any and
all proper documents reasonably required by the Administrative Agent in aid of such
enforcement. Each Obligated Party shall, upon demand, promptly reimburse the Administrative
Agent for all costs and expenses incurred by the Administrative Agent in the exercise of its
rights under this Section 10.14(f) (including Attorney Costs and other fees and
expenses of other professionals).

     Section 10.15 Indemnification. In any suit, proceeding, or action brought by the
Administrative Agent or any other Credit Provider relating to any Collateral for any sum owing with
respect thereto or to enforce any rights or claims with respect thereto, each Obligated Party will
save, indemnify, and keep the Administrative Agent and the other Credit Providers harmless from and
against all expense (including Attorney Costs and other reasonable attorneys’ fees and expenses),
loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment, or reduction of
liability whatsoever of the Account Debtor or other Person obligated on the Collateral, arising out
of a breach by any Obligated Party of any obligation thereunder or arising out of any other
agreement, indebtedness, or liability at any time owing to, or in favor of, such obligor or its
successors from any Obligated Party, provided that no Obligated Party shall be liable to
any Credit Provider for the payment of any portion of such amount to the extent determined in a
final, nonappealable judgment by a court of competent jurisdiction to have resulted from such
Credit Provider’s own gross negligence or willful misconduct. All such obligations of each
Obligated Party shall be and remain enforceable against and only against such Obligated Party and
shall not be enforceable against the Administrative Agent or any Lender.

     Section 10.16 Grant of License to Use Proprietary Rights. For the purpose of enabling
the Administrative Agent to exercise default rights and remedies under Section 11.2 or
under any other Loan Document or applicable Requirement of Law (including in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for sale, sell, or
otherwise dispose of Collateral) at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, each Obligated Party hereby grants to the
Administrative Agent, for the benefit of the Administrative Agent and the other Credit Providers,
an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation
to such Obligated Party) to use, license, or sublicense any Proprietary Rights now owned or
hereafter acquired by such Obligated Party, and wherever the same may be located, and including in
such license access to all media in which any of the licensed items may be recorded or stored and
to all computer software and programs used for the compilation or printout thereof.

     Section 10.17 Limitation on the Administrative Agent’s and the Lenders’ Duty in Respect of
the Collateral. The Administrative Agent and each other Credit Provider shall use reasonable
care with respect to the Collateral in its possession or under its control. Neither the
Administrative Agent nor any other Credit Provider shall have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or nominee of

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the Administrative Agent or such other Credit Provider, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining thereto.

     Section 10.18 Miscellaneous.

     (a) Reinstatement. The Agent’s Liens on the Collateral granted pursuant to
this Agreement shall remain in full force and effect and continue to be effective should any
petition be filed by or against any Obligated Party for liquidation or reorganization,
should any Obligated Party become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or any
significant part of any Obligated Party’s assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the Obligations,
or any part thereof, remains outstanding or is, pursuant to any Requirement of Law,
rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise,
all as though such payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.

     (b) Benefit. All Liens granted or contemplated hereby shall be for the benefit
of the Administrative Agent and the other Credit Providers, and all proceeds or payments
realized from Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of Section 4.3.

     (c) Limitations. The Liens granted pursuant to Section 10.1 in each
Obligated Party’s, other than the Parent’s, Collateral shall be limited to a maximum
aggregate amount equal to the largest amount that would not render its obligations hereunder
and the Liens granted hereby subject to avoidance as a fraudulent transfer or conveyance
under any Requirement of Law, in each case after giving effect to all other liabilities and
obligations of such Obligated Party, contingent or otherwise, that are relevant under such
laws, and after giving effect to the value, as assets (as determined under the applicable
provisions of such laws), of any rights of such Obligated Party to contribution, indemnity,
and/or subrogation from any other Obligated Party or other Person pursuant to any
Requirement of Law or any agreement providing for an equitable allocation among such
Obligated Party, any other Obligated Party, and any other such Person of their respective
obligations hereunder.

ARTICLE 11

DEFAULT; REMEDIES

     Section 11.1 Events of Default. It shall constitute an event of default (“Event
of Default”) if any one or more of the following shall occur for any reason:

     (a) any failure by the Borrowers to pay the principal of or interest or premium on any
of the Obligations when due, whether upon demand or otherwise;

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     (b) any failure by the Borrowers to pay any fee or other amount owing (except for
amounts set forth in Section 11.1(a)) under any Loan Document when due, which
failure to pay shall continue for three Business Days or more;

     (c) any representation or warranty made or deemed made by any Obligated Party in any
Loan Document, any Financial Statement, or any certificate furnished by any Obligated Party
at any time to the Administrative Agent or any Lender shall prove to be untrue in any
material respect as of the date on which made, deemed made, or furnished;

     (d) any default shall occur in the observance or performance of:

     (i) any of the covenants and agreements contained in Sections 10.3(c)
or (d), 10.5, 10.8, 10.10 or 10.14, provided
that such default shall continue for three Business Days or more;

     (ii) any of the covenants and agreements contained in Section 6.2, clauses
(a) through (e), and (k), Section 8.2 (insofar as it
requires the preservation of the existence of the Obligated Parties), Section
8.5, Section 8.9 through Section 8.27, or Article 10
(except as specified in clause (i) preceding),

     (iii) any of the covenants and agreements contained in Section 6.2
(except as specified in clause (ii) preceding) or Section 6.3 and
such default shall continue for five Business Days or more;

     (iv) any of the other covenants or agreements contained in this Agreement other
than as referenced in Section 11.1(a), Section 11.1(b), and
clause (i), clause (ii), and clause (iii) preceding, any
other Loan Document, or any other agreement entered into at any time to which any
Obligated Party and the Administrative Agent or any Lender are party (including in
respect of any Bank Products) and such default shall continue for ten Business Days
or more;

     (e) any default shall occur with respect to any Debt (other than the Obligations) of
any Obligated Party in an aggregate outstanding principal amount that exceeds $500,000, or
under any agreement or instrument under or pursuant to which any such Debt may have been
issued, created, assumed, or guaranteed by any Obligated Party, and such default shall
continue for more than the period of grace, if any, therein specified, if the effect thereof
(with or without the giving of notice or further lapse of time or both) is to accelerate or
to permit the holders of any such Debt to accelerate, the maturity of any such Debt, or any
such Debt shall be declared due and payable or be required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;

     (f) any Obligated Party shall: (i) file a voluntary petition in bankruptcy or file a
voluntary petition or an answer or otherwise commence any action or proceeding seeking
reorganization, arrangement, or readjustment of its debts or for any other relief under the
Bankruptcy Code or under any other bankruptcy or insolvency act or law, state or federal,
now or hereafter existing, or consent to, approve of, or acquiesce in, any such petition,
action, or proceeding; (ii) apply for or acquiesce in the appointment of a

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receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee, or similar
officer for it or for all or any part of its property; (iii) make an assignment for the
benefit of its creditors; or (iv) be unable generally to pay its debts as they become due;

     (g) an involuntary petition or proposal shall be filed or an action or proceeding
otherwise commenced seeking reorganization, arrangement, consolidation, or readjustment of
the debts of any Obligated Party or for any other relief under the Bankruptcy Code or under
any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing
and such petition or proceeding shall not be dismissed within 60 days after the filing or
commencement thereof or an order of relief (or comparable order under any other Requirement
of Law) against any Obligated Party shall be entered with respect thereto;

     (h) a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee, or
similar officer for any Obligated Party or for all or any part of its property shall be
appointed or a warrant of attachment, execution, or similar process shall be issued against
any part of the property of any Obligated Party;

     (i) any Obligated Party shall file a certificate of dissolution under any Requirement
of Law or shall be liquidated, dissolved, or wound-up (except in a transaction allowed under
Section 8.9) or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up, or liquidation, or shall take any action in furtherance thereof
(except in connection with a transaction allowed under Section 8.9);

     (j) all or any material part of the property of any Obligated Party is nationalized,
expropriated, condemned, recalled, seized, or otherwise appropriated, or custody or control
of such property or of any Obligated Party is assumed by any Governmental Authority or any
court of competent jurisdiction at the instance of any Governmental Authority, except where
contested in good faith by proper proceedings diligently pursued where a stay of enforcement
is in effect;

     (k) any Loan Document is terminated, revoked, or declared void, invalid, or
unenforceable or is challenged by any Obligated Party or any other party thereto (other than
in accordance with its terms or the terms hereof or with the written consent of the
Administrative Agent and the Majority Lenders);

     (l) one or more judgments, orders, decrees (including out-of-court settlements), or
arbitration or mediation awards is entered against any Obligated Party involving liability
in the aggregate for any or all of the Obligated Parties as to any single, related, or
unrelated series of transactions, incidents, or conditions, of $500,000 or more, and any
such judgment, order, or decree remains unsatisfied, unvacated, and unstayed pending appeal
for a period of 30 days after the entry thereof;

     (m) any loss, theft, damage, or destruction of any item or items of Collateral or other
property of any Obligated Party occurs that is not adequately covered by insurance and could
reasonably be expected to result in a Material Adverse Effect;

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     (n) there is filed against any Obligated Party any action, suit, or proceeding under
any federal or state racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit, or proceeding (i) is not dismissed within 120
days and (ii) could reasonably be expected to result in the confiscation or forfeiture of
any material portion of the Collateral;

     (o) for any reason other than the failure of the Administrative Agent to take any
action available to it to maintain perfection of the Agent’s Liens pursuant to the Loan
Documents, any Loan Document ceases to be in full force and effect (other than in accordance
with its terms or the terms hereof or with the written consent of the Administrative Agent
and the Majority Lenders) or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected, and prior to all
other Liens (other than Permitted Liens that are expressly permitted to have priority over
the Agent’s Liens) or is terminated, revoked, or declared void (other than in accordance
with its terms or the terms hereof or with the written consent of the Administrative Agent
and the Majority Lenders);

     (p) (i) an ERISA Event shall occur with respect to any Pension Plan or Multi-employer
Plan that has resulted in, or could reasonably be expected to result in, liability of any
Obligated Party under Title IV of ERISA to such Pension Plan, such Multi-employer Plan, or
the PBGC in an aggregate amount in excess of $100,000; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds $100,000; or (iii) any
Obligated Party or any ERISA Affiliate shall fail to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multi-employer Plan in an aggregate amount in
excess of $100,000;

     (q) there occurs a Change of Control; or

     (r) there occurs any event that results in a Material Adverse Effect.

     Section 11.2 Remedies.

     (a) During the existence of any Default or Event of Default, the Administrative Agent
may, in its discretion, and shall, at the direction of the Majority Lenders, do one or more
of the following at any time or times and in any order, without notice to or demand on any
Obligated Party: (i) reduce the Maximum Revolver Amount, or the advance rates against the
Net Amount of Eligible Accounts and the Net Amount of Eligible Foreign Accounts used in
computing the Borrowing Base (including increasing the amount of any Reserve); (ii) restrict
the amount of or refuse to make Revolving Loans; and (iii) instruct the Letter of Credit
Issuer to restrict or refuse to provide Letters of Credit.

     (b) During the existence of any Event of Default, the Administrative Agent shall, at
the direction of the Majority Lenders, do one or more of the following: (i) take any of the
actions described in clause (a) preceding, at any time or times and in any order,
without notice to or demand on any Obligated Party; (ii) terminate the Commitments, the

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obligation of the Lenders to make Revolving Loans under this Agreement, and the
obligation of the Administrative Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit hereunder; (iii) declare any or all of the Obligations to be immediately
due and payable; provided, however, that upon the occurrence of any Event of
Default described in Section 11.1(f), Section 11.1(g), Section
11.1(h), or Section 11.1(i) the Commitments shall automatically and immediately
expire and all Obligations shall automatically become immediately due and payable without
notice or demand of any kind; (iv) require the Obligated Parties to provide cash collateral
in an amount equal to 105% of all Obligations (contingent or otherwise) outstanding with
respect to Letters of Credit; and (v) pursue its other rights and remedies under the Loan
Documents and any Requirement of Law.

     (c) During the existence of any Event of Default: (i) the Administrative Agent shall
have, for the benefit of the Administrative Agent and the Lenders, in addition to all other
rights of the Administrative Agent and the Lenders, the default rights and remedies of a
secured party under the Loan Documents and the UCC; (ii) the Administrative Agent may, at
any time, take possession of the Collateral and keep it on any Obligated Party’s premises,
at no cost to the Administrative Agent or any Lender, or remove any part of the Collateral
to such other place or places as the Administrative Agent may desire, or any Obligated Party
shall, upon the Administrative Agent’s demand, at such Obligated Party’s cost, assemble the
Collateral and make it available to the Administrative Agent at a place reasonably
convenient to the Administrative Agent; (iii) the Administrative Agent or the Administrative
Agent’s designee may notify the Obligated Parties’ Account Debtors that the Obligated
Parties’ Accounts have been assigned to the Administrative Agent and of the Agent’s Lien
therein, and may collect such Accounts directly and charge the collection costs and expenses
to the Loan Account as a Revolving Loan; and (iv) the Administrative Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit, or otherwise, at
such prices and upon such terms as the Administrative Agent deems advisable, in its sole
discretion, and may, if the Administrative Agent deems it reasonable, postpone or adjourn
any sale of the Collateral by an announcement at the time and place of sale or of such
postponed or adjourned sale without giving a new notice of sale. Without in any way
requiring notice to be given in the following manner, each Obligated Party agrees that any
notice by the Administrative Agent of sale, disposition, or other intended action hereunder
or in connection herewith, whether required by the UCC or otherwise, shall constitute
reasonable notice to the Obligated Parties if such notice is mailed by registered or
certified mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least ten days prior to such action to the Obligated Parties’ address
specified in or pursuant to Section 15.8. If any Collateral is sold on terms other
than payment in full at the time of sale, no credit shall be given against the Obligations
until the Administrative Agent or the Lenders receive payment, and if the buyer defaults in
payment, the Administrative Agent may resell the Collateral without further notice to any
Obligated Party. In the event the Administrative Agent seeks to take possession of all or
any portion of the Collateral by judicial process, each Obligated Party irrevocably waives
the posting of any bond, surety, or security with respect thereto that might otherwise be
required, any demand for possession prior to the commencement of any suit or action to
recover the Collateral, and any requirement that the Administrative Agent retain possession
and not dispose of any

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Collateral until after trial or final judgment. Each Obligated Party agrees that the
Administrative Agent has no obligation to preserve rights to the Collateral or marshal any
Collateral for the benefit of any Person. In addition to any license granted pursuant to
Section 10.16, the Administrative Agent is hereby granted a license or other right
to use, without charge, each Obligated Party’s labels, patents, copyrights, name, trade
secrets, trade names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising, or selling any Collateral, and each Obligated Party’s
rights under all licenses and all franchise agreements shall inure to the Administrative
Agent’s benefit for such purpose. The proceeds of sale shall be applied first to all
expenses of sale, including Attorney Costs, and then to the Obligations as provided in
Section 4.6(b). The Administrative Agent will return any excess to the Obligated
Parties, and the Obligated Parties shall remain liable for any deficiency.

     (d) Without limiting the generality of the foregoing, each Obligated Party expressly
agrees that, during the existence of any Event of Default, the Administrative Agent, without
demand of performance or other demand, advertisement, or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon any Obligated
Party or any other Person (all and each of which demands, advertisements, and notices are
hereby expressly waived to the maximum extent permitted by the UCC and other applicable
law), may forthwith enter upon the premises of any Obligated Party where any Collateral is
located through self-help, without judicial process, without first obtaining a final
judgment or giving such Obligated Party or any other Person notice and opportunity for a
hearing on the Administrative Agent’s claim or action and may collect, receive, assemble,
process, appropriate, and realize upon the Collateral, or any part thereof, and may
forthwith sell, lease, license, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or any part
thereof, in one or more parcels at a public or private sale or sales, at any exchange at
such prices as the Administrative Agent may deem acceptable, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent or any
other Credit Provider shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase for the benefit of
the Administrative Agent and the other Credit Providers, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of redemption
each Obligated Party hereby releases. Such sales may be adjourned and continued from time
to time with or without notice. The Administrative Agent shall have the right to conduct
such sales on any Obligated Party’s premises or elsewhere and shall have the right to use
each Obligated Party’s premises without charge for such time or times as the Administrative
Agent deems necessary or advisable.

     (e) Each Obligated Party further agrees, at the Administrative Agent’s request, to
assemble the Collateral and make it available to the Administrative Agent at a place or
places designated by the Administrative Agent that are reasonably convenient to the
Administrative Agent and such Obligated Party, whether at such Obligated Party’s premises or
elsewhere. Until the Administrative Agent is able to effect a sale, lease, or other
disposition of the Collateral, the Administrative Agent shall have the right to hold or use
the Collateral, or any part thereof, to the extent that it deems appropriate for the

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 99

 

 

purpose of preserving the Collateral or its value or for any other purpose deemed
appropriate by the Administrative Agent. The Administrative Agent shall have no obligation
to any Obligated Party to maintain or preserve the rights of such Obligated Party as against
third parties with respect to any Collateral while such Collateral is in the possession of
the Administrative Agent. The Administrative Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of the Collateral and to enforce any
of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and the
other Credit Providers), with respect to such appointment without prior notice or hearing as
to such appointment. The Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization, or sale to the Obligations as
provided in Section 4.6(b), and only after so paying over such net proceeds, and
after the payment by the Administrative Agent of any other amount required by any provision
of law, need the Administrative Agent account for the surplus, if any, to the applicable
Obligated Party. To the maximum extent permitted by applicable law, each Obligated Party
waives all claims, damages, and demands against the Administrative Agent or any other Credit
Provider arising out of the repossession, retention, or sale of the Collateral except to the
extent resulting from the gross negligence or willful misconduct of the Administrative Agent
or such other Credit Provider as finally determined in a final, nonappealable judgment by a
court of competent jurisdiction. Each Obligated Party agrees that ten days prior notice by
the Administrative Agent of the time and place of any public sale or of the time after which
a private sale may take place is reasonable notification of such matters. Each Obligated
Party shall remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all Obligations, including any attorneys’ fees or
other expenses incurred by the Administrative Agent or any other Credit Provider to collect
such deficiency.

     (f) Except as otherwise specifically provided herein or in the other Loan Documents,
each Obligated Party hereby waives presentment, demand, protest, or any notice (to the
maximum extent permitted by applicable law) of any kind in connection with this Agreement or
any Collateral.

     (g) To the extent that applicable law imposes duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, each Obligated Party acknowledges and
agrees that it is not commercially unreasonable for the Administrative Agent: (i) to fail
to incur expenses reasonably deemed significant by the Administrative Agent to prepare
Collateral for disposition or otherwise to complete raw material or work-in-process into
finished goods or other finished products for disposition; (ii) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if not required
by other law, to fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of; (iii) to fail to exercise
collection remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral; (iv) to exercise collection
remedies against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists; (v) to advertise
dispositions of Collateral through publications or media of general circulation, whether or
not the Collateral is of a specialized nature; (vi) to contact other Persons, whether or not
in the same business as such Obligated Party, for expressions of interest in

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 100

 

 

acquiring all or any portion of such Collateral; (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of
a specialized nature; (viii) to dispose of Collateral by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets; (ix) to dispose
of assets in wholesale rather than retail markets; (x) to disclaim disposition warranties,
such as title, possession, or quiet enjoyment; (xi) to purchase insurance or credit
enhancements to insure the Administrative Agent against risks of loss, collection, or
disposition of Collateral or to provide to the Administrative Agent a guaranteed return from
the collection or disposition of Collateral; or (xii) to the extent deemed appropriate by
the Administrative Agent, to obtain the services of other brokers, investment bankers,
consultants, and other professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Obligated Party acknowledges that the purpose of
this Section 11.2(g) is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would not be commercially unreasonable in the
Administrative Agent’s exercise of remedies against the Collateral and that other actions or
omissions by the Administrative Agent shall not be deemed commercially unreasonable solely
on account of not being indicated in this Section 11.2(g). Without limiting the
foregoing, nothing contained in this Section 11.2(g) shall be construed to grant any
rights to any Obligated Party or to impose any duties on the Administrative Agent that would
not have been granted or imposed by this Agreement or by Requirement of Law in the absence
of this Section 11.2(g).

     (h) Without limiting Section 10.12(b), during the existence of an Event of
Default, each Obligated Party, at the Administrative Agent’s request, shall execute and
deliver to the Administrative Agent such documents as the Administrative Agent shall require
to grant the Administrative Agent access to any post office box in which collections of
Accounts are received.

     (i) During the existence of an Event of Default, the Obligated Parties will, at the
Administrative Agent’s request, with respect to all Inventory financed by Letters of Credit,
instruct all suppliers, carriers, forwarders, customs brokers, warehouses, or others
receiving or holding cash, checks, Inventory, documents, or instruments in which the
Administrative Agent holds a security interest to deliver them to the Administrative Agent
and/or subject to the Administrative Agent’s order, and if they shall come into any
Obligated Party’s possession, to deliver them, upon request, to the Administrative Agent in
their original form. The Obligated Parties shall also, at the Administrative Agent’s
request, during the existence of an Event of Default, designate the Administrative Agent as
the consignee on all bills of lading and other negotiable and non-negotiable documents or
cause all such documents to designate the applicable Obligated Party as the consignee
subject to the Agent’s Liens.

     (j) During the existence of an Event of Default, each Obligated Party hereby waives all
rights to notice and hearing prior to the exercise by the Administrative Agent of the
Administrative Agent’s rights to repossess the Collateral without judicial process or to
replevy, attach, or levy upon the Collateral without notice or hearing.

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ARTICLE 12

TERM AND TERMINATION

     Section 12.1 Term and Termination.

     (a) The term of this Agreement shall end on the Stated Termination Date unless sooner
terminated in accordance with the terms hereof. The Administrative Agent may, and upon
direction from the Required Lenders shall, terminate this Agreement, without notice to the
Obligated Parties, during the existence of an Event of Default. Upon the effective date of
termination of this Agreement for any reason whatsoever, all Obligations (including all
unpaid principal, accrued and unpaid interest, and any early termination or prepayment fees,
and any unpaid indemnification or reimbursement obligations, but excluding indemnification
obligations only to the extent no claim with respect thereto has been asserted and remains
unsatisfied) shall become immediately due and payable, the Lenders shall have no obligation
to make any Loans, the Administrative Agent shall have no obligation to cause the Letter of
Credit Issuer to issue any Letter of Credit, and the Borrowers shall immediately arrange for
the cancellation and return of all Letters of Credit then outstanding or delivery to the
Administrative Agent of a Supporting Cash Deposit or a Supporting Letter of Credit in
accordance with Section 2.4(g). Notwithstanding the termination of this Agreement,
until all Obligations (whether then existing or thereafter arising) are indefeasibly paid
and performed in full, the Obligated Parties shall remain bound by the terms of this
Agreement and the other Loan Documents and shall not be relieved of any of their Obligations
hereunder or thereunder, and the Administrative Agent and the Lenders shall retain all their
rights and remedies hereunder and thereunder (including the Agent’s Liens in and all rights
and remedies with respect to all then existing and after-acquired or after-arising
Collateral).

     (b) Notwithstanding the payment in full of the Obligations, the Administrative Agent
shall not be required to terminate the Agent’s Liens in any of the Collateral unless, with
respect to any loss or damage the Administrative Agent may incur as a result of the dishonor
or return of any payment items applied to the Obligations, the Administrative Agent shall
have received either (i) a written agreement, executed by the Obligated Parties and any
other Person deemed financially responsible by the Administrative Agent and whose loans or
other advances to the Borrowers, or any of them, are used in whole or in part to satisfy the
Obligations, indemnifying the Administrative Agent and the other Credit Providers from any
such loss or damage or (ii) such monetary reserves and Liens on the Collateral for such
period of time as the Administrative Agent, in its reasonable credit judgment, may deem
necessary to protect the Administrative Agent and the Lenders from any such loss or damage.
The provisions of Section 2.4(f), Section 2.5, Section 4.7,
Article 5, this Section 12.1(b), Section 14.7, Section
14.16(d), Section 15.7, Section 15.11, and all indemnification and
reimbursement obligations of the Obligated Parties shall in all events survive any
termination of the Commitments or this Agreement.

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ARTICLE 13

AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

     Section 13.1 Amendments and Waivers.

     (a) Except as specified in clause (b) and clause (c) following, no
amendment or waiver of any provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by any Obligated Party therefrom, shall be effective
unless such amendment, modification, or consent is in writing, signed by the Majority
Lenders (or by the Administrative Agent at the written request of the Majority Lenders) and
the Obligated Parties, and acknowledged by the Administrative Agent, and then any such
amendment, waiver, or consent shall be effective only in the specific instance and for the
specific purpose for which given.

     (b) Unless it is in writing and signed by all of the Lenders (or by the Administrative
Agent at the written request of the Lenders (including any Defaulting Lender with respect to
clause (i) following) and the Obligated Parties and acknowledged by the Administrative
Agent, no amendment, waiver, or consent shall do any of the following:

     (i) increase (other than pursuant to an assignment under Section 13.2)
or extend the Commitment of any Lender;

     (ii) amend the second sentence of Section 2.2(a);

     (iii) increase the Maximum Revolver Amount or the Letter of Credit Subfacility;

     (iv) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees (other than fees payable to
the Administrative Agent solely for the Administrative Agent’s benefit), or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;

     (v) reduce the principal of, or the rate of interest specified herein on any
Loan, or any fees or other amounts payable hereunder or under any other Loan
Document;

     (vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that is required for the Lenders, or any of them, to
take any action hereunder;

     (vii) change the definition of Majority Lenders or Required Lenders;

     (viii) increase any of the percentages set forth in the definition of Borrowing
Base;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 103

 

 

     (ix) amend this Section 13.1 or any provision of this Agreement
providing for consent or other action by all of the Lenders; or

     (x) other than as permitted by Section 14.11, release any Guaranties of
the Obligations or release Collateral;

provided that: (A) no amendment, waiver, or consent shall, unless in writing and
signed by the Administrative Agent, affect the rights or duties of the Administrative Agent
under this Agreement or any other Loan Document; (B) no amendment, waiver, or consent shall,
unless in writing and signed by the Bank, acting in its capacity as the Letter of Credit
Issuer, affect the rights or duties of the Letter of Credit Issuer under this Agreement or
any other Loan Document related to any Letter of Credit issued or to be issued by it; (C)
Schedule 1.1A may be amended from time to time by the Administrative Agent alone to
reflect assignments of Commitments in accordance with this Agreement; (D) any Loan Document
relating to Bank Products may be amended by the applicable Obligated Parties and the Bank
without the approval or consent of any other Lender; and (E) except as specified for in
clause (i) preceding, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver, or consent hereunder.

     (c) No waiver, amendment, or consent shall, unless in writing and signed by the
Required Lenders and the Obligated Parties and acknowledged by the Administrative Agent,
amend any provision of Section 2.2(j), other than an amendment to the percentage of
Lenders required to revoke the Administrative Agent’s authorization to make Agent Advances,
which revocation shall require only the signature of the Required Lenders.

     (d) If any fees are paid to the Lenders as consideration for amendments, waivers, or
consents with respect to this Agreement, at the Administrative Agent’s election, such fees
may be paid only to those Lenders that agree to such amendments, waivers, or consents within
the time specified for submission thereof.

     (e) If, in connection with any proposed amendment, waiver, or consent:

     (i) requiring the consent of all of the Lenders, the consent of the Required
Lenders is obtained but the consent of the other Lenders is not obtained (any such
Lender whose consent is not obtained as described in this clause (i) or
clause (ii) following being referred to as a “Non-Consenting
Lender”), or

     (ii) requiring the consent of the Required Lenders, the consent of the Majority
Lenders is obtained but the consent of the other Lenders is not obtained,

then, if the Bank (in its individual capacity as a Lender) is not a Non-Consenting Lender,
at the Obligated Parties’ request the Bank (in its individual capacity as a Lender) or an
Eligible Assignee shall, subject to the requirements of Section 13.2(a), have the
right (but not the obligation) to purchase from each Non-Consenting Lender, and each
Non-Consenting Lender agrees that it shall sell, such Non-Consenting Lender’s Loans and
Commitments for an amount equal to the aggregate outstanding principal balances thereof
plus all accrued interest and fees with respect thereto through the date of sale
pursuant to one or more Assignment and Acceptances, without premium or discount.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 104

 

 

     Section 13.2 Assignments; Participations.

     (a) Any Lender (the “assigning Lender”) may, with the written consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and if no Default or
Event of Default exists with the written consent of the Borrowers (which consent shall not
be unreasonably withheld), assign and delegate to one or more Eligible Assignees
(provided that no consent of the Administrative Agent or the Borrowers shall be
required in connection with any assignment and delegation by an assigning Lender to an
Affiliate of the assigning Lender or to another Lender) (each an “Assignee”) all or
part of the Commitment of the assigning Lender hereunder, in a minimum amount of $10,000,000
and integral amounts of $5,000,000 in excess thereof, together with a ratable part of the
assigning Lender’s outstanding Loans and the other rights and obligations of the assigning
Lender hereunder (provided that, unless the assigning Lender has assigned and
delegated all of its Loans and Commitments, no such assignment and/or delegation shall be
permitted unless, after giving effect thereto, the assigning Lender retains a Commitment in
a minimum amount of $10,000,000 and a ratable part of the outstanding Loans and the other
rights and obligations hereunder); provided, further, that the Obligated
Parties and the Administrative Agent in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, shall have been given to
the Obligated Parties and the Administrative Agent by the assigning Lender and the Assignee,
(ii) the assigning Lender and the Assignee shall have delivered to the Obligated Parties and
the Administrative Agent an Assignment and Acceptance substantially in the form of
Exhibit F (an “Assignment and Acceptance”), and (iii) the assigning Lender
or the Assignee has paid to the Administrative Agent a processing fee in the amount of Three
Thousand Five Hundred Dollars ($3,500) (provided that the Administrative Agent may,
in its discretion, waive such fee in connection with the initial syndication of the
Commitments). The Borrowers agree to promptly execute and deliver any promissory notes as
reasonably requested by the Administrative Agent to evidence assignments of the Loans and
Commitments in accordance herewith.

     (b) From and after the date that the Administrative Agent notifies the assigning Lender
that it has received an executed Assignment and Acceptance and payment of the
above-referenced processing fee, if applicable, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations, including, but not limited to, the
obligation to participate in Letters of Credit have been assigned to the Assignee pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a Lender under
the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by the assigning
Lender pursuant to such Assignment and Acceptance, relinquish its rights and be released
from its obligations under this Agreement (and in the case of an Assignment and Acceptance
covering all or the remaining portion of the assigning Lender’s rights and obligations under
this Agreement, the assigning Lender shall cease to be a party hereto).

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 105

 

 

     (c) By executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the Assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the
assigning Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other Loan Document furnished pursuant hereto or the
attachment, perfection, or priority of any Lien granted by the Obligated Parties to the
Administrative Agent or any Lender in the Collateral; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial
condition of the Obligated Parties or the performance or observance by the Obligated Parties
of any of their respective obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Administrative Agent,
the assigning Lender, or any other Lender, and based on such documents and information as
such Assignee shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such Assignee appoints and
authorizes the Administrative Agent to take such action as administrative agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers, including the
discretionary rights and incidental powers, as are reasonably incidental thereto; and (vi)
such Assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by it as a
Lender.

     (d) Immediately upon satisfaction of the requirements of Section 13.2(a), this
Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce the Commitment of the
assigning Lender pro tanto.

     (e) Any Lender (the “originating Lender”) may at any time sell to one or more
Participants participating interests in any Loans, the Commitment of the originating Lender,
and the other interests of the originating Lender hereunder and under the other Loan
Documents; provided that: (i) the originating Lender’s obligations under this
Agreement shall remain unchanged; (ii) the originating Lender shall remain solely
responsible for the performance of such obligations; (iii) the Obligated Parties and the
Administrative Agent shall continue to deal solely and directly with the originating Lender
in connection with the originating Lender’s rights and obligations under this Agreement and
the other Loan Documents; (iv) no Lender shall transfer or grant any participating interest
under which the Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document except for the matters set forth
in Section 13.1(b)(i), Section 13.1(b)(ii), and Section
13.1(b)(iii); and (v) all amounts payable by the Borrowers hereunder shall be determined
as if the originating Lender had not sold such participation, except that, if

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amounts outstanding under this Agreement are due and unpaid, or shall have become due
and payable upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this Agreement.

     (f) Notwithstanding any other provision in this Agreement, any Lender may at any time
create a security interest in, or pledge, all or any portion of its rights under and
interest in this Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 C.F.R. §203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.

ARTICLE 14

THE ADMINISTRATIVE AGENT

     Section 14.1 Appointment and Authorization.

     (a) Each Lender hereby irrevocably appoints and designates the Bank (acting in its
capacity as the Administrative Agent) as its agent under this Agreement and the other Loan
Documents, and each Lender hereby irrevocably authorizes the Administrative Agent to take
such action on such Lender’s behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. The Administrative Agent
agrees to act as such on the express conditions contained in this Article 14. Other
than as expressly provided in Section 14.10 and Section 14.11, the
provisions of this Article 14 are solely for the benefit of the Administrative Agent
and the other Credit Providers, and no Obligated Party shall have any rights as a third
party beneficiary of any of the provisions contained herein. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender or Participant, and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against the Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term “agent” in this
Agreement or any other Loan Document with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative relationship
between independent contracting parties. Except as expressly otherwise provided in this
Agreement, the Administrative Agent shall have and may use its sole discretion with respect
to exercising or refraining from exercising any discretionary rights or taking or refraining
from taking any actions that the Administrative Agent is expressly entitled to take or
assert under this Agreement and the

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other Loan Documents, including (i) the determination of the applicability of
ineligibility criteria with respect to the calculation of the Borrowing Base, (ii) the
making of Agent Advances pursuant to Section 2.2(j), and (iii) the exercise of
remedies pursuant to Section 11.2, and any action so taken or not taken shall be
deemed consented to by the Lenders.

     (b) The Letter of Credit Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued hereunder and the agreements and documents associated therewith.
The Letter of Credit Issuer shall have all of the benefits and immunities (i) provided to
the Administrative Agent in this Article 14 with respect to any acts taken or
omissions suffered by the Letter of Credit Issuer in connection with Letters of Credit
issued by it, or proposed to be issued by it, and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in this Article 14 included the Letter of Credit
Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with
respect to the Letter of Credit Issuer.

     (c) Without limiting the generality of paragraph (a) above, for the purposes of
creating a solidarité active in accordance with Article 1541 of the Civil Code of Québec,
between each Lender, taken individually, on the one hand, and the Administrative Agent, on
the other hand, each Obligated Party, each such Lender and the Administrative Agent
acknowledge and agree that such Lender and the Administrative Agent are hereby conferred the
legal status of solidary creditors of each Obligated Party in respect of all Obligations,
present and future, owed by each Obligated Party to each such Lender and the Administrative
Agent (collectively, the “Solidary Claim”). Each Obligated Party which is not a
signatory of this Agreement but is or may become a signatory to any other Loan Documents
shall be deemed to have accepted the provisions contained in this paragraph by its execution
of such other Loan Documents. Accordingly, but subject (for the avoidance of doubt) to
Article 1542 of the Civil Code of Québec, the Obligated Parties are irrevocably bound
towards the Administrative Agent and each Lender in respect of the entire Solidary Claim of
the Administrative Agent and such Lender. As a result of the foregoing, the parties hereto
acknowledge that the Administrative Agent and each Lender shall at all times have a valid
and effective right of action for the entire Solidary Claim of the Administrative Agent and
such Lender and the right to give full acquittance for it. Accordingly, without limiting
the generality of the foregoing, the Administrative Agent, as solidary creditor with each
Lender, shall at all times have a valid and effective right of action in respect of all
Obligations, present and future, owed by each Obligated Party to the Agent and Lenders or
any of them and the right to give a full acquittance for same. The parties further agree
and acknowledge that the Administrative Agent’s Liens on the Collateral shall be granted to
the Administrative Agent, for its own benefit and for the benefit of the Lenders.

     Section 14.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents, employees, or
attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall not be

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responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects
as long as such selection was made without gross negligence or willful misconduct.

     Section 14.3 Liability of the Administrative Agent. None of the Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (b) be responsible in any manner to any Credit Provider or Participant for
any recital, statement, representation, or warranty made by any Obligated Party or any Affiliate of
any Obligated Party, or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement, or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability, or sufficiency of
this Agreement or any other Loan Document, or for any failure of any Obligated Party or any other
party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or Participant to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books, or records of any
Obligated Party or any Obligated Party’s Affiliates.

     Section 14.4 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, or telephone message, electronic mail message, statement, or other document or
conversation believed by the Administrative Agent to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to any Obligated Party or any of their respective Affiliates),
independent accountants and other experts selected by the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action under this Agreement or
any other Loan Document unless it shall first receive such advice or concurrence of the Majority
Lenders or the Required Lenders, as applicable, as the Administrative Agent deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders or the Required Lenders, as applicable, (or all Lenders
if so required by Section 11.2) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders. For purposes of determining compliance
with the conditions specified in Section 9.1, each Lender that has executed and delivered
this Agreement shall be deemed to have consented to, approved, or accepted, or to be satisfied
with, each document or other matter required thereunder to be consented to or approved by, or
acceptable or satisfactory to, a Lender unless the Administrative Agent shall have received written
notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 109

 

 

     Section 14.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, other than the failure of
the Borrowers to make any payment of principal, interest, fees, and expenses required to be paid to
the Administrative Agent for the benefit of the Credit Providers, unless the Administrative Agent
shall have received written notice from an Obligated Party or a Lender referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a “notice of default.”
The Administrative Agent will notify the Lenders of its receipt of any such notice. The
Administrative Agent shall take such action with respect to such Default or Event of Default as may
be directed by the Majority Lenders or Required Lenders, as applicable, in accordance with
Article 11; provided that unless and until the Administrative Agent has received
any such direction, the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Credit Providers.

     Section 14.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to such Lender, and that no act by the
Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Obligated Parties and their Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender as to any matter,
including whether any Agent-Related Person has disclosed material information in its possession.
Each Lender represents to the Administrative Agent that such Lender has, independently and without
reliance upon any Agent-Related Person and based on such documents and information as such Lender
has deemed appropriate, made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition, and creditworthiness of the Obligated Parties
and their Affiliates, and any Requirement of Law relating to the transactions contemplated hereby,
and such Lender has made its own decision to enter into this Agreement and to extend credit to the
Borrowers hereunder. Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as such Lender shall deem
appropriate at the time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition, and creditworthiness of the Obligated Parties and their
Affiliates. Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition, or creditworthiness of
any Obligated Party or any of their Affiliates that may come into the possession of any of the
Agent-Related Persons.

     Section 14.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Lenders shall, upon demand, indemnify the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower
to do so), in accordance with their Pro Rata Shares, and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities; provided that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities
to the extent determined in a final, nonappealable judgment by a court of competent 

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jurisdiction to have resulted from such Agent-Related Person’s own gross negligence or
willful misconduct; provided, further, that no action taken in accordance with the
directions of the Majority Lenders or the Required Lenders, as applicable, shall be deemed to
constitute gross negligence or willful misconduct for purposes of this section. Without
limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its Pro Rata Share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by
the Administrative Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal proceedings, or
otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The
undertaking in this Section 14.7 shall survive the termination of the Commitments, payment
of all Obligations hereunder, and the resignation or replacement of the Administrative Agent.

     Section 14.8 The Administrative Agent in its Individual Capacity. The Bank and its
Affiliates may make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with any Obligated Party and its Affiliates as though the
Bank were not the Administrative Agent or the Letter of Credit Issuer hereunder and without notice
to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, the Bank
or its Affiliates may receive information regarding any Obligated Party, its Affiliates, and
Account Debtors (including information that may be subject to confidentiality obligations in favor
of any such Obligated Party or Affiliate), and the Lenders acknowledge that the Administrative
Agent and the Bank shall be under no obligation to provide such information to the Lenders. With
respect to its Loans, the Bank as a Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not the Administrative
Agent or the Letter of Credit Issuer, and the terms “Lender” and “Lenders” include the Bank in its
individual capacity.

     Section 14.9 Successor Agent. The Administrative Agent may resign as Administrative
Agent (the “resigning Administrative Agent”) upon at least 30 days prior notice to the Lenders and
the Obligated Parties (and any such resignation by the Bank shall also constitute its resignation
as the Letter of Credit Issuer hereunder (the “resigning Letter of Credit Issuer”)). In the event
the Bank sells all of its Commitment and Loans as part of a sale, transfer, or other disposition by
the Bank of substantially all of its loan portfolio, the Bank shall resign as the Administrative
Agent and such purchaser or transferee shall become the successor Administrative Agent hereunder.
Subject to the foregoing, if the Administrative Agent resigns under this Agreement, the Majority
Lenders shall appoint from among the Lenders a successor administrative agent (any Person being
appointed as successor to the resigning Administrative Agent being referred to in this Section as
the “successor Administrative Agent”, and any such appointment shall also constitute appointment of
the successor Administrative Agent as the Letter of Credit Issuer hereunder (the “successor Letter
of Credit Issuer”)) for the Lenders that shall be consented to by the Borrowers at all times other
than during the existence of a Default or an Event of Default (such consent not to be unreasonably
withheld or delayed). If no successor Administrative Agent is appointed prior to the effective
date of the resignation of the resigning Administrative Agent, the resigning Administrative Agent
may appoint, after consulting with the

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Lenders and the Obligated Parties, a successor Administrative Agent from among the Lenders.
Upon the acceptance of its appointment as the successor Administrative Agent hereunder: (a) the
successor Administrative Agent shall succeed to all the rights, powers, and duties of the resigning
Administrative Agent and the resigning Letter of Credit Issuer; (b) the respective terms
“Administrative Agent” and “Letter of Credit Issuer” shall mean the successor Administrative Agent
and the successor Letter of Credit Issuer; (c) the resigning Administrative Agent’s appointment,
rights, powers, and duties as the Administrative Agent shall be terminated; and (d) the resigning
Letter of Credit Issuer’s appointment, rights, powers, and duties as the Letter of Credit Issuer
shall be terminated without any other or further act or deed on the part of the resigning Letter of
Credit Issuer or any Lender, other than the obligation of the successor Letter of Credit Issuer to
issue Letters of Credit in substitution for the Letters of Credit, if any, outstanding at the time
of such succession or to make other arrangements satisfactory to the resigning Letter of Credit
Issuer to effectively assume the obligations of the resigning Letter of Credit Issuer with respect
to its Letters of Credit. After any resigning Administrative Agent’s resignation hereunder as the
Administrative Agent, the provisions of this Article 14, Section 15.7, and
Section 15.11 shall continue to inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Administrative Agent under this Agreement. If no successor
Administrative Agent has accepted appointment as successor Administrative Agent within 30 days of
the resigning Administrative Agent’s notice of resignation, the resigning Administrative Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the Majority Lenders
appoint a successor Administrative Agent as provided for in this Section 14.9.

     Section 14.10 Withholding Tax.

     (a) If any Lender is a “foreign corporation, partnership, or trust” within the meaning
of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the
Administrative Agent, to deliver to the Administrative Agent and the Parent:

     (i) if such Lender claims an exemption from, or a reduction of, withholding tax
under a U.S. tax treaty, two properly completed and executed IRS Forms W-8BEN and
W-8ECI before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during which interest
may be paid under this Agreement;

     (ii) if such Lender claims that interest paid under this Agreement is exempt
from U.S. withholding tax because it is effectively connected with a U.S. trade or
business of such Lender, two properly completed and executed copies of IRS Form
W-8ECI before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest may
be paid under this Agreement, and IRS Form W-9; and

     (iii) such other form or forms as may be required under the Code or other laws
of the U.S. as a condition to exemption from, or reduction of, U.S. withholding tax.

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Such Lender agrees to promptly notify the Administrative Agent and the Parent of any change
in circumstances that would modify or render invalid any claimed exemption or reduction.

     (b) If any Lender claims exemption from, or reduction of, withholding tax under a U.S.
tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations owing to such
Lender, such Lender agrees to notify the Administrative Agent and the Parent of the
percentage amount in which it is no longer the beneficial owner of Obligations owing to such
Lender. To the extent of such percentage amount, the Administrative Agent and the Borrowers
will treat such Lender’s IRS Form W-8BEN as no longer valid.

     (c) If any Lender claiming exemption from U.S. withholding tax by filing IRS Form
W-8ECI with the Administrative Agent sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.

     (d) If any Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent or any Borrower may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by clause (a) preceding are
not delivered to the Administrative Agent and the Parent, then the Administrative Agent or
any Borrower may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax.

     (e) If the IRS or any other Governmental Authority of the U.S. or other jurisdiction
asserts a claim that the Administrative Agent or any Borrower did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify the
Administrative Agent or any Borrower of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other reason) such
Lender shall indemnify each of the Administrative Agent and any Borrower fully for all
amounts paid, directly or indirectly, by either of them as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to either the Administrative Agent or the Borrowers under this Section
14.10, together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this clause (e) shall survive the payment of all Obligations
and the resignation or replacement of the Administrative Agent.

Section 14.11 Collateral Matters.

     (a) The Credit Providers hereby irrevocably authorize the Administrative Agent to
release any Guarantor that is permitted to wind-up, dissolve, liquidate, or merge out of
existence under Section 8.9, and to release any Agent’s Liens upon any Collateral:
(i) upon (A) termination of the Commitments, (B) termination or collateralization as

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 113

 

 

provided in Section 2.4(g) of all outstanding Letters of Credit (whether or not
any of such obligations are due), and (C) the Borrowers’ payment and satisfaction in full of
all Loans and other Obligations (other than indemnification obligations to the extent no
claim with respect thereto has been asserted and remains unsatisfied); (ii) constituting
property being sold or disposed of if the Obligated Party disposing of such property
certifies to the Administrative Agent that the sale or disposition is made in compliance
with Section 8.9 (and the Administrative Agent may rely conclusively on any such
certification, without further inquiry); (iii) constituting property in which no Obligated
Party owned any interest at the time the Lien was granted or at any time thereafter; or (iv)
constituting property leased to an Obligated Party under a lease that has expired or been
terminated in a transaction permitted under this Agreement. Except as provided above, the
Administrative Agent will not release any of the Agent’s Liens without the prior written
authorization of the Majority Lenders; provided that the Administrative Agent may,
in its discretion, release the Agent’s Liens on Collateral valued in the aggregate not in
excess of $250,000 during each Fiscal Year without the prior written authorization of any
Lender and the Administrative Agent may release the Agent’s Liens on Collateral valued in
the aggregate not in excess of $1,000,000 during each Fiscal Year with the prior written
authorization of the Majority Lenders. Upon request by the Administrative Agent or the
Obligated Parties at any time, the Credit Parties will confirm in writing the Administrative
Agent’s authority to release any Guarantor and any of the Agent’s Liens upon particular
types or items of Collateral in accordance with the terms of this Section 14.11.

     (b) Upon receipt by the Administrative Agent of any authorization required pursuant to
Section 14.11(a) from the Majority Lenders of the Administrative Agent’s authority
to release any Agent’s Liens upon particular types or items of Collateral, and upon at least
five Business Days prior written request by the Obligated Parties, the Administrative Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Agent’s Liens upon such Collateral;
provided that (i) the Administrative Agent shall not be required to execute any such
document on terms that, in the Administrative Agent’s opinion, would expose the
Administrative Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such release shall not
in any manner discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Obligated Parties in respect of) all
interests retained by the Obligated Parties, including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.

     (c) The Administrative Agent shall have no obligation whatsoever to any of the Credit
Providers to assure that the Collateral exists or is owned by the Obligated Parties or is
cared for, protected, or insured or has been encumbered, or that the Agent’s Liens have been
properly or sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure, or fidelity, or to continue exercising, any of the
rights, authorities, and powers granted or available to the Administrative Agent pursuant to
any of the Loan Documents, it being understood and agreed that in respect of the Collateral,
or any act, omission, or event related thereto, the Administrative Agent

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 114

 

 

may act in any manner it may deem appropriate, in its sole discretion, given the
Administrative Agent’s own interest in the Collateral in its capacity as one of the Lenders
and that the Administrative Agent shall have no other duty or liability whatsoever to any
Credit Provider as to any of the foregoing.

Section 14.12 Restrictions on Actions by Lenders; Sharing of Payments.

     (a) Each of the Credit Providers agrees that it shall not, without the express consent
of the Required Lenders, and that it shall, to the extent it is lawfully entitled to do so,
upon the request of the Required Lenders, setoff against the Obligations, any amounts owing
by such Credit Provider to any Obligated Party or any accounts of any Obligated Party now or
hereafter maintained with such Lender. Each of the Credit Providers further agrees that it
shall not, unless specifically requested to do so by the Administrative Agent, take or cause
to be taken any action to enforce its rights under this Agreement or any other Loan Document
or against any Obligated Party, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of
the Collateral.

     (b) If at any time or times any Credit Provider shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect
to the Obligations owing to such Credit Provider arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments received by
such Credit Provider from the Administrative Agent pursuant to the terms of this Agreement,
or (ii) payments from the Administrative Agent in excess of such Credit Provider’s ratable
portion of all such distributions by the Administrative Agent, such Credit Provider shall
promptly (A) turn the same over to the Administrative Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Administrative Agent, or in
same day funds, as applicable, for the account of all of the Credit Providers and for
application to the Obligations in accordance with the applicable provisions of this
Agreement, or (B) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess payment
received shall be applied among the Credit Providers in accordance with the terms of this
Agreement; provided that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the purchase
price paid therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.

     Section 14.13 Agency for Perfection. Each Credit Provider hereby appoints each other
Credit Provider as agent for the purpose of perfecting Liens, for the benefit of the Credit
Providers, in assets that, in accordance with Article 9 of the UCC or any other Requirement of Law
can be perfected only by possession. Should any Credit Provider (other than the Administrative
Agent) obtain possession of any such Collateral, such Credit Provider shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor, shall
deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in
accordance with the Administrative Agent’s instructions.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 115

 

 

     Section 14.14 Payments by Administrative Agent to the Lenders. All payments to be
made by the Administrative Agent to the Credit Providers shall be made by bank wire transfer or
internal transfer of immediately available funds to each Credit Provider pursuant to transfer
instructions delivered in writing to the Administrative Agent on or prior to the Closing Date (or
if such Credit Provider is an Assignee, delivered with or in the applicable Assignment and
Acceptance), or pursuant to such other transfer instructions as each party may designate for itself
by written notice to the Administrative Agent. Concurrently with each such payment, the
Administrative Agent shall identify whether such payment (or any portion thereof) represents
principal, premium, interest, or fees on the Revolving Loans, the Letters of Credit, or otherwise.
Unless the Administrative Agent receives notice from the Borrowers prior to the date on which any
payment is due to any Credit Provider that the Borrowers will not make such payment in full as and
when required, the Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date in immediately available funds and the Administrative
Agent may (but shall not be so required), in reliance upon such assumption, distribute to each
Credit Provider on such due date an amount equal to the amount then due such Credit Provider. If
and to the extent the Borrowers have not made such payment in full to the Administrative Agent,
each Credit Provider shall repay to the Administrative Agent on demand such amount distributed to
such Credit Provider, together with interest thereon at the Federal Funds Rate for each day from
the date such amount is distributed to such Credit Provider until the date repaid.

Section 14.15 Settlement.

     (a) Each Lender’s funded portion of the Revolving Loans is intended by the Lenders to
be equal at all times to such Lender’s Pro Rata Share of the outstanding Revolving Loans.
Notwithstanding such agreement, the Administrative Agent, the Bank, and the Lenders agree
(which agreement shall not be for the benefit of or enforceable by the Obligated Parties)
that in order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Revolving Loans, including the Non-Ratable Loans
and the Agent Advances, shall take place on a periodic basis in accordance with the
following provisions:

     (i) The Administrative Agent shall request settlement (a “Settlement”)
with the Lenders on at least a weekly basis, or on a more frequent basis at the
Administrative Agent’s election, (A) on behalf of the Bank, with respect to each
outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent Advance,
and (C) with respect to collections received, in each case, by notifying the Lenders
of such requested Settlement by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 12 noon (Pasadena,
California time) on the date of such requested Settlement (the “Settlement
Date”). In its discretion, the Administrative Agent may on any Settlement Date
permit Non-Ratable Loans in an aggregate principal amount not to exceed One Million
Dollars ($1,000,000) to remain outstanding, while requiring Settlement of the other
outstanding Non-Ratable Loans. Each Lender (other than the Bank, in the case of the
Non-Ratable Loans, and the Administrative Agent, in the case of the Agent Advances)
shall transfer the amount of such Lender’s Pro Rata Share of the outstanding
principal amount of

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the Non-Ratable Loans and Agent Advances with respect to which Settlement is
requested to the Administrative Agent, to such account of the Administrative Agent
as the Administrative Agent may designate, not later than 2:00 p.m. (Pasadena,
California time), on the Settlement Date applicable thereto. Settlements shall
occur during the continuation of a Default or an Event of Default and whether or not
the applicable conditions precedent set forth in Article 9 have then been
satisfied. Such amounts transferred to the Administrative Agent shall be applied
against the amounts of the applicable Non-Ratable Loan or Agent Advance for which
the Administrative Agent has requested Settlement and, together with the portion of
such Non-Ratable Loan or Agent Advance representing the Bank’s or the Administrative
Agent’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders,
respectively. If any such amount is not transferred to the Administrative Agent by
any Lender on the Settlement Date applicable thereto, the Administrative Agent shall
be entitled to recover such amount on demand from such Lender together with interest
thereon at the Federal Funds Rate for the first three days from and after the
Settlement Date and thereafter at the Interest Rate then applicable to Base Rate
Revolving Loans (Y) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, and (Z) for itself, with respect to each Agent Advance.

     (ii) Notwithstanding the foregoing, not more than one Business Day after demand
is made by the Administrative Agent (whether before or after the occurrence of a
Default or an Event of Default and regardless of whether the Administrative Agent
has requested a Settlement with respect to a Non-Ratable Loan or Agent Advance),
each other Lender (A) shall irrevocably and unconditionally purchase and receive
from the Bank or the Administrative Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or Agent
Advance equal to such Lender’s Pro Rata Share of such Non-Ratable Loan or Agent
Advance, and (B) if Settlement has not previously occurred with respect to such
Non-Ratable Loans or Agent Advances, upon demand by the Bank or the Administrative
Agent, as applicable, shall pay to the Bank or the Administrative Agent, as
applicable, as the purchase price of such participation an amount equal to 100% of
such Lender’s Pro Rata Share of such Non-Ratable Loans or Agent Advances. If such
amount is not in fact transferred to the Administrative Agent by any Lender, the
Administrative Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first three
days from and after such demand and thereafter at the Interest Rate then applicable
to Base Rate Revolving Loans.

     (iii) From and after the date, if any, on which any Lender purchases an
undivided interest and participation in any Non-Ratable Loan or Agent Advance
pursuant to clause (ii) preceding, the Administrative Agent shall promptly
distribute to such Lender, such Lender’s Pro Rata Share of all payments of principal
and interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Non-Ratable Loan or Agent Advance.

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     (iv) Between Settlement Dates, to the extent no Agent Advances are outstanding,
the Administrative Agent may pay over to the Bank for application to the Bank’s
Revolving Loans (including Non-Ratable Loans) any payments received by the
Administrative Agent, that in accordance with the terms of this Agreement would be
applied to the reduction of the Revolving Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have been
applied to the Bank’s Revolving Loans (other than to Non-Ratable Loans or Agent
Advances in which a Lender has not yet funded its purchase of a participation
pursuant to clause (ii) preceding), as provided for in the previous
sentence, the Bank shall pay to the Administrative Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an amount
such that each Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Revolving Loans. During the period
between Settlement Dates, the Bank with respect to Non-Ratable Loans, the
Administrative Agent with respect to Agent Advances, and each Lender with respect to
the Revolving Loans other than Non-Ratable Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this Agreement on
the actual average daily amount of funds employed by the Bank, the Administrative
Agent, and the other Lenders.

     (v) Unless the Administrative Agent has received written notice from a Lender
to the contrary, the Administrative Agent may assume that the applicable conditions
precedent set forth in Article 9 have been satisfied and the requested
Borrowing will not exceed the Unused Availability on any Funding Date for a
Revolving Loan or Non-Ratable Loan.

     (b) The Lenders’ Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be
responsible for any failure by any other Lender to perform its obligation to make any
Revolving Loans hereunder, nor shall any Commitment of any Lender be increased or decreased
as a result of any failure by any other Lender to perform its obligation to make any
Revolving Loans hereunder, (ii) no failure by any Lender to perform its obligation to make
any Revolving Loans hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder shall be
several, not joint and several.

     (c) Defaulting Lenders. Unless the Administrative Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such Lender will
not make available as and when required hereunder to the Administrative Agent such Lender’s
Pro Rata Share of such Borrowing, the Administrative Agent may assume that each Lender has
made such amount available to the Administrative Agent in immediately available funds on the
Funding Date. Furthermore, the Administrative Agent may, in reliance upon such assumption,
make available to the Borrowers on such date a corresponding amount. If any Lender has not
transferred its full Pro Rata Share to the Administrative Agent in immediately available
funds and if the Administrative Agent

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 118

 

 

has transferred a corresponding amount to the Borrowers on the Business Day following
such Funding Date, the applicable Lender shall make such amount available to the
Administrative Agent, together with interest at the Federal Funds Rate for that day. A
notice by the Administrative Agent submitted to any Lender with respect to amounts owing
shall be conclusive, absent manifest error. If each Lender’s full Pro Rata Share is
transferred to the Administrative Agent as required, the amount transferred to the
Administrative Agent shall constitute such Lender’s Revolving Loan for all purposes of this
Agreement. If any such amount is not transferred to the Administrative Agent on the
Business Day following the Funding Date, the Administrative Agent will notify the Borrowers
of such failure to fund and, upon demand by the Administrative Agent, the Borrowers shall
pay such amount to the Administrative Agent for the Administrative Agent’s account, together
with interest thereon for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the Interest Rate applicable at the time to the Revolving Loans comprising
that particular Borrowing. The failure of any Lender to make any Revolving Loan on any
Funding Date (any such Lender, prior to the cure of such failure, being referred to herein
as a “Defaulting Lender”) shall not relieve any other Lender of its obligation
hereunder to make a Revolving Loan on such Funding Date. No Lender shall be responsible for
any other Lender’s failure to advance such other Lenders’ Pro Rata Share of any Borrowing.

     (d) Retention of Defaulting Lender’s Payments. The Administrative Agent shall
not be obligated to transfer to a Defaulting Lender any payments made by any Borrower to the
Administrative Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to a Defaulting Lender
shall instead be paid to or retained by the Administrative Agent. In its discretion, the
Administrative Agent may loan the Borrowers the amount of all such payments received or
retained by it for the account of such Defaulting Lender. Any amounts so loaned to the
Borrowers shall bear interest at the rate applicable to Base Rate Revolving Loans and for
all other purposes of this Agreement shall be treated as if they were Revolving Loans,
provided, however, that for purposes of voting or consenting to matters with
respect to the Loan Documents and determining Pro Rata Shares, such Defaulting Lender shall
be deemed not to be a “Lender”. Until a Defaulting Lender cures its failure to fund its Pro
Rata Share of any Borrowing (i) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee, and (ii) the Unused Line Fee shall accrue in favor of the Lenders
that have funded their respective Pro Rata Shares of such requested Borrowing and shall be
allocated among such performing Lenders ratably based upon their relative Commitments. This
Section shall remain effective with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations under this Agreement. The
terms of this Section shall not be construed to increase or otherwise affect the Commitment
of any Lender, or relieve or excuse the performance by any Borrower of its duties and
obligations hereunder.

     (e) Removal of Defaulting Lender. At the Borrowers’ request, the
Administrative Agent (acting in its individual capacity as a Lender) or an Eligible Assignee
reasonably acceptable to the Administrative Agent and the Borrowers shall have the right
(but not the obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
shall, upon such request, sell and assign to the Administrative Agent

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 119

 

 

(acting in its individual capacity as a Lender) or such Eligible Assignee, all of the
Defaulting Lender’s outstanding Loans and Commitments hereunder. Such sale shall be
consummated promptly after the Administrative Agent has arranged for a purchase by the
Administrative Agent (acting in its individual capacity as a Lender) or an Eligible Assignee
pursuant to an Assignment and Acceptance, and at a price equal to the outstanding principal
balance of the Defaulting Lender’s Loans, plus accrued interest and fees (excluding
the Unused Line Fee to the extent not required to be paid to the Defaulting Lender pursuant
to Section 14.15(d)), without premium or discount.

Section 14.16 Letters of Credit; Intra-Lender Issues.

     (a) Notice of Letter of Credit Balance. On each Settlement Date, the
Administrative Agent shall notify each Lender of the issuance of any Letters of Credit since
the prior Settlement Date.

     (b) Participations in Letters of Credit.

     (i) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with Section 2.4(d), each Lender shall be
deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation equal to such Lender’s
Pro Rata Share of the face amount of such Letter of Credit in connection with the
issuance of such Letter of Credit (including all obligations of the Borrower for
whose account such Letter of Credit was issued, and any security therefor or
guaranty pertaining thereto).

     (ii) Sharing of Reimbursement Obligation Payments. Whenever the
Administrative Agent receives a payment from a Borrower on account of reimbursement
obligations in respect of a Letter of Credit as to which the Administrative Agent
has previously received for the account of the Administrative Agent or the Letter of
Credit Issuer payment from a Lender, the Administrative Agent shall pay to such
Lender such Lender’s Pro Rata Share of such payment from such Borrower. Each such
payment shall be made by the Administrative Agent on the next Settlement Date.

     (iii) Documentation. Upon the request of any Lender, the Letter of
Credit Issuer shall furnish to the Administrative Agent and the Administrative Agent
shall furnish to such Lender copies of any Letter of Credit, reimbursement
agreements executed in connection therewith, applications for any Letter of Credit,
and such other documentation relating to such Letter of Credit as may reasonably be
requested by such Lender.

     (iv) Obligations Irrevocable. The obligation of each Lender to make
payments to the Administrative Agent with respect to any Letter of Credit or with
respect to their participation therein or with respect to the Revolving Loans made
as a result of a drawing under a Letter of Credit and the obligation of the
Borrowers to make payments to the Administrative Agent, for the account of the

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Lenders, with respect to any Letter of Credit shall be irrevocable and shall
not be subject to any qualification or exception whatsoever, including any of the
following circumstances:

     (A) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;

     (B) the existence of any claim, setoff, defense, or other right that
any Borrower may have at any time against a beneficiary named in a Letter of
Credit or any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, the Administrative Agent, the
Letter of Credit Issuer, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transactions between
such Borrower or any other Person and the beneficiary named in any Letter of
Credit);

     (C) any draft, certificate, or other document presented under any
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;

     (D) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;

     (E) the occurrence of any Default or Event of Default; or

     (F) the failure of the Borrowers to satisfy the applicable conditions
precedent set forth in Article 9.

     (c) Recovery or Avoidance of Payments; Refund of Payments in Error. In the
event any payment by or on behalf of any Borrower received by the Administrative Agent with
respect to any Letter of Credit and distributed by the Administrative Agent to the Lenders
on account of their respective participations therein is thereafter set aside, avoided, or
recovered from the Administrative Agent or the Letter of Credit Issuer in connection with
any receivership, liquidation, or bankruptcy proceeding, the Lenders shall, upon demand by
the Administrative Agent, pay to the Administrative Agent their respective Pro Rata Shares
of such amount set aside, avoided, or recovered, together with interest at the rate required
to be paid by the Administrative Agent or the Letter of Credit Issuer upon the amount
required to be repaid by it. Unless the Administrative Agent receives notice from the
Borrowers prior to the date on which any payment is due to the Lenders that the Borrowers
will not make such payment in full as and when required, the Administrative Agent may assume
that the Borrowers have made such payment in full to the Administrative Agent on such date
in immediately available funds and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 121

 

 

then due such Lender. If and to the extent the Borrowers have not made such payment in
full to the Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Lender until the
date repaid.

     (d) Indemnification by the Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the Lenders agree
to indemnify the Letter of Credit Issuer ratably in accordance with their respective Pro
Rata Shares, for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against the Letter of
Credit Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter of Credit
Issuer under any Letter of Credit or any Loan Document in connection therewith;
provided that no Lender shall be liable for any of the foregoing to the extent
determined in a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from the Letter of Credit Issuer’s own gross negligence or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse the Letter of Credit Issuer
promptly upon demand for its Pro Rata Share of any costs or expenses payable by any Borrower
to the Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by a Borrower. The agreement contained in
this Section shall survive payment in full of all other Obligations.

     Section 14.17 Concerning the Collateral and the Related Loan Documents. Each Lender
authorizes and directs the Administrative Agent to enter into the other Loan Documents, for the
benefit and obligation of the Credit Providers. Each Lender agrees that any action taken by the
Administrative Agent, the Required Lenders, or the Majority Lenders, as applicable, in accordance
with the terms of this Agreement or the other Loan Documents, and the exercise by the
Administrative Agent, the Required Lenders, or the Majority Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders. The Lenders acknowledge that the
Revolving Loans (including the Agent Advances and the Non-Ratable Loans), Bank Products, and all
interest, fees, and expenses hereunder constitute one Debt, secured pari passu by all of the
Collateral, subject to the order of distribution of payments set forth in Section 4.6.

     Section 14.18 Field Audit and Examination Reports; Disclaimer by Lenders. By signing
this Agreement, each Lender:

     (a) is deemed to have requested that the Administrative Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination report (each
a “Report” and collectively, the “Reports”) prepared by or on behalf of the
Administrative Agent;

     (b) expressly agrees and acknowledges that neither the Bank nor the Administrative
Agent (i) makes any representation or warranty as to the accuracy of any Report, or (ii)
shall be liable for any information contained in any Report;

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 122

 

 

     (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Administrative Agent, the Bank, or any other Person performing any
audit or examination will inspect only specific information regarding the Obligated Parties
and will rely significantly upon the Obligated Parties’ books and records, as well as on
representations of the Obligated Parties’ personnel;

     (d) agrees to keep all Reports confidential and strictly for its internal use, and not
to distribute except to its Participants, or use any Report in any other manner; and

     (e) without limiting the generality of any other indemnification provision contained in
this Agreement, agrees: (i) to hold the Administrative Agent and any such other Person
preparing a Report harmless from any action the indemnifying Lender may take or conclusion
the indemnifying Lender may reach or draw from any Report in connection with any loans or
other credit accommodations that the indemnifying Lender has made or may make to the
Obligated Parties, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, a loan or loans to the Obligated Parties; and (ii) to pay and protect,
and indemnify, defend, and hold the Administrative Agent and any such other Person preparing
a Report harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including Attorney Costs) incurred by the Administrative Agent
and any such other Person preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying Lender.

     Section 14.19 Relation Among the Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise
set forth herein in the case of the Administrative Agent and with respect to agency for perfection)
authorized to act for, any other Lender.

     Section 14.20 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition, or other judicial proceeding relative to any Obligated Party, or any other Person
party to any Loan Document, the Administrative Agent (irrespective of whether the principal of any
Loan or Obligation relating to Letters of Credit shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Obligated Parties or such other Person) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, Obligations relating to Letters of Credit, and all other
Obligations that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Administrative Agent and the Lenders
(including any claim for the reasonable compensation, expenses, disbursements, and advances
of the Administrative Agent and the Lenders, and their respective agents and counsel, and
all other amounts due the Administrative Agent and the Lenders under Section 3.4
through Section 3.5 and Section 15.7 allowed in such judicial proceeding;
and

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     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements, and advances of the Administrative Agent and its
agents and counsel (including Attorney Costs), and any other amounts due to the Administrative
Agent under Section 3.4 through Section 3.5 and Section 15.7. Nothing
contained in this Section shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment, or composition affecting the Obligations or the rights of any Lender, or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

ARTICLE 15

MISCELLANEOUS

     Section 15.1 No Waivers; Cumulative Remedies. No failure by the Administrative Agent
or any Lender to exercise any right, remedy, or option under this Agreement, any other Loan
Document, or any present or future supplement hereto or thereto, or in any other agreement between
or among any Obligated Party and the Administrative Agent and/or any Lender, or delay by the
Administrative Agent or any Lender in exercising the same, will operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, or option hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other right, remedy, or
option. Subject to Section 13.1, no waiver by the Administrative Agent or any Lender will
be effective unless it is in writing, and then only to the extent specifically stated. No waiver
by the Administrative Agent or the Lenders on any occasion shall affect or diminish the
Administrative Agent’s and each Lender’s rights thereafter to require strict performance by the
Obligated Parties of any provision of this Agreement. The Administrative Agent and the Lenders may
proceed directly to collect the Obligations without any prior recourse to the Collateral. The
Administrative Agent’s and each Lender’s rights under this Agreement will be cumulative and not
exclusive of any other right or remedy that the Administrative Agent or any Lender may have.

     Section 15.2 Severability. The illegality or unenforceability of any provision of
this Agreement, any other Loan Document, or any instrument or agreement required hereunder shall
not in any way affect or impair the legality or enforceability of the remaining provisions of this
Agreement, any other Loan Document, or any instrument or agreement required hereunder.

     Section 15.3 Governing Law; Choice of Forum; Service of Process.

     (a) This Agreement shall be interpreted and the rights and liabilities of the
parties thereto determined in accordance with the internal laws (as 

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 opposed to the conflict of laws provisions, provided that perfection issues with respect to Article 9 of the
UCC may give effect to applicable choice or conflict of law rules set forth in Article 9 of
the UCC) of the State of  California; provided that the parties hereto shall retain all rights
arising under federal law.

     (b) Any legal action or proceeding with respect to this agreement or any other Loan
Document may be brought in the courts of the State of California or of the U.S. located in
Los Angeles county, California, and by execution and delivery of this Agreement, each of the
Obligated Parties, the Administrative Agent, and the Lenders consents, for itself and in
respect of its property, to the non-exclusive jurisdiction of those courts. Each of the
Obligated Parties, the Administrative Agent, and the Lenders irrevocably waives any
objection, including any objection to the laying of venue or based on the grounds of
forum non conveniens, that it may now or hereafter have to the bringing of any
action or proceeding in such jurisdiction in respect of this Agreement, any other Loan
Document, or any other agreement, document, or instrument related hereto or thereto.
notwithstanding the foregoing (I) the Administrative Agent and the Lenders shall have the
right to bring any action or proceeding against any Obligated Party or its property in the
courts of any other jurisdiction the Administrative Agent or the Lenders deem necessary or
appropriate in order to realize on the collateral or other security for the Obligations; and
(II) each of the parties hereto acknowledges that any appeals from the courts described in
the immediately preceding sentence may have to be heard by a court located outside those
jurisdictions.

     (c) Each Obligated Party hereby waives personal service of any and all process upon
it and consents that all such service of process may be made by registered mail (return
receipt requested) directed to the Borrower at its address set forth in Section 15.8
and service so made shall be deemed to be completed five days after the same shall have been
so deposited in the U.S. mails postage prepaid. Nothing contained herein shall affect the
right of the Administrative Agent or the Lenders to serve legal process by any other manner
permitted by law.

     (d) Notwithstanding any other provision of this Agreement to the contrary, any
controversy or claim between or among the parties, arising out of or relating to this
Agreement or any other Loan Document including any claim based on or arising from an alleged
tort, shall at the request of either party hereto be determined by binding arbitration.
The arbitration shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this Agreement, and
under the Commercial Rules of the American Arbitration Association (“AAA”). The
arbitrator(s) shall give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by the
arbitrator(s). Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief or pursuant
to a

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provisional or ancillary remedy shall not constitute a waiver of the right of either
party, including the plaintiff, to submit the controversy or claim to arbitration if any
other party contests such action for judicial relief.

     (e) Notwithstanding the provisions of clause (d) preceding, no controversy or
claim shall be submitted to arbitration without the consent of all parties if, at the time
of the proposed submission, such controversy or claim arises from or related to an
obligation to the Lenders that is secured by real estate property collateral (exclusive of
real estate space lease assignments). If all the parties do not consent to submission of
such a controversy or claim to arbitration, the controversy or claim shall be determined as
provided in Section 15.3(f).

     (f) At the request of either party a controversy or claim that is not submitted to
arbitration as provided and limited in Section 15.3(d) and Section 15.3(e)
shall be determined by judicial reference. If such an election is made, the parties shall
designate to the court a referee or referees selected under the auspices of the AAA in the
same manner as arbitrators are selected in AAA-sponsored proceedings. The presiding referee
of the panel, or the referee if there is a single referee, shall be an active attorney or
retired judge. Judgment upon the award rendered by such referee or referees shall be
entered in the court in which such proceeding was commenced.

     (g) No provision of clause (d) through clause (g) preceding shall limit
the right of the Administrative Agent or the Lenders to exercise self-help remedies such as
setoff, foreclosure against or sale of any real or personal property collateral or security,
or obtaining provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding. The exercise
of a remedy does not waive the right of either party to resort to arbitration or reference.
At the Administrative Agent’s option, foreclosure under a deed of trust or mortgage may be
accomplished either by exercise of power of sale under the deed of trust or mortgage or by
judicial foreclosure.

     Section 15.4 Waiver of Jury Trial. Subject to the provisions of Section
15.3   (d) , Each Obligated Party, the Administrative Agent, and each other Credit
Provider irrevocably waives its rights to a trial by jury of any claim or cause of action based
upon or arising out of or related to this Agreement, the other Loan Documents, or the transactions
contemplated hereby or thereby, in any action, proceeding, or other litigation of any type brought
by any of the parties against any other party or any Agent-Related Person, Participant, or
Assignee, whether with respect to contract claims, tort claims, or otherwise. Each Obligated
Party, the Administrative Agent, and each other Credit Provider agrees that any such claim or cause
of action shall be tried by a court trial without a jury. Without limiting the foregoing, each of
the parties further agrees that its respective right to a trial by jury is waived by operation of
this Section 15.4 as to any action, counterclaim, or other proceeding that seeks, in whole
or in part, to challenge the validity or enforceability of this Agreement, the other Loan
Documents, or any provision hereof or thereof. This waiver shall apply to any subsequent
amendments, renewals, supplements, or modifications to this Agreement and the other Loan
Documents.

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     Section 15.5 Survival of Representations and Warranties. All representations and
warranties of the Obligated Parties contained in this Agreement and the other Loan Documents
shall survive the execution, delivery, and acceptance thereof by the parties, notwithstanding
any investigation by the Administrative Agent or the Lenders or their respective agents.

     Section 15.6 Other Security and Guaranties. The Administrative Agent may, without
notice or demand and without affecting the Obligated Parties’ obligations hereunder, from time to
time (a) take from any Person and hold collateral (other than the Collateral) for the payment of
all or any part of the Obligations and exchange, enforce, or release such collateral or any part
thereof and (b) accept and hold any endorsement or guaranty of payment of all or any part of the
Obligations and release or substitute any such endorser or guarantor (other than any Guarantor), or
any Person who has given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or any part of the
Obligations.

     Section 15.7 Fees and Expenses. Each Borrower agrees to pay to the Administrative
Agent, for its account, on demand, all costs and expenses that the Administrative Agent pays or
incurs in connection with the negotiation, preparation, syndication, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan Documents, including: (a)
Attorney Costs; (b) costs and expenses (including Attorney Costs) for any amendment, supplement,
waiver, consent, or subsequent closing in connection with the Loan Documents and the transactions
contemplated thereby; (c) costs and expenses of lien and title searches, and environmental audits;
(d) taxes, fees, and other charges for filing financing statements and continuations, and other
actions to perfect, protect, and continue the Agent’s Liens (including costs and expenses paid or
incurred by the Administrative Agent in connection with the consummation of this Agreement); (e)
sums paid or incurred to pay any amount or take any action required of any Obligated Party under
the Loan Documents that such Obligated Party fails to pay or take; (f) costs of appraisals (whether
conducted by an internal or external appraiser), inspections, and verifications of the Collateral
and other due diligence, including travel, lodging, and meals for field examinations and
inspections of the Collateral and the Obligated Parties’ operations by the Administrative Agent,
plus the Administrative Agent’s then customary charge for field examinations and audits and
the preparation of reports thereof (such charge is currently $850 per day (or portion thereof) for
each Person retained or employed by the Administrative Agent with respect to each field examination
or audit) performed or prepared at any time; and (g) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing and maintaining Clearing
Accounts and lockboxes, and costs and expenses of preserving and protecting the Collateral. In
addition, the Borrowers agree to pay (i) to the Administrative Agent, for its benefit, on demand,
all costs and expenses incurred by the Administrative Agent (including Attorney Costs), provided,
that neither the Administrative Agent, nor the Lenders, shall be entitled to reimbursement under
this clause (i) in respect of any indemnity solely to the extent that the matter for which
indemnity is requested results from the gross negligence or willful misconduct of such
Administrative Agent, or Lenders, respectively, and (ii) to the Lenders (other than the Bank), for
their benefit, on demand, all reasonable and actual fees, expenses, and disbursements incurred by
the Lenders for one law firm retained by the Lenders, in each case, paid or incurred in connection
with any Insolvency Proceeding, to obtain payment of the Obligations, to enforce the Agent’s Liens,
to sell or otherwise realize upon the Collateral, or to otherwise enforce the provisions of the
Loan Documents or defend any

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claims made or threatened against the Administrative Agent or any Credit Provider arising out of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). The foregoing shall not be construed to limit any other provisions of the
Loan Documents regarding costs and expenses to be paid by the Borrowers. All of the foregoing
costs and expenses may be charged to the Loan Account as Revolving Loans as described in
Section 4.5. The agreements in this Section 15.7 shall survive payment of all
other Obligations.

     Section 15.8 Notices and Information.

     (a) Except as otherwise provided herein, all notices, demands, and requests that any
party is required or elects to give to any other party shall be in writing, or by a
telecommunications device capable of creating a written record, and any such notice shall
become effective (i) upon personal delivery thereof, including, but not limited to, delivery
by overnight mail or courier service, (ii) four days after it shall have been mailed by U.S.
mail, first class, certified or registered, with postage prepaid, or (iii) in the case of
notice by such a telecommunications device, when properly transmitted and confirmed, in each
case addressed to the party to be notified as follows:

     If to the Administrative Agent or to the Bank:

Bank of America, N.A.

55 South Lake Avenue, Suite 900

Pasadena, CA 91101

Attention: Business Capital/URGENT

Telecopy No.: (626) 397-1273 / (626) 397-1275

     If to any Obligated Party:

c/o Mercury Air Group, Inc.

5456 McConnell Avenue

Los Angeles, California 90066-7062

Attention: Joseph A. Czyzyk

Telecopy No.: (310) 827-6897

with a copy to:

c/o Mercury Air Group, Inc.

5456 McConnell Avenue

Los Angeles, California 90066-7062

Attention: Wayne Lovett

Telecopy No.: (310) 827-6050

     If to any Lender:

to the address of such Lender set forth on the signature pages of this
Agreement or on the most recent Assignment and Acceptance to which such
Lender is a party,

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or to such other address as each party may designate for itself by like notice.

     (b) Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such Loan Documents and signatures shall, subject to Requirements of Law, have the same
force and effect as manually signed originals and shall be binding on the Obligated Parties,
the Administrative Agent, the Lenders, and all other parties to the Loan Documents. The
Administrative Agent may also require that any such documents and signatures be confirmed by
a manually signed original thereof, provided that the failure to request or deliver
the same shall not limit the effectiveness of any facsimile document or signature.

     (c) The Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including telephonic notices in lieu of written Notices of Borrowing and Notices of
Continuation/Conversion) purportedly given by or on behalf of any Borrower even if (i) such
notices were not made in a manner specified herein, (ii) such notices were incomplete or
were not preceded or followed by any other form of notice specified herein, or (iii) the
terms thereof, as understood by the recipient, varied from any confirmation thereof. The
Obligated Parties shall indemnify each Credit Provider 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 Borrowers. All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.

     (d) Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each Obligated Party agrees to use its best efforts to provide all Communications
(as defined below) to the Administrative Agent in an electronic/soft medium in a format
acceptable to the Administrative Agent to the e-mail addresses specified by the
Administrative Agent to the Parent from time to time. As used in this Section 15.8
“Communications” means all information, documents and other materials that any Obligated
Party is obligated to furnish to the Administrative Agent pursuant to this Agreement or any
other Loan Document, including all notices, requests, Financial Statements, financial and
other reports, certificates, and other information materials, but excluding any such
information, documents, or materials that (i) relate to any request for a Borrowing or a
continuation or a conversion of any existing Loan (including any election of an interest
rate or the duration of an Interest Period), (ii) relate to the payment of any principal or
other amount due under this Agreement or any other Loan Document prior to the scheduled date
therefor, (iii) provide notice of any Default or Event of Default; or (iv) are required to
be delivered to satisfy any condition set forth in Section 9.1 or Section
9.2. The Administrative Agent may, in its sole discretion, require that the Obligated
Parties provide any of the information provided in electronic/soft medium also provide such
information in written or printed form.

     (e) Each Obligated Party and each Credit Provider agrees that the Administrative Agent
may make the Loan Documents and the Communications, together with other information relating
to the Obligated Parties and their business and assets, including Borrowing Base
Certificates, appraisals, and Reports, (all such other

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information being referred to collectively in this Section 15.8 as the “Other Information”), available to
the Credit Providers by posting on Intralinks or a substantially similar electronic
transmission system (each such system being referred to in this Section  15.8 as a “Platform”). Each Obligated Party (i) acknowledges that the
distribution of material through an electronic medium is not necessarily secure and that
there are confidentiality and other risks associated with such distribution and (ii) agrees
that posting of the Communications and Other Information to a Platform will not in any event
constitute a breach of the confidentiality provisions of Section 15.16.

     (f) Each Platform is provided “as is” and “as available”. The Agent-Related
Persons do not warrant the accuracy or completeness of any Loan Documents, communications,
or other information posted by any Agent-Related Person to any Platform, or the adequacy of
any Platform, and the Agent-Related Persons and the other Credit Providers expressly
disclaim any liability for errors or omissions in any Loan Documents, communications, or
other information as posted on any Platform. No warranty of any kind, express, implied, or
statutory (including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights, or freedom from viruses or other code defects) is
made by the Agent-Related Persons or any other Credit Provider in connection with the Loan
Documents, communications, or other information or any Platform. In no event shall any
Agent-Related Person or any other Credit Provider have any liability to the Borrower or any
other Person for damages of any kind (including direct or indirect damages, special damages,
incidental or consequential damages, losses or expenses (whether in contract, tort or
otherwise)) arising out of any Person’s transmission of Loan Documents, communications, or
other information through the internet, or posting or failure to post any Loan Documents,
communications, or other information on any Platform, except to the extent determined in a
final, nonappealable judgment by a court of competent jurisdiction to have resulted from
such Person’s own gross negligence or willful misconduct.

     (g) Subject to the last sentence of clause (d) preceding, the Administrative
Agent agrees that the receipt of the Communications by it at its e-mail addresses specified
to the Obligated Parties from time to time shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of this Agreement. Each Lender
agrees that notice to it (as provided in the following sentence) specifying that the
Communications and the Other Information have been posted to a Platform shall constitute
effective delivery of the Communications and the Other Information to such Lender for
purposes of this Agreement. Each Lender agrees (i) to notify the Administrative Agent in
writing (including by electronic communication) from time to time of such Lender’s e-mail
addresses to which the foregoing notice may be sent by electronic transmission and (ii) that
the foregoing notice may be sent to such e-mail address.

     Section 15.9 Waiver of Notices. Unless otherwise expressly provided herein, each
Obligated Party waives presentment, notice of demand or dishonor, protest as to any instrument,

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notice of intent to accelerate the Obligations, and notice of acceleration of the Obligations, as
well as any and all other notices to which it might otherwise be entitled. No notice to or demand
on any Obligated Party that the Administrative Agent or any Lender may elect to give shall
entitle any Obligated Party to any or further notice or demand in the same, similar, or other
circumstances.

     Section 15.10 Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective representatives, successors, and assigns of the parties
hereto; provided that no interest herein may be assigned by any Obligated Party without the
prior written consent of the Administrative Agent and the Lenders.

     Section 15.11 Indemnity of the Credit Providers by the Obligated Parties.

     (a) Each Obligated Party agrees to defend, indemnify, and hold the Agent-Related
Persons, each Credit Provider, and each of their respective officers, directors, employees,
counsel, representatives, agents, and attorneys-in-fact (each, an “Indemnified Person”)
harmless from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses, and disbursements (including attorney
costs and reasonable legal costs and expenses of the other credit providers) of any kind or
nature whatsoever that may at any time (including at any time following repayment of the
Loans and the termination, resignation, or replacement of the Administrative Agent or
replacement of any other Credit Provider) be imposed on, incurred by, or asserted against
any such Person in any way relating to or arising out of this Agreement, any other Loan
Document, or any other agreement, instrument, or document contemplated by or referred to
herein or therein, or the transactions contemplated hereby or thereby, or any action taken
or omitted by any Indemnified Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation, or proceeding (including any
insolvency proceeding and any appellate proceeding) related to or arising out of this
Agreement, any other Loan Document, the Loans, or the use of the proceeds of the Loans,
whether or not any Indemnified Person is a party thereto (all the foregoing, collectively,
the “Indemnified Liabilities”); provided that no Obligated Party shall have any
obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such indemnified Person’s own gross negligence or willful
misconduct. The Agreements in this Section 15.11   (a)  shall survive payment
of all other Obligations.

     (b) Each Obligated Party agrees to indemnify, defend, and hold harmless the
Administrative Agent, the Lenders, and the other Credit Providers from any loss or liability
directly or indirectly arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal, or presence of a hazardous substance
relating to any Obligated Party’s operations, business, or property. This indemnity will 

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 apply whether the hazardous substance is on, under, or about any Obligated Party’s property
or operations or property leased to the Borrower. The indemnity includes but is not limited
to Attorney Costs and reasonable legal  costs and expenses of the other Credit Providers (including environmental
assessments). The indemnity extends to the Administrative Agent and the other Credit
Providers, their Affiliates, Subsidiaries, and all of their directors, officers, employees,
agents, successors, attorneys, and assigns. As used in this clause  (b),
“Hazardous Substances” means any substance, material, or waste that is or becomes designated
or regulated as “toxic,” “hazardous,” “pollutant,” or “contaminant” or a similar designation
or regulation under any federal, state, or local law (whether under common law, statute,
regulation, or otherwise) or judicial or administrative interpretation of such, including
petroleum or natural gas. The agreements in this Section 15.11  (b) shall
survive payment of all other Obligations.

     Section 15.12 Limitation of Liability. No claim may be made by any Obligated
Party, the Administrative Agent, any other Credit Provider, or any other Person against any
Obligated Party, the Administrative Agent, any other Credit Provider, or any Affiliate, director,
officer, employee, counsel, representative, agent, or attorney-in-fact of any of them for any
special, indirect, consequential, or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement or any other Loan Document, or any act, omission, or event occurring
in connection therewith, and the Borrower, the Administrative Agent, and each other Credit Provider
hereby waives, releases, and agrees not to sue upon any claim for such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

     Section 15.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Obligated Parties, the Administrative Agent, and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement and the other
Loan Documents supersede any and all prior oral or written agreements relating to the subject
matter hereof and thereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by a written agreement
signed by a duly authorized officer of each of (a) the Obligated Parties, (b) the Administrative
Agent, and (c) the Majority Lenders, the Required Lenders, or all of the Lenders, as applicable.

     Section 15.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Administrative Agent, each Lender, and each Obligated Party in separate
counterparts, each of which shall be an original, but all of which shall together constitute one
and the same agreement. Signature pages to this Agreement may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document and a telecopy of any such executed signature page shall be valid as
an original.

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     Section 15.15 Right of Setoff. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior notice to any Obligated Party, any such
notice being waived by the Obligated Parties to the fullest extent permitted by law, to setoff
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, such Lender or any Affiliate of such
Lender to or for the credit or the account of any Obligated Party against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Lender shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify
the Obligated Parties and the Administrative Agent after any such setoff and application made by
such Lender; provided that the failure to give such notice shall not affect the validity of
such setoff and application. Notwithstanding the foregoing, no Lender shall exercise any right
of setoff, banker’s lien, or the like against any deposit account or property of any Obligated
Party held or maintained by such Lender without the prior written consent of the Required
Lenders.

     Section 15.16 Confidentiality.

     (a) Each Obligated Party hereby consents that the Administrative Agent and each Lender
may issue and disseminate to the public general information describing the credit
accommodation entered into pursuant to this Agreement, including the name and address of the
Obligated Parties and a general description of the Obligated Parties’ business and may use
each Obligated Party’s name in advertising and other promotional material.

     (b) Each Lender severally agrees, for two years following receipt thereof, to take
normal and reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as “confidential” or “secret” by any Obligated Party and provided
to the Administrative Agent or such Lender by or on behalf of any Obligated Party, under
this Agreement or any other Loan Document, except to the extent that such information (i)
was or becomes generally available to the public other than as a result of disclosure by the
Administrative Agent or a Lender or (ii) was or becomes available on a nonconfidential basis
from a source other than an Obligated Party, provided that such source is not bound
by a confidentiality agreement with an Obligated Party known to the Administrative Agent or
such Lender; provided, however, that the Administrative Agent and any Lender
may disclose such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Administrative Agent or such Lender is subject or in
connection with an examination of the Administrative Agent or such Lender by any such
Governmental Authority, (B) pursuant to subpoena or other court process, (C) when required
to do so in accordance with the provisions of any applicable Requirement of Law, (D) to the
extent reasonably required in connection with any litigation or proceeding (including any
bankruptcy proceeding) to which the Administrative Agent, any Lender or their respective
Affiliates may be party, (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document, (F) to the Administrative
Agent’s or such Lender’s independent auditors, accountants, attorneys, and other
professional advisors,

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(G) to any prospective Participant or Assignee, actual or potential,
provided that such prospective Participant or Assignee agrees to keep such
information confidential to the same extent required of the Administrative Agent and the
Lenders hereunder, (H) as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which any Obligated Party is party or is deemed party with the
Administrative Agent or such Lender, and (I) to its Affiliates. 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. Notwithstanding anything herein to the contrary, the
information subject to this Section 15.16(b) shall not include, and the Obligated
Parties, the Administrative Agent, each Lender, and their respective Affiliates (and the
respective partners, directors, officers, employees, agents, advisors, and other
representatives of each of the foregoing and their Affiliates) may disclose to any and all
Persons, without limitation of any kind, (1) any information with respect to the U.S.
federal and state income tax treatment of the transactions contemplated hereby and any facts
that may be relevant to understanding such tax treatment and (2) all materials of any kind
(including opinions or other tax analyses) relating to such tax treatment or facts that are
provided to any of the Persons referred to above which facts and materials shall not include
for such purpose the names of the parties or any other Person named herein, or information
that would permit identification of the parties or such other Persons, or any pricing terms
or other nonpublic business or financial information that is unrelated to such tax
treatment, facts or materials.

     Section 15.17 USA Patriot Act Notice. Each Lender and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Obligated Parties that pursuant to the
requirements of the Patriot Act, such Credit Provider is required to obtain, verify, and record
information that identifies the Obligated Parties, which information includes the name and address
of the Obligated Parties and other information that will allow such Credit Provider to identify the
Obligated Parties in accordance with the Patriot Act.

     Section 15.18 Joint and Several Liability. All Loans, upon funding, shall be deemed
to be jointly funded to and received by the Borrowers. Each Borrower jointly and severally agrees
to pay, and shall be jointly and severally liable under this Agreement for, all Obligations,
regardless of the manner or amount in which proceeds of Loans are used, allocated, shared, or
disbursed by or among the Borrowers themselves, or the manner in which the Administrative Agent
and/or any Lender accounts for such Loans or other extensions of credit on its books and records.
Each Borrower shall be liable for all amounts due to the Administrative Agent and/or any Lender
under this Agreement, regardless of which Borrower actually receives Loans or other extensions of
credit hereunder or the amount of such Loans and extensions of credit received or the manner in
which the Administrative Agent and/or such Lender accounts for such Loans or other extensions of
credit on its books and records. Each Borrower’s Obligations with respect to Loans and other
extensions of credit made to it, and such Borrower’s Obligations arising as a result of the joint
and several liability of such Borrower hereunder, with respect to Loans made to the other Borrowers
hereunder, shall be separate and distinct obligations, but all such Obligations shall be primary
obligations of such Borrower. The Borrowers acknowledge and expressly agree with the
Administrative Agent and each Lender that the joint and several liability

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of each Borrower is required solely as a condition to, and is given solely as inducement for and in consideration of,
credit or accommodations extended or to be extended under the Loan Documents to any or all of the
other Borrowers and is not required or given as a condition of extensions of credit to such
Borrower. Each Borrower’s obligations under this Agreement and as an obligor under a Guaranty Agreement shall be separate and distinct obligations. Each
Borrower’s obligations under this Agreement shall, to the fullest extent permitted by law, be
unconditional irrespective of (a) the validity or enforceability, avoidance, or subordination of
the Obligations of any other Borrower or of any promissory note or other document evidencing all or
any part of the Obligations of any other Borrower, (b) the absence of any attempt to collect the
Obligations from any other Borrower, any Guarantor, or any other security therefor, or the absence
of any other action to enforce the same, (c) the waiver, consent, extension, forbearance, or
granting of any indulgence by the Administrative Agent and/or any Lender with respect to any
provision of any instrument evidencing the Obligations of any other Borrower or Guarantor, or any
part thereof, or any other agreement now or hereafter executed by any other Borrower or Guarantor
and delivered to the Administrative Agent and/or any Lender, (d) the failure by the Administrative
Agent and/or any Lender to take any steps to perfect and maintain its security interest in, or to
preserve its rights to, any security or collateral for the Obligations of any other Borrower or
Guarantor, (e) the Administrative Agent’s and/or any Lender’s election, in any proceeding
instituted under the Bankruptcy Code, or the application of Section 1111(b)(2) of the Bankruptcy
Code, (f) any borrowing or grant of a security interest by any other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code, (g) the disallowance of all or any
portion of the Administrative Agent’s and/or any Lender’s claim(s) for the repayment of the
Obligations of any other Borrower under Section 502 of the Bankruptcy Code, or (h) any other
circumstances that might constitute a legal or equitable discharge or defense of a Guarantor or of
any other Borrower. With respect to any Borrower’s Obligations arising as a result of the joint
and several liability of the Borrowers hereunder with respect to Loans or other extensions of
credit made to any of the other Borrowers hereunder, such Borrower waives, until the Obligations
shall have been paid in full and this Agreement shall have been terminated, any right to enforce
any right of subrogation or any remedy that the Administrative Agent and/or any Lender now has or
may hereafter have against any other Borrower, any endorser or any Guarantor of all or any part of
the Obligations, and any benefit of, and any right to participate in, any security or collateral
given to the Administrative Agent and/or any Lender to secure payment of the Obligations or any
other liability of any Borrower to the Administrative Agent and/or any Lender. Upon any Event of
Default, the Administrative Agent may proceed directly and at once, without notice, against any
Borrower to collect and recover the full amount, or any portion of the Obligations, without first
proceeding against any other Borrower or any other Person, or against any security or collateral
for the Obligations. Each Borrower consents and agrees that the Administrative Agent shall be
under no obligation to marshal any assets in favor of any Borrower or against or in payment of any
or all of the Obligations.

     Section 15.19 Contribution and Indemnification among the Obligated Parties. Each
Borrower is obligated to repay the Obligations as joint and several obligors under this Agreement.
To the extent that any Borrower shall, under this Agreement as a joint and several obligor, repay
any of the Obligations constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower and to the extent any other Obligated Party
makes any transfer (including any payment, grant, guaranty, or granting of a Lien) pursuant to this
Agreement (any such payment or transfer being referred to herein as an

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“Accommodation Payment”), then the Obligated Party making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other Obligated Parties in
an amount, for each of such other Obligated Parties, equal to a fraction of such Accommodation
Payment, the numerator of which fraction is such other Obligated Party’s Allocable Amount and the denominator of which is the sum of the Allocable Amounts of
all of the Obligated Parties. As of any date of determination, the “Allocable Amount” of
each Obligated Party shall be equal to the maximum amount of liability for Accommodation Payments
that could be asserted against such Obligated Party hereunder without (a) rendering such Obligated
Party “insolvent” within the meaning of Section 101 (32) of the Bankruptcy Code, Section 2 of the
Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance
Act (“UFCA”), (b) leaving such Obligated Party with unreasonably small capital or assets,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of
the UFCA, or (c) leaving such Obligated Party unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.
All rights and claims of contribution, indemnification, and reimbursement under this Section shall
be subordinate in right of payment to the prior payment in full of the Obligations. The provisions
of this Section shall, to the extent expressly inconsistent with any provision in any Loan
Document, supersede such inconsistent provision. Notwithstanding the foregoing, no provision of
this Agreement shall limit the liability or obligation of any Person (the “subject Person”) with
respect to any indebtedness, liabilities, or obligations of any Subsidiary of the subject Person.

     Section 15.20 Agency of the Parent for Each Other Obligated Party. Each of the
Obligated Parties (excluding the Parent) irrevocably appoints the Parent as its agent for all
purposes relevant to this Agreement, including the giving and receipt of notices and execution and
delivery of all documents, instruments, and certificates contemplated herein (including execution
and delivery to the Administrative Agent of Borrowing Base Certificates) and all modifications
hereto. Any acknowledgment, consent, direction, certification, or other action that might
otherwise be valid or effective only if given or taken by all or any of the Obligated Parties or
acting singly, shall be valid and effective if given or taken only by the Parent, whether or not
any of the other Obligated Parties joins therein, and the Administrative Agent and the Lenders
shall have no duty or obligation to make further inquiry with respect to the authority of the
Parent under this Section 15.20, provided that nothing in this Section
15.20 shall limit the effectiveness of, or the right of the Administrative Agent and the
Lenders to rely upon, any notice, document, instrument, certificate, acknowledgment, consent,
direction, certification, or other action delivered by any Obligated Party pursuant to this
Agreement.

     Section 15.21 Additional Borrowers and Guarantors. Addition of any Person as a
Borrower or a Guarantor to this Agreement is subject to approval of the Administrative Agent and
the Majority Lenders, and may be conditioned upon such requirements as they may determine in their
discretion, including (a) the furnishing of such financial and other information as the
Administrative Agent may request, (b) approval by all appropriate approval authorities of the
Administrative Agent and each such Lender, as applicable, and (c) execution and delivery by the
Obligated Parties, such Person, and the Administrative Agent, and the Majority Lenders of such
agreements and other documentation (including an amendment to this Agreement or any other Loan
Document), and the furnishing by such Person or any of the Obligated Parties of such certificates,
opinions, and other documentation, as the Administrative Agent and any such

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 136

 

 

Lender may request. Neither the Administrative Agent nor any Lender shall have any obligation to approve any such
Person for addition as a party to this Agreement.

     Section 15.22 Express Waivers By the Obligated Parties In Respect of Cross Guaranties and
Cross Collateralization. Each Obligated Party agrees as follows:

     (a) Each Obligated Party hereby waives: (i) notice of acceptance of this Agreement;
(ii) notice of the making of any Loans, the issuance of any Letter of Credit, or any other
financial accommodations made or extended under the Loan Documents or the creation or
existence of any Obligations; (iii) notice of the amount of the Obligations, subject,
however, to such Obligated Party’s right to make inquiry of the Administrative Agent to
ascertain the amount of the Obligations at any reasonable time; (iv) notice of any adverse
change in the financial condition of any other Obligated Party or of any other fact that
might increase such Obligated Party’s risk with respect to such other Obligated Party under
the Loan Documents; (v) notice of presentment for payment, demand, protest, and notice
thereof as to any promissory notes or other instruments among the Loan Documents; and (vii)
all other notices (except if such notice is specifically required to be given to such
Obligated Party hereunder or under any of the other Loan Documents to which such Obligated
Party is a party) and demands to which such Obligated Party might otherwise be entitled.

     (b) Each Obligated Party hereby waives the right by statute or otherwise to require any
Credit Provider to institute suit against any other Obligated Party or to exhaust any rights
and remedies that any Credit Provider has or may have against any other Obligated Party.
Each Obligated Party further waives any defense arising by reason of any disability or other
defense of any other Obligated Party (other than the defense that the Obligations shall have
been fully and finally performed and indefeasibly paid) or by reason of the cessation from
any cause whatsoever of the liability of any such Obligated Party in respect thereof.

     (c) Each Obligated Party hereby waives and agrees not to assert against any Credit
Provider: (i) any defense (legal or equitable), setoff, counterclaim, or claim that such
Obligated Party may now or at any time hereafter have against any other Obligated Party or
any other party liable under the Loan Documents; (ii) any defense, setoff, counterclaim, or
claim of any kind or nature available to any other Obligated Party against any Credit
Provider, arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Obligations or any security therefor; (iii)
any right or defense arising by reason of any claim or defense based upon an election of
remedies by any Credit Provider under any Requirement of Law; (iv) the benefit of any
statute of limitations affecting any other Obligated Party’s liability hereunder.

     (d) Each Obligated Party consents and agrees that, without notice to or by such
Obligated Party and without affecting or impairing the obligations of such Obligated Party
hereunder, the Administrative Agent may (subject to any requirement for consent of any of
the Lenders to the extent required by this Agreement), by action or inaction: (i)
compromise, settle, extend the duration or the time for the payment of, or discharge

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 137

 

 

the performance of, or may refuse to or otherwise not enforce the Loan Documents; (ii) release
all or any one or more parties to any one or more of the Loan Documents or grant other
indulgences to any other Obligated Party in respect thereof; (iii) amend or modify
in any manner and at any time (or from time to time) any of the Loan Documents; or (iv)
release or substitute any Person liable for payment of the Obligations, or enforce,
exchange, release, or waive any security for the Obligations or any Guaranty of the
Obligations.

Each Obligated Party represents and warrants that such Obligated Party is currently informed of the
financial condition of all other Obligated Parties and all other circumstances that a diligent
inquiry would reveal and that bear upon the risk of nonpayment of the Obligations. Each Obligated
Party further represents and warrants that such Obligated Party has read and understands the terms
and conditions of the Loan Documents. Each Obligated Party agrees that no Credit Provider has any
responsibility to inform any Obligated Party of the financial condition of any other Obligated
Party or of any other circumstances that bear upon the risk of nonpayment or nonperformance of the
Obligations.

     Section 15.23 Amendment and Restatement. This Agreement is in amendment and
restatement of the Original Loan Agreement. All obligations of the “Borrowers” and “Guarantors”
under the Original Loan Agreement, and all security interests, liens, and collateral assignments
granted to the Administrative Agent under the Original Loan Agreement or any of the other “Loan
Documents” defined therein, hereby are renewed and continued in full force and effect, and
hereafter shall be governed by this Agreement. All existing “Loan Documents” previously executed
in connection with the Original Loan Agreement shall continue in full force and effect, except to
the extent any such agreement is amended, restated, or replaced in connection with this Agreement,
and any and all references therein to the Original Loan Agreement (regardless of terminology) shall
refer to and mean this Agreement.

[Remainder of Page Intentionally Left Blank]

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 138

 

 

     IN WITNESS WHEREOF, the parties have entered into this Agreement on the date first above
written.

	 	 	 	 	 
	 	 	OBLIGATED PARTIES:
	 
	 	 	 	 
	 	 	MERCURY AIR GROUP, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	MAYTAG AIRCRAFT CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	MERCURY AIR CARGO, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	MERCFUEL, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	HERMES AVIATION, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Signature Page

 

 

	 	 	 	 	 
	 	 	SWIFT GLOBAL LOGISTICS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: Chairman of the Board
	 
	 	 	 	 
	 	 	EXCEL CARGO, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	JUPITER AIRLINE SERVICES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO
	 
	 	 	 	 
	 	 	VULCAN AVIATION, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Joseph A. Czyzyk
	 	 	Title: CEO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Signature Page

 

 

	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT:
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N. A.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Robert M. Dalton
	 	 	Title: Vice President

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Signature Page

 

 

	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Robert M. Dalton
	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 
	 	 	Bank of America, N.A.
	 	 	55 South Lake Avenue, Suite 900
	 	 	Pasadena, CA 91101
	 	 	Attn: Business Capital: URGENT
	 	 	Telecopy: (626) 397-1273 / (626) 397-1275

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Signature Pageexv10w1

 

Exhibit 10.1

PURCHASE AGREEMENT

     THIS PURCHASE AGREEMENT (the “Agreement”) is entered into as of the 17th day of September,
2004, by and among Sutura, Inc., a Delaware corporation (the “Company”), and Pandora Select
Partners L.P., a British Virgin Islands limited partnership (“Pandora”), Whitebox Hedged High Yield
Partners L.P., a British Virgin Islands limited partnership (“WHHY”), Whitebox Convertible
Arbitrage Partners L.P., a British Virgin Islands limited partnership (“WCAP”), Whitebox
Intermarket Partners L.P., a British Virgin Islands limited partnership (“WIP”) and Gary S. Kohler
(“Kohler”) and Scot W. Malloy (“Malloy”), each residents of the State of Minnesota. Pandora, WHHY,
WCAP, WIP, Kohler and Malloy are individually referred to herein as a “Purchaser” and together as
the “Purchasers.”

R E C I T A L S :

     WHEREAS, in consideration of $1,000,000, $2,000,000, $2,500,000, $800,000, $200,000 and
$50,000 (representing $6,550,000 in the aggregate), the Company proposes to issue to Pandora, WHHY,
WCAP, WIP, Kohler and Malloy, respectively, and each such Purchaser desires to severally (and not
jointly) purchase, a corresponding secured convertible promissory note in the form attached as
Exhibit A (each, a “Note” and together, the “Notes”) and a warrant in the form of Exhibit B (each,
a “Warrant” and together, the “Warrants”) to purchase (subject to certain adjustments) shares of
the Company’s common stock, $0.001 par value (the “Common Stock”).

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the parties hereto agree as follows:

SECTION 1. AGREEMENT TO SELL AND PURCHASE

     1.1. Authorization of Transaction. On or prior to the closing of the transactions
contemplated in this Agreement (the “Closing”), the Company shall have authorized the sale and
issuance to each Purchaser of its respective Note, Warrant and the shares of Common Stock issuable
upon conversion of each such Note and upon exercise of each such Warrant (collectively, the
“Shares”).

     1.2. Sale and Purchase. Subject to the terms and conditions hereof, at the Closing, the
Company hereby agrees to issue and sell to each Purchaser, and each Purchaser severally (and not
jointly) agrees to purchase from the Company, such Purchaser’s respective Note and the Warrant for
an aggregate purchase price from all Purchasers of $6,550,000 (the “Purchase Price”).

SECTION 2. CLOSING, DELIVERY AND PAYMENT

     2.1. Closing. The Closing shall take place at 10:00 a.m. on the date hereof at the offices of
the Purchasers’ legal counsel, Messerli & Kramer P.A., in Minneapolis, Minnesota, or

 

 

at such other time or place as the Company and the Purchasers may mutually agree (the
“Closing Date”). At the Closing, subject to the terms and conditions hereof, the Company will
issue, sell and deliver to each Purchaser its respective Note and Warrant, against payment by each
Purchaser of its allocable portion of the Purchase Price by certified check or wire transfer of
immediately available funds. At that time, the Company shall also execute and deliver to the
Purchasers the Registration Rights Agreement in the form attached as Exhibit C (the “Registration
Rights Agreement”) and the Security Agreement in the form attached as Exhibit D (the “Security
Agreement”).

SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

     The Company hereby makes the following representations and warranties to each of the
Purchasers as of the Closing Date and, as to the 510(k) clearance and CE mark described in Section
3.16, covenants to so comply with the requirements thereof from and after the Closing Date so long
as any portion of any of the Notes remain outstanding.

     3.1. Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. Except as
set forth on Schedule 3.1, the Company has no subsidiaries. The Company has all requisite corporate
power and authority to own and operate its properties and assets, to execute and deliver this
Agreement, the Notes, the Warrants, the Registration Rights Agreement and the Security Agreement
(together, the “Transaction Documents”), to pledge certain of the Company’s assets as described on
the attached Exhibit E as security for the Notes (the “Collateral”), to issue and sell the Shares
upon conversion of the Notes and upon exercise of the Warrants, to carry out the provisions of the
Transaction Documents, and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in which failure to be
so qualified would not have a material adverse effect on the Company, or its business or
properties, taken as a whole.

     3.2. Capitalization. The authorized capital stock of the Company consists of 5,000,000 shares
of Preferred Stock, par value $0.00025 per share, of which 352,160 shares are issued and
outstanding, and 10,000,000 shares of Common Stock, par value $0.00025 per share, of which
6,874,429 shares are issued and outstanding. Except as set forth on Schedule 3.2, the Company has
no outstanding options, warrants or other rights to acquire any capital stock, or securities
convertible or exchangeable for capital stock or for securities themselves convertible or
exchangeable for capital stock (together, “Convertible Securities”). Except as set forth on
Schedule 3.2, the Company has no agreement or commitment to sell or issue any shares of capital
stock or Convertible Securities. All issued and outstanding shares of the Company’s capital stock
(i) have been duly authorized and validly issued, (ii) are fully paid and nonassessable, (iii) are
free from any preemptive and cumulative voting rights and (iv) were issued pursuant to valid
exemptions under federal and state securities laws. Except as set forth

- 2 -

 

on Schedule 3.2, there are no outstanding rights of first refusal or proxy or shareholder
agreements of any kind relating to any of the Company’s securities to which the Company or any of
its executive officers and directors is a party or as to which the Company otherwise has knowledge
of. When issued in compliance with the provisions of the Notes and the Warrants (and upon payment
as provided by the Warrants), the Shares will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided, however, that the Shares may be subject to
restrictions on transfer under applicable state and/or federal securities laws.

     3.3. Authorization; Binding Obligations. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization of the Transaction
Documents, the performance of all obligations of the Company hereunder and thereunder at the
Closing, including the pledge of the Collateral as security for the Notes, and the authorization,
sale, issuance and delivery of the Shares upon conversion of the Notes and upon exercise of the
Warrants has been taken or will be taken prior to Closing. The Transaction Documents, when
executed and delivered, will be valid and binding obligations of the Company enforceable in
accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) to the extent that the enforceability of
the indemnification provisions of the Registration Rights Agreement may be limited by applicable
laws. The sale of the Shares upon exercise of the Warrants or upon conversion of the Notes is not
and will not be subject to any preemptive rights or rights of first refusal.

     3.4. Financial Statements. The Company’s unaudited balance sheets at, and the unaudited
statements of operations, cash flows and changes in shareholders’ equity of the Company for the
years ended, December 31, 2003 and 2002 and the Company’s unaudited balance sheet at, and the
unaudited statements of operations and cash flows of the Company for the six months ended June 30,
2004 (all of the foregoing together, the “Financial Statements,” with June 30, 2004 being the
“Latest Statement Date” and the financial statements at and for the six months ended June 30, 2004
being the “Latest Financial Statements”) fairly present in all material respects (such that no
material modifications are required to conform the financial statements to generally accepted
accounting principles) the financial condition and operating results of the Company as of the
respective dates and for the respective periods covered thereby.

     3.5. Liabilities. The Company (i) has no material liabilities and (ii) to the best of its
knowledge, has no material contingent liabilities, in each case not otherwise disclosed in the
Latest Financial Statements, except (A) current liabilities incurred in the ordinary course of
business subsequent to the Latest Statement Date and (B) obligations under contracts and
commitments incurred in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Latest Financial Statements, which, in both cases have
not had, either in any individual case or in the aggregate, a material adverse effect on the
Company, or its business or properties, taken as a whole.

- 3 -

 

     3.6. Certain Agreements and Actions. Except as disclosed in the Financial Statements or on
Schedule 3.6, the Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock during the periods
covered by the Financial Statements or since the Latest Statement Date, (ii) since the Latest
Statement Date, incurred any indebtedness for money borrowed or any other material liabilities out
of the ordinary course of business, (iii) except as set forth in Schedule 3.6, made any loans or
advances to any person, other than ordinary advances for travel or entertainment expenses or (iv)
sold, exchanged or otherwise disposed of any of its assets or rights, other than in the ordinary
course of business.

     3.7. Obligations of or to Related Parties. Except as disclosed on Schedule 3.7, there are no
obligations of the Company to officers, directors or key employees of the Company or, to the
Company’s knowledge, to any members of their immediate families or other affiliates, other than (i)
for accrued salaries, (ii) reimbursement for expenses reasonably incurred on behalf of the Company
and (iii) for other employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board of Directors of the
Company). Except as disclosed on Schedule 3.7, to the Company’s knowledge, none of the officers,
directors or key employees of the Company or, to the Company’s knowledge, any members of their
immediate families or other affiliates, are indebted to the Company or have any direct or indirect
ownership interest in any firm, corporation or other entity with which the Company is affiliated or
with which the Company has a business relationship, or any firm, corporation or other entity that
competes with the Company, except that such officers, directors, employees and members of their
immediate families may own securities (with beneficial ownership not exceeding 2%) in
publicly-traded companies that compete with the Company . Except as disclosed on Schedule 3.7, no
officer, director or key employee of the Company, or, to the Company’s knowledge, any member of
their immediate families or other affiliates, is, directly or indirectly, interested in or a party
to any material contract with the Company. Except as disclosed on Schedule 3.7 or in the Financial
Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person,
firm or corporation.

     3.8. Changes. Since the Latest Statement Date, and except as disclosed on Schedule 3.8, there
has not been, to the Company’s knowledge, any event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition, operations or prospects of the Company.

     3.9. Title to Properties and Assets; Liens. Except as set forth on Schedule 3.9, the Company
has good and marketable title to its properties and assets, including the properties and assets
reflected in the Latest Financial Statements, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) those resulting
from taxes that have not yet become delinquent, (ii) liens and encumbrances that do not materially
detract from the value of the property subject thereto or materially impair the operations of the
Company and (iii) those that have otherwise arisen in the ordinary course of business. With respect
to the property and

- 4 -

 

assets it leases, the Company is in compliance with such leases in all material respects and, to
the Company’s knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances. All facilities, machinery, equipment, fixtures and other properties owned, leased or
used by the Company which are reasonably necessary to the Company’s conduct of its business are in
good operating condition and repair and are reasonably fit and usable for the purposes for which
they are being used, reasonable wear and tear excepted.

     3.10. Patents and Trademarks. Schedule 3.10 contains a listing of all U.S. and foreign
patents and patent applications, and U.S. and foreign trademarks and service marks and applications
therefor, owned by, assigned to or licensed to the Company. Except as set forth on Schedule 3.10,
the Company owns or has a valid right to use all patents, trademarks, service marks, trade names,
copyrights, trade secrets, information and other proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted, without any known infringement of the
rights of others. The Company is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other agreement, or
subject to any judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Company or that would conflict with the Company’s business as
now conducted or proposed to be conducted. None of the execution or delivery of, or the performance
of the transactions contemplated by, the Transaction Documents, the pledge of the Collateral by the
Company to secure the Notes, the carrying on of the Company’s business by the employees of the
Company nor the conduct of the Company’s business as currently conducted or proposed to be
conducted will conflict with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any employee is now
obligated. The Company does not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees made prior to their employment by
the Company, except for inventions, trade secrets or proprietary information that have been
exclusively assigned to the Company.

     Without limiting the generality of the above, neither of Cardio Medical Solutions, Inc. nor
Nobles LAI Engineering Inc., nor any other entity owned or controlled by officers, directors or key
employees of the Company, own or control any inventions, trade secrets or proprietary information
necessary for or desirable to the Company in connection with and directly related to its business
as now conducted or proposed to be conducted.

     Except as set forth in Schedule 3.10, (i) each of the Company’s employees have executed
agreements of confidentiality and non-disclosure as to the Company’s
confidential information, including its intellectual property and trade secrets, and (ii) each of
the Company’s employees has agreed to assign to the Company any and all significant conceptions and
ideas for inventions, improvements and valuable discoveries, whether patentable or not, which are
conceived or made by such employees, solely or jointly with another, during the period of
employment, and which are directly related to the business or activities of the Company and which
the employee conceives as a result of the employee’s employment by the Company (other than
inventions for which no equipment, supplies, facility or trade secret information of the Company
was used and

- 5 -

 

which was developed entirely on the employee’s own time and (1) which does not relate (a) directly
to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research
or development or (2) which does not result from any work performed by the employee for the
Company).

     3.11. Compliance with Other Instruments. Except as disclosed on Schedule 3.11, the Company is
not in violation or default of any term of its Certificate of Incorporation or Bylaws, or in any
material respect of any mortgage, indenture, contract, agreement, instrument or contract to which
it is party or by which it is bound or of any judgment, decree, order, writ or, to its knowledge,
any statute, rule or regulation applicable to the Company that would materially and adversely
affect the business, assets, liabilities, financial condition, operations or prospects of the
Company. The execution and delivery of, and the performance of and compliance with the
transactions contemplated by, the Transaction Documents, and the issuance and sale of the Shares
upon conversion of the Notes or upon exercise of the Warrants, will not, with or without the
passage of time or giving of notice, result in any such material violation, or be in conflict with
or constitute a default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets or properties, except
for such results that would not materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company.

     3.12. Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company that questions the validity of this
Agreement or the other Transaction Documents or the right of the Company to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby. Except as disclosed
on Schedule 3.12, there is no action, suit, proceeding or investigation or, to the Company’s
knowledge, currently threatened against the Company that might result, either individually or in
the aggregate, in any material adverse change in the assets, condition, affairs or prospects of the
Company, financial or otherwise, or any change in the current equity ownership of the Company. The
foregoing includes, without limitation, actions pending or threatened involving the prior
employment of any of the employees of the Company, their use in connection with the Company’s
business of any information or techniques allegedly proprietary to any of
their former employers or their obligations under any agreements with prior employers. The Company
is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality.

     3.13. Tax Returns and Payments. The Company has filed all tax returns (federal, state and
local) required to be filed by it. All taxes shown to be due and payable on such returns, any
assessments imposed, and, to the Company’s knowledge, all other taxes due and payable by the
Company on or before the Closing have been paid or will be paid prior to the time they become
delinquent. The Company has not been advised (i) that any of its returns, federal, state or other,
have been or are being audited as of the date hereof or (ii) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no

- 6 -

 

knowledge of any liability of any tax to be imposed upon the properties or assets of the Company as
of the date of this Agreement that is not adequately provided for.

     3.14. Employees. The Company has no collective bargaining agreements with any of its
employees. The Company is not aware of any labor union organizing activity relating to its
employees. Except as set forth on Schedule 3.14, no employee has any agreement or contract, written
or verbal, regarding his employment. Except as disclosed on Schedule 3.14, the Company is not a
party to or bound by any currently effective employment contract, deferred compensation
arrangement, bonus plan, incentive plan, profit sharing or defined benefit plan, retirement
agreement or other employee compensation plan or agreement. To the Company’s actual knowledge, no
employee of the Company, nor any consultant with whom the Company has contracted, is in violation
of any material term of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company; and, to the Company’s
knowledge, the continued employment by the Company of its present employees, and the performance of
the Company’s contracts with its independent contractors, will not result in any such violation.
The Company has not received any written or oral notice alleging that any such violation has
occurred. Except as disclosed on Schedule 3.14, no employee of the Company has been granted the
right to continued employment by the Company or to any material compensation following termination
of employment with the Company. The Company is not aware that any officer or key employee, or that
any group of key employees, intends to terminate their employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer, key employee or group
of key employees.

     3.15. Registration Rights. Except as disclosed on Schedule 3.15 or required pursuant to the
Registration Rights Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in the Registration Rights Agreement) any of the
Company’s presently outstanding securities or any of its securities that may hereafter be issued.

     3.16. Compliance with Laws; Permits; Company Medical Devices. Except as disclosed on
Schedule 3.16, the Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties that would materially and
adversely affect the business, assets, liabilities, financial condition, operations or prospects of
the Company. No governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be filed in connection
with the execution and delivery of, and the performance of the transactions contemplated by, the
Transaction Documents, the pledge of the Collateral to secure the Notes or the issuance of the
Shares upon conversion of the Notes or upon exercise of the Warrants, except such as has been duly
and validly obtained or filed, or with respect to any filings that must be made after the Closing,
as will be filed in a timely manner. The Company has all franchises, permits, licenses and any
similar authority necessary for the conduct of its

- 7 -

 

business as now being conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects or financial condition of the Company and the Company believes it
can obtain any similar authority for the conduct of its business as now conducted or planned to be
conducted.

     With respect to the Company’s marketing and sale of minimally invasive vessel closure devices
for surgical applications (which the Company represents are the only products that the Company
manufactures, markets or sells):

     (i) The Company has received 510(k) clearance from the U.S. Food & Drug Administration (the
“FDA”) to sell its F8 & F6 SuperStitch® devices (the “Company Medical Devices”) in the United
States;

     (ii) The Company has obtained permission from its notified body to place the CE mark on the
Company Medical Devices so as to permit their sale in European Union countries;

     (iii) The Company’s 510(k) clearance and CE mark for the Company Medical Devices are in full
force and effect and the Company has not received and anticipates no warning letter or other notice
of, and is unaware of any basis for, revocation, limitation or modification of such 510(k)
clearance or CE marking; and

     (iv) The Company manufactures the Company Medical Devices in compliance with FDA quality
system regulations and the EU Medical Device Directive and is otherwise in compliance with all
applicable FDA rules and regulations and EU directives (including the Medical Device Directive)
relating to the manufacture, marketing and sale of the Company Medical Devices, including with
respect to reporting of any device failures or adverse reactions, except where such failure to
comply would not materially and adversely affect the ability of the Company to sell the Company’s
Medical Devices in each EU country.

     With respect to any human clinical investigation of new or proposed medical devices by the
Company, or modifications to the Company Medical Devices, the Company is conducting each such
investigation in material compliance with applicable rules and regulations, including by obtaining
any required Investigational Device Exemption or Institutional Review Board approvals.

     3.17. Environmental and Safety Laws. The Company is not in violation of any applicable
statute, law or regulation relating to the environment or occupational health and safety, where
such violation would have a material adverse effect on the Company, and to the Company’s knowledge,
no material expenditures are or will be required in order to comply with any such existing statute,
law or regulation. Without limiting the foregoing:

        (a) with respect to any real property owned, leased or otherwise
utilized by the Company (“Real Property”), the Company is not or has not
in the past been in violation of any

- 8 -

 

Hazardous Substance Law which violation could reasonably be expected to
result in a material liability to the Company or its properties and
assets;

        (b) neither the Company nor, to the knowledge of the Company, any
third party has used, released, generated, manufactured, produced or
stored, in, on, under, or about any Real Property, or transported thereto
or therefrom, any Hazardous Substances that could reasonably be expected
to result in a material liability to the Company under any Hazardous
Substance Law;

        (c) to the knowledge of the Company, there are no underground tanks,
whether operative or temporarily or permanently closed, located on any
Real Property that could reasonably be expected to result in a material
liability to the Company under any Hazardous Substance Law;

        (d) there are no Hazardous Substances used, stored or present at, or
on, or to the knowledge of the Company that could reasonably be expected
to migrate onto any Real Property, except in compliance with Hazardous
Substance Laws; and

        (e) to the knowledge of the Company, there neither is nor has been
any condition, circumstance, action, activity or event that could
reasonably be expected to be a material violation by the Company of any
Hazardous Substance Law, or to result in liability to the Company under
any Hazardous Substance Law.

     For purposes hereof, “Hazardous Substances” means (statutory acronyms and
abbreviations having the meaning given them in the definition below of “Hazardous Substances Laws”)
substances defined as “hazardous substances,” “pollutants” or “contaminants” in Section 101 of the
CERCLA; those substances defined as “hazardous waste,” “hazardous materials” or “regulated
substances” by the RCRA; those substances designated as a “hazardous substance” pursuant to Section
311 of the CWA; those substances defined as “hazardous materials” in Section 103 of the HMTA;
those substances regulated as a hazardous chemical substance or mixture or as an imminently
hazardous chemical substance or mixture pursuant to Sections 6 or 7 of the TSCA; those substances
defined as “contaminants” by Section 1401 of the SDWA, if present in excess of permissible levels;
those substances regulated by the Oil Pollution Act; those substances defined as a pesticide
pursuant to Section 2(u) of the FIFRA; those substances defined as a source, special nuclear or
by-product material by Section 11 of the AEA; those substances defined as “residual radioactive
material” by Section 101 of the UMTRCA; those substances defined as “toxic materials” or “harmful
physical agents” pursuant to Section 6 of the OSHA; those substances defined as hazardous wastes
in 40 C.F.R. Part 261.3; those substances defined as hazardous waste constituents in 40 C.F.R. Part
260.10,

- 9 -

 

specifically including Appendix VII and VIII of Subpart D of 40 C.F.R. Part 261; those substances
designated as hazardous substances in 40 C.F.R. Parts 116.4 and 302.4; those substances defined as
hazardous substances or hazardous materials in 49 C.F.R. Part 171.8; those substances regulated as
hazardous materials, hazardous substances, or toxic substances in 40 C.F.R. Part 1910; any
chemical, material, toxin, pollutant, or waste regulated by or in any other Hazardous Substances
Laws; and in the regulations adopted and publications promulgated pursuant to said laws, whether or
not such regulations or publications are specifically referenced herein.

     “Hazardous Substances Law” means any of:

     (i) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) (“CERCLA”);

     (ii) the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.) (“Clean Water
Act” or “CWA”);

     (iii) the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) (“RCRA”);

     (iv) the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) (“AEA”);

     (v) the Clean Air Act (42 U.S.C. Section 7401 et seq.) (“CAA”);

     (vi) the Emergency Planning and Community Right to Know Act (42 U.S.C. Section 11001 et seq.) (“EPCRA”);

     (vii) the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.)
(“FIFRA”);

     (viii) the Oil Pollution Act of 1990 (33 U.S.C.A. Section 2701 et seq.);

     (ix) the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.) (“SDWA”);

     (x) the Surface Mining Control and Reclamation Act of 1974 (30 U.S.C.
Sections 1201 et seq.) (“SMCRA”);

     (xi) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.) (“TSCA”);

     (xii) the Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.) (“HMTA”);

     (xiii) the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. Section 7901 et seq.) (“UMTRCA”);

- 10 -

 

     (xiv) the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) (“OSHA”); and

     (xv) all other federal, state and local governmental rules which govern Hazardous Substances,
and the regulations adopted and publications promulgated pursuant to all such foregoing laws.

     3.18. Offering Valid. Assuming the accuracy of the representations and warranties of the
Purchasers contained in Section 4, the offer, sale and issuance of the Notes and the Warrants (and
the Shares issuable upon conversion of the Notes or upon exercise of the Warrants) will be exempt
from the registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”), and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of the State of
Minnesota.

     3.19. Full Disclosure. None of this Agreement, the Notes, the Warrants, the Registration
Rights Agreement or the Security Agreement contains any untrue statement of a material fact nor, to
the Company’s knowledge and belief, omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading.

     3.20. Insurance. The Company has fire and casualty insurance policies with coverage customary
for companies similarly situated to the Company. The Company’s coverage for product liability is
described on Schedule 3.20.

     3.21. Investment Company Act. The Company is not, and will not use the proceeds from the Notes
in a manner so as to become, an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.

     3.22. Security Interest in Collateral. The Company owns the Collateral free and clear of all
claims, liens or encumbrances of any kind and, upon consummation of the transactions as
contemplated hereby, the Purchasers will, together, have a first priority security interest in the
Collateral.

     3.23. Foreign Corrupt Practices; Sarbanes-Oxley.

     (a) Neither the Company, nor to the knowledge of the Company, any agent or other person acting
on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or

- 11 -

 

(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

     (b) The Company is in compliance in all material respects with all provisions of the
Sarbanes-Oxley Act of 2002 that are applicable to it as of the Closing Date.

     3.24. Brokers or Finders. Except as set forth in Schedule 3.24, the Company has not incurred
nor will incur, directly or indirectly, any liability for any brokerage or finders’ fees or agent’s
commissions or any similar charges (whether payable in cash, in equity securities or by a
combination thereof) in connection with this Agreement or any transaction contemplated hereby.

     3.25. Proposed Merger with Millenium Holding Group, Inc. The Company has entered into an
Agreement and Plan of Merger dated July 9, 2004 (the “Merger Agreement”) with Millenium Holding
Group, Inc., a Nevada corporation (“Millenium”), pursuant to which the Company is to merge into
Millenium (the “Merger”). The Merger Agreement, in the form filed by Millenium as an exhibit to a
Current Report on Form 8-K dated July 12, 2004, is a true and correct copy of the agreement between
the Company and Millenium and is in full force and effect. From and after the date hereof, the
Company will not amend, modify, replace, terminate or abandon the Merger Agreement and the proposed
Merger without first obtaining the written consent of Whitebox Advisors, LLC, as agent for the
Purchasers (“Whitebox Advisors”), unless with respect to such abandonment or termination, a
majority of the members of the Board of Directors of the Company determine that such abandonment or
termination is in the best interests of the Company and its stockholders.

     3.26. Use of Proceeds. The Company will use the proceeds from the purchase of the Notes and
Warrants to retire in full the convertible notes and certain securities issued by the Company to Al
Novak and Bruce Barrows, and will otherwise use the transaction
proceeds for general corporate purposes.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     Each Purchaser hereby severally, but not jointly, represents and warrants to the Company as of
the Closing Date, and agrees, as follows:

     4.1. Authorization. Such Purchaser has full power and authority to enter into this Agreement
and each of the Transaction Documents, and each such agreement, when executed and delivered by such
Purchaser, will be valid and binding obligations of the Purchaser enforceable in accordance with
their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) to the extent that the enforceability of the indemnification
provisions of the Registration Rights Agreement may be limited by applicable laws.

- 12 -

 

     4.2. Investment Representations. The Purchaser understands that neither the offer nor the sale
of the Purchaser’s Note, the Warrant or the Shares has been registered under the Securities Act.
The Purchaser also understands that the Purchaser’s Note and Warrant are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based in part upon the
Purchaser’s representations contained in the Agreement. The Purchaser hereby represents and
warrants as follows:

     (a) Purchaser Bears Economic Risk. The Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Purchaser must bear the economic risk of this
investment indefinitely unless the Purchaser’s respective Note or Warrant (or the Shares) are
registered pursuant to the Securities Act, or an exemption from registration is available. Except
as contemplated by the Registration Rights Agreement, the Purchaser has no present intention of
selling or otherwise transferring its respective Note, the Warrant or the Shares, or any interest
therein. The Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if available, such exemption
may not allow the Purchaser to transfer all or any portion of the Purchaser’s respective Note, the
Warrant or the Shares under the circumstances, in the amounts or at the times the Purchaser might
propose.

     (b) Acquisition for Own Account. Except as contemplated by the Registration Rights Agreement,
the Purchaser is acquiring its respective Note, the Warrant and the Shares for the Purchaser’s own
account for investment only, and not with a view towards their public distribution.

     (c) Purchaser Can Protect Its Interest. The Purchaser represents that by reason of its, or of
its management’s, business or financial experience, the Purchaser has
the capacity to protect its own interests in connection with the transactions contemplated in this
Agreement, the Note, the Warrant and the Registration Rights Agreement. Further, the Purchaser is
aware of no publication of any advertisement in connection with the transactions contemplated in
the Agreement.

     (d) Accredited Investor. The Purchaser represents that it is an accredited investor within the
meaning of Rule 501 of Regulation D of the Securities Act

     (e) Residence. The Purchaser represents that, if it is an entity, it is organized under the
laws of the British Virgin Islands and that its principal office is located in the State of
Minnesota and that, if the Purchaser is an individual, he is a resident of the State of Minnesota.

     (f) Rule 144. The Purchaser acknowledges and agrees that its respective Note and Warrant, and,
if issued, its Shares, must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. The

- 13 -

 

Purchaser has been advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of shares purchased in a private placement subject to
the satisfaction of certain conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring not less than one year after a
party has purchased and paid for the security to be sold, the sale being through an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as such term is defined
under the Securities Exchange Act of 1934, as amended) and the number of shares being sold during
any three-month period not exceeding specified limitations.

     (g) Disclosure of Information. Such Purchaser believes it has received all the information it
considers necessary or appropriate for deciding whether to purchase the securities of the Company
contemplated by this Agreement and the Transaction Documents. Such Purchaser further represents
that it or he has had an opportunity to ask questions and receive answers from the Company
regarding the securities being issued by the Company pursuant to this Agreement and the Transaction
Documents and Company’s business, properties, prospects and financial condition.

     4.3. Transfer Restrictions. The Purchaser acknowledges and agrees that its respective Note
and Warrant and, if issued, its Shares, are subject to restrictions on transfer and will bear
restrictive legends.

     4.4. Limitation on Short Selling of Millenium Common Stock. The Purchaser has not and agrees
not to engage in any “short sale” (as such term is defined in Rule 3b-3 of the Securities Exchange
Act of 1934, as amended) of Millenium’s Common Stock or any hedging transaction, which establishes
a net short position of Millenium’s Common Stock (i) from and after the Closing Date and until the
effective date of the Merger (or, if sooner, until the termination or abandonment of the Merger
Agreement or the Merger)
and (ii) if the Company effects the Merger into Millenium, during the period consisting of the
sixty (60) consecutive trading days ending on the date that is one year following the effective
date of the Merger. The foregoing covenant shall lapse if the Company defaults in the timely
payment of any amount due under the Purchaser’s Note.

SECTION 5. CONDITIONS FOR CLOSING

     5.1. Conditions for the Company to Satisfy. The several obligations of each Purchaser to
purchase its respective Note and Warrant as contemplated by this Agreement is subject to
satisfaction of the following contingencies at or prior to Closing:

     (a) The Company shall have obtained all third party consents required in connection herewith,
including consents to pledge the Collateral to the Purchasers as security for the Notes.

     (b) The Company shall have executed and delivered to the Purchasers at Closing the Transaction
Documents.

- 14 -

 

     (c) The Company shall have satisfied all judgment liens against it filed of record with the
U.S. Patent and Trademark Office or otherwise.

     (d) The Company shall have obtained the written consent of Fusion Capital Fund II, LLC, an
Illinois limited liability company and prospective funding source for Millenium upon consummation
of the Merger, to the transactions contemplated hereby in such form as the Purchasers shall
require.

     (e) The Company shall have paid Whitebox Advisors a $180,000 cash origination fee related to
the transactions contemplated hereby.

     (f) Sheppard, Mullin, Richter & Hampton LLP, legal counsel to the Company (“SMRH”), shall have
delivered an opinion to the Purchasers with respect to the following matters (which opinion may
contain customary exclusions and limitations that are reasonably acceptable to counsel for the
Purchasers):

     (i) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware. The Company has all corporate power and authority
necessary to own its properties and to conduct its business as, to SMRH’s knowledge, it is
presently conducted. The Company is qualified to do business and is in good standing in each state
where it owns or leases any material property or conducts any material business, except where a
failure to so qualify would not have a material adverse effect on the Company.

     (ii) The Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Transaction Documents.

     (iii) The Transaction Documents have been duly authorized by all necessary
corporate action on the part of the Company.

     (iv) The authorized capital stock of the Company consists of 10,000,000 shares of Common
Stock, par value $0.00025 per share, 6,874,429 shares of which to SMRH’s knowledge are issued and
outstanding prior to the Closing, and 5,000,000 shares of Preferred Stock, par value $0.00025 per
share, 352,160 shares of which to SMRH’s knowledge are issued and outstanding prior to the Closing.
To SMRH’s knowledge, except as described in the Purchase Agreement (including the schedules and
exhibits thereto), there are no other presently outstanding preemptive rights to purchase from the
Company any of the authorized but unissued stock of the Company.

     (v) Each of the Transaction Documents, when executed and delivered by the Company, will
constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms.

     (vi) When issued in compliance with the provisions of the Notes and Warrants (and upon payment
as provided by the Warrants), the Shares will be validly issued, fully paid and nonassessable.

- 15 -

 

     (vii) The execution and delivery of the Transaction Documents by the Company will not result
in (i) a violation of the Company’s Certificate of Incorporation or Bylaws, as amended or (ii) a
violation of any judgment or order specifically identified on the Schedules to the Purchase
Agreement, if any.

     (g) The Company shall have procured, at its expense, UCC-type insurance in form and amount
satisfactory to the Purchasers as to the perfection and priority of the Purchasers’ security
interest in the Collateral.

SECTION 6. MISCELLANEOUS

     6.1. Governing Law. This Agreement shall be governed by the laws of the State of Minnesota as
such laws are applied to agreements between Minnesota residents entered into and performed entirely
in Minnesota.

     6.2. Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by the parties and the closing of the transactions contemplated
hereby. All statements as to factual matters contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the Company hereunder
solely as of the date of such certificate or instrument.

     6.3. Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Notes, the
Warrants or the Shares from time to time.

     6.4. Entire Agreement. The Transaction Documents and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set forth herein and
therein.

     6.5. Severability. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     6.6. Amendment and Waiver. This Agreement may be amended or modified, and any provision
hereunder may be waived, only upon the written consent of the Company and Whitebox Advisors, as
agent for the Purchasers.

     6.7. Notices. All notices, requests, consents, and other communications hereunder shall be in
writing and shall be deemed effectively given and received when delivered in person

- 16 -

 

or by national overnight courier service or by certified or registered mail, return receipt
requested, or by telecopier, addressed as follows:

	 	 	 	 	 
	 

	 	(a)
	 	if to the Company, at
	 
	 	 	 	 
	 

	 	 	 	Sutura, Inc.

17080 Newhope Street

Fountain Valley, California 92708

Attention: Anthony A. Nobles, President and Chief Executive Officer

Facsimile: (714) 427-6354
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	Sheppard, Mullin, Richter & Hampton LLP

650 Town Center Drive, Fourth Floor

Costa Mesa, California 92626

Attention: Richard J. Babcock, Esq.

Facsimile: (714) 513-5130
	 
	 	 	 	 
	 

	 	(b)
	 	if to the Purchasers, in care of:
	 
	 	 	 	 
	 

	 	 	 	Whitebox Advisors, LLC

3033 Excelsior Boulevard, Suite 300

Minneapolis, Minnesota 55416

Attention: Jonathan Wood, Chief Financial Officer

Facsimile: (612) 253-6151
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	Messerli & Kramer P.A.

150 South Fifth Street, Suite 1800

Minneapolis, Minnesota 55402

Attention: Jeffrey C. Robbins, Esq.

Facsimile: (612) 672-3777.

     6.8. Indemnification by the Company. The Company agrees to indemnify and hold the Purchasers
harmless against any loss, liability, damage or expense (including reasonable legal fees and costs)
that the Purchasers may suffer, sustain or become subject to as a result of or in connection with
the breach by the Company of any representation, warranty, covenant or agreement of the Company
contained in this Agreement, the Notes, the Warrants, the Security Agreement or the Patent and
Trademark Security Agreement, dated as of this date, among the Company and the Purchasers.

- 17 -

 

     6.9. Expenses. At Closing, the Company shall pay the Purchaser’s counsel, Messerli
& Kramer P.A., $17,000 for its legal fees and expenses in representing the Purchasers in connection
with the transactions contemplated hereby. In addition, the Purchaser agrees to pay or reimburse
the Purchasers for their reasonable legal fees and expenses that they may incur after the date
hereof in connection with the review and approval of any matter relating to the Merger or the
granting of any waiver with respect to, the modification of any of the terms or provisions of or
the enforcement of any of the Transaction Documents.

     6.10. Titles and Subtitles. The titles of the sections and subsections of the Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

     6.11. Counterparts. This Agreement may be delivered via facsimile or other means of electronic
communication, and may be executed in counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.

     IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures.

	 	 	 	 	 	 	 	 	 
	Sutura, Inc.	 	 	 	Pandora Select Partners L.P.,

	 	 	 	 	 	 	Whitebox Hedged High Yield Partners L.P.,

	 	 	 	 	 	 	Whitebox Intermarket Partners L.P. and

	 	 	 	 	 	 	Whitebox Convertible Arbitrage

	By

	 	 	 	 	 	 	 	Partners L.P.
	 

	 	 	 	 	 	 	 	 
	 

	 	Anthony A. Nobles, President and

Chief Executive Officer	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Their	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Gary S. Kohler
	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Scot W. Malloy

- 18 -

 

Exhibit A

Form of Notes

- 19 -

 

Exhibit B

Form of Warrants

- 20 -

 

Exhibit C

Form of Registration Rights Agreement

- 21 -

 

Exhibit D

Form of Security Agreement

- 22 -

 

Exhibit E

Description of Collateral

     All assets of Sutura, Inc., a Delaware corporation (the “Company”), including without
limitation, the following:

     Inventory: All inventory of the Company as that term is defined in the Uniform Commercial
Code, whether now owned or hereafter acquired or in which the Company obtains rights, whether
consisting of whole goods, spare parts or components, supplies or materials whether acquired, held
or furnished for sale, for lease or for any other arrangements, or under contracts or for
manufacture or processing, and wherever located worldwide;

     Equipment: All equipment of the Company, whether now owned or hereafter acquired, including
all present and future machinery, vehicles, furniture, fixtures, office and recordkeeping
equipment, parts, tools, jigs, supplies and all other goods (except inventory) used or bought for
use by the Company for any business or enterprise and including specifically (without limitation)
all accessions thereto, all substitutions and replacements thereof, and all like or similar
property now owned or hereafter acquired by the Company, and all of which is owned by the Company,
and all deposits made on any such equipment;

     Deposit Accounts and Other Cash: All deposits and deposit accounts with any bank, savings and
loan association, credit union or like organization, and all funds and amounts therein, and whether
or not held in trust, or in custody or safekeeping, or otherwise restricted or designated for a
particular purpose, and all other cash or
marketable securities on hand, whether held in-vault or otherwise;

     Receivables: Each and every right of the Company to the payment of money, whether such right
to payment now exists or hereafter arises, whether such right to payment arises out of a sale,
lease or other disposition of goods or other property, out of a rendering of services, or of a
loan, out of the overpayment of taxes or other liabilities, or any other transaction or event,
whether such right to payment is created, generated or earned by the Company or by some other
person who subsequently transfers his, her or its interest to the Company, whether such right to
payment is or is not already earned by performance, and howsoever such right to payment may be
evidenced, together with all other rights and interests (including all liens and other security
interests) which the Company may at any time have by law or agreement against any account debtor or
other person obligated to make such payment or against any property of such account debtor or other
persons including, but not limited to, all present and future accounts, contract rights, chattel
paper, bonds, notes and other debt instruments, and rights to payment in the nature of general
intangibles; and to include, without limitation, each and every right of the Company to the payment
of money, whether such right to payment now exists or hereafter arises, out of a sale, lease or
other disposition of Inventory or Equipment;

     General Intangibles: All general intangibles of the Company whether now owned or hereafter
acquired, including (without limitation) all present and future U.S. and foreign patents,

- 23 -

 

patent applications, copyrights, trademarks, trade names, trade secrets, customer or supplier lists
and contracts, manuals, operating instructions, permits, franchises, the right to use the Company’s
name, the Company’s internet domain names and address and the goodwill of the Company’s business.

     Securities: All securities and other equity interests now owned or hereafter acquired by the
Company, including shares of capital stock of any now owned or hereafter acquired wholly owned or
partially owned subsidiary of the Company.

     The Collateral shall include (i) all substitutes and replacements for and proceeds of any and
all of the foregoing property, and in the case of all tangible Collateral, all accessions,
accessories, attachments, parts, equipment and repairs now or hereafter attached or affixed to or
use in connection with any such goods and (ii) all warehouse receipts, bills of lading and other
documents of title now or hereafter covering such goods.

- 24 -

 

Schedule 3.1

Subsidiaries

- 25 -

 

Schedule 3.2

Stock Matters

- 26 -

 

Schedule 3.6

Certain Agreements and Actions

- 27 -

 

Schedule 3.7

Related Party Matters

- 28 -

 

Schedule 3.8

Changes

- 29 -

 

Schedule 3.9

Properties Matters

- 30 -

 

Schedule 3.10

Intellectual Property Matters

- 31 -

 

Schedule 3.11

Compliance Matters

- 32 -

 

Schedule 3.12

Litigation

- 33 -

 

Schedule 3.14

Employment Matters

- 34 -

 

Schedule 3.15

Registration Rights

- 35 -

 

Schedule 3.16

Violations

- 36 -

 

Schedule 3.20

Product Liability Insurance

- 37 -

 

Schedule 3.22

Encumbrances on Collateral

- 38 -

 

Schedule 3.24

Brokers or Finders

     The Company owes a cash payment of $360,000 to Catalina Capital Advisors or its assigns in
connection with the closing on the transactions contemplated by this Agreement.

- 39 -

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