Document:

Exhibit
10.1

BIODIESEL
SALE AND PURCHASE AGREEMENT

(GREENVILLE,
MISSISSIPPI)

This
Biodiesel Sale and Purchase Agreement (“Agreement”) dated as of the 30th day of July, 2007, is by and between Nova
Biofuels Trade Group, LLC, a Delaware Limited Liability Company having its
offices at 363 N. Sam Houston Parkway East, Suite 630, Houston, TX 77060
(hereinafter referred to as “Seller”) and ConAgra Trade Group, Inc. a Delaware
corporation having its offices at Eleven ConAgra Drive, Omaha, Nebraska
(hereinafter referred to as “Purchaser”) (each of Seller and Purchaser is a “Party”
and together they are collectively referred to as the “Parties”).

RECITALS

WHEREAS,
Seller holds the right to receive certain quantities
of Biodiesel pursuant to that certain Tolling and Off-take Agreement between
Seller and Scott Petroleum, Inc. (“Scott”), dated March 7, 2007, as same may be
amended from time to time, at Scott’s Biodiesel production facility in
Greenville, Mississippi; and

WHEREAS,
Seller has agreed to sell to Purchaser, and Purchaser has agreed to purchase
from Seller, certain quantities of Biodiesel produced at the Plant on the terms
and conditions set forth hereinafter.

NOW,
THEREFORE, for the mutual promises and covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged, the Parties hereto
agree as follows:

ARTICLE
I

DEFINITIONS
AND INTERPRETATIONS

1.1                                 Definitions.  In this Agreement, including the recitals, the
following words and terms shall have the following meanings ascribed thereto:

a)              “Agreement” means this Biodiesel
Sale and Purchase Agreement.

b)             “Biodiesel” means
products meeting the specifications set forth on Exhibit 6.1 attached
hereto.

c)              “Certificate of
Analysis” has the meaning given in Section 6.2.

d)             “Confidential
Information” has the meaning given in Section 19.1.

e)              “Confirmed Orders”
has the meaning given in Exhibit 2.1.

f)                “Constructively
Placed” or “Constructive Placement” means, with respect to either (i) a loaded
shipment of Biodiesel by either railcars or trucks, that such railcars or
trucks are located at the Delivery Point in such condition ready for receipt by
Purchaser, or (ii) receipt of either railcars or trucks for Biodiesel loading,
that such railcars or trucks are located at the Delivery Point and within the
operating hours specified, in such condition ready for receipt by Seller.

g)             “Contract Year” means
the 12 month period during the Term starting on the Initial Supply Date and
ending on the day prior to the first anniversary of the Initial Supply Date and
each successive 12 month period during the Term starting on the anniversary of
the Initial Supply Date and ending on the day prior to the next succeeding
anniversary thereof.

h)             “Delivery” means the Biodiesel has
crossed the flange and resulted in the complete loading of the Biodiesel onto
the applicable Transport Vessel (barge, railcar, or truck).

i)                 “Delivery Point”
means for Transport Vessels the locations at the Terminal where Transport
Vessels are received for loading of Biodiesel on barges, railcars, or trucks,
respectively.  The Delivery Point for
rail car shipments is the railroads’ “Constructively Placed” designation.  The Delivery Point for trucks is the arrival
of the truck at the Terminal within the loading hours specified in this
Agreement.  The Delivery Point for barge
shipments is the Terminal at the earlier of the connection of the first hose to
the vessel or six (6) hours after notice of readiness is given at such port.

j)                 “Delivery
Schedule” has the meaning given in Exhibit 2.1.

k)              “Demurrage” means
all costs, damages, penalties and charges resulting from any delay in loading
and/or unloading of Biodiesel shipments, including, without limitation, any
delay related to any truck, rail car, or barge, as applicable: (i) being
incapable of timely loading any shipment of Biodiesel due to mechanical failure
or for other reasons, or (ii) delivering any shipment of Biodiesel to an
incorrect Delivery Point.

l)                 “Fees” means
either (a) $.025 per gallon of Biodiesel sold when the difference between the
Net Price of Biodiesel (calculated at a per gallon rate) and the Plant’s
feedstock cost per gallon is less than $.50, or (b) when the difference between
the Net Price of Biodiesel (calculated at a per gallon rate) and the Plant’s
feedstock cost per gallon is equal to or greater than $.50 per gallon, then the
greater of (i) 1.25% of the Net Price, or (ii) $.025 per gallon of Biodiesel
sold.

m)           “Force Majeure”  has the meaning given in Section 13.2.

n)             “Initial Supply Date”
means the first day of the calendar month in which Seller sells and delivers to
Purchaser Biodiesel, or Nonconforming Product accepted by Purchaser which has
been produced at the Plant.

o)             “Initial Term” has
the meaning given in Section 3.1.

p)             “Logistics” means
activities related to or connected with either (i) transporting, storing and
otherwise handling Biodiesel after Delivery to Purchaser hereunder, or (ii)
delivery of Transport Vessels to the Delivery Point for loading.

q)             “Logistics Costs”
shall mean the costs (including any and all duties and other customs costs, as
well as railcar lease costs),without markup, for providing Logistics.

r)                “Net Price” means
the price per gallon of Biodiesel (a) invoiced by Purchaser to its unaffiliated
third party customers or (b) otherwise payable by Purchaser when it is the
principal buyer, in each case less applicable Logistics Costs; subject,
however, to adjustment for quantity, price and tax incentive if Biodiesel is
blended prior to sale.

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s)              “Nonconforming Product”
means any product delivered (or attempted to be delivered) by Seller hereunder
(a) which does not meet the specifications set forth in Exhibit 6.1, or
(b) for which an RIN has not been timely generated, assigned and documented in
accordance with applicable law.

t)                “Normal Operating
Hours” has the meaning given in Section 8.3.

u)             “Plant” means the
Biodiesel production plant owned and to be operated by Scott for the production
of 20 million gallons of biodiesel product per annum (prior to any expansion
thereof) and to be located at Greenville, Mississippi.

v)             “Price” means an
amount equal to the Net Price less Fees.

w)           “Project Control
Account” means the bank account as established by Seller’s lenders and as
designated by Seller to Purchaser in writing.

x)               “Renewal Term” has
the meaning given in Section 3.2.

y)             “Representatives” has
the meaning given in Section 19.2.

z)               “RIN” means
Renewable Identification Number that complies with the rules and regulations
relating to the Renewable Fuel Standards Program of the Environmental
Protection Agency.

aa)        “Scott” has the meaning
given in the first recital.

bb)      “Storage Costs” means direct
or indirect costs incurred by Purchaser or charged by a third party for storing
Biodiesel together with insurance and all other charges incurred to third
parties in connection with such storage, without markup by Purchaser.

cc)        “Term” means the Initial
Term and any Renewal Terms.

dd)      “Terminal” means the site
and facilities of the applicable terminal operator (“Terminal Operator”)
serving the Plant operations, whether Scott, Seller, or a third party.

ee)        “Terminal Operator” has
the meaning given in Section 1.1(dd).

ff)            “Transport Vessels”
means barges, railcars, or tank trucks.

1.2                                 Interpretation.  Whenever the singular or masculine neuter
is used in this Agreement the same shall be construed as meaning plural or
feminine or body politic or corporate and vice versa where the context or the
Parties hereto so requires.

1.3                                 Industry
Usage.  Any word, phrase or
expression that is not defined in this Agreement and that has a generally
accepted meaning in the custom and usage in the biodiesel industry shall have
that meaning in this Agreement.

1.4                                 Currency.  All references to “dollars” or “$” in this
Agreement shall be references to amounts expressed in United States
currency.  All calculations of monetary
sums shall be made in U.S. currency.

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ARTICLE
II

PLANNING

2.1                                 The
planning, ordering, delivery and inventory management procedures for Biodiesel
are established in Exhibit 2.1.

ARTICLE
III

TERM

3.1                                 Initial Term. This Agreement shall become
effective as of the date signed by Seller and Purchaser and shall extend until
the later of (a) ten (10) years from the Initial Supply Date, or (b) May 1,
2018, unless extended either by mutual agreement of the Parties or due to a
delay (up to a maximum of one (1) year) caused by an event of Force Majeure
pursuant to Section 13.1 (the “Initial Term”). 
Either Party shall have the right on fifteen (15) days prior written
notice to the other Party to terminate this Agreement if the Initial Supply
Date has not occurred by May 1, 2008 (unless such date is extended either by
mutual agreement of the Parties or due to a delay (up to a maximum of one (1)
year) caused by an Event of Force Majeure). 
Upon any such termination no Party shall have any liability to the other
Party with respect to this Agreement or the transactions contemplated hereby
except in respect to confidentiality obligations under Article XVIII.

3.2                                 Renewal Terms. The Parties may, by written mutual
agreement, extend this Agreement for successive five (5) year terms (each a “Renewal
Term”), provided, however, that such extension agreement shall have been
executed by the Parties no later than six (6) months prior to the end of the
then-current Term.

ARTICLE
IV

PURCHASE,
SUPPLY AND DELIVERY OBLIGATIONS

4.1                                 Delivery. Subject to Confirmed Orders and
the other terms and conditions herein, commencing on the Initial Supply Date
and during each Contract Year thereafter, it is expected that Seller shall sell
and make available for delivery to Purchaser, and Purchaser shall purchase and
take delivery of, approximately 10,000,000 gallons annually of Biodiesel
produced at the Plant.

4.2                                 Purchase Shortfall.  If Purchaser fails to purchase and take
delivery of any quantities of Biodiesel specified in Confirmed Orders, and
Seller, using commercially reasonable efforts to mitigate any damage, has
produced and must sell such Biodiesel to a substitute purchaser at a price
lower than the applicable Price, Purchaser shall pay Seller the amount by which
the Price exceeds the actual sales price per gallon, multiplied by the number
of gallons sold to the substitute purchaser. 
If Seller exercises commercially reasonable efforts and is still unable
to sell any such Biodiesel to a substitute purchaser, then Purchaser shall pay
Seller an amount equal to the Price multiplied by the entire unsold
portion.  Purchaser shall remit payment
within fifteen (15) days of receiving an invoice from Seller.  In either case, Purchaser shall also pay any
additional costs solely and directly incurred by Seller to identify a
substitute purchaser.  The remedy
specified in this Section 4.2 shall be Seller’s sole and exclusive remedy in
the event Purchaser fails to purchase and take delivery of the Biodiesel
specified in the Confirmed Order.

4.3                                 Seller Delivery Shortfall.  If Seller fails to make available for
purchase the quantity of Biodiesel specified in Confirmed Orders under the Delivery
Schedule, and Purchaser,

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using commercially reasonable efforts to mitigate the
damage, is unable to obtain a substitute supply of Biodiesel at a price equal
to or less than the Price, Seller shall pay Purchaser the amount by which the
Price is less than the price paid by Purchaser for substitute supply, multiplied
by the delivery shortfall (Confirmed Order quantity less the amount actually
delivered by Seller); plus any additional costs solely and directly incurred by
Purchaser to identify a substitute purchaser. 
The remedy specified in this Section 4.3 shall be Purchaser’s sole and
exclusive remedy in the event that Seller fails to make available for purchase
the quantity of Biodiesel specified in the Confirmed Order.

4.4                                 Quarterly Payment Reconciliation. No later
than the third (3rd)
business day following the end of every third month during each Contract Year,
each Party shall submit to the other an invoice and appropriate documentation
for all amounts due pursuant to Sections 4.2 and 4.3 for the preceding
three-month period.  Within five (5)
business days thereafter, Seller and Purchaser shall reconcile amounts due each
other as provided in this Section.  Any
amounts due pursuant to Sections 4.2 and 4.3 shall be paid within five (5)  business days after such reconciliation.

4.5                                 Purchaser’s Responsibilities. In addition
to, and without limiting Purchaser’s other obligations hereunder, Purchaser
shall:

4.5.1                        Establish,
monitor and communicate logistics to ensure the shipment of Biodiesel purchased
hereunder in accordance with the applicable Delivery Schedule and Confirmed
Orders.

4.5.2                        Be
responsible for the management of railcars (including Purchaser’s leased
railcars), barges and trucks related to Confirmed Orders, in accordance with
Article VIII.

4.5.3                        Provide
Seller with estimated annual Biodiesel requirements and delivery schedules to
assist Seller in preparing the Delivery Schedule.

4.6                                 Seller’s Responsibilities.  In addition to, and without limiting Seller’s
other obligations hereunder, Seller shall:

4.6.1                        Inform
Purchaser of all scheduled plant shutdowns at least forty five (45) days prior
to the beginning of each fiscal year of Seller, and within forty eight (48)
hours after Seller becomes aware of the occurrence of any event that may result
in an unscheduled Plant shutdown.

4.6.2                        Provide a
designated individual for daily operational and logistic issues, and provide a
designated individual for pricing and other contractual issues, associated with
Confirmed Orders.

4.6.3                        Cause
Scott to handle and supervise the loading and dispatch of Biodiesel, prepare
delivery documentation and generally be responsible for all logistics ancillary
to such matters in accordance with Article VIII.

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ARTICLE
V

QUANTITY

5.1                                 Delivery.  Following
the Initial Supply Date, delivery and receipt of Biodiesel purchased hereunder
shall take place at the Terminal loading facility or dock in accordance with
the applicable Confirmed Order.

5.2                                 Quantities.  The
quantity of Biodiesel delivered to Purchaser shall be established by outbound
weight certificates.  The certificates
shall be obtained from either scales, certified metering devices, or
surveyor-gauged shore weights which are certified as of the time of weighing
and which comply with all applicable laws, rules and regulations.  The outbound weight certificates shall be
determinative in the absence of manifest error of the quantity of Biodiesel for
which Purchaser is obligated to pay pursuant to Article VII.

ARTICLE
VI

QUALITY;
RIN COMPLIANCE

6.1                                 Specifications.  Seller warrants that all Biodiesel delivered
by Seller to Purchaser hereunder shall meet the specifications set forth in Exhibit
6.1 at the time of Delivery of such Biodiesel by Seller to Purchaser.  Seller further represents and warrants that
title to all Biodiesel delivered and sold hereunder will be good and
marketable, free and clear of all liens, security interests, other
encumbrances, or adverse claims of any kind. 
Except as set forth in the preceding sentences, Seller makes no warranty
whether expressed, implied, statutory or otherwise, concerning the Biodiesel
sold hereunder, and Seller expressly disclaims any implied warranty of
merchantability or fitness or suitability for a particular purpose.

6.2                                 Certification.  Seller will cause Scott to issue a
certificate of laboratory analysis (“Certificate of Analysis”) to Purchaser for
each shipment, confirming that the shipment of Biodiesel conforms to the
specifications in Exhibit 6.1.  Testing
procedures will be certified periodically by an independent laboratory.   Seller will cause Scott to use its best
efforts to obtain and to thereafter renew and maintain, BQ9000 certification
for the Plant within one (1) year after the Initial Supply Date.

6.3                                 Samples. 
Seller agrees to maintain original sealed numbered samples of all
Biodiesel prior to delivery to Transport Vessels.  Seller will label these samples to indicate
date of shipment and the identity of the Transport Vessel.  Seller will retain these samples for six (6)
months and shall send one such sample of each requested shipment to Purchaser
or its designated representative or agent promptly upon Purchaser’s request.

6.4                                 Renewable Identification Numbers.  Seller will timely generate, assign and
document RINs for all Biodiesel sold hereunder in accordance with applicable
laws and regulations.

6.5                                 Nonconforming Product. If Biodiesel
delivered from the Plant is found to be out of specification by Purchaser or by
an independent laboratory using approved ASTM analysis and sampling methods,
after Delivery, such condition will be immediately communicated to Seller.  Purchaser will provide a copy of the
certified laboratory report(s) evidencing such Nonconforming Product.  Seller will then direct Purchaser to either
(i) sell the Nonconforming Product at a discounted price, or (ii) return the
Nonconforming Product to Seller.  If such
Nonconforming Product is not discountable, Seller may replace the Nonconforming
Product with an acceptable type and/or quality of Biodiesel within fifteen (15)
days of receipt of written notice that the delivered Biodiesel is

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nonconforming and such nonconformance has been
confirmed.  In the event Seller cannot
replace the Nonconforming Product within the fifteen (15) day period, Purchaser
shall have the option to return the Nonconforming Product, withhold payment
therefor and purchase replacement Biodiesel.

Purchaser will
immediately notify Seller in the event any Biodiesel is not timely accompanied
by properly-documented RINs.  In the
event Seller does not provide such documentation within one (1) business day
thereafter, Purchaser shall have the option of returning such Nonconforming
Product, withholding payment therefor and purchasing replacement Biodiesel.

Seller will be
responsible for all costs of replacing and disposing of any Nonconforming
Product, including any costs reasonably incurred by Purchaser as a result of
the Nonconforming Product and/or any unreasonable delay by Seller in obtaining
conforming Biodiesel.  Such costs may
include, without limitation, reasonably incurred Storage Costs, Logistics Costs
and other costs reasonably incurred by Purchaser to return such Nonconforming
Product to Seller.  If such Nonconforming
Product is sold by Purchaser at a discount, the Price payable by Purchaser will
be calculated in the normal manner.

ARTICLE
VII

PRICE

7.1                                 Price. 
For all sales of Biodiesel to Purchaser hereunder, Purchaser agrees to
pay Seller the Price for each gallon of Biodiesel delivered to Purchaser, such
quantity to be as determined in accordance with Section 5.2.  In determining the Price, it is agreed that
feedstock costs shall be calculated on a first-in, first-out basis.  Purchaser shall furnish Seller with the
applicable Net Price, and Seller shall provide Purchaser with the Plant’s
feedstock costs (on a per-gallon basis) so that Purchaser can verify the Net
Price.

7.2                                 Taxes. 
Seller shall pay or cause to be paid all valid levies, assessments,
duties, rates and taxes (together “Taxes”) on Biodiesel delivered hereunder
that arise prior to, or as a result of, the sale and Delivery of Biodiesel
hereunder.  Purchaser shall pay or cause
to be paid all Taxes, including fuel or excise Taxes, on Biodiesel arising
after the sale and Delivery of Biodiesel. 
Any and all state or federal tax, production, investor, or U.S. excise
credits, any and all emissions credits, other government incentives or credits
or benefits relating to the production of Biodiesel or the sale thereof to
Purchaser, shall inure solely to the benefit of Seller.

ARTICLE
VIII

TRANSPORTATION
AND LOGISTICS

8.1                                 Logistics Responsibilities.  Purchaser agrees to secure and maintain all
necessary agreements, licenses, documents and contracts to transport Biodiesel
purchased hereunder from the Delivery Point following Delivery by Seller.  Purchaser shall solely be responsible for the
arrangement of Logistics which arise prior to the Transport Vessel reaching the
Delivery Point, and which arise after Delivery. 
Seller shall be responsible for all logistics which arise once the
Transport Vessel has reached the Delivery Point up through Delivery.

8.2                                 Logistics Costs.  Purchaser will use the same general efforts
to minimize Logistics Costs as it does for its own operations.  Seller acknowledges that the Logistics
requirements

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hereunder may, due to the cargo involved and other
factors, be different from the Logistics needs for Purchaser’s other operations.

8.3                                 Seller’s Demurrage Obligations.  Seller’s responsibility for Demurrage as it
applies to rail car shipments begins to accrue seventy-two (72) hours after the
rail car has reached the Delivery Point provided that the Constructive
Placement occurs between the hours of 6:00 a.m. and 6:00 p.m., Monday through
Friday excluding holidays (“Normal Operating Hours”), otherwise Demurrage will
begin to accrue seventy-two (72) hours after the start of Normal Operating
Hours following Constructive Placement.  Seller’s responsibility for Demurrage for tank
trucks will begin to accrue (i) after the second (2nd) hour waiting to load at
the Plant provided the tank truck arrived during Normal Operating Hours or (ii)
after the twelfth (12th)
hour waiting to load at the Plant if arrival is outside the dates and times
specified in clause (i).  Seller’s
responsibility for Demurrage for barges begins to accrue upon arrival of such
Transport Vessel at the Delivery Point. 
It is understood that in the event Purchaser transports Biodiesel
hereunder using freight carriers that extend Demurrage terms more favorable
than those set out above, such terms shall govern Seller’s Demurrage
obligations.  Further, the parties agree
that any Demurrage obligations borne by Seller shall be limited to the actual
obligations imposed by the demurrage provisions of the freight contract
relating to the specific Transport Vessel to which such Demurrage relates.

8.4                                 Purchaser’s Demurrage Obligations.  Purchaser will, with respect to Biodiesel sold
hereunder, coordinate all Logistics for arrival of Transport Vessels at
Delivery Points and shipment of such Biodiesel product from Delivery Points.
Purchaser shall be responsible for Demurrage  (i)
for the time period between the point of origin of Transport Vessel to the
Delivery Points, (ii) for the time period between Delivery of Biodiesel product
to the point of sales, and (iii) as a result of any failure of arriving
Transport Vessels to meet Transport Vessel requirements of Exhibit 6.1.

8.5                                 Notification of Problems with Delivery.  Seller shall inform Purchaser of any problem
regarding any shipment of Biodiesel, without delay, by fax and telephone after
Seller becomes aware of any such problem. 
An example of this includes, but is not limited to the possible event
that one or more Biodiesel orders are not available from Seller in the quantity
originally set out in the Confirmed Order. 
Purchaser shall inform Seller, without delay, by fax or telephone of any
problems in delivering Transport Vessels in accordance with the Delivery
Schedule or taking any shipment of Biodiesel.

ARTICLE
IX

BILLING AND PAYMENTS

9.1                                 Payment Terms.  For all Biodiesel delivered hereunder,
Purchaser shall pay to Seller the amount calculated according to Article VII
above by direct wire transfer or electronic transfer of immediately available
funds to Seller’s Project Control Account. 
Payments will be made within fifteen (15) days from receipt of
invoice.  The Parties agree that payment
terms may, as mutually agreed, be revised to reflect current market terms.

9.2                                 Billing Information.  For each shipment of Biodiesel to Purchaser,
Seller shall furnish the following in reasonable detail: (i) an invoice giving
the actual quantity and date of shipment of the Biodiesel, (ii) the documentation
described in Section in 6.2, (iii)  a
copy of the bill of lading, and (iv) the feedstock costs as described in
Section 7.1.

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9.3                                 Payment Verification.  Any payment made pursuant to this Article
will not preclude a Party from subsequently verifying payments of the other
Party as permitted in Article XV of this Agreement.

ARTICLE
X

POSSESSION
AND TITLE

10.1                           Title; Risk of Loss.  Title to and risk of loss in Biodiesel
purchased hereunder shall pass from Seller to Purchaser upon Delivery.  Until such time, Seller shall be deemed to be
in control of and in possession of and shall have title to and risk of loss in
the Biodiesel.

10.2                           Responsibility for Product.  Purchaser shall have no responsibility or
liability with respect to any Biodiesel deliverable under this Agreement until
Delivery.  Without prejudice to Purchaser’s
right to reject Nonconforming Product as set forth in Article VI and without
affecting Seller’s liability for the Delivery of Nonconforming Product.  Seller shall have no responsibility or
liability with respect to the Biodiesel after its Delivery or on account of
anything which may be done or happen to arise with respect to such Biodiesel
after such Delivery.

10.3                           Product Insurance.  Purchaser shall, in respect to CIF shipments
to its customers, bear the cost of insurance with respect to the Biodiesel
after Delivery thereof.

ARTICLE
XI

REPRESENTATIONS,
COVENANTS AND WARRANTIES

11.1                           Seller Representations.  Seller represents, warrants and covenants to
Purchaser, as of the date hereof and at all times during the Term, as follows
and acknowledges that Purchaser is relying upon such representations and
warranties in connection with the purchase of Biodiesel hereunder:

a)                                      Seller
is duly organized and a validly existing limited liability company under the
laws of the State of Delaware with full power and authority to carry on its
business, to enter into this Agreement and to fully carry out its terms;

b)                                     The
execution and delivery of this Agreement and the completion of the transactions
contemplated herein have been duly and validly authorized by all necessary
action on the part of Seller;

c)                                      There
is no action, proceeding or inquiry pending or, to Seller’s knowledge,
threatened, against Seller or any of its affiliates, nor does Seller know of or
have any reason for believing there is any action, proceeding or inquiry, in
either case which may materially affect its ability to carry out its
obligations hereunder;

d)                                     Seller
will have title to all Biodiesel to be delivered hereunder, the right to sell the
same to Purchaser, and the Biodiesel delivered hereunder will be delivered free
from any liens and encumbrances other than those to a bank or other financing
source;

e)                                      Seller
covenants that it shall procure and maintain in force all licenses, consents and
approvals required for its procurement and sale to Purchaser of the Biodiesel
under this Agreement and shall be solely responsible for and indemnify

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Purchaser against any
costs, liabilities or fines arising out of Seller’s failure to comply with any
applicable requirements of such licenses, consents and approvals;

f)                                        Seller
covenants that it will maintain accurate and complete production and delivery
records in a prudent and businesslike manner in accordance with sound
commercial practices in respect of the Biodiesel produced by Seller hereunder;

g)                                     Seller
covenants that it will promptly notify Purchaser of any actual or anticipated
production downtime or disruption to Biodiesel availability; and

h)                                     Seller
is a limited liability company in good standing in the jurisdiction of its
organization and is authorized to conduct business in each state where the
nature of its business requires such authorization and is a U.S. entity for
purposes of state and federal income and excise taxes.

11.2                           Purchaser Representations.  Purchaser represents, warrants and covenants
to Seller, as of the date hereof and at all times during the term of this
Agreement, as follows and acknowledges that Seller is relying upon such
representations and warranties in connection with the sale of Biodiesel
hereunder:

(a)                                  Purchaser
is duly incorporated and a validly existing corporation under the laws of the
State of Delaware with full power and authority to carry on its business, to
enter into this Agreement and to fully carry out its terms;

(b)                                 The
execution and delivery of this Agreement and the completion of the transactions
contemplated herein have been duly and validly authorized by all necessary
corporate action on the part of Purchaser;

(c)                                  There
is no action, proceeding or inquiry pending or, to Purchaser’s knowledge,
threatened, against Purchaser or any of its affiliates, nor does Purchaser know
of or have any reason for believing there is any action, proceeding or inquiry,
in either case which may materially affect its ability to carry out its
obligations hereunder;

(d)                                 Purchaser
is a corporation in good standing in the jurisdiction of its incorporation and
is authorized to conduct business and is in good standing in each jurisdiction
where the nature of its business requires such authorization and is a U.S.
entity for purposes of state and federal income and excise taxes; and

(e)                                  Purchaser
covenants that it shall procure and maintain in force all licenses, consents
and approvals required for its purchase and export of Biodiesel hereunder and
all its other obligations under this Agreement and shall be solely responsible
for and indemnify Seller against any costs, liabilities or fines arising out of
Purchaser’s failure to comply with any applicable requirements of such
licenses, consents and approvals.

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ARTICLE
XII

DEFAULT AND TERMINATION

12.1         Termination by Mutual Agreement.  This Agreement may be terminated upon mutual
written agreement between the Parties.

12.2         Termination By Either Party.  Except as otherwise provided in this
Agreement, either Party may immediately terminate this Agreement upon written
notice to the other Party if:

(a)           The other Party
defaults on any material term, covenant or condition hereunder and fails to
cure such default within sixty (60) days after receiving written notice thereof
from the non-defaulting Party; or

(b)           Such other Party
becomes the subject of any bankruptcy, insolvency or similar proceedings.

12.3         Termination for Non-Performance.

(a)           If either Party does
not make payment or delivery as required hereunder, the non-defaulting Party
may immediately terminate this Agreement if such default is not cured within
ten (10) days of delivery of written notice to the defaulting Party.

(b)           If the Seller fails to
make Deliveries in accordance with the terms of Confirmed Orders for a period
of sixty (60) consecutive days, such action shall be deemed an event of default
and (notwithstanding any term to the contrary in Section 4.3 hereof), the
Purchaser shall have the right to immediately terminate this Agreement upon
delivery of written notice to the Seller. 
For purposes of calculating such sixty (60) day period, each day for
which there is no Delivery scheduled (pursuant to a Confirmed Order), shall be
deemed to be a day on which the Seller has failed to Deliver.

12.4         Termination for Force Majeure. In the event
that Force Majeure shall continue unabated for a period of six (6) months from
the date the Party claiming relief under Article XIII gives the other Party
notice of Force Majeure in accordance with the provisions of Article XIII,
either Party hereto shall have the right to terminate this Agreement by
furnishing written notice to the other no less than thirty (30) days prior to
the expiration of such six (6) month period, with termination effective only
upon the expiration date of such six (6) month period.

12.5         Rights and Obligations on Termination.   Except as otherwise provided in this Article
XII, any rights of Purchaser or Seller to receive payments accrued through
termination, as well as obligations of the Parties under Confirmed Orders for
the delivery of Biodiesel to Purchaser that exist at the time of such
termination, shall remain in effect notwithstanding any termination of this
Agreement.  The above notwithstanding,
Seller shall have no obligation to supply Biodiesel to Purchaser after
termination, provided that such termination is due to a breach by Purchaser of
its payment obligations under this Agreement. Purchaser shall have no
obligation to order any shipments of Biodiesel after termination or, subject to
the first sentence of this Section 12.5, to accept or pay for shipments of
Biodiesel, if Purchaser terminates this Agreement pursuant to Section 12.2 or
12.3.  Upon termination of this
Agreement, each Party shall be relieved from its respective obligations, except
(i) as set forth in this Section 12.5, (ii) for obligations for payment of
monetary sums which arose prior to termination, and (iii) for obligations 

 11
 

under the confidentiality provisions set forth in
Article XVIII and the rights and obligations set forth in Article XIV and
Article XVII.

12.6         Non-Waiver of Future Default.  No waiver by either Party of any default by
the other Party in the performance of any of the provisions of this Agreement
will operate or be construed as a waiver of any other or future default or
defaults, whether of a like or of a different character.

ARTICLE
XIII

FORCE MAJEURE

13.1         Force Majeure.  In the event either Party hereto is
rendered unable by reason of Force Majeure, as defined in Section 13.2, to
carry out its obligations under this Agreement, such Party shall give written
notice and reasonably complete particulars of such Force Majeure to the other
Party stating the obligation(s) the performance of which are, or are expected
to be, delayed or prevented, as soon as possible after the occurrence of the
event.  The obligations of the Party
giving such notice shall be suspended during and to the extent affected by
Force Majeure and such event shall, so far as possible, be remedied with all reasonable
dispatch.  In the event Purchaser
declares Force Majeure, Seller may contract for the sale of Biodiesel to other
parties until Purchaser can resume taking delivery.  The Initial Term shall be extended, up to a
maximum total of one (1) year (subject to Section 12.4), for the period(s) during
which a Party’s obligations are suspended hereunder by Force Majeure.

13.2         Definition of Force
Majeure.  The term “Force Majeure”,
as used in this Agreement, shall mean any cause not reasonably within the
control of the Party claiming suspension and which, by the exercise of due
diligence, such Party is unable to prevent or overcome.  Such term shall include, but not be limited
to: (i) acts of God, (ii) strikes, lockouts or other industrial acts of the
public enemy, (iii) wars, blockades, insurrections, riots, epidemics, and acts
of terrorism, (iv) transportation shortages, and (v) landslides, lightning,
earthquakes, fires, storms, floods, and washouts.  The term “Force Majeure” shall specifically
include those events affecting any transporter of Biodiesel acting on behalf of
Purchaser but shall in all events exclude any economic or commercial changes
involving the production of Biodiesel. 
Events directly and proximately caused by the gross negligence or
willful misconduct of a Party or its affiliates shall in no event constitute
Force Majeure.

ARTICLE
XIV

LIMITATION OF LIABILITY;
INDEMNIFICATION

14.1         Limitation of Liability.  Without limiting any express remedies set
forth in this Agreement, and except for any acts of willful misconduct or
fraud, or damages arising from third-party product liability and product
warranty claims, neither Seller nor Purchaser will be liable to each other or
any third party for any indirect, consequential, punitive, exemplary or special
damages, loss of business expectations, lost profits, business interruptions,
or any damage to third parties arising out of this Agreement or any breach of
this Agreement.  Under no circumstances
(other than for willful misconduct or fraud) will either Party be liable to the
other for any damages for breach that arise under this Agreement, and exceed
the total amount of $200,000.  In the
event such excess damages arise, the sole remedy of the damaged Party shall be
to terminate this Agreement.  The
foregoing limitations shall not apply in respect to (a) the payment by
Purchaser for Biodiesel received hereunder, (b) the obligation of Seller to
reimburse 

 12
 

Purchaser for any payment made for nonconforming or
undelivered Biodiesel, (c) Claims asserted under Section 14.2, (d) damages
arising from third-party product liability and product warranty claims, or (e)
damages covered by the insurance required in this Agreement.

14.2         Indemnification.  Each Party (the “Indemnitor”) shall release,
defend, indemnify and hold harmless the other Party, its affiliates, its
contractors, and their respective members, partners, directors, officers,
shareholders, managers, employees, agents, representatives and insurers
(collectively, the “Indemnitee Group”) from and against any and all losses,
damages, fines, liens, levies, penalties, claims, demands, causes of action,
suits, legal or administrative proceedings, orders, governmental actions and
judgments of every kind and character, and any and all costs and expenses
(including, without limitation, reasonable attorneys’ fees, reasonable expert
witness fees, and court costs) related thereto (collectively, “Claims”) which
arise out of, or result from, directly or indirectly, (a) a breach of this
Agreement by the Indemnitor, or (b) the negligence or willful acts or omissions
hereunder of the Indemnitor, its affiliates, 
contractors, and their respective members, partners, directors,
officers, shareholders, managers, employees, agents, representatives and
insurers.

Seller shall defend, indemnify and hold Purchaser (and
its respective Indemnitee Group) harmless from and against any and all Claims
asserted by third parties that arise from the condition or quality of the
Biodiesel sold hereunder, except to the extent such Claims are the result of
Purchaser’s negligence.

The Party claiming indemnification shall give prompt
written notice to the Indemnitor of any matter for which the Indemnitor may
become liable under this provision.  Said
notice shall contain full details of the matter in order to provide the
Indemnitor with sufficient information to assess its potential liability and to
undertake defense of the Claim. The indemnified Party shall have the right at
all times to participate in the preparation for and conducting of any hearing,
trial or other proceeding related to the provisions of this Article, as well as
the right to appear on its own behalf at any such hearing, trial or other
proceeding.  Any such participation or
appearance by the indemnified Party shall be at its sole cost and expense.  The indemnified Party shall cooperate in all
reasonable respects with the Indemnitor and its counsel in defending any Claims
and shall not take any action that is reasonably likely to be detrimental to
such defense.  The Indemnitor shall
obtain written approval from the indemnified Party prior to any settlement that
might impose obligations or restrictions on the indemnified Party.

ARTICLE
XV

RECORDS AND VERIFICATION

15.1         Books and Records. Purchaser will establish
and maintain at all times, true and accurate books, records and accounts in
accordance with United States generally accepted accounting principles applied
consistently from year to year consistent with good industry practices,
distinguishable from all other books and records of Purchaser, in respect of
all prices paid, payments, statements charges and computations made pursuant to
this Agreement and will preserve these books, records and accounts for a period
of at least one year after the expiration of the Term.  Seller will, or will cause Scott to,
establish and maintain at all times true and accurate records of, all Biodiesel
production, deliveries and sales (including prices charged), payments received,
feedstock costs, quality certificates and test records.  The Parties shall preserve, and Seller shall
cause Scott to preserve, such records for at least one (1) year after the
expiration of the Term, but in no event 

 13
 

shall a Party (or Scott) be obligated to retain
records longer than seven (7) years from the date of creation.

15.2         Audit Rights. Upon five (5) business days notice
and during normal business hours each Party shall have the right, and Seller
shall cause Scott to extend the right to audit such books, records and accounts
of the other Party (and Scott) to the extent necessary in order to verify the
accuracy of any statement, charge, computation or demand made under or pursuant
to any provision of this Agreement.  If
any material error is discovered in any statement rendered hereunder, such
error will be adjusted within seven (7) days from the date of discovery, but no
adjustment will be made for errors discovered more than two (2) years after
delivery and receipt of such statements. 
Any error or discrepancy detected which has led to an overpayment or an
underpayment between the Parties shall be corrected by a balancing payment to
the Party that received the underpayment or by a refund by the Party that
received the overpayment in each case to the extent of such underpayment or
overpayment as applicable.  Such
balancing payment or refund shall be made no later than five (5) days from the
date of the adjustment of the underlying error.

ARTICLE
XVI

NOTICES

16.1         Addresses. 
Except as specifically otherwise provided herein, any notice or other
written matter required or permitted to be given hereunder by one Party to the other
Party shall be deemed to be sufficiently given if delivered by hand or via
nationally-recognized overnight courier, or sent by telecopy and confirmed by
U.S. mail (certified mail, return receipt requested), and addressed as follows:

	
  If to Purchaser:

  	
   

  	
  ConAgra Trade Group, Inc.

  
	
   

  	
   

  	
  Eleven ConAgra
  Drive

  
	
   

  	
   

  	
  Omaha, NE
  68102-5011

  
	
   

  	
   

  	
  Fax: (402)
  977-9808

  
	
   

  	
   

  	
  Attn:

  	
  Bill Davis

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  ConAgra Foods, Inc.

  
	
   

  	
   

  	
  One ConAgra
  Drive

  
	
   

  	
   

  	
  Omaha, NE 68102

  
	
   

  	
   

  	
  Fax:

  	
  (402) 595-6149

  
	
   

  	
   

  	
  Attn:

  	
  Capital and
  Contracts

  
	
   

  	
   

  	
   

  
	
  If to Seller:

  	
   

  	
  Nova Biofuels Trade Group, LLC

  
	
   

  	
   

  	
  363 N. Sam
  Houston Parkway East, Suite 630

  
	
   

  	
   

  	
  Houston, TX
  77060

  
	
   

  	
   

  	
  Fax:

  	
  (713) 482-0288

  
	
   

  	
   

  	
  Attn:

  	
  Dallas Neil

  
					

 

16.2         Change of
Address.  Each Party shall give
notice within thirty (30) days to the other Party, in the manner herein
provided, of a change in its address for notice.

16.3         Effective
Date of Notice.  Any notice or
other written matter shall be deemed to have been given and received: if
delivered by hand, on the date of delivery; and, if sent by telecopy, on the
business day following the sending of the notice.

 14
 

ARTICLE
XVII

MISCELLANEOUS

17.1         Assignment. 
Neither Party may assign this Agreement in whole or in part or any of
its rights or obligations hereunder, without the prior written consent of the
other Party, which consent may not be unreasonably withheld or delayed, except
that:  (a) Seller may assign its rights
(subject to its obligations) in this Agreement to any lender providing primary
debt or equity financing arrangements for the benefit of Seller and/or its any
affiliates in respect to the Plant, and (b) Purchaser may assign this Agreement
to a purchaser of its grain merchandising business, biofuel business or trading
business.

17.2         Waiver. 
No delay or omission in the exercise of any right, power, or remedy
hereunder shall impair such right, power, or remedy or be construed to be a
waiver of any default or acquiescence therein.

17.3         Dispute Resolution. Except where a
different dispute resolution mechanism is specified herein, in the event a
dispute arises in connection with the performance or non-performance of this
Agreement, either Party has the right to notify the other Party in writing of
the substance of such dispute.  The Party
receiving such notice must respond in writing within thirty (30) days of
receipt of such notice and either (a) provide evidence that the matter has been
resolved, or (b) provide an explanation of why it believes that its performance
is in accordance with the terms of this Agreement and specify three (3) dates,
all of which must be within thirty (30) days from the date of its response, for
a meeting to resolve the dispute.  The
notifying Party will then select one (1) of the three (3) dates, and a dispute
resolution meeting will be held among management-level representatives of each
Party.  If the Parties cannot, in good
faith discussions, resolve their dispute at such meeting, either Party may
request that the dispute be submitted to senior executives representing each
Party who are authorized to resolve such dispute, respectively.  If said dispute cannot be settled within
thirty (30) days after the initial request for a senior executive level
meeting, the Parties shall submit such matter to arbitration using a sole arbitrator
under the Commercial Arbitration Rules of the American Arbitration Association,
or using another independent arbitrator and set of rules mutually acceptable to
the Parties; provided, however, such matter so arbitrated shall solely involve
commercial aspects of the delivery of Biodiesel (otherwise, the Parties shall
have available whatever rights or remedies exist at law or equity). The
arbitrator shall have no power to award damages inconsistent with this
Agreement.  All aspects of the
arbitration shall be treated as confidential and judgment on the arbitrator’s
award may be entered in any court having jurisdiction.  The expenses of the arbitrator shall be
shared equally by the Parties, and each Party shall bear its own legal costs,
unless the arbitrator determines that legal costs shall be otherwise
assessed.  Nothing contained in any
indemnification provision hereunder shall be construed as having any bearing on
the award of attorney’s fees under this Section.  The foregoing dispute-resolution process
shall in no event be deemed to excuse either Party from continuing to fulfill
its respective obligations under, or prevent or impede either Party from
exercising its rights or remedies set forth in, this Agreement.

17.4         Inurement. This Agreement will inure to the
benefit of and be binding upon the respective successors and permitted assigns
of the Parties.

17.5         Entire Agreement. This Agreement and the
Exhibits attached hereto and made a part hereof constitute the entire agreement
between the Parties with respect to the subject matter contained herein and any
and all previous agreements, written or oral, express or 

 15
 

implied, between the Parties or on their behalf
relating to the matters contained herein are hereby terminated and
canceled.  In the event of a conflict
with any Confirmed Order issued hereunder, the terms of this Agreement shall
govern.

17.6         Amendments.  There will be no modification of the term and
provisions hereof except by the mutual agreement in writing signed by the
Parties.

17.7         Governing Law; Venue. The Agreement will be
interpreted, construed and enforced in accordance with the procedural,
substantive and other laws of the State of Mississippi without giving effect to
principles and provisions thereof relating to conflict or choice of law even
though one or more of the Parties is now or may do business in or become a
resident of a different state.  Subject to Section 17.3, all
disputes arising out of this Agreement shall be resolved exclusively by state
or federal courts located in Mississippi, and each of the Parties waives any
objection that it may have to the bringing of an action in any such court.

17.8         Compliance with Laws. This Agreement and
the respective obligations of the Parties hereunder are subject to present and
future valid laws and valid orders, rules and regulations of duly constituted
authorities having jurisdiction.

17.9         Furnishing of Information. The Parties
will, upon request, provide such additional information as may be reasonably
required to allow the Parties to efficiently and effectively carry out their
respective obligations hereunder and to determine and enforce individual or
collective rights under this Agreement.

17.10       Cumulative Remedies. 
Unless otherwise specifically provided in this Agreement, the rights,
powers, and remedies of each of the Parties provided in this Agreement are
cumulative and the exercise of any right, power or remedy under this Agreement
does not affect any other right, power or remedy that may be available to
either Party under this Agreement or otherwise at law or in equity.

17.11       Faithful Performance and Good Faith. The Parties shall
faithfully perform and discharge their respective obligations in this Agreement
and endeavor in good faith to negotiate and settle all matters arising during
the performance of this Agreement not specifically provided for.

17.12       No Partnership. This Agreement shall not create or be
construed to create in any respect a partnership or any agency or joint venture
relationship between the Parties.

17.13       Costs To Be Borne by Each Party. Seller and Purchaser shall
pay its own costs and expenses incurred in the negotiation, preparation and
execution of this Agreement and of all documents referred to in it.

17.14       Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if Seller and Purchaser had signed the
same document and all counterparts will be construed together and constituted
as one and the same instrument.

17.15       Severability. Any provision of this Agreement, which is or
becomes prohibited or unenforceable in any jurisdiction shall not invalidate or
impair the remaining provisions of this Agreement, and the remaining terms of
this Agreement shall continue in full force and effect.

 16
 

17.16       Setoff.  In addition to,
and without limitation of, any rights of either Party hereunder, if either of
Seller or Purchaser becomes insolvent, however evidenced, or any default occurs
and the defaulting Party has failed to cure the default within the period
specified in Section 12.2(a), then any and all amounts due and owing by such
insolvent or defaulting Party under this Agreement may be applied by the other
Party toward the payment of amounts due and owing to such insolvent or
defaulting Party under this Agreement.

17.17       Headings.  The article
and section headings used herein are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement.  Unless the context of this Agreement
otherwise requires, (i) words of any gender shall be deemed to include each
other gender; (ii) words using the singular or plural number shall also include
the plural or singular number, respectively; and (iii) the terms “hereof,” “herein,”
“hereby,” “hereto,” and derivative or similar words shall refer to this entire
Agreement.  The Agreement is the product
of negotiation by and among the Parties hereto. 
The Agreement shall be interpreted and constructed neutrally as to all
Parties, without any Party deemed to be the drafter of the Agreement.

ARTICLE
XVIII

RISK
MANAGEMENT

18.1         Monitoring of Biodiesel Positions.  Purchaser will monitor Biodiesel sales made
hereunder and may, from time to time, make suggestions concerning Seller’s risk
management program and the position of its Biodiesel sales to Purchaser for
future physical delivery.

18.2         Market Conditions.  Purchaser will review with Seller on a
monthly basis market conditions relating to Biodiesel and associated
feedstocks, and forward marketing strategies in an attempt to assist Seller in
maximizing its revenue on Biodiesel sales to Purchaser.  It is understood by Seller that all risk
management services must be tied to a valid written purchase contract requiring
physical delivery of Biodiesel by Seller to Purchaser.

18.3         No Liability. Seller recognizes that
Purchaser’s monitoring of positions, periodic suggestions, review of market
conditions and risk management services are informational and optional, and the
final decisions concerning purchases and risk management strategies, and the
implementation of such strategies, will be made by, and is the sole
responsibility of, Seller.  Purchaser is
not responsible for any Seller losses or entitled to any Seller gains resulting
from risk management information supplied by Purchaser.

ARTICLE  XIX

CONFIDENTIALITY

19.1         Confidential Information.  For purposes of this Agreement, the term “Confidential
Information” shall mean the pricing terms of this Agreement and any information
which is not in the public domain and is disclosed by one Party to the other
pursuant to this Agreement and which is in written, graphic, machine readable
or other tangible form.  Confidential
Information may also include oral information disclosed by one Party to the
other pursuant to this Agreement, provided that such information is designated
as Confidential Information at the time of disclosure and is reduced to writing
by the disclosing Party within a reasonable time (not to exceed ten (10) days)
after its oral 

 17
 

disclosure, and the writing is marked in a manner to
indicate its confidential nature and delivered to the receiving Party.  Nothing in this Agreement shall be construed
to prohibit or limit a receiving Party from disclosing information, (including
ideas, concepts, know-how, techniques, and methodologies) (a) previously known
to it, (b) independently developed by it without use of the disclosing Party’s
Confidential Information by those employees or representatives of the
disclosing Party that have not had access to such Confidential Information, as
can be substantiated by reasonable evidence, (c) acquired by it from a third
party which was not, to the receiving Party’s knowledge, under an obligation to
the disclosing Party or any third party not to disclose such information, (d)
that is or becomes publicly available through no breach  by the receiving Party of this Agreement or
(e) to the extent disclosure of such information is required by law or by the
rules, regulations or practices of the Securities and Exchange Commission or
any exchange or automated quotation system upon which shares of such Party may
be listed, quoted or traded.

If a receiving Party receives a subpoena or other
validly issued administrative or judicial process demanding Confidential
Information of a disclosing Party, the receiving Party must promptly notify the
disclosing Party and tender to it the defense of such demand.   Unless the demand has been timely limited,
quashed or extended, the receiving Party will thereafter be entitled to comply
with that demand to the extent required by law but shall exercise commercially
reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such Confidential Information.  If requested by the disclosing Party, the
receiving Party shall cooperate (at the expense of the disclosing Party) in the
defense of such a demand.

19.2         Seller Nondisclosure.  Seller acknowledges that, by reason of this
Agreement, it and the principals (members, managers, officers and the like),
employees, agents, advisors, lenders, other financing sources, representatives
and affiliates (collectively, “Representatives”) of Seller may become privy to
Confidential Information belonging to Purchaser. Seller agrees that it will
not, without the prior written consent of Purchaser, disclose to any third
parties or use for its own benefit any such Confidential Information except in
the carrying out of its obligations under this Agreement.  Seller shall inform any of its
Representatives to whom Seller intends to disclose Confidential Information of
the confidential nature of such Confidential Information and shall require such
persons to be bound by the provisions of this Article XIX of this
Agreement.  The confidentiality
obligations hereunder shall survive any expiration or termination of this
Agreement.

19.3         Purchaser Nondisclosure. Purchaser
acknowledges that, by reason of this Agreement, it and its Representatives may
become privy to Confidential Information belonging to Seller.  Purchaser agrees that it will not, without
the prior written consent of Seller, disclose to any third parties or use for
its own benefit any such Confidential Information except in the carrying out of
its obligations under this Agreement. 
Purchaser shall inform any of its Representatives to whom they intend to
disclose Confidential Information of the confidential nature of such
Confidential Information and shall require such persons to be bound by the
provisions of the Article XIX of this Agreement.  The confidentiality obligations hereunder
shall survive any expiration or termination of this Agreement.

19.4         Injunction. 
Each Party hereto acknowledges that a violation or attempted breach of
any of its covenants and agreements in this Article XIX will cause such damage
as will be irreparable, the exact amount of which would be difficult to
ascertain and for which there will be no adequate remedy at law, and
accordingly, each of the Parties hereto agrees that in the event of a breach of
this Article XIX the non-breaching Party shall be entitled 

 18
 

as a matter of right to
an injunction issued by any court of competent jurisdiction, restraining
breaching Party or the affiliates, principals, employees, agents or
representatives of the breaching Party from such breach or attempted violation
of such covenants and agreements.  The
Parties hereto agree that no bond or other security shall be required in
connection with such injunction.  Any
exercise by a Party hereto of such Party’s rights pursuant to this Article XIX
shall be cumulative and in addition to any other remedies to which such Party
may be entitled.

19.5         Announcements.  Any public statements, press releases, and
similar announcements concerning the negotiation or consummation of the
transactions contemplated hereby, including such statements made by
Representatives of the Parties, shall be jointly planned and coordinated by the
Parties.  Neither Party shall issue any
such statement without the prior review (for which the reviewing Party shall
have a minimum of five (5) business days) and consent of the other Party, which
consent shall not be unreasonably withheld or delayed.  In no event will the terms and conditions of
this Agreement be disclosed except to the extent requested by applicable law.

ARTICLE
XX

INSURANCE

20.           Each Party shall,
during the Term, provide the insurance coverages as set forth in Exhibit 20.

IN
WITNESS  WHEREOF, the Parties
hereto have caused this Agreement to be executed the day and year first above
written.

CONAGRA
TRADE GROUP, INC.

	
  By:

  	
  /s/ Thomas Kelly

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Thomas Kelly

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  VP Strategic
  Development

  	
   

  
	
   

  
	
  NOVA BIOFUELS
  TRADE GROUP, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Kenneth T.
  Hern

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Kenneth T. Hern

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman &
  CEO

  	
   

  
					

 

 19

EXHIBIT 2.1

PLANNING, ORDERING,
DELIVERY, AND INVENTORY MANAGEMENT OF BIODIESEL PROCEDURES

The
following procedures are set forth to clarify the planning, ordering and
delivery of Biodiesel from the Plant.

1.             Delivery Schedule.  The Parties shall jointly develop a delivery
schedule (the “Delivery Schedule”) that will serve as the formal planning tool
for Biodiesel to be purchased for each quarter and each month of the quarter
under this Agreement.  The initial draft
of each Delivery Schedule shall be submitted by Seller to Purchaser no later
than ten (10) business days prior to the end of each calendar quarter.  The Delivery Schedule shall pertain to the
second subsequent quarter of Biodiesel delivery requirements (e.g., the
Delivery Schedule submitted prior to the end of the quarter ending December 31
will cover the quarter beginning April 1 and ending June 30).  The use of the Delivery Schedules shall
commence for the first calendar quarter in which the start-up of the Plant
and/or the first shipments of Biodiesel are forecasted.  The initial draft of the Delivery Schedule
shall be a three (3) month daily forecast and shall include:

·                                          Submission Date.

·                                          Production plan with estimated production of
Biodiesel.

·                                          Estimated start-of-quarter inventory of Biodiesel
in gallons.

·                                          Comments regarding operations, scheduled shutdowns,
and other comments relating to market, Logistics, and inventory management.

·                                          Should any changes from the Delivery Schedule be
anticipated for the subsequent three (3) quarters, Seller shall communicate
this in writing together with the above information.  Such changes could include: production rates
per month, quantities of Biodiesel to be produced and a list of special
operational and delivery considerations.

The
specific format of the Delivery Schedule will be created with mutual consent of
both Parties to accommodate the required information outlined above.

Purchaser shall review
the initial draft of the Delivery Schedule and advise Seller of market
conditions, inventory management, and transportation and Logistics issues
relating to the Delivery Schedule within ten (10) business days after
receipt.  Purchaser shall amend the
Delivery Schedule to include planned shipments of Biodiesel (in gallons) purchased
hereunder and the expected mode of transport for these shipments.

2.             Confirmed Orders.  It is understood that, in all events, pricing
of Biodiesel shall be bid by Purchaser and either accepted or rejected by
Seller.  Net Price bids (prior to the
incurrence of Logistics Costs) for Biodiesel shipments shall be submitted to
Seller by Purchaser, and Seller shall reject or accept the price bid by the
close of that same business day or earlier if notified by Purchaser of price
changes due to specific market conditions.  
Such Net Price bids that are not expressly rejected by Seller at least
fifteen (15) days prior to the first day of the month in which the applicable
Biodiesel shipment is to be made shall be deemed accepted by 

 20
 

Purchaser.  Such acceptances shall constitute “Confirmed
Orders” and the price in $/gallon thereunder shall be the Net Price (prior to
the incurrence of Logistics Costs) for the applicable Biodiesel.  The monthly schedules of the Delivery
Schedule shall reflect and be further governed by such Confirmed Orders of
Biodiesel.  The Parties understand and
agree that telephone conversations are recorded by Purchaser and may be
recorded by Seller in the ordinary course of their respective businesses for
purposes of, among other things, further documenting the quotation and acceptance
of Biodiesel prices in order to establish and verify Confirmed Orders.
Purchaser shall be responsible for marketing, selling, and shipment for each
gallon of Biodiesel per the Confirmed Orders.

3.             Delivery Schedule Deviations.  The
Parties recognize the need to maintain a reasonable degree of scheduling and
Delivery flexibility to accommodate the commissioning and start-up of the
Plant, unexpected changes in the Plant operating capacity, and changing
Biodiesel market conditions.  Upon
notification by either Party of any substantial deviations to the Delivery
Schedule, the Parties agree to work in good faith to jointly resolve any such
discovered deviations and correct such deviations within fifteen (15) days
following first notification.

4.             Liability Disclaimer.  Each of the Parties understands and agrees
that except for quantity, grade, and price quotations confirmed by the Parties
in Confirmed Orders pursuant to this Exhibit 2.1, the planned production
rates, estimated costs, pricing and market information, and all other
information furnished by the Parties in the preparation of the Delivery
Schedules is for planning and informational purposes only. Neither Party shall
be responsible to the other for any actions taken in reliance on such
estimates, plans and other information.

 21
 

EXHIBIT
6.1

BIODIESEL SPECIFICATIONS

Seller, as producer of Biodiesel product, is
responsible for the compliance with the following standard of quality,
specifications, and methods of analysis and sampling.  Seller and Purchaser agree to the
specifications and procedures set forth herein.

1.             Product Stewardship.  Purchaser and Seller will mutually establish
a Product stewardship program to assist end-use customers in the safe handling
and responsible use of Biodiesel products purchased and sold hereunder.  Seller will provide to Purchaser product
information and material safety data sheets for all Biodiesel products.

2.             Industry Standards.  Purchaser shall be responsible for the
administration of and compliance with all applicable industry transportation
and safety standards for transportation and delivery of Biodiesel to Purchaser’s
customers.

3.             Standard Specifications.  Seller shall comply with the standards of
quality for Biodiesel as defined in ASTM D6751-07a.  The specifications are provided in Table
6.1-1.  In the event of any changes in
ASTM D-6751, Seller shall make every reasonable effort to cause Scott to
upgrade the Plant or modify operations, if required, to meet such changes in standards.  However, failure to upgrade or modify
operations will not relieve Seller of its obligations to pay the Fees otherwise
owed pursuant to Section 4.4 of this Agreement.

4.             Sampling and Analysis Methods.  Seller shall use applicable approved ASTM
analysis methods, defined in Table 6.1-1, or certified equivalent test
methods and comply with the applicable sampling procedures, as defined in ASTM
D6751.

Seller shall take
or cause to be taken samples of Biodiesel product in storage tanks prior to
loading Transport Vessels and analyze the contents thereof against the
applicable specifications.  Seller shall
cause Terminal Operator to load Biodiesel product.  Samples will be taken of each shipment and
will be retained for six (6) months.  The
quality of the Biodiesel product at the time of Delivery shall govern in
determining compliance with the specifications. 
Samples of Biodiesel product  may
be requested by Purchaser for analysis. 
Seller shall make available product samples to Purchaser at the Plant.

5.             Quality Control Procedures.  Upon Seller’s receipt of Transport Vessels
and prior to product loading, each Transport Vessel will be visually inspected
for equipment integrity, safety, and potential contamination.  Seller has the right to reject any Transport
Vessel for loading, which does not materially comply with minimum safety
standards and/or is contaminated with products or materials.  Seller shall notify Purchaser immediately in
the event any Transport Vessel does not meet the minimum requirements.  Seller shall invoice Purchaser for all handling
costs for any rejected Transport Vessel, including all costs incurred by Seller
for placement, set-up and return of vehicle to Purchaser.  If Purchaser requests Transport Vessel
cleaning at the Terminal, Purchaser shall be responsible for all associated
cleaning costs.  Seller shall provide
certified tare weights with each Transport Vessel.  Seller shall provide certified weights for
each shipment and the Certificate of Analysis for each shipment by invoice to
Purchaser.

Purchaser and Seller shall work together to qualify
individual customers of Biodiesel prior to sales and develop a list of
qualified customers.  Seller shall
provide to Purchaser samples, analysis data, and information for use in the
development of sales.  Seller shall have 

 22
 

the
right to disqualify customers based on the customers’ safe and environmentally
responsible end-use of Biodiesel and other qualification criteria mutually
established by both Parties.

Seller and
Purchaser shall jointly cooperate to improve specifications’ requirements from
customers.  Additional specifications can
be added to Table 6.1-1 or the contents of Table 6.1-1 can be amended upon
mutual agreement of Purchaser and Seller.

 23
 

TABLE 6.1-1

BIODIESEL SPECIFICATIONS

	
  Property

  	
   

  	
  ASTM Method

  	
   

  	
  Limits

  	
   

  	
  Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calcium & Magnesium, combined

  	
   

  	
  EN 14538

  	
   

  	
  5 max

  	
   

  	
  ppm (ug/g)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FlashPoint (closed cup)

  	
   

  	
  D 93

  	
   

  	
  93min.

  	
   

  	
  Degrees
  C

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alcohol Control
  (One of the following must be met)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1. Methanol
  Content

  	
   

  	
  EN 14110

  	
   

  	
  0.2 Max  

  	
   

  	
  % volume

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Flash Point

  	
   

  	
  D 93

  	
   

  	
  130 Min

  	
   

  	
  Degrees C

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Water & Sediment

  	
   

  	
  D 2709

  	
   

  	
  0.05
  max. 

  	
   

  	
  % vol.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kinematic Viscosity, 40 C

  	
   

  	
  D 445

  	
   

  	
  1.9 - 6.0

  	
   

  	
  mm2/sec.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sulfated Ash

  	
   

  	
  D 874

  	
   

  	
  0.02 max. 

  	
   

  	
  % mass

  
	
  Sulfur

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S 15 Grade

  	
   

  	
  D 5453

  	
   

  	
  0.0015
  max. (15) 

  	
   

  	
  % mass
  (ppm)

  
	
  S 500 Grade

  	
   

  	
  D 5453

  	
   

  	
  0.05
  max. (500) 

  	
   

  	
  % mass
  (ppm)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Copper Strip Corrosion

  	
   

  	
  D 130

  	
   

  	
  No. 3 max

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cetane

  	
   

  	
  D 613

  	
   

  	
  47 min.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cloud Point

  	
   

  	
  D 2500

  	
   

  	
  Report

  	
   

  	
  Degrees
  C

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carbon Residue 100% sample

  	
   

  	
  D 4530*

  	
   

  	
  0.05 max. 

  	
   

  	
  % mass

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acid Number

  	
   

  	
  D 664

  	
   

  	
  0.50
  max.

  	
   

  	
  mg
  KOH/g

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Free Glycerin

  	
   

  	
  D 6584

  	
   

  	
  0.020
  max.

  	
   

  	
  % mass

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Glycerin

  	
   

  	
  D 6584

  	
   

  	
  0.240
  max.

  	
   

  	
  % mass

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phosphorus Content

  	
   

  	
  D 4951

  	
   

  	
  0.001 max. 

  	
   

  	
  % mass

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation. T90 AET

  	
   

  	
  D 1160

  	
   

  	
  360 max.

  	
   

  	
  Degrees C

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sodium/Potassium, combined

  	
   

  	
  EN 14538

  	
   

  	
  5 max

  	
   

  	
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oxidation Stability

  	
   

  	
  EN
  14112

  	
   

  	
  3 min

  	
   

  	
  hours

  

 

 24
 

EXHIBIT
20

INSURANCE
COVERAGES

Each Party shall
be required to purchase, maintain and provide proof (via Certificate of Insurance)
of the following insurance:

Commercial General
Liability Insurance - $2 Million Combined Single Limit

Policy shall
include coverage for liability resulting from Premises/Operations, Products and
Completed Operations, Blanket and Contractual Liability.  Policy shall also include coverage for Broad
Form Property Damage, including explosion, collapse and underground
hazards.  Such insurance shall be on an
occurrence basis.

Environmental
Pollution Liability Insurance  - $2
Million  Combined Single Limit

Policy shall
include coverage for bodily injury or property damage arising from (a) the
release or discharge of Biodiesel, and (b) the transportation, handling,
storage, disposal, dumping, processing or treatment of waste.  Such insurance shall be on an occurrence
basis.  Notwithstanding anything to the
contrary contained herein, Purchaser, may at its sole discretion choose to
self-insure for Environmental Pollution Liability coverage.

In addition,
Purchaser shall be required to carry the following insurance:

Commercial
Automobile Liability Insurance - $1 Million Combined Single Limit

Policy shall
include coverage for liability resulting from the operation of all owned,
non-owned and hired automobiles.  Such
insurance shall be on an occurrence basis.

Prior to the initial sale of Biodiesel and at all
times during the Term of this Agreement, Seller shall carry and maintain
product liability insurance with minimum limits of $2,000,000 (combined single
limit) for Biodiesel per accident or occurrence.  The provisions for product liability
insurance may be satisfied by issuance of separate policies, or included under
the commercial general liability policies, or a combination of general
commercial liability policies with umbrella/excess liability policies.

Each Party shall also carry excess or umbrella
liability insurance with limits of at least $4,000,000 per occurrence for
bodily injury or property damage in excess of the limits afforded for general
liability, automobile liability and environmental liability provided above.

All required policies of insurance shall be endorsed
to provide that the insurance company shall notify the certificate holder at
least thirty (30) days prior to the effective date of any cancellation or
material change of such policies.

 25Exhibit 10.1

 

 

CREDIT AGREEMENT

DATED AS OF AUGUST 9, 2007,

AMONG

DG FASTCHANNEL, INC.,

THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

AND

BANK OF MONTREAL,

AS ADMINISTRATIVE AGENT

 

 

BMO CAPITAL MARKETS AND
WACHOVIA, NATIONAL ASSOCIATION, 

AS CO-LEAD ARRANGER AND CO-BOOK RUNNER

Table of Contents

	
  Section

  	
   

  	
  Heading

  	
   

  	
  Page

  
	
  SECTION 1.

  	
   

  	
  THE CREDIT FACILITIES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Term Loan Commitments

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Revolving Credit Commitments

  	
   

  	
  1

  
	
  Section 1.3.

  	
   

  	
  Letters of Credit

  	
   

  	
  2

  
	
  Section 1.4.

  	
   

  	
  Applicable Interest Rates

  	
   

  	
  5

  
	
  Section 1.5.

  	
   

  	
  Minimum Borrowing Amounts; Maximum Eurodollar Loans

  	
   

  	
  7

  
	
  Section 1.6.

  	
   

  	
  Manner of Borrowing Loans and Designating Applicable
  Interest Rates

  	
   

  	
  7

  
	
  Section 1.7.

  	
   

  	
  Swing Loans

  	
   

  	
  9

  
	
  Section 1.8.

  	
   

  	
  Maturity of Loans

  	
   

  	
  11

  
	
  Section 1.9.

  	
   

  	
  Prepayments

  	
   

  	
  11

  
	
  Section 1.10.

  	
   

  	
  Default Rate

  	
   

  	
  13

  
	
  Section 1.11.

  	
   

  	
  Evidence of Indebtedness

  	
   

  	
  13

  
	
  Section 1.12.

  	
   

  	
  Funding Indemnity

  	
   

  	
  14

  
	
  Section 1.13.

  	
   

  	
  Commitment Terminations

  	
   

  	
  14

  
	
  Section 1.14.

  	
   

  	
  Substitution of Lenders

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  FEES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Fees

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  PLACE AND APPLICATION OF
  PAYMENTS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Place and Application of Payments

  	
   

  	
  16

  
	
  Section 3.2.

  	
   

  	
  Account Debit

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Guaranties and Collateral

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Guaranties

  	
   

  	
  18

  
	
  Section 4.2.

  	
   

  	
  Collateral

  	
   

  	
  18

  
	
  Section 4.3.

  	
   

  	
  Liens on Real Property

  	
   

  	
  19

  
	
  Section 4.4.

  	
   

  	
  Further Assurances

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  DEFINITIONS; INTERPRETATION

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Definitions

  	
   

  	
  19

  
	
  Section 5.2.

  	
   

  	
  Interpretation

  	
   

  	
  36

  
	
  Section 5.3.

  	
   

  	
  Change in Accounting Principles

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Organization and Qualification

  	
   

  	
  36

  
	
  Section 6.2.

  	
   

  	
  Subsidiaries

  	
   

  	
  36

  

 

 

	
  Section 6.3.

  	
   

  	
  Authority and Validity of Obligations

  	
   

  	
  37

  
	
  Section 6.4.

  	
   

  	
  Use of Proceeds; Margin Stock

  	
   

  	
  38

  
	
  Section 6.5.

  	
   

  	
  Financial Reports

  	
   

  	
  38

  
	
  Section 6.6.

  	
   

  	
  No Material Adverse Change

  	
   

  	
  38

  
	
  Section 6.7.

  	
   

  	
  Full Disclosure

  	
   

  	
  38

  
	
  Section 6.8.

  	
   

  	
  Trademarks, Franchises, and Licenses

  	
   

  	
  39

  
	
  Section 6.9.

  	
   

  	
  Governmental Authority and Licensing

  	
   

  	
  39

  
	
  Section 6.10.

  	
   

  	
  Good Title

  	
   

  	
  39

  
	
  Section 6.11.

  	
   

  	
  Litigation and Other Controversies

  	
   

  	
  39

  
	
  Section 6.12.

  	
   

  	
  Taxes

  	
   

  	
  39

  
	
  Section 6.13.

  	
   

  	
  Approvals

  	
   

  	
  39

  
	
  Section 6.14.

  	
   

  	
  Affiliate Transactions

  	
   

  	
  40

  
	
  Section 6.15.

  	
   

  	
  Investment Company

  	
   

  	
  40

  
	
  Section 6.16.

  	
   

  	
  ERISA

  	
   

  	
  40

  
	
  Section 6.17.

  	
   

  	
  Compliance with Laws

  	
   

  	
  40

  
	
  Section 6.18.

  	
   

  	
  Other Agreements

  	
   

  	
  41

  
	
  Section 6.19.

  	
   

  	
  Solvency

  	
   

  	
  41

  
	
  Section 6.20.

  	
   

  	
  No Broker Fees.

  	
   

  	
  41

  
	
  Section 6.21.

  	
   

  	
  No Default

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  All Credit Events

  	
   

  	
  41

  
	
  Section 7.2.

  	
   

  	
  Initial Credit Event

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  COVENANTS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Maintenance of Business

  	
   

  	
  45

  
	
  Section 8.2.

  	
   

  	
  Maintenance of Properties

  	
   

  	
  45

  
	
  Section 8.3.

  	
   

  	
  Taxes and Assessments

  	
   

  	
  45

  
	
  Section 8.4.

  	
   

  	
  Insurance

  	
   

  	
  45

  
	
  Section 8.5.

  	
   

  	
  Financial Reports

  	
   

  	
  46

  
	
  Section 8.6.

  	
   

  	
  Inspection

  	
   

  	
  48

  
	
  Section 8.7.

  	
   

  	
  Borrowings and Guaranties

  	
   

  	
  48

  
	
  Section 8.8.

  	
   

  	
  Liens

  	
   

  	
  49

  
	
  Section 8.9.

  	
   

  	
  Investments, Acquisitions, Loans and Advances

  	
   

  	
  50

  
	
  Section 8.10.

  	
   

  	
  Mergers, Consolidations and Sales

  	
   

  	
  51

  
	
  Section 8.11.

  	
   

  	
  Maintenance of Subsidiaries

  	
   

  	
  52

  
	
  Section 8.12.

  	
   

  	
  Dividends and Certain Other Restricted Payments

  	
   

  	
  52

  
	
  Section 8.13.

  	
   

  	
  ERISA

  	
   

  	
  52

  
	
  Section 8.14.

  	
   

  	
  Compliance with Laws

  	
   

  	
  53

  
	
  Section 8.15.

  	
   

  	
  Burdensome Contracts With Affiliates

  	
   

  	
  53

  
	
  Section 8.16.

  	
   

  	
  No Changes in Fiscal Year

  	
   

  	
  54

  
	
  Section 8.17.

  	
   

  	
  Formation of Subsidiaries

  	
   

  	
  54

  
	
  Section 8.18.

  	
   

  	
  Change in the Nature of Business

  	
   

  	
  54

  
	
  Section 8.19.

  	
   

  	
  Use of Proceeds

  	
   

  	
  54

  
	
  Section 8.20.

  	
   

  	
  No Restrictions

  	
   

  	
  54

  

 

 ii
 

 

	
  Section 8.21.

  	
   

  	
  Subordinated Debt

  	
   

  	
  54

  
	
  Section 8.22.

  	
   

  	
  Financial Covenants

  	
   

  	
  55

  
	
  Section 8.23.

  	
   

  	
  Hedging Facilities.

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  EVENTS OF DEFAULT AND
  REMEDIES

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Events of Default

  	
   

  	
  56

  
	
  Section 9.2.

  	
   

  	
  Non-Bankruptcy Defaults

  	
   

  	
  58

  
	
  Section 9.3.

  	
   

  	
  Bankruptcy Defaults

  	
   

  	
  58

  
	
  Section 9.4.

  	
   

  	
  Collateral for Undrawn Letters of Credit

  	
   

  	
  58

  
	
  Section 9.5.

  	
   

  	
  Notice of Default

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  CHANGE IN CIRCUMSTANCES

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Change of Law

  	
   

  	
  59

  
	
  Section 10.2.

  	
   

  	
  Unavailability of Deposits or Inability to
  Ascertain, or Inadequacy of, LIBOR

  	
   

  	
  60

  
	
  Section 10.3.

  	
   

  	
  Increased Cost and Reduced Return

  	
   

  	
  60

  
	
  Section 10.4.

  	
   

  	
  Lending Offices

  	
   

  	
  61

  
	
  Section 10.5.

  	
   

  	
  Discretion of Lender as to Manner of Funding

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  THE ADMINISTRATIVE AGENT

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Appointment and Authorization of Administrative
  Agent

  	
   

  	
  62

  
	
  Section 11.2.

  	
   

  	
  Administrative Agent and its Affiliates

  	
   

  	
  62

  
	
  Section 11.3.

  	
   

  	
  Action by Administrative Agent

  	
   

  	
  62

  
	
  Section 11.4.

  	
   

  	
  Consultation with Experts

  	
   

  	
  63

  
	
  Section 11.5.

  	
   

  	
  Liability of Administrative Agent; Credit Decision

  	
   

  	
  63

  
	
  Section 11.6.

  	
   

  	
  Indemnity

  	
   

  	
  64

  
	
  Section 11.7.

  	
   

  	
  Resignation of Administrative Agent and Successor
  Administrative Agent

  	
   

  	
  64

  
	
  Section 11.8.

  	
   

  	
  L/C Issuer and Swing Line Lender.

  	
   

  	
  65

  
	
  Section 11.9.

  	
   

  	
  Hedging Liability and Funds Transfer and Deposit
  Account Liability Arrangements

  	
   

  	
  65

  
	
  Section 11.10.

  	
   

  	
  Designation of Additional Agents

  	
   

  	
  65

  
	
  Section 11.11.

  	
   

  	
  Authorization to Release or Subordinate or Limit
  Liens

  	
   

  	
  65

  
	
  Section 11.12.

  	
   

  	
  Authorization to Enter into, and Enforcement of, the
  Collateral Documents

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  THE GUARANTEES

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  The Guarantees

  	
   

  	
  66

  
	
  Section 12.2.

  	
   

  	
  Guarantee Unconditional

  	
   

  	
  67

  
	
  Section 12.3.

  	
   

  	
  Discharge Only upon Payment in Full; Reinstatement
  in Certain Circumstances

  	
   

  	
  68

  
	
  Section 12.4.

  	
   

  	
  Subrogation

  	
   

  	
  68

  
	
  Section 12.5.

  	
   

  	
  Waivers

  	
   

  	
  68

  
	
  Section 12.6.

  	
   

  	
  Limit on Recovery

  	
   

  	
  68

  

 

 iii
 

 

	
  Section 12.7.

  	
   

  	
  Stay of Acceleration

  	
   

  	
  69

  
	
  Section 12.8.

  	
   

  	
  Benefit to Guarantors

  	
   

  	
  69

  
	
  Section 12.9.

  	
   

  	
  Guarantor Covenants

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Withholding Taxes

  	
   

  	
  69

  
	
  Section 13.2.

  	
   

  	
  No Waiver, Cumulative Remedies

  	
   

  	
  70

  
	
  Section 13.3.

  	
   

  	
  Non-Business Days

  	
   

  	
  71

  
	
  Section 13.4.

  	
   

  	
  Documentary Taxes

  	
   

  	
  71

  
	
  Section 13.5.

  	
   

  	
  Survival of Representations

  	
   

  	
  71

  
	
  Section 13.6.

  	
   

  	
  Survival of Indemnities

  	
   

  	
  71

  
	
  Section 13.7.

  	
   

  	
  Sharing of Set-Off

  	
   

  	
  71

  
	
  Section 13.8.

  	
   

  	
  Notices

  	
   

  	
  72

  
	
  Section 13.9.

  	
   

  	
  Counterparts

  	
   

  	
  72

  
	
  Section 13.10.

  	
   

  	
  Successors and Assigns

  	
   

  	
  72

  
	
  Section 13.11.

  	
   

  	
  Participants

  	
   

  	
  72

  
	
  Section 13.12.

  	
   

  	
  Assignments

  	
   

  	
  73

  
	
  Section 13.13.

  	
   

  	
  Amendments

  	
   

  	
  75

  
	
  Section 13.14.

  	
   

  	
  Headings

  	
   

  	
  76

  
	
  Section 13.15.

  	
   

  	
  Costs and Expenses; Indemnification

  	
   

  	
  76

  
	
  Section 13.16.

  	
   

  	
  Set-off

  	
   

  	
  77

  
	
  Section 13.17.

  	
   

  	
  Entire Agreement

  	
   

  	
  78

  
	
  Section 13.18.

  	
   

  	
  Governing Law

  	
   

  	
  78

  
	
  Section 13.19.

  	
   

  	
  Severability of Provisions

  	
   

  	
  78

  
	
  Section 13.20.

  	
   

  	
  Excess Interest

  	
   

  	
  78

  
	
  Section 13.21.

  	
   

  	
  Construction

  	
   

  	
  79

  
	
  Section 13.22.

  	
   

  	
  Lender’s and L/C Issuer ‘s Obligations Several

  	
   

  	
  79

  
	
  Section 13.23.

  	
   

  	
  Submission to Jurisdiction; Waiver of Jury Trial

  	
   

  	
  79

  
	
  Section 13.24.

  	
   

  	
  USA Patriot Act

  	
   

  	
  79

  
	
  Section 13.25.

  	
   

  	
  Confidentiality

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Page

  	
   

  	
   

  	
   

  	
  S-1

  

 

	
  Exhibit A

  	
  —

  	
  Notice of Payment Request

  
	
  Exhibit B

  	
  —

  	
  Notice of Borrowing

  
	
  Exhibit C

  	
  —

  	
  Notice of Continuation/Conversion

  
	
  Exhibit D-1

  	
  —

  	
  Term Note

  
	
  Exhibit D-2

  	
  —

  	
  Revolving Note

  
	
  Exhibit D-3

  	
  —

  	
  Swing Note

  
	
  Exhibit E

  	
  —

  	
  Compliance Certificate

  
	
  Exhibit F

  	
  —

  	
  Additional Guarantor Supplement

  
	
  Exhibit G

  	
  —

  	
  Assignment and Acceptance

  
	
  Schedule 1

  	
  —

  	
  Commitments

  
	
  Schedule 6.2

  	
  —

  	
  Subsidiaries

  
	
  Schedule 6.11

  	
  —

  	
  Litigation

  
	
  Schedule 6.14

  	
  —

  	
  Affiliate Transactions

  

 

 iv
 

 

	
  Schedule 8.7

  	
  —

  	
  Indebtedness

  
	
  Schedule 8.8

  	
  —

  	
  Liens

  
	
  Schedule 8.9

  	
  —

  	
  Existing Investments

  

 

 v

CREDIT AGREEMENT

This Credit Agreement is entered into as of
August 9, 2007, by and among DG FastChannel, Inc., a Delaware corporation
(the “Borrower”), the direct and indirect
Subsidiaries of the Borrower from time to time party to this Agreement, as Guarantors,
the several financial institutions from time to time party to this Agreement,
as Lenders, and BANK OF MONTREAL, a  Canadian chartered bank acting through
its Chicago branch, as
Administrative Agent as provided herein. 
All capitalized terms used herein without definition shall have the same
meanings herein as such terms are defined in Section 5.1 hereof.

PRELIMINARY STATEMENT

The Borrower has requested, and the Lenders have
agreed to extend, certain credit facilities on the terms and conditions of this
Agreement.

NOW, THEREFORE, in
consideration of the mutual agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

SECTION 1.                                                    THE
CREDIT FACILITIES.

Section 1.1.           Term Loan Commitments.  Subject to the terms and conditions hereof,
each Lender, by its acceptance hereof, severally agrees to make a loan
(individually a “Term Loan” and collectively for
all the Lenders the “Term Loans”)
in U.S. Dollars to the Borrower in the amount of such Lender’s Term Loan
Commitment.  The Term Loans shall be
advanced in a single Borrowing on the Closing Date and shall be made ratably by
the Lenders in proportion to their respective Term Loan Percentages, at which
time the Term Loan Commitments shall expire. 
As provided in Section 1.6(a) hereof, the Borrower may elect that
the Term Loans be outstanding as Base Rate Loans or Eurodollar Loans.  No amount repaid or prepaid on any Term Loan
may be borrowed again.

Section 1.2.           Revolving Credit Commitments.  Subject to the terms and conditions hereof,
each Lender, by its acceptance hereof, severally agrees to make a loan or loans
(individually a “Revolving Loan” and collectively
for all the Lenders the “Revolving Loans”)
in U.S. Dollars to the Borrower from time to time on a revolving basis up to
the amount of such Lender’s Revolving Credit Commitment, subject to any
reductions thereof pursuant to the terms hereof, before the Revolving Credit
Termination Date.  The sum of the
aggregate principal amount of Revolving Loans, Swing Loans, and L/C Obligations
at any time outstanding shall not exceed the Revolving Credit Commitments in
effect at such time.  Each Borrowing of
Revolving Loans shall be made ratably by the Lenders in proportion to their
respective Revolver Percentages.  As
provided in Section 1.6(a) hereof, the Borrower may elect that each
Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar Loans.  Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.

Section 1.3.           Letters of Credit.  (a) General Terms.  Subject to the terms and conditions hereof,
as part of the Revolving Credit, the L/C Issuer shall issue standby
letters of credit (each a “Letter of Credit”)
for the account of Borrower or for the account of the Borrower and one or more
of its Subsidiaries in an aggregate undrawn face amount up to the L/C
Sublimit.  Each Letter of Credit shall be
issued by the L/C Issuer, but each Lender shall be obligated to reimburse
the L/C Issuer for such Lender’s Revolver Percentage of the amount of each
drawing thereunder and, accordingly, each Letter of Credit shall constitute
usage of the Revolving Credit Commitment of each Lender pro rata in an amount
equal to its Revolver Percentage of the L/C Obligations then outstanding.

(b)       Applications.  At any time before the Revolving Credit
Termination Date, the L/C Issuer shall, at the request of the Borrower,
issue one or more Letters of Credit in U.S. Dollars, in a form satisfactory to
the L/C Issuer, with expiration dates no later than the earlier of 12
months from the date of issuance (or which are cancelable not later than 12
months from the date of issuance and each renewal) or thirty (30) days
prior to the Revolving Credit Termination Date, in an aggregate face amount as
set forth above, upon the receipt of an application duly executed by the
Borrower and, if such Letter of Credit is for the account of one of its
Subsidiaries, such Subsidiary for the relevant Letter of Credit in the form
then customarily prescribed by the L/C Issuer for the Letter of Credit
requested (each an “Application”).  Notwithstanding anything contained in any
Application to the contrary: 
(i) the Borrower shall pay fees in connection with each Letter of
Credit as set forth in Section 2.1 hereof, (ii) except as otherwise
provided in Section 1.9 hereof, unless an Event of Default exists, the
L/C Issuer will not call for the funding by the Borrower of any amount
under a Letter of Credit before being presented with a drawing thereunder, and
(iii) if the L/C Issuer is not timely reimbursed for the amount of
any drawing under a Letter of Credit on the date such drawing is paid, the Borrower’s
obligation to reimburse the L/C Issuer for the amount of such drawing
shall bear interest (which the Borrower hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the sum of the
Applicable Margin for the Reimbursement Obligation plus
the Base Rate from time to time in effect (computed on the basis of a year of
365 or 366 days, as the case may be, and the actual number of days
elapsed).  If the L/C Issuer issues
any Letter of Credit with an expiration date that is automatically extended
unless the L/C Issuer gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, unless the Administrative
Agent or the Required Lenders instruct the L/C Issuer otherwise, the
L/C Issuer will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date:  (i) the expiration date of
such Letter of Credit if so extended would be after the Revolving Credit Termination
Date, (ii) the Revolving Credit Commitments have been terminated, or
(iii) a Default or an Event of Default exists and either the
Administrative Agent or the Required Lenders (with notice to the Administrative
Agent) have given the L/C Issuer instructions not to so permit the
extension of the expiration date of such Letter of Credit.  The L/C Issuer agrees to issue
amendments to the Letter(s) of Credit increasing the amount, or extending the
expiration date, thereof at the request of the Borrower subject to the
conditions of Section 7 hereof and the other terms of this
Section 1.3.

(c)       The Reimbursement
Obligations.  Subject to
Section 1.3(b) hereof, the obligation of the Borrower to reimburse the
L/C Issuer for all drawings under a Letter of Credit (a “Reim­burse­ment Obligation”) shall be governed by the
Application related to such Letter of Credit,

 2
 

except that reimbursement shall be made by no later
than 12:00 Noon (Chicago time) on the date when each drawing is to be paid if
the Borrower has been informed of such drawing by the L/C Issuer on or
before 11:00 a.m. (Chicago time) on the date when such drawing is to be
paid or, if notice of such drawing is given to the Borrower after
11:00 a.m. (Chicago time) on the date when such drawing is to be paid, by
no later than 12:00 Noon (Chicago time) on the following Business Day, in
immediately available funds at the Administrative Agent’s principal office in
Chicago, Illinois, or such other office as the Administrative Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds).  If the Borrower does not make any such
reimbursement payment on the date due and the Participating Lenders fund their
participations therein in the manner set forth in Section 1.3(d) below,
then all payments thereafter received by the Administrative Agent in discharge
of any of the relevant Reimbursement Obligations shall be distributed in
accordance with Section 1.3(d) below.

(d)       Obligations Absolute.  The Borrower’s obligation to reimburse L/C
Obligations as provided in subsection (c) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and the relevant Application under
any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Letter of Credit or this Agreement, or any
term or provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment
by the L/C Issuer under a Letter of Credit against presentation of a draft
or other document that does not strictly comply with the terms of such Letter
of Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrower’s obligations hereunder. None of the
Administrative Agent, the Lenders, or the L/C Issuer shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the L/C Issuer ; provided that the foregoing shall not be construed to excuse
the L/C Issuer from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the L/C Issuer ‘s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the
L/C Issuer (as finally determined by a court of competent jurisdiction),
the L/C Issuer shall be deemed to have exercised care in each such
determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the
L/C Issuer may, in its sole discretion, either accept and make payment
upon such documents without responsibility for further investigation,
regardless

 3
 

of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(e)       The Participating
Interests.  Each Lender (other
than the Lender acting as L/C Issuer in issuing the relevant Letter of
Credit), by its acceptance hereof, severally agrees to purchase from the
L/C Issuer, and the L/C Issuer hereby agrees to sell to each such
Lender (a “Participating Lender”), an undivided
percentage participating interest (a “Participating Interest”),
to the extent of its Revolver Percentage, in each Letter of Credit issued by,
and each Reimbursement Obligation owed to, the L/C Issuer.  Upon any failure by the Borrower to pay any
Reimburse­ment Obligation at the time required on the date the related drawing
is to be paid, as set forth in Section 1.3(c) above, or if the
L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of
Exhibit A hereto from the L/C Issuer (with a copy to the
Administrative Agent) to such effect, if such certificate is received before
1:00 p.m. (Chicago time), or not later than 1:00 p.m. (Chicago time)
the following Business Day, if such certificate is received after such time,
pay to the Administrative Agent for the account of the L/C Issuer an
amount equal to such Participating Lender’s Revolver Percentage of such unpaid
or recap­tured Reimbursement Obligation together with interest on such amount
accrued from the date the related payment was made by the L/C Issuer to
the date of such payment by such Participating Lender at a rate per annum equal
to:  (i) from the date the related
payment was made by the L/C Issuer to the date two (2) Business Days
after payment by such Participating Lender is due hereunder, the Federal Funds
Rate for each such day and (ii) from the date two (2) Business Days
after the date such payment is due from such Participating Lender to the date
such payment is made by such Participating Lender, the Base Rate in effect for
each such day.  Each such Participating
Lender shall thereafter be entitled to receive its Revolver Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Revolver
Percentage thereof as a Lender hereunder. 
The several obligations of the Participating Lenders to the
L/C Issuer under this Section 1.3 shall be absolute, irrevocable, and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Borrower, the
L/C Issuer, the Administrative Agent, any Lender or any other Person whatsoever.  Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event of
Default or by any reduction or termination of any Commitment of any Lender, and
each payment by a Participating Lender under this Section 1.3 shall be
made without any offset, abatement, withholding or reduction whatsoever.

(f)        Indemnification.  The
Participating Lenders shall, to the extent of their respective Revolver
Percentages, indemnify the L/C Issuer (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such L/C Issuer ‘s gross negligence or willful misconduct) that the
L/C Issuer may suffer or incur in connection with any Letter of Credit
issued by it.  The obligations of the
Participating Lenders under this Section 1.3(f) and all other parts of
this Section 1.3 shall survive termination of this Agreement and of all
Applications, Letters of Credit, and all drafts and other documents presented
in connection with drawings thereunder.

 4
 

(g)       Manner of Requesting a
Letter of Credit.  The
Borrower shall provide at least three (3) Business Days’ advance written
notice to the Administrative Agent of each request for the issuance of a Letter
of Credit, such notice in each case to be accompanied by an Application for
such Letter of Credit properly completed and executed by the Borrower and, in
the case of an extension or amendment or an increase in the amount of a Letter
of Credit, a written request therefor, in a form acceptable to the
Administrative Agent and the L/C Issuer, in each case, together with the
fees called for by this Agreement (provided that
the L/C Issuer shall be entitled to assume that the conditions precedent
to any such issuance, extension, amendment or increase have been satisfied
unless notified to the contrary by the Administrative Agent or the Required
Lenders).  The Administrative Agent shall
promptly notify the L/C Issuer of the Administrative Agent’s receipt of
each such notice and the L/C Issuer shall promptly notify the
Administrative Agent and the Lenders of the issuance of the Letter of Credit so
requested.

(h)       Replacement of the
L/C Issuer.  The
L/C Issuer may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced L/C Issuer and the
successor L/C Issuer.  The
Administrative Agent shall notify the Lenders of any such replacement of the
L/C Issuer.  At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced L/C Issuer.  From and after the effective date of any such
replacement (i) the successor L/C Issuer shall have all the rights
and obligations of the L/C Issuer under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to
the term “L/C Issuer “ shall be deemed to refer to such successor or to
any previous L/C Issuer, or to such successor and all previous
L/C Issuer s, as the context shall require.  After the replacement of a L/C Issuer
hereunder, the replaced L/C Issuer shall remain a party hereto and shall
continue to have all the rights and obligations of a L/C Issuer under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.

Section 1.4.           Applicable Interest Rates.  (a) Base Rate Loans.  Each Base Rate Loan made or maintained by a
Lender shall bear interest (computed on the basis of a year of 365 or
366 days, as the case may be, and the actual days elapsed) on the unpaid
principal amount thereof from the date such Loan is advanced, or created by
conversion from a Eurodollar Loan, until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Base Rate from time to time in effect, payable by the Borrower on each
Interest Payment Date and at maturity (whether by acceleration or otherwise).

“Base Rate” means for any day the
greater of:  (i) the rate of interest
announced or otherwise established by the Administrative Agent from time to
time as its prime commercial rate, or its equivalent, for U.S. Dollar loans to borrowers
located in the United States as in effect on such day, with any change in the
Base Rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Administrative Agent’s
best or lowest rate) and (ii) the sum of (x) the rate determined by
the Administrative Agent to be the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the rates per annum quoted to the
Administrative Agent at approximately 10:00 a.m. (Chicago time) (or as
soon thereafter as is practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) by two or more Federal
funds brokers selected by the Administrative Agent for

 5
 

sale to the
Administrative Agent at face value of Federal funds in the secondary market in
an amount equal or comparable to the principal amount for which such rate is
being determined, plus (y) 1/2 of 1%.

(b)       Eurodollar Loans.  Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is advanced or continued,
or created by conversion from a Base Rate Loan, until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period,
payable by the Borrower on each Interest Payment Date and at maturity (whether
by acceleration or otherwise).

“Adjusted LIBOR” means, for any
Borrowing of Eurodollar Loans, a rate per annum determined in accordance with
the following formula:

	
  Adjusted
  LIBOR

  	
  =

  	
  LIBOR

  	
   

  
	
   

  	
   

  	
  1 -
  Eurodollar Reserve Percentage

  	
   

  

 

“Eurodollar Reserve Percentage”
means, for any Borrowing of Eurodollar Loans, the daily average for the
applicable Interest Period of the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any supplemental, marginal, and
emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) on “eurocurrency liabilities”, as defined in such Board’s
Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on Eurodollar Loans
is determined or any category of extensions of credit or other assets that
include loans by non-United States offices of any Lender to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments
thereto.  For purposes of this
definition, the Eurodollar Loans shall be deemed to be “eurocurrency
liabilities” as defined in Regulation D without benefit or
credit for any prorations, exemptions or offsets under Regulation D.

“LIBOR” means, for an Interest
Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate for
such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. Dollars in immediately available funds are offered to
the Administrative Agent at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by three
(3) or more major banks in the interbank eurodollar market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made as part of such Borrowing.

“LIBOR Index Rate” means, for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period, which appears on the

 6
 

LIBOR01 Page as of
11:00 a.m. (London, England time) on the day 2 Business Days before
the commencement of such Interest Period.

“LIBOR01 Page” means the display
designated as “Reuters Screen LIBOR01 Page” (or
such other page as may replace the LIBOR01 Page on that service or such other
service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for U.S. Dollar deposits).

(c)       Rate Determinations.  The Administrative Agent shall determine each
interest rate applicable to the Loans and the Reimbursement Obligations
hereunder, and its determination thereof shall be conclusive and binding except
in the case of manifest error.

Section 1.5.           Minimum Borrowing Amounts; Maximum
Eurodollar Loans.  Each
Borrowing of Base Rate Loans advanced under a Credit shall be in an amount not
less than $100,000.  Each Borrowing of
Eurodollar Loans advanced, continued or converted under a Credit shall be in an
amount equal to $1,000,000 or such greater amount which is an integral multiple
of $500,000.  Without the Administrative
Agent’s consent, there shall not be more than five (5) Borrowings of Eurodollar
Loans outstanding hereunder at any one time.

Section 1.6.           Manner of Borrowing Loans and
Designating Applicable Interest Rates.  (a) Notice to the
Administrative Agent.  The
Borrower shall give notice to the Administrative  Agent
by no later than 10:00 a.m. (Chicago time):  (i) at least three (3) Business
Days before the date on which the Borrower requests the Lenders to advance a
Borrowing of Eurodollar Loans and (ii) on the date the Borrower requests
the Lenders to advance a Borrowing of Base Rate Loans.  The Loans included in each Borrowing shall
bear interest initially at the type of rate specified in such notice of a new
Borrowing.  Thereafter, subject to the
terms and conditions hereof, the Borrower may from time to time elect to change
or continue the type of interest rate borne by each Borrowing or, subject to
the minimum amount requirement for each outstanding Borrowing set forth in
Section 1.5 hereof, a portion thereof, as follows:  (i) if such Borrowing is of Eurodollar
Loans, on the last day of the Interest Period applicable thereto, the Borrower
may continue part or all of such Borrowing as Eurodollar Loans or convert part
or all of such Borrowing into Base Rate Loans or (ii) if such Borrowing is
of Base Rate Loans, on any Business Day, the Borrower may convert all or part
of such Borrowing into Eurodollar Loans for an Interest Period or Interest
Periods specified by the Borrower.  The
Borrower shall give all such notices requesting the advance, continuation or
conversion of a Borrowing to the Administrative  Agent
by telephone, telecopy, or other telecommunication device acceptable to the
Administrative Agent (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing), substantially in the form
attached hereto as Exhibit B (Notice of Borrowing) or Exhibit C (Notice
of Continuation/Conversion), as applicable, or in such other form acceptable to
the Administrative  Agent.  Notice of the continuation of a Borrowing of
Eurodollar Loans for an additional Interest Period or of the conversion of part
or all of a Borrowing of Base Rate Loans into Eurodollar Loans must be given by
no later than 10:00 a.m. (Chicago time) at least three (3) Business
Days before the date of the requested continuation or conversion.  All such notices concerning the advance,
continuation or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced,

 7
 

continued or converted, the type of Loans to comprise such
new, continued or converted Borrowing and, if such Borrowing is to be comprised
of Eurodollar Loans, the Interest Period applicable thereto.  No Borrowing of Eurodollar Loans shall be
advanced, continued, or created by conversion if any Default or Event of
Default then exists.  The Borrower agrees
that the Administrative Agent may rely on any such telephonic, telecopy or
other telecommunication notice given by any person the Administrative Agent in
good faith believes is an Authorized Representative without the necessity of
independent investigation, and in the event any such notice by telephone
conflicts with any written confirmation such telephonic notice shall govern if
the Administrative Agent has acted in reliance thereon.

(b)       Notice to the Lenders.  The Administrative Agent shall give prompt
telephonic, telecopy or other telecommunication notice to each Lender of any
notice from the Borrower received pursuant to Section 1.6(a) above and, if
such notice requests the Lenders to make Eurodollar Loans, the Administrative
Agent shall give notice to the Borrower and each Lender by like means of the
interest rate applicable thereto promptly after the Administrative Agent has
made such determination.

(c)       Borrower’s Failure to
Notify.  If the Borrower fails
to give notice pursuant to Section 1.6(a) above of the continuation or
conversion of any outstanding principal amount of a Borrowing of Eurodollar
Loans before the last day of its then current Interest Period within the period
required by Section 1.6(a) and such Borrowing is not prepaid in accordance
with Section 1.9(a), such Borrowing shall automatically be converted into
a Borrowing of Base Rate Loans.  In the
event the Borrower fails to give notice pursuant to Section 1.6(a) above
of a Borrowing equal to the amount of a Reimbursement Obligation and has not
notified the Administrative Agent by 12:00 noon (Chicago time) on the day
such Reimbursement Obligation becomes due that it intends to repay such
Reimbursement Obligation through funds not borrowed under this Agreement, the
Borrower shall be deemed to have requested a Borrowing of Base Rate Loans under
the Revolving Credit (or, at the option of the Swing Line Lender, under the
Swing Line) on such day in the amount of the Reimbursement Obligation then due,
which Borrowing shall be applied to pay the Reimbursement Obligation then due.

(d)       Disbursement of Loans.  Not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to
Section 7 hereof, each Lender shall make available its Loan comprising
part of such Borrowing in funds immediately available at the principal office
of the Administrative Agent in Chicago, Illinois (or at such other location as
the Administrative Agent shall designate). 
The Administrative Agent shall make the proceeds of each new Borrowing
available to the Borrower at the Administrative Agent’s principal office in
Chicago, Illinois (or at such other location as the Administrative Agent shall
designate), by depositing or wire transferring such proceeds to the credit of
the Borrower’s Designated Disbursement Account or as the Borrower and the
Administrative Agent may otherwise agree.

(e)       Administrative Agent
Reliance on Lender Funding. 
Unless the Administrative Agent shall have been notified by a Lender
prior to (or, in the case of a Borrowing of Base Rate Loans, by 1:00 p.m.
(Chicago time) on) the date on which such Lender is scheduled to make payment
to the Administrative Agent of the proceeds of a Loan (which notice shall be
effective upon receipt) that such Lender does not intend to make such payment,
the Administrative Agent 

 8
 

may assume that such Lender has made such payment when
due and the Administrative Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower the proceeds of the
Loan to be made by such Lender and, if any Lender has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, pay to the
Administrative Agent the amount made available to the Borrower attributable to
such Lender together with interest thereon in respect of each day during the
period commencing on the date such amount was made available to the Borrower
and ending on (but excluding) the date such Lender pays such amount to the
Administrative Agent at a rate per annum equal to:  (i) from the date the related advance
was made by the Administrative Agent to the date two (2) Business Days after
payment by such Lender is due hereunder, the Federal Funds Rate for each such
day and (ii) from the date two (2) Business Days after the date such
payment is due from such Lender to the date such payment is made by such
Lender, the Base Rate in effect for each such day.  If such amount is not received from such Lender
by the Administrative Agent immediately upon demand, the Borrower will, on
demand, repay to the Administrative Agent the proceeds of the Loan attributable
to such Lender with interest thereon at a rate per annum equal to the interest
rate applicable to the relevant Loan, but without such payment being considered
a payment or prepayment of a Loan under Section 1.12 hereof so that the
Borrower will have no liability under such Section with respect to such
payment.

Section 1.7.           Swing Loans.  (a) Generally.  Subject to the terms and conditions hereof,
as part of the Revolving Credit, the Swing Line Lender may, in its discretion,
make loans in U.S. Dollars to the Borrower under the Swing Line
(individually a “Swing Loan” and collectively the
“Swing Loans”) which shall not in the
aggregate at any time outstanding exceed the Swing Line Sublimit.  Swing Loans may be availed of from time to
time and borrowings thereunder may be repaid and used again during the period
ending on the Revolving Credit Termination Date.  Each Swing Loan shall be in a minimum amount
of $250,000 or such greater amount which is an integral multiple of $100,000.

(b)       Interest on Swing Loans.  Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal to
(i) the sum of the Base Rate plus the Applicable Margin for Base Rate
Loans under the Revolving Credit as from time to time in effect (computed on
the basis of a year of 365 or 366 days, as the case may be, for the actual
number of days elapsed) or (ii) the Quoted Rate (computed on the basis of
a year of 360 days for the actual number of days elapsed).  Interest on each Swing Loan shall be due and
payable by the Borrower on each Interest Payment Date and at maturity (whether
by acceleration or otherwise).

(c)       Requests for Swing Loans.  The Borrower shall give the Administrative
Agent prior notice (which may be written or oral) no later than 12:00 Noon
(Chicago time) on the date upon which the Borrower requests that any Swing Loan
be made, of the amount and date of such Swing Loan, and, if applicable, the
Interest Period requested therefor.  The
Administrative Agent shall promptly advise the Swing Line Lender of any such
notice received from the Borrower.  After
receiving such notice, the Swing Line Lender shall in its discretion quote an
interest rate to the Borrower at which the Swing Line Lender would be willing
to make such Swing Loan available to the Borrower for the Interest Period so
requested (the rate so quoted for a given Interest Period being herein referred
to as “Quoted Rate”).  The Borrower acknowledges and agrees that the
interest rate quote is given for immediate and irrevocable acceptance.  If the

 9
 

Borrower does not so immediately accept the Quoted
Rate for the full amount requested by the Borrower for such Swing Loan,
the  Quoted Rate shall be deemed
immediately withdrawn and such Swing Loan shall bear interest at the rate per
annum determined by adding the Applicable Margin for Base Rate Loans under the
Revolving Credit to the Base Rate as from time to time in effect.  Subject to the terms and conditions hereof,
the proceeds of each Swing Loan extended to the Borrower shall be deposited or
otherwise wire transferred to the Borrower’s Designated Disbursement Account or
as the Borrower, the Administrative Agent, and the Swing Line Lender may
otherwise agree.  Anything contained in
the foregoing to the contrary notwithstanding, the undertaking of the Swing
Line Lender to make Swing Loans shall be subject to all of the terms and conditions
of this Agreement (provided that the Swing Line Lender shall be entitled to
assume that the conditions precedent to an advance of any Swing Loan have been
satisfied unless notified to the contrary by the Administrative Agent or the
Required Lenders).

(d)       Refunding Loans.  In its sole and absolute discretion, the
Swing Line Lender may at any time, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to act on its behalf for such
purpose) and with notice to the Borrower and the Administrative Agent, request
each Lender to make a Revolving Loan in the form of a Base Rate Loan in an
amount equal to such Lender’s Revolver Percentage of the amount of the Swing
Loans outstanding on the date such notice is given.  Unless an Event of Default described in
Section 9.1(j) or 9.1(k) exists with respect to the Borrower, regardless
of the existence of any other Event of Default, each Lender shall make the
proceeds of its requested Revolving Loan available to the Administrative Agent
for the account of the Swing Line Lender), in immediately available funds, at
the Administrative Agent’s office in Chicago, Illinois (or such other location
designated by the Administrative Agent), before 12:00 Noon (Chicago time) on
the Business Day following the day such notice is given.  The Administrative Agent shall promptly remit
the proceeds of such Borrowing to the Swing Line Lender to repay the
outstanding Swing Loans.

(e)       Participations.  If any Lender refuses or otherwise
fails to make a Revolving Loan when requested by the Swing Line Lender pursuant
to Section 1.7(d) above (because an Event of Default described in
Section 9.1(j) or 9.1(k) exists with respect to the Borrower or
otherwise), such Lender will, by the time and in the manner such Revolving Loan
was to have been funded to the Swing Line Lender, purchase from the Swing Line
Lender an undivided participating interest in the outstanding Swing Loans in an
amount equal to its Revolver Percentage of the aggregate principal amount of
Swing Loans that were to have been repaid with such Revolving Loans.  Each Lender that so purchases a participation
in a Swing Loan shall thereafter be entitled to receive its Revolver Percentage
of each payment of principal received on the Swing Loan and of interest
received thereon accruing from the date such Lender funded to the Swing Line
Lender its participation in such Loan. 
The several obligations of the Lenders under this Section shall be
absolute, irrevocable, and unconditional under any and all circumstances
whatsoever and shall not be subject to any set-off, counterclaim or
defense to payment which any Lender may have or have had against the Borrower,
any other Lender, or any other Person whatsoever.  Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event of
Default or by any reduction or termination of the Commitments of any Lender,
and each payment made by a Lender under this Section shall be made without any
offset, abatement, withholding, or reduction whatsoever.

 10
 

Section 1.8.           Maturity of Loans.  (a) Scheduled Payments of Term Loans.  The Borrower shall make principal payments on
the Term Loans in installments on the last day of each March, June, September,
and December in each year, commencing with the calendar quarter ending
September 30, 2007, with the amount of each such principal installment to
equal $112,500, it being agreed that a final payment comprised of all principal
and interest not sooner paid on the Term Loans shall be due and payable on
August 9, 2013 the final maturity thereof. 
Each such principal payment shall be applied to the Lenders holding the
Term Loans pro rata based upon their Term Loan
Percentages.

(b)           Revolving Loans.  Each Revolving Loan, both for principal and
interest not sooner paid, shall mature and be due and payable by the Borrower
on the Revolving Credit Termination Date.

(c)           Swing Loans.  Each Swing Loan, both for principal and
interest not sooner paid, shall mature and be due and payable by the Borrower
on the Revolving Credit Termination Date.

Section 1.9.           Prepayments.  (a) Optional.  The Borrower may prepay in whole or in part
(but, if in part, then:  (i) if such
Borrowing is of Base Rate Loans, in an amount not less than $100,000,
(ii) if such Borrowing is of Eurodollar Loans, in an amount not less than
$500,000, and (iii) in each case, in an amount such that the minimum
amount required for a Borrowing pursuant to Section 1.5 and 1.7 hereof
remains outstanding) any Borrowing of Eurodollar Loans at any time upon three
(3) Business Days prior notice by the Borrower to the Administrative Agent
or, in the case of a Borrowing of Base Rate Loans, notice delivered by the
Borrower to the Administrative Agent no later than 10:00 a.m. (Chicago
time) on the date of prepayment (or, in any case, such shorter period of time
then agreed to by the Administrative Agent), such prepayment to be made by the
payment of the principal amount to be prepaid and, in the case of any Term
Loans or Eurodollar Loans or Swing Loans, accrued interest thereon to the date
fixed for prepayment plus any amounts due the Lenders under Section 1.12
hereof.

(b)       Mandatory.  (i) If the Borrower or any Subsidiary
shall at any time or from time to time make or agree to make a Disposition or
shall suffer an Event of Loss with respect to any Property, then the Borrower
shall promptly notify the Administrative Agent of such proposed Disposition or
Event of Loss (including the amount of the estimated Net Cash Proceeds to be
received by the Borrower or such Subsidiary in respect thereof) and, promptly upon
receipt by the Borrower or such Subsidiary of the Net Cash Proceeds of such
Disposition or Event of Loss, the Borrower shall prepay the Obligations in an
aggregate amount equal to 100% of the amount of all such Net Cash Proceeds; provided that (x) so long as no Default or Event of
Default then exists, this subsection shall not require any such prepayment with
respect to Net Cash Proceeds received on account of an Event of Loss so long as
such Net Cash Proceeds are applied to replace or restore the relevant Property
in accordance with the relevant Collateral Documents, (y) this subsection
shall not require any such prepayment with respect to Net Cash Proceeds
received on account of Dispositions during any fiscal year of the Borrower not
exceeding $500,000 in the aggregate so long as no Default or Event of Default
then exists, and (z) in the case of any Disposition not covered by
clause (y) above, so long as no Default or Event of Default then exists,
if the Borrower states in its notice of such event that the Borrower or the
relevant Subsidiary intends to reinvest, within ninety (90) days of the
applicable Disposition, the Net Cash

 11
 

Proceeds thereof in assets similar to the assets which
were subject to such Disposition, then the Borrower shall not be required to
make a mandatory prepayment under this subsection in respect of such Net Cash
Proceeds to the extent such Net Cash Proceeds are actually reinvested in such
similar assets with such 90-day period. 
Promptly after the end of such 90-day period, the Borrower shall
notify the Administrative Agent whether the Borrower or such Subsidiary has
reinvested such Net Cash Proceeds in such similar assets, and, to the extent
such Net Cash Proceeds have not been so reinvested, the Borrower shall promptly
prepay the Obligations in the amount of such Net Cash Proceeds not so
reinvested.  The amount of each such
prepayment shall be applied first to the outstanding Term Loans until paid in
full and then to the Revolving Credit.  If the Administrative Agent or the
Required Lenders so request, all proceeds of such Disposition or Event of Loss
shall be deposited with the Administrative Agent (or its agent) and held by it
in the Collateral Account.  So long as no
Default or Event of Default exists, the Administrative Agent is authorized to
disburse amounts representing such proceeds from the Collateral Account to or
at the Borrower’s direction for application to or reimbursement for the costs
of replacing, rebuilding or restoring such Property.

(ii)       If after the Closing Date the Borrower or
any Subsidiary shall issue any Indebted­ness for Borrowed Money, other than
Indebtedness for Borrowed Money permitted by Section 8.7(a)-(e)
hereof, the Borrower shall promptly notify the Administrative Agent of the
estimated Net Cash Proceeds of such issuance to be received by or for the
account of the Borrower or such Subsidiary in respect thereof.  Promptly upon receipt by the Borrower or such
Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the
Obligations in an aggregate amount equal to 100% of the amount of such Net Cash
Proceeds.  The amount of each such
prepayment shall be applied first to the outstanding Term Loans until paid in
full and then to the Revolving Credit. 
The Borrower acknowledges that its performance hereunder shall not limit
the rights and remedies of the Lenders for any breach of Section 8.7
hereof or any other terms of the Loan Documents.

(iii)      Within two (2) days after receipt of the
Borrower’s year-end audited financial statements, and in any event within
ninety (90) days after the end of each fiscal year of the Borrower (commencing
with the fiscal year ending December 31, 2008), the Borrower shall prepay
the Obligations by an amount equal to fifty percent (50%) of Excess Cash Flow
of Borrower and its Subsidiaries for the most recently completed fiscal year of
the Borrower.  The amount of each such
prepayment shall be applied first to the outstanding Term Loans until paid in
full and then to the Revolving Credit.

(iv)      The Borrower shall, on each date the
Revolving Credit Commitments are reduced pursuant to Section 1.13 hereof,
prepay the Revolving Loans, Swing Loans, and, if necessary, prefund the L/C
Obligations by the amount, if any, necessary to reduce the sum of the aggregate
principal amount of Revolving Loans, Swing Loans, and L/C Obligations then
outstanding to the amount to which the Revolving Credit Commitments have been
so reduced.

(v)       Unless the Borrower otherwise directs,
prepayments of Loans (either prepayment of Term Loans or Revolving Loans, as
applicable) under this Section 1.9(b) shall be applied first to Borrowings
of Base Rate Loans until payment in full thereof with any balance applied to
Borrowings of Eurodollar Loans in the order in which their Interest Periods
expire.  Each

 12
 

prepayment of Loans under this Section 1.9(b) shall be
made by the payment of the principal amount to be prepaid and, in the case of
any Term Loans or Eurodollar Loans or Swing Loans, accrued interest thereon to
the date of prepayment together with any amounts due the Lenders under
Section 1.12 hereof.  Each
prefunding of L/C Obligations shall be made in accordance with Section 9.4
hereof.

(c)       Any amount of Revolving Loans and Swing
Loans paid or prepaid before the Revolving Credit Termination Date may, subject
to the terms and conditions of this Agreement, be borrowed, repaid and borrowed
again.  No amount of the Term Loans paid
or prepaid may be reborrowed, and, in the case of any partial prepayment, such
prepayment shall be applied to the remaining amortization payments on the Term
Loans on a ratable basis among all such remaining amortization payments based
on the principal amounts thereof.

Section 1.10.        Default Rate.  Notwithstanding anything to the contrary
contained herein, while any Event of Default exists or after acceleration, the
Borrower shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) on the principal amount of all Loans and
Reimbursement Obligations, and letter of credit fees at a rate per annum equal
to:

(a)           for any Loan or Reimbursement
Obligation, the sum of two percent (2%) plus the rate otherwise applicable to
such Loan or Reimbursement Obligation; and

(b)           for any Letter of Credit, the sum of
2.0% plus the letter of credit fee due under
Section 2.1 with respect to such Letter of Credit;

provided, however, that in the
absence of acceleration, any adjustments pursuant to this Section shall be made
at the election of the Administrative Agent, acting at the request or with the
consent of the Required Lenders, with written notice to the Borrower.  While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.

Section 1.11.        Evidence of Indebtedness.  (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

(b)       The Administrative Agent shall also
maintain accounts in which it will record (i) the amount of each Loan made
hereunder, the type thereof and the Interest Period with respect thereto,
(ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

(c)       The entries maintained in the accounts
maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided, however, that
the failure of the Administrative Agent or any Lender to

 13
 

maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.

(d)       Any Lender may request that its Loans be
evidenced by a promissory note or notes in the forms of Exhibit D-1 (in
the case of its Term Loan and referred to herein as a “Term Note”),
D-2 (in the case of its Revolving Loans and referred to herein as a “Revolving Note”), or D-3 (in the case of its Swing
Loans and referred to herein as a “Swing Note”),
as applicable (the Term Notes, Revolving Notes, and Swing Note being
hereinafter referred to collectively as the “Notes” and
individually as a “Note”).  In such event, the Borrower shall prepare,
execute and deliver to such Lender a Note payable to such Lender or its
registered assigns in the amount of the relevant Term Loan, Commitment, or
Swing Line Sublimit, as applicable. 
Thereafter, the Loans evidenced by such Note or Notes and interest
thereon shall at all times (including after any assignment pursuant to
Section 13.12) be represented by one or more Notes payable to the order of
the payee named therein or any assignee pursuant to Section 13.12, except
to the extent that any such Lender or assignee subsequently returns any such
Note for cancellation and requests that such Loans once again be evidenced as
described in subsections (a) and (b) above.

Section 1.12.        Funding Indemnity.  If any Lender shall incur any loss, cost or
expense (including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or re-employment of deposits or other funds
acquired by such Lender to fund or maintain any Eurodollar Loan or Swing Loan
or the relending or reinvesting of such deposits or amounts paid or prepaid to
such Lender) as a result of:

(a)           any payment, prepayment or conversion
of a Eurodollar Loan or Swing Loan on a date other than the last day of its
Interest Period,

(b)           any failure (because of a failure to
meet the conditions of Section 7 or otherwise) by the Borrower to borrow
or continue a Eurodollar Loan or Swing Loan, or to convert a Base Rate Loan
into a Eurodollar Loan or Swing Loan on the date specified in a notice given
pursuant to Section 1.6(a) or 1.7 hereof,

(c)           any failure by the Borrower to make
any payment of principal on any Eurodollar Loan or Swing Loan when due (whether
by acceleration or otherwise), or

(d)           any acceleration of the maturity of a
Eurodollar Loan or Swing Loan as a result of the occurrence of any Event of
Default hereunder,

then, upon the demand of such Lender, the Borrower
shall pay to such Lender such amount as will reimburse such Lender for such
loss, cost or expense.  If any Lender
makes such a claim for compensation, it shall provide to the Borrower, with a
copy to the Administrative Agent, a certificate setting forth the amount of
such loss, cost or expense in reasonable detail (including an explanation of
the basis for and the computation of such loss, cost or expense) and the
amounts shown on such certificate shall be conclusive if reasonably determined.

Section 1.13.     Commitment Terminations.  (a) Optional Revolving Credit
Terminations.  The Borrower
shall have the right at any time and from time to time, upon five
(5) Business Days

 14
 

prior written notice to the Administrative Agent (or
such shorter period of time agreed to by the Administrative Agent), to
terminate the Revolving Credit Commitments without premium or penalty and in
whole or in part, any partial termination to be (i) in an amount not less
than $500,000 and (ii) allocated ratably among the Lenders in proportion
to their respective Revolver Percentages, provided that the Revolving Credit
Commitments may not be reduced to an amount less than the sum of the aggregate
principal amount of Revolving Loans, Swing Loans, and L/C Obligations then
outstanding.  Any termination of the
Revolving Credit Commitments below the L/C Sublimit or the Swing Line
Sublimit then in effect shall reduce the L/C Sublimit and Swing Line
Sublimit, as applicable, by a like amount. 
The Administrative Agent shall give prompt notice to each Lender of any
such termination of the Revolving Credit Commitments.

(b)       Mandatory Revolving Credit
Termination.  If at any time
Net Cash Proceeds or other amounts remain after the prepayment of the Term
Loans in full pursuant to Section 1.9(b) hereof, the Revolving Credit
Commitments shall ratably terminate by an amount equal to 100% of such excess; provided that the Revolving Credit Commitments shall not be
reduced below $20,000,000 pursuant to this Section 1.13(b).

(c)       Any termination of the Commitments
pursuant to this Section 1.13 may not be reinstated.

Section 1.14.        Substitution of Lenders.  In the event (a) the Borrower receives a
claim from any Lender for compensation under Section 10.3 or 13.1 hereof,
(b) the Borrower receives notice from any Lender of any illegality
pursuant to Section 10.1 hereof, (c) any Lender is in default in any
material respect with respect to its obligations under the Loan Documents, or
(d) a Lender fails to consent to an amendment or waiver requested under
Section 13.13 hereof at a time when the Required Lenders have approved
such amendment or waiver (any such Lender referred to in clause (a), (b),
(c), or (d) above being hereinafter referred to as an “Affected Lender”),
the Borrower may, in addition to any other rights the Borrower may have
hereunder or under applicable law, require, at its expense, any such Affected
Lender to assign, at par, without recourse, all of its interest, rights, and
obligations hereunder (including all of its Commitments and the Loans and
participation interests in Letters of Credit and other amounts at any time
owing to it hereunder and the other Loan Documents) to an Eligible Assignee
specified by the Borrower, provided that
(i) such assignment shall not conflict with or violate any law, rule or
regulation or order of any court or other governmental authority, (ii) the
Borrower shall have paid to the Affected Lender all monies (together with
amounts due such Affected Lender under Section 1.12 hereof as if the Loans
owing to it were prepaid rather than assigned) other than such principal owing
to it hereunder, and (iii) the assignment is entered into in accordance
with, and subject to the consents required by, Section 13.12 hereof
(provided any assignment fees and reimbursable expenses due thereunder shall be
paid by the Borrower).

SECTION 2.                                                    FEES.

Section 2.1.           Fees.  (a) Revolving Credit
Commitment Fee.  The Borrower
shall pay to the Administrative Agent for the ratable account of the Lenders in
accordance with their Revolver Percentages a commitment fee at the rate per
annum equal to 0.25% (computed on the basis of a year of 360 days and the
actual number of days elapsed) on the average daily Unused Revolving

 15
 

Credit Commitments. 
Such commitment fee shall be payable quarterly in arrears on the last
day of each March, June, September, and December in each year (commencing on
the first such date occurring after the date hereof) and on the Revolving
Credit Termination Date, unless the Revolving Credit Commitments are terminated
in whole on an earlier date, in which event the commitment fee for the period
to the date of such termination in whole shall be paid on the date of such
termination.

(b)       Letter of Credit Fees.  On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.3
hereof, the Borrower shall pay to the L/C Issuer for its own account a
fronting fee equal to 0.125% of the face amount of (or of the increase in the
face amount of) such Letter of Credit. 
Quarterly in arrears, on the last day of each March, June, September,
and December, commencing on the first such date occurring after the date
hereof, the Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders in accordance with their Revolver Percentages, a letter
of credit fee at a rate per annum equal to the amount set forth under the
column heading “Applicable Margin for Eurodollar Loans under Revolving Credit
and Letter of Credit Fee Shall Be:” as set forth in the definition of
Applicable Margin (computed on the basis of a year of 360 days and the
actual number of days elapsed) in effect during each day of such quarter
applied to the daily average face amount of Letters of Credit outstanding during
such quarter.  In addition, the Borrower
shall pay to the L/C Issuer for its own account the L/C Issuer’s
standard issuance, drawing, negotiation, amendment, assignment, and other
administrative fees for each Letter of Credit as established by the
L/C Issuer from time to time.

(c)       Administrative Agent Fees.  The Borrower shall pay to the Administrative
Agent, for its own use and benefit, the fees agreed to between the
Administrative Agent and the Borrower in a fee letter dated June 25, 2007,
or as otherwise agreed to in writing between them.

(f)        Audit Fees.  Upon the
occurrence and during the continuation of an Event of Default, the Borrower
shall pay to the Administrative Agent for its own use and benefit charges for
audits of the Collateral performed by the Administrative Agent or its agents or
representatives, in such amounts as the Administrative Agent may from time to
time request (the Administrative Agent acknowledging and agreeing that such
charges shall be computed in the same manner as it at the time customarily uses
for the assessment of charges for similar collateral audits).

SECTION 3.                                                    PLACE
AND APPLICATION OF PAYMENTS.

Section 3.1.           Place and Application of Payments.  All payments of principal of and interest on
the Loans and the Reimbursement Obligations, and of all other Obligations
payable by the Borrower under this Agreement and the other Loan Documents,
shall be made by the Borrower to the Administrative Agent by no later than
1:00 p.m. (Chicago time) on the due date thereof at the office of the
Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrower), for the benefit of the
Lender(s) or L/C Issuer entitled thereto. 
Any payments received after such time shall be deemed to have been
received by the Administrative Agent on the next Business Day.  All such payments shall be made in U.S.
Dollars, in immediately available funds at the place of payment, in each case

 16
 

without set-off or counterclaim.  The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on Loans and on Reimbursement Obligations in which the
Lenders have purchased Participating Interests ratably to the Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.  If the Administrative Agent
causes amounts to be distributed to the Lenders in reliance upon the assumption
that the Borrower will make a scheduled payment and such scheduled payment is
not so made, each Lender shall, on demand, repay to the Administrative Agent
the amount distributed to such Lender together with interest thereon in respect
of each day during the period commencing on the date such amount was
distributed to such Lender and ending on (but excluding) the date such Lender
repays such amount to the Administrative Agent, at a rate per annum equal
to:  (i) from the date the
distribution was made to the date two (2) Business Days after payment by such
Lender is due hereunder, the Federal Funds Rate for each such day and
(ii) from the date two (2) Business Days after the date such payment is
due from such Lender to the date such payment is made by such Lender, the Base
Rate in effect for each such day.

Anything contained herein to the contrary
notwithstanding (including, without limitation, Section 1.9(b) hereof),
all payments and collections received in respect of the Obligations and all
proceeds of the Collateral received, in each instance, by the Administrative
Agent or any of the Lenders after acceleration or the final maturity of the
Obligations or termination of the Commitments as a result of an Event of
Default shall be remitted to the Administrative Agent and distributed as
follows:

(a)           first, to the payment of any
outstanding costs and expenses incurred by the Administrative Agent, and any
security trustee therefor, in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral, in protecting, preserving or enforcing
rights under the Loan Documents, and in any event including all costs and
expenses of a character which the Borrower has agreed to pay the Administrative
Agent under Section 13.15 hereof (such funds to be retained by the
Administrative Agent for its own account unless it has previously been
reimbursed for such costs and expenses by the Lenders, in which event such
amounts shall be remitted to the Lenders to reimburse them for payments
theretofore made to the Administrative Agent);

(b)           second, to the payment of the Swing
Loans, both for principal and accrued but unpaid interest;

(c)           third, to the payment of any
outstanding interest and fees due under the Loan Documents to be allocated pro
rata in accordance with the aggregate unpaid amounts owing to each holder
thereof;

(d)           fourth, to the payment of principal
on the Loans (other than Swing Loans), unpaid Reimbursement Obligations,
together with amounts to be held by the Administrative Agent as collateral
security for any outstanding L/C Obligations pursuant to Section 9.4
hereof (until the Administrative Agent is holding an amount of cash equal to
the then outstanding amount of all such L/C Obligations), and Hedging
Liability, the aggregate amount paid to, or held as collateral security for,
the Lenders and L/C Issuer

 17
 

and, in the case of
Hedging Liability, their Affiliates to be allocated pro rata in accordance with
the aggregate unpaid amounts owing to each holder thereof;

(e)           fifth, to the payment of all other
unpaid Obligations and all other indebtedness, obligations, and liabilities of
the Borrower and its Subsidiaries secured by the Loan Documents (including,
without limitation, Funds Transfer and Deposit Account Liability) to be
allocated pro rata in accordance with the aggregate unpaid amounts owing to
each holder thereof; and

(f)            finally, to the Borrower or whoever
else may be lawfully entitled thereto.

Section 3.2.           Account Debit.  The Borrower hereby irrevocably authorizes
the Administrative Agent to charge any of the Borrower’s deposit accounts
maintained with the Administrative Agent for the amounts from time to time
necessary to pay any then due Obligations; provided that  the Borrower acknowledges and agrees that the
Administrative Agent shall not be under an obligation to do so and the
Administrative Agent shall not incur any liability to the Borrower or any other
Person for the Administrative Agent’s failure to do so.

SECTION 4.                                                    GUARANTIES
AND COLLATERAL.

Section 4.1.           Guaranties.  The payment and performance of the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability shall at all times be guaranteed by each direct and indirect Domestic
Subsidiary of the Borrower pursuant to Section 12 hereof or pursuant to
one or more guaranty agreements in form and substance acceptable to the
Administrative Agent, as the same may be amended, modified or supplemented from
time to time (individually a “Guaranty” and
collectively the “Guaranties” and each such
Subsidiary executing and delivering this Agreement as a Guarantor (including
any Subsidiary hereafter executing and delivering an Additional Guarantor
Supplement in the form called for by Section 12 hereof) or a separate
Guaranty being referred to herein as a “Guarantor” and
collectively the “Guarantors”).

Section 4.2.           Collateral.  The Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall be secured by valid, perfected,
and enforceable Liens on all right, title, and interest of the Borrower and
each Guarantor in all of their accounts, chattel paper, instruments, documents,
general intangibles, letter-of-credit rights, supporting
obligations, deposit accounts, investment property, inventory, equipment,
fixtures, commercial tort claims, real estate and certain other Property,
whether now owned or hereafter acquired or arising, and all proceeds thereof; provided, however, that: 
(i) until a Default or Event of Default has occurred and is
continuing and thereafter until otherwise required by the Administrative Agent
or the Required Lenders, Liens on local petty cash accounts maintained by the
Borrower and the Guarantors in proximity to their operations need not be
perfected provided that the total amount on deposit at any one time not so
perfected shall not exceed $500,000 in the aggregate and Liens on payroll
accounts maintained by the Borrower and the Guarantors need not be perfected
provided the total amount on deposit at any time does not exceed the current
amount of their payroll obligations, (ii) until a Default or Event of
Default has occurred and is continuing and thereafter until otherwise required
by the Administrative Agent or the Required Lenders, Liens

 18

on vehicles which are subject to a certificate of
title law need not be perfected provided that the total value of such property
at any one time not so perfected shall not exceed $1,000,000 in the aggregate,
and (iii) Liens on the Voting Stock of a Foreign Subsidiary shall be
limited to 66% of the total outstanding Voting Stock of such Foreign
Subsidiary.  The Borrower acknowledges
and agrees that the Liens on the Collateral shall be granted to the
Administrative Agent for the benefit of the holders of the Obligations, the
Hedging Liability, and the Funds Transfer and Deposit Account Liability and
shall be valid and perfected first priority Liens subject, however, to the
proviso appearing at the end of the preceding sentence and to Liens permitted
by Section 8.8 hereof, in each case pursuant to one or more Collateral
Documents from such Persons, each in form and substance satisfactory to the
Administrative Agent.

Section 4.3            Liens on Real Property.  In the event that the Borrower or any
Guarantor owns or hereafter acquires any real property (provided
that the requirements of this Section 4.3 shall not apply to any lease of
real property by the Borrower or any Guarantor), the Borrower shall, or shall
cause such Guarantor to, execute and deliver to the Administrative Agent a
mortgage or deed of trust acceptable in form and substance to the
Administrative Agent for the purpose of granting to the Administrative Agent
(or a security trustee therefor) a Lien on such real property to secure the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, shall pay all taxes, costs, and expenses incurred by the
Administrative Agent in recording such mortgage or deed of trust, and shall
supply to the Administrative Agent at the Borrower’s cost and expense a survey,
environmental report, hazard insurance policy, appraisal report, and a
mortgagee’s policy of title insurance from a title insurer acceptable to the
Administrative Agent insuring the validity of such mortgage or deed of trust
and its status as a first Lien (subject to Liens permitted by this Agreement)
on the real property encumbered thereby and such other instrument, documents,
certificates, and opinions reasonably required by the Administrative Agent in
connection therewith.

Section 4.4.           Further Assurances.  The Borrower agrees that it shall, and shall
cause each Guarantor to, from time to time at the request of the Administrative
Agent or the Required Lenders, execute and deliver such documents and do such
acts and things as the Administrative Agent or the Required Lenders may
reasonably request in order to provide for or perfect or protect such Liens on
the Collateral.  In the event the
Borrower or any Guarantor forms or acquires any other Subsidiary after the date
hereof, except as otherwise provided in Sections 4.1 and 4.2 above, the
Borrower shall promptly upon such formation or acquisition cause such newly
formed or acquired Subsidiary to execute a Guaranty and such Collateral
Documents as the Administrative Agent may then require, and the Borrower shall
also deliver to the Administrative Agent, or cause such Subsidiary to deliver
to the Administrative Agent, at the Borrower’s cost and expense, such other
instruments, documents, certificates, and opinions reasonably required by the
Administrative Agent in connection therewith.

SECTION 5.                                                    DEFINITIONS;
INTERPRETATION.

Section 5.1.           Definitions.  The following terms when used herein shall
have the following meanings:

“Account Debtor” means any Person
obligated to make payment on any Receivable.

 19
 

“Acquired Business” means the
entity or assets acquired by the Borrower or a Subsidiary in an Acquisition,
whether before or after the date hereof.

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

“Acquisition Corp. V” means DGFC
Acquisition Corp. V, a Delaware corporation and a Wholly-owned Subsidiary of
the Borrower.

“Adjusted EBITDA” means, with
reference to any period, Net Income for such period plus
all amounts deducted in arriving at such Net Income amount in respect of
(a) Interest Expense for such period, (b) federal, state, and local
income taxes for such period, (c) depreciation of fixed assets and
amortization of intangible assets for such period, (d) Transactions Costs,
(e) any non-recurring costs and extraordinary expenses approved by
the Administrative Agent in its sole discretion, and (f) restructuring
charges and any other items approved by the Administrative Agent in its sole
discretion; provided, further that there shall be
included in such determination for such period all such amounts attributable to
any Person acquired during such period pursuant to a Permitted Acquisition to
the extent not subsequently sold or otherwise disposed of during such period.

“Adjusted LIBOR” is defined in
Section 1.4(b) hereof.

“Administrative Agent” means Bank
of Montreal, in is capacity as Administrative Agent hereunder, and any
successor in such capacity pursuant to Section 11.7 hereof.

 “Administrative
Questionnaire” means an Administrative Questionnaire in a
form supplied by the Administrative Agent.

“Affiliate” means any Person
directly or indirectly controlling or controlled by, or under direct or
indirect common control with, another Person. 
A Person shall be deemed to control another Person for purposes of this
definition if such 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, common directors,
trustees or officers, by contract or otherwise; provided
that, in any event for purposes of this definition, any Person that
owns, directly or indirectly, 5% or more of the securities having the ordinary
voting power for the election of directors or governing body of a corporation
or 5% or more of the partnership or other ownership interest of any other
Person (other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person.

“Agreement” means this Credit
Agreement, as the same may be amended, modified, restated or supplemented from
time to time pursuant to the terms hereof.

 20
 

“Applicable Margin” means, with
respect to Loans, Reimbursement Obligations, and the commitment fees and letter
of credit fees payable under Section 2.1 hereof, until the first Pricing
Date, the rates per annum shown opposite Level IV below, and thereafter
from one Pricing Date to the next the Applicable Margin means the rates per
annum determined in accordance with the following schedule:

	
  Level

  	
   

  	
  Total Leverage Ratio for Such

  Pricing Date

  	
   

  	
  Applicable 

  Margin for Base

  Rate Loans under

  revolving credit

  and

  Reimbursement

  Obligations shall

  be:

  	
   

  	
  Applicable

  Margin for 

  Eurodollar

  Loans under

  Revolving

  credit and

  Letter of credit

  Fee Shall Be:

  	
   

  	
  Applicable

  Margin for

  Base Rate

  Loans

  Under Term

  Credit shall

  be:

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Loans Under

  Term Credit

  Shall be:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  Greater than 2.0 to 1.0

  	
   

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  Less than or equal to 2.0 to 1.0,

  but greater than 1.5 to 1.0

  	
   

  	
  0.25

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Less than or equal to 1.5 to 1.0,

  but greater than 1.0 to 1.0

  	
   

  	
  0

  	
  %

  	
  1.25

  	
  %

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Less than or equal to 1.0 to 1.0

  	
   

  	
  0

  	
  %

  	
  1.00

  	
  %

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  

 

For purposes hereof, the term “Pricing
Date” means, for any fiscal quarter of the Borrower ending on or
after September 30, 2007, the date on which the Administrative Agent is in
receipt of the Borrower’s most recent financial statements (and, in the case of
the year-end financial statements, audit report) for the fiscal quarter
then ended, pursuant to Section 8.5 hereof.  The Applicable Margin shall be established
based on the Total Leverage Ratio for the most recently completed fiscal
quarter and the Applicable Margin established on a Pricing Date shall remain in
effect until the next Pricing Date.  If
the Borrower has not delivered its financial statements by the date such
financial statements (and, in the case of the year-end financial
statements, audit report) are required to be delivered under Section 8.5
hereof, until such financial statements and audit report are delivered, the
Applicable Margin shall be the highest Applicable Margin (i.e.,
Level IV shall apply).  If the Borrower
subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date.  In all other circumstances, the Applicable
Margin established by such financial statements shall be in effect from the
Pricing Date that occurs immediately after the end of the fiscal quarter
covered by such financial statements until the next Pricing Date.  Each determination of the Applicable Margin
made by the Administrative Agent in accordance with the foregoing shall be
conclusive and binding on the Borrower and the Lenders if reasonably
determined.

“Application” is defined in
Section 1.3(b) hereof.

“Approved Fund” means any Fund
that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

 21
 

“Assignment and Acceptance” means
an assignment and acceptance entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by Section 13.12
hereof), and accepted by the Administrative Agent, in substantially the form of
Exhibit G or any other form approved by the Administrative Agent.

“Authorized Representative” means
those persons shown on the list of officers provided by the Borrower pursuant
to Section 7.2 hereof or on any update of any such list provided by the
Borrower to the Administrative Agent, or any further or different officers of
the Borrower so named by any Authorized Representative of the Borrower in a
written notice to the Administrative Agent.

“Base Rate” is defined in
Section 1.4(a) hereof.

“Base Rate Loan” means a Loan
bearing interest at a rate specified in Section 1.4(a) hereof.

“Borrower” is defined in the
introductory paragraph of this Agreement.

“Borrowing” means the total of
Loans of a single type advanced, continued for an additional Interest Period,
or converted from a different type into such type by the Lenders under a Credit
on a single date and, in the case of Eurodollar Loans, for a single Interest
Period.  Borrowings of Loans are made and
maintained ratably from each of the Lenders under a Credit according to their
Percentages of such Credit.  A Borrowing
is “advanced” on the day Lenders advance
funds comprising such Borrowing to the Borrower, is “continued”
on the date a new Interest Period for the same type of Loans commences for such
Borrowing, and is “converted” when such Borrowing
is changed from one type of Loans to the other, all as determined pursuant to
Section 1.6 hereof.  Borrowings of
Swing Loans are made by the Swing Line Lender in accordance with the procedures
set forth in Section 1.7 hereof.

“Business Day” means any day
(other than a Saturday or Sunday) on which banks are not authorized or required
to close in Chicago, Illinois and, if the applicable Business Day relates to
the advance or continuation of, or conversion into, or payment of a Eurodollar
Loan, on which banks are dealing in U.S. Dollar deposits in the interbank
eurodollar market in London, England and Nassau, Bahamas.

“Capital Expenditures” means,
with respect to any Person for any period, the aggregate amount of all
expenditures (whether paid in cash or accrued as a liability) by such Person
during that period for the acquisition or leasing (pursuant to a Capital Lease)
of fixed or capital assets or additions to property, plant, or equipment
(including replacements, capitalized repairs, and improvements) which should be
capitalized on the balance sheet of such Person in accordance with GAAP.

“Capital Lease” means any lease
of Property which in accordance with GAAP is required to be capitalized on the
balance sheet of the lessee.

 22
 

“Capitalized Lease Obligation”
means, for any Person, the amount of the liability shown on the balance sheet
of such Person in respect of a Capital Lease determined in accordance with
GAAP.

“CERCLA” means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and
any future amendments.

“Change of Control” means any of
(a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) at any time of
beneficial ownership of 50% or more of the outstanding capital stock or other
equity interests of the Borrower on a fully-diluted basis, other than
acquisitions of such interests by Scott K. Ginsburg, (b) the failure of individuals
who are members of the board of directors (or similar governing body) of the
Borrower on the Closing Date (together with any new or replacement directors
whose initial nomination for election was approved by a majority of the
directors who were either directors on the Closing Date or previously so
approved) to constitute a majority of the board of directors (or similar
governing body) of the Borrower, or (c) any “Change of Control” (or words
of like import), as defined in any agreement or indenture relating to any issue
of Indebtedness for Borrowed Money of the Borrower or any Subsidiary shall
occur.

“Closing Date” means the date of
this Agreement or such later Business Day upon which each condition described
in Section 7.2 shall be satisfied or waived in a manner acceptable to the
Administrative Agent in its discretion.

“Code” means the Internal Revenue
Code of 1986, as amended, and any successor statute thereto.

“Collateral” means all
properties, rights, interests, and privileges from time to time subject to the
Liens granted to the Administrative Agent, or any security trustee therefor, by
the Collateral Documents.

“Collateral Account” is defined
in Section 9.4 hereof.

“Collateral Documents” means the
Mortgages, the Security Agreement, and all other mortgages, deeds of trust,
security agreements, pledge agreements, assignments, financing statements and
other documents as shall from time to time secure or relate to the Obligations,
the Hedging Liability, and the Funds Transfer and Deposit Account Liability or
any part thereof.

“Commitments” means the Revolving
Credit Commitments and the Term Loan Commitments.

“Controlled Group” means all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the Code.

 23
 

“Credit” means any of the
Revolving Credit or the Term Credit.

“Credit Event” means the
advancing of any Loan, or the issuance of, or extension of the expiration date
or increase in the amount of, any Letter of Credit.

“Default” means any event or
condition the occurrence of which would, with the passage of time or the giving
of notice, or both, constitute an Event of Default.

“Designated Disbursement Account”
means the account of the Borrower maintained with the Wachovia Bank, National
Association and designated in writing to the Administrative Agent as the
Borrower’s Designated Disbursement Account (or such other account as the
Borrower and the Administrative Agent may otherwise agree).

“Disposition” means the sale,
lease, conveyance or other disposition of Property, other than sales or other
dispositions expressly permitted under  Sections 8.10(a),
8.10(b), or 8.10(d) hereof.

“Domestic Subsidiary” means a
Subsidiary that is not a Foreign Subsidiary.

“Eligible Assignee” means
(a) a Lender, (b) an Affiliate of a Lender, (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by
(i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Credit Commitment, the L/C Issuer, and (iii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any Guarantor or any of the Borrower’s or such Guarantor’s
Affiliates or Subsidiaries.

“Eligible Line of Business” means
any business engaged in as of the date of this Agreement by the Borrower or any
of its Subsidiaries.

“Environmental Claim” means any
investigation, notice, violation, demand, allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, pro­ceeding or claim
(whether administrative, judicial or private in nature) arising
(a) pursuant to, or in connection with an actual or alleged violation of,
any Environmental Law, (b) in connection with any Hazardous Material,
(c) from any abatement, removal, remedial, cor­rective or response action
in connection with a Hazardous Material, Environmental Law or order of a
governmental authority or (d) from any actual or alleged damage, injury,
threat or harm to health, safety, natural resources or the environment.

“Environmental Law” means any
current or future Legal Requirement pertaining to (a) the protection of health,
safety and the indoor or outdoor environment, (b) the conservation, management
or use of natural resources and wildlife, (c) the protection or use of surface
water or groundwater, (d) the management, manufacture, possession, presence,
use, generation, transportation, treatment, storage, disposal, Release,
threatened Release, abatement, removal, remediation or handling of, or exposure
to, any Hazardous Material or (e) pollution (including

 24
 

any Release to air, land,
surface water or groundwater), and any amendment, rule, regulation, order or
directive issued thereunder.

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, or any successor statute
thereto.

“Eurodollar Loan” means a Loan
bearing interest at the rate specified in Section 1.4(b) hereof.

“Eurodollar Reserve Percentage”
is defined in Section 1.4(b) hereof.

“Event of Default” means any
event or condition identified as such in Section 9.1 hereof.

“Event of Loss” means, with
respect to any Property, any of the following: 
(a) any loss, destruction or damage of such Property or
(b) any condemnation, seizure, or taking, by exercise of the power of
eminent domain or otherwise, of such Property, or confiscation of such Property
or the requisition of the use of such Property.

“Excess Availability” means, as
of any time the same is to be determined, the amount (if any) by which (a) the
Revolving Credit Commitment as then in effect exceeds (b) the aggregate
principal amount of Revolving Loans, Swing Loans, and L/C Obligations then
outstanding.

“Excess Cash Flow” means, with
respect to any period, the amount (if any) by which (a) Adjusted EBITDA
(but determined for such purposes without giving effect to any extraordinary
gains or losses) during such period exceeds (b) the sum of
(i) Interest Expense payable in cash during such period, plus (ii) federal, state and local income taxes payable
in cash during such period, plus
(iii) the aggregate amount of payments required to be made, and actually
made, by the Borrower and its Subsidiaries during such period in respect of all
principal on all Indebtedness of Borrowed Money (whether at maturity, as a
result of mandatory sinking fund redemption, mandatory prepayment, acceleration
or otherwise, but excluding payments made under the Revolving Credit and
excluding prepayments of the Term Loans made under Section 1.9 hereof), plus (iv) the aggregate amount of Capital Expenditures
made by the Borrower and its Subsidiaries during such period to the extent
permitted by this Agreement and not financed with proceeds of Indebtedness for
Borrowed Money (but excluding credit extended under the Revolving Credit), plus (v) any increases in non-debt, non-cash
working capital of the Borrower and its Subsidiaries for such period, plus (vi) the aggregate amount of the Total Consideration
paid in cash for Permitted Acquisitions and not financed with the proceeds of
Indebtedness for Borrowed Money, minus (vii) any
decreases in non-debt, non-cash working capital of the Borrower and
its Subsidiaries for such period.

“Federal Funds Rate” means the
fluctuating interest rate per annum described in part (x) of clause (ii) of the
definition of Base Rate appearing in Section 1.4(a) hereof.

“Fixed Charge Coverage Ratio” means
as of the last day of each fiscal quarter of the Borrower, the ratio of (a)
Adjusted EBITDA minus Capital Expenditures
(including any Capital

 25
 

Expenditures of any
Acquired Business) for the same four fiscal quarters then ended to (b) Fixed
Charges for the same four fiscal quarters then ended.

“Fixed Charges” means, with
reference to any period, the sum of (a) all scheduled payments of
principal made or to be made during such period with respect to Indebtedness
for Borrowed Money of the Borrower and its Subsidiaries, (b) cash Interest
Expense for such period, (c) federal, state, and local income taxes paid
or payable by the Borrower and its Subsidiaries in cash during such period, (d)
the aggregate amount of dividends paid in cash by the Borrower during such
period, and (e) the aggregate cash consideration paid by the Borrower during
such period in connection with any repurchases of its capital stock; provided that for each period ending on or prior to
June 30, 2008, all amounts in clauses (a), (b) and (c) above shall be
calculated as such amounts paid from the Closing Date and then annualized.

“Foreign Subsidiary” means each
Subsidiary which (a) is organized under the laws of a jurisdiction other
than the United States of America or any state thereof or the District of
Columbia, (b) conducts substantially all of its business outside of the
United States of America, and (c) has substantially all of its assets
outside of the United States of America.

“Fund” means any Person (other
than a natural person) that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.

“Funds Transfer and Deposit Account Liability”
means the liability of the Borrower or any  Subsidiary  owing to any of the Lenders, or any Affiliates of such
Lenders, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from deposit accounts of the Borrower and/or any Subsidiary  now or hereafter maintained with any of the Lenders or
their Affiliates, (b) the acceptance for deposit or the honoring for
payment of any check, draft or other item with respect to any such deposit
accounts, and (c) any other deposit, disbursement, and cash management
services afforded to the Borrower or any Subsidiary  by
any of such Lenders or their Affiliates.

“GAAP” means generally accepted
accounting principles 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), which are
applicable to the circumstances as of the date of determination.

“GTN” means, GTN, Inc., a
Michigan corporation.

“Guarantor” and “Guarantors” each is defined in Section 4.1 hereof.

“Guaranty” and “Guaranties” each is defined in Section 4.1 hereof.

“Hazardous Material” means any
substance, chemical, compound, product, solid, gas, liquid, waste, byproduct,
pollutant, contaminant or material which is hazardous or toxic, and

 26
 

includes, without
limitation, (a) asbestos, polychlorinated biphenyls and petroleum (including
crude oil or any fraction thereof) and (b) any material classified or regulated
as “hazardous” or “toxic” or words of like import pursuant to an Environmental
Law.

“Hazardous Material Activity”
means any activity, event or occurrence involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling of or corrective or response
action to any Hazardous Material.

“Hedging Liability” means the
liability of the Borrower or any Subsidiary  to any of the
Lenders, or any Affiliates of such Lenders, in respect of any interest rate,
foreign currency, and/or commodity swap, exchange, cap, collar, floor, forward,
future or option agreement, or any other similar interest rate, currency or
commodity hedging arrangement, as the Borrower or such Subsidiary, as the case
may be, may from time to time enter into with any one or more of the Lenders
party to this Agreement or their Affiliates.

“Hostile Acquisition” means the
acquisition of the capital stock or other equity interests of a Person through
a tender offer or similar solicitation of the owners of such capital stock or
other equity interests which has not been approved (prior to such acquisition)
by resolutions of the Board of Directors of such Person or by similar action if
such Person is not a corporation, or as to which such approval has been withdrawn.

“Indebtedness for Borrowed Money”
means for any Person (without duplication) (a) all indebtedness created,
assumed or incurred in any manner by such Person representing money borrowed
(including by the issuance of debt securities), (b) all indebtedness for
the deferred purchase price of property or services (other than trade accounts
payable arising in the ordinary course of business which are not more than
thirty (30) days past due), (c) all indebtedness secured by any Lien upon
Property of such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, (d) all Capitalized Lease
Obligations of such Person, and (e) all obligations of such Person on or
with respect to letters of credit, bankers’ acceptances and other extensions of
credit whether or not representing obligations for borrowed money.

“Interest Expense” means, with
reference to any period, the sum of all interest charges (including imputed
interest charges with respect to Capitalized Lease Obligations and all
amortization of debt discount and expense) of the Borrower and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.

“Interest Payment Date” means
(a) with respect to any Eurodollar Loan, the last day of each Interest
Period with respect to such Eurodollar Loan and on the maturity date and, if
the applicable Interest Period is longer than three (3) months, on each day
occurring every three (3) months after the commencement of such Interest
Period, (b) with respect to any Base Rate Loan (other than Swing Loans),
the last day of every quarter) and on the maturity date, and (c) as to any
Swing Loan, (i) bearing interest by reference to the Base Rate, the last
day of every quarter, and on the maturity date and (ii) bearing interest
by reference to the  Quoted Rate, the
last day of the Interest Period with respect to such Swing Loan, and on the
maturity date.

 27
 

“Interest Period” means the
period commencing on the date a Borrowing of Eurodollar Loans or Swing Loans
(bearing interest at the  Quoted Rate) is
advanced, continued, or created by conversion and ending (a) in the case
of Eurodollar Loans, 1, 2, 3, or 6 months thereafter and (b) in the
case of Swing Loans bearing interest at the 
Quoted Rate, on the date one (1) to five (5) Business Days
thereafter as mutually agreed by the Borrower and the Swing Line Lender, provided, however, that:

(i)            no Interest Period shall extend
beyond the final maturity date of the relevant Loans;

(ii)           no Interest Period with respect to any
portion of the Term Loans shall extend beyond a date on which the Borrower is
required to make a scheduled payment of principal on the Term Loans unless the
sum of (a) the aggregate principal amount of Term Loans that are Base Rate
Loans plus (b) the aggregate principal
amount of Term Loans that are Eurodollar Loans with Interest Periods expiring
on or before such date equals or exceeds the principal amount to be paid on the
Term Loans on such payment date;

(iii)          whenever the last day of any Interest
Period would otherwise be a day that is not a Business Day, the last day of
such Interest Period shall be extended to the next succeeding Business Day, provided that, if such extension would cause the last day of
an Interest Period for a Borrowing of Eurodollar Loans to occur in the
following calendar month, the last day of such Interest Period shall be the
immediately preceding Business Day; and

(iv)          for purposes of determining an
Interest Period for a Borrowing of Eurodollar Loans, a month means a period starting
on one day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided, however,
that if there is no numerically corresponding day in the month in which such an
Interest Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end on the
last Business Day of the calendar month in which such Interest Period is to
end.

“L/C Issuer “ means Bank of
Montreal, in its capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 1.3(h) hereof.

“L/C Obligations” means the
aggregate undrawn face amounts of all outstanding Letters of Credit and all
unpaid Reimbursement Obligations.

“L/C Sublimit” means $5,000,000,
as reduced pursuant to the terms hereof.

“Legal Requirement” means any
treaty, convention, statute, law, regulation, ordinance, license, permit,
governmental approval, injunction, judgment, order, consent decree or other
requirement of any governmental authority, whether federal, state, or local.

 28
 

“Lenders” means and includes the
financial institutions from time to time party to this Agreement, including
each assignee Lender pursuant to Section 13.12 hereof and, unless the
context otherwise requires, the Swing Line Lender.

“Lending Office” is defined in
Section 10.4 hereof.

“Letter of Credit” is defined in
Section 1.3(a) hereof.

“LIBOR” is defined in Section
1.4(b) hereof.

“Lien” means any mortgage, lien,
security interest, pledge, charge or encumbrance of any kind in respect of any
Property, including the interests of a vendor or lessor under any conditional
sale, Capital Lease or other title retention arrangement.

“Loan” means any Revolving Loan,
Swing Loan or Term Loan, whether outstanding as a Base Rate Loan or Eurodollar
Loan or otherwise, each of which is a “type” of Loan
hereunder.

“Loan Documents” means this
Agreement, the Notes (if any), the Applications, the Collateral Documents, the
Guaranties, and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.

“Material Adverse Effect” means
(a) a material adverse change in, or material adverse effect upon, the
operations, business, Property, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole,
(b) a material impairment of the ability of the Borrower or any Subsidiary
to perform its material obligations under any Loan Document or (c) a
material adverse effect upon (i) the legality, validity, binding effect or
enforceability against the Borrower or any Subsidiary of any Loan Document or
the rights and remedies of the Administrative Agent and the Lenders thereunder
or (ii) the perfection or priority of any Lien granted under any
Collateral Document.

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

“Mortgages” means, collectively,
each Mortgage and Security Agreement with Assignment of Rents and each Deed of
Trust and Security Agreement with Assignment of Rents between the Borrower or
the relevant Guarantor and the Administrative Agent relating to such Person’s
real property owned as of the Closing Date and any other mortgages or deeds of
trust delivered to the Administrative Agent pursuant to Section 4.3
hereof, as the same may be amended, modified, supplemented or restated from
time to time.

“Net Cash Proceeds” means, as
applicable, (a) with respect to any Disposition by a Person, cash and cash
equivalent proceeds received by or for such Person’s account, net of (i) reasonable
costs, fees and expenses incurred in connection therewith, (ii) income,
sale, use or other transactional taxes paid or payable by such Person as a
result of such Disposition, and (iii) the principal amount of, premium, if
any, and interest on any Indebtedness for Borrowed Money secured by a Lien on
the asset (or a portion thereof) disposed of, which Indebtedness for Borrowed
Money is required to be repaid in connection with such Disposition,
(b) with respect to

 29
 

any Event of Loss of a
Person, cash and cash equivalent proceeds received by or for such Person’s
account (whether as a result of payments made under any applicable insurance
policy therefor or in connection with condemnation proceedings or otherwise),
net of (i) reasonable costs, fees and expenses incurred in connection with
the collection of such proceeds, awards or other payments and (ii) the
principal amount, premium, if any, and interest on any Indebtedness for
Borrowed Money secured by a Lien on the asset (or a portion thereof) subject to
such Event of Loss, which Indebtedness for Borrowed Money is required to be
repaid in connection with such Event of Loss, and (c) with respect to any
issuance of any Indebtedness for Borrowed Money by a Person,  cash and cash equivalent proceeds received by
or for such Person’s account, net of reasonable legal, underwriting, and other
fees and expenses incurred in connection therewith.

“Net Income” means, with
reference to any period, the net income (or net loss) of the Borrower and its
Subsidiaries for such period computed on a consolidated basis in accordance
with GAAP; provided that there shall be excluded
from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or has merged into or consolidated
with, the Borrower or another Subsidiary, (b) the net income (or net loss)
of any Person (other than a Subsidiary) in which the Borrower or any of its
Subsidiaries has a equity interest in, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries during such period, (c) any non-cash gains or non-cash
losses, (d) any other extraordinary gains or extraordinary losses, (e) any
results from discontinued operations and (f) impairment charges with
respect to any assets.

“Net Worth” means, for any Person
and at any time the same is to be determined, the difference between total
assets and total liabilities of such Person, total assets and total liabilities
each to be determined in accordance with GAAP.

“Note” and “Notes”
each is defined in Section 1.11 hereof.

“Obligations” means all
obligations of the Borrower to pay principal and interest on the Loans, all
Reimbursement Obligations owing under the Applications, all fees and charges
payable hereunder, and all other payment obligations of the Borrower or any of
its Subsidiaries arising under or in relation to any Loan Document, in each
case whether now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or acquired.

“Participating Interest” is
defined in Section 1.3(e) hereof.

“Participating Lender” is defined
in Section 1.3(e) hereof.

“PBGC” means the Pension Benefit
Guaranty Corporation or any Person succeeding to any or all of its functions
under ERISA.

“Percentage” means for any Lender
its Revolver Percentage or Term Loan Percentage, as applicable; and where the
term “Percentage” is applied on an aggregate
basis (including, without limitation, Section 11.6 hereof), such aggregate
percentage shall be calculated by

 30
 

aggregating the separate
components of the Revolver Percentage and Term Loan Percentage, and expressing
such components on a single percentage basis.

“Permitted Acquisition” means (i)
the Acquisition of the Targets and (ii) any Acquisition with respect to which
all of the following conditions shall have been satisfied:

(a)           the Acquired Business is in an
Eligible Line of Business and has its primary operations within the United
States of America;

(b)           the Acquisition shall not be a
Hostile Acquisition;

(c)           the financial statements of the
Acquired Business shall have been audited by a nationally recognized accounting
firm or such financial statements shall have undergone review of a scope
satisfactory to the Administrative Agent;

(d)           the Total Consideration for the
Acquired Business shall not exceed $40,000,000 and, when taken together with
the Total Consideration for all Acquired Businesses acquired since the Closing
Date, shall not exceed $75,000,000 in the aggregate; provided
that the Total Consideration for the Targets and any other acquisitions
occurring prior to the Closing Date shall not be included in determining
compliance with this provision;

(e)           the Borrower shall have notified the
Administrative Agent and Lenders not less than 30 days prior to any such
Acquisition and furnished to the Administrative Agent and Lenders at such time
reasonable details as to such Acquisition (including sources and uses of funds
therefor), and 3-year historical financial information and 3-year pro forma financial forecasts of the Acquired Business on a
stand alone basis as well as of the Borrower on a consolidated basis after
giving effect to the Acquisition and covenant compliance calculations
reasonably satisfactory to the Administrative Agent demonstrating satisfaction
of the condition described in clause (g) below;

(f)            if a new Subsidiary is formed or
acquired as a result of or in connection with the Acquisition, the Borrower
shall have complied with the requirements of Section 4 hereof in
connection therewith;

(g)           after giving effect to the
Acquisition and any Credit Event in connection therewith, no Default or Event
of Default shall exist;

(h)           the Borrower delivers to the
Administrative Agent evidence reasonably satisfactory to the Administrative
Agent that the Borrower would be in compliance with Section 8.22(a) hereof on a
pro forma basis (assuming the
indebtedness incurred at the time of such Acquisition was incurred on the first
day of such 12-month period and on a pro forma basis
after giving effect to such Acquisition) by more than 0.25 to 1.0;

 31
 

(i)            the Acquired Business has Adjusted
EBITDA, the calculation and determination of which shall be reasonably
acceptable to the Administrative Agent, greater than zero; and

(j)            after giving effect to the
Acquisition and any Credit Event in connection therewith, the Borrower shall
have not less than $5,000,000 of Excess Availability.

“Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization or any other entity or organization, including a
government or agency or political subdivision thereof.

“Plan” means any employee pension
benefit plan covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code that either (a) is
maintained by a member of the Controlled Group for employees of a member of the
Controlled Group or (b) is maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

“Point.360” means Point.360, a
California corporation.

“Point.360 Merger Agreement”
means that certain Agreement and Plan of Merger dated as of April 16, 2007, by
and among the Borrower, Point.360 and New 360, a California corporation.

“Premises” means the real
property owned or leased by the Borrower or any Subsidiary, including without
limitation the real property and improvements thereon owned by the Borrower or
any Subsidiary subject to the Lien of the Mortgages or any other Collateral
Documents.

“Property” means, as to any
Person, all types of real, personal, tangible, intangible or mixed property
owned by such Person whether or not included in the most recent balance sheet
of such Person and its subsidiaries under GAAP.

“Quoted Rate” is defined in
Section 1.7(c) hereof.

“RCRA” means the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901 et seq., and
any future amendments.

“Reimbursement Obligation” is
defined in Section 1.3(c) hereof.

“Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migration, dumping, or disposing into the indoor or outdoor
environment, including, without limitation, the abandonment or discarding of
barrels, drums, containers, tanks or other receptacles containing or previously
containing any Hazardous Material.

 32
 

“Required Lenders” means, as of
the date of determination thereof, Lenders whose outstanding Loans and
interests in Letters of Credit and Unused Revolving Credit Commitments
constitute more than fifty percent (50%)  of the sum of
the total outstanding Loans, interests in Letters of Credit, and Unused
Revolving Credit Commitments of the Lenders.

“Revolver Percentage” means, for
each Lender, the percentage of the Revolving Credit Commitments represented by
such Lender’s Revolving Credit Commitment or, if the Revolving Credit
Commitments have been terminated, the percentage held by such Lender (including
through participation interests in Reimbursement Obligations) of the aggregate
principal amount of all Revolving Loans and L/C Obligations then
outstanding.

“Revolving Credit” means the
credit facility for making Revolving Loans and Swing Loans and issuing Letters
of Credit described in Sections 1.2, 1.3 and 1.7 hereof.

“Revolving Credit Commitment”
means, as to any Lender, the obligation of such Lender to make Revolving Loans
and to participate in Swing Loans and Letters of Credit issued for the account
of the Borrower hereunder in an aggregate principal or face amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule 1 attached hereto and made a part hereof, as the same may be
reduced or modified at any time or from time to time pursuant to the terms hereof.

“Revolving Credit Termination Date”
means August 9, 2012, or such earlier date on which the Revolving Credit
Commitments are terminated in whole pursuant to Section 1.13, 9.2 or 9.3
hereof.

“Revolving Loan” is defined in
Section 1.2 hereof and, as so defined, includes a Base Rate Loan or a
Eurodollar Loan, each of which is a “type” of
Revolving Loan hereunder.

“Revolving Note” is defined in
Section 1.11 hereof.

“S&P” means Standard &
Poor’s Ratings Services Group, a division of The McGraw-Hill Companies,
Inc.

“Security Agreement” means that
certain Security Agreement dated the date of this Agreement among the Borrower
and the Guarantors and the Administrative Agent, as the same may be amended,
modified, supplemented or restated from time to time.

“Subordinated Debt” means
Indebtedness for Borrowed Money which is subordinated in right of payment to
the prior payment of the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability pursuant to subordination provisions approved in writing
by the Administrative Agent and is otherwise pursuant to documentation that is,
which is in an amount that is, and which contains interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies and
other material terms that are in form and substance, in each case satisfactory
to the Administrative Agent.

 33

“Subsidiary” means, as to any
particular parent corporation or organization, any other corporation or
organization more than 50% of the outstanding Voting Stock of which is at the
time directly or indirectly owned by such parent corporation or organization or
by any one or more other entities which are themselves subsidiaries of such
parent corporation or organization. 
Unless otherwise expressly noted herein, the term “Subsidiary”
means a Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries;
provided, however, Acquisition Corp. V
shall not be deemed a Subsidiary for purposes of this Agreement until such time
that Acquisition Corp. V has any assets or transacts any business.

“Swing Line” means the
credit facility for making one or more Swing Loans described in
Section 1.7 hereof.

“Swing Line Lender” means BMO
Capital Markets Financing, Inc., acting in its capacity as the Lender of Swing
Loans hereunder, or any successor Lender acting in such capacity appointed
pursuant to Section 13.12 hereof.

“Swing Line Sublimit” means
$3,000,000, as reduced pursuant to the terms hereof.

“Swing Loan” and “Swing Loans” each is defined in Section 1.7 hereof.

“Swing Note” is defined in
Section 1.11 hereof.

“Targets” means Point.360 and
GTN.

“Term Credit” means the
credit facility for the Term Loans described in Section 1.1 hereof.

“Term Loan” is defined in Section
1.1 hereof and, as so defined, includes a Base Rate Loan or a Eurodollar Loan,
each of which is a “type” of Term
Loan hereunder.

“Term Loan Commitment” means, as
to any Lender, the obligation of such Lender to make its Term Loan on the
Closing Date in the principal amount not to exceed the amount set forth
opposite such Lender’s name on Schedule 1 attached hereto and made a part
hereof.

“Term Loan Percentage” means, for
each Lender, the percentage of the Term Loan Commitments represented by such
Lender’s Term Loan Commitment or, if the Term Loan Commitments have been
terminated or have expired, the percentage held by such Lender of the aggregate
principal amount of all Term Loans then outstanding.

“Term Note” is defined in
Section 1.11 hereof.

“Total Consideration” means, with
respect to an Acquisition, the sum (but without duplication) of (a) cash
paid in connection with any Acquisition, (b) indebtedness payable to the
seller in connection with such Acquisition, (c) the fair market value of
any equity securities, including any warrants or options therefor, delivered in
connection with any Acquisition, (d) the present value of covenants not to
compete entered into in connection with such Acquisition or

 34
 

other future payments
which are required to be made over a period of time and are not contingent upon
the Borrower or its Subsidiary meeting financial performance objectives
(exclusive of salaries paid in the ordinary course of business) (discounted at
the Base Rate), but only to the extent not included in clause (a), (b) or
(c) above, and (e) the amount of indebtedness assumed in connection with
such Acquisition.

“Total Funded Debt” means, at any
time the same is to be determined, the sum (but without duplication) of
(a) all Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries at such time, and (b) all Indebtedness for Borrowed Money of
any other Person which is directly or indirectly guaranteed by the Borrower or
any of its Subsidiaries or which the Borrower or any of its Subsidiaries has
agreed (contingently or otherwise) to purchase or otherwise acquire or in
respect of which the Borrower or any of its Subsidiaries has otherwise assured
a creditor against loss.

“Total Leverage Ratio” means, as
of the last day of any fiscal quarter of the Borrower, the ratio of Total
Funded Debt of the Borrower and its Subsidiaries as of the last day of such
fiscal quarter to Adjusted EBITDA of the Borrower and its Subsidiaries for the
period of four fiscal quarters then ended.

“Transaction Costs” means all
transaction fees, charges and other amounts related to this Agreement or any
Permitted Acquisitions as approved by the Administrative Agent (including,
without limitation, any financing fees, merger and acquisition fees, legal fees
and expenses, due diligence fees or any other fees and expenses in connection
therewith).

“Unfunded Vested Liabilities”  means,
for any Plan at any time, the amount (if any) by which the present value of all
vested nonforfeitable accrued benefits under such Plan exceeds the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or the Plan under Title IV of ERISA.

“Unused Revolving Credit Commitments”
means, at any time, the difference between the Revolving Credit Commitments then
in effect and the aggregate outstanding principal amount of Revolving Loans and
L/C Obligations.

“U.S. Dollars” and “$” each means the lawful currency of the United States of
America.

“Voting Stock” of any Person
means capital stock or other equity interests of any class or classes (however
designated) having ordinary power for the election of directors or other
similar governing body of such Person, other than stock or other equity
interests having such power only by reason of the happening of a contingency.

“Welfare Plan” means a “welfare
plan” as defined in Section 3(1) of ERISA.

“Wholly-owned Subsidiary”
means a Subsidiary of which all of the issued and outstanding shares of capital
stock (other than directors’ qualifying shares as required by law) or

 35
 

other equity interests
are owned by the Borrower and/or one or more Wholly-owned Subsidiaries
within the meaning of this definition.

Section 5.2.           Interpretation.  The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined.  The words “hereof”, “herein”, and “hereunder” and
words of like import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement.  All references to time of day herein are references
to Chicago, Illinois, time unless otherwise specifically provided.  Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP except
where such principles are inconsistent with the specific provisions of this
Agreement.

Section 5.3.           Change in Accounting Principles.  If, after the date of this Agreement, there
shall occur any change in GAAP from those used in the preparation of the
financial statements referred to in Section 6.5 hereof and such change
shall result in a change in the method of calculation of any financial
covenant, standard or term found in this Agreement, either the Borrower or the
Required Lenders may by notice to the Lenders and the Borrower, respectively,
require that the Lenders and the Borrower negotiate in good faith to amend such
covenants, standards, and terms so as equitably to reflect such change in
accounting principles, with the desired result being that the criteria for
evaluating the financial condition of the Borrower and its Subsidiaries shall
be the same as if such change had not been made.  No delay by the Borrower or the Required
Lenders in requiring such negotiation shall limit their right to so require
such a negotiation at any time after such a change in accounting
principles.  Until any such covenant,
standard, or term is amended in accordance with this Section 5.3,
financial covenants shall be computed and determined in accordance with GAAP in
effect prior to such change in accounting principles.  Without limiting the generality of the
foregoing, the Borrower shall neither be deemed to be in compliance with any
financial covenant hereunder nor out of compliance with any financial covenant
hereunder if such state of compliance or noncompliance, as the case may be,
would not exist but for the occurrence of a change in accounting principles
after the date hereof.

SECTION 6.                                   REPRESENTATIONS
AND WARRANTIES.

The Borrower represents and warrants to the
Administrative Agent, the Lenders, and the L/C Issuer as follows:

Section 6.1.           Organization and Qualification.  The Borrower is duly organized, validly
existing, and in good standing as a corporation under the laws of the State of
Delaware, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the Property owned or leased by it requires such licensing
or qualifying, except where the failure to do so would not have a Material
Adverse Effect.

Section 6.2.           Subsidiaries.  Each Subsidiary is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it
is organized, has full and adequate

 36
 

power to own its Property and conduct its business as
now conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the nature
of the Property owned or leased by it requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.  Schedule 6.2 hereto identifies each
Subsidiary, the jurisdiction of its organization, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by the Borrower and the other Subsidiaries and, if such percentage is not
100% (excluding directors’ qualifying shares as required by law), a description
of each class of its authorized capital stock and other equity interests and
the number of shares of each class issued and outstanding.  All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable, except as set forth on
Schedule 6.2, and all such shares and other equity interests indicated on
Schedule 6.2 as owned by the Borrower or another Subsidiary are owned,
beneficially and of record, by the Borrower or such Subsidiary free and clear
of all Liens other than the Liens granted in favor of the Administrative Agent
pursuant to the Collateral Documents. 
There are no outstanding commitments or other obligations of any
Subsidiary to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
any Subsidiary except as set forth on Schedule 6.2.

Section 6.3.           Authority and Validity of Obligations.  The Borrower has full right and authority to
enter into this Agreement and the other Loan Documents executed by it, to make
the borrowings herein provided for, to grant to the Administrative Agent the Liens
described in the Collateral Documents executed by the Borrower, and to perform
all of its obligations hereunder and under the other Loan Documents executed by
it.  Each Subsidiary has full right and
authority to enter into the Loan Documents executed by it, to guarantee the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, to grant to the Administrative Agent the Liens described in the
Collateral Documents executed by such Person, and to perform all of its
obligations under the Loan Documents executed by it.  The Loan Documents delivered by the Borrower
and its Subsidiaries have been duly authorized, executed, and delivered by such
Persons and constitute valid and binding obligations of the Borrower and its
Subsidiaries enforceable against them in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors’ rights generally and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law); and this Agreement and the other Loan
Documents do not, nor does the performance or observance by the Borrower or any
Subsidiary of any of the matters and things herein or therein provided for,
(a) contravene or constitute a default under any provision of the
organizational documents (e.g., charter,
certificate or articles of incorporation and by-laws, certificate or
articles of association and operating agreement, partnership agreement, or
other similar organizational documents) of the Borrower or any Subsidiary,
(b) contravene or constitute a default under any provision of law, any
judgment, injunction, order, decree, covenant, indenture or agreement of
binding upon or affecting the Borrower or any Subsidiary or any of their
Property, in each case where such contravention or default, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
or (c) result in the creation or imposition of any Lien on any Property of
the Borrower or any Subsidiary other than the Liens granted in favor of the
Administrative Agent pursuant to the Collateral Documents.

 37
 

Section 6.4.           Use of Proceeds; Margin Stock.  The Borrower shall use the proceeds of the Term
Loans and Revolving Credit (a) to pay a portion of the purchase price of
the acquisition of all of the capital stock of the Targets, (b) to
re-finance certain existing indebtedness, (c) to finance Capital
Expenditures, working capital, Permitted Acquisitions and other general
corporate purposes, (d) to fund certain fees and expenses in connection
with the acquisition of the Targets and this Agreement and (e) for its
general working capital purposes and for such other legal and proper purposes
as are consistent with all applicable laws. 
Neither the Borrower nor any Subsidiary is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan or any other extension of
credit made hereunder will be used to purchase or carry any such margin stock
or to extend credit to others for the purpose of purchasing or carrying any
such margin stock.  Margin stock (as
hereinabove defined) constitutes less than 25% of the assets of the Borrower
and its Subsidiaries which are subject to any limitation on sale, pledge or
other restriction hereunder.

Section 6.5.           Financial Reports.   The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2006, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report
of KPMG LLP, independent public accountants, and the unaudited interim
consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
2007, and the related consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the six (6) months
then ended, heretofore furnished to the Administrative Agent and the Lenders,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as at said dates and the consolidated results of their operations
and cash flows for the periods then ended in conformity with GAAP applied on a
consistent basis.  Neither the Borrower
nor any Subsidiary has contingent liabilities which are material to it other
than as indicated on such financial statements or, with respect to future
periods, on the financial statements furnished pursuant to Section 8.5
hereof.

Section 6.6.           No Material Adverse Change.  Since December 31,
2006, there has been no change in the condition (financial or otherwise) or
business prospects of the Borrower or any Subsidiary except those occurring in
the ordinary course of business, none of which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect.

Section 6.7.           Full Disclosure.  The statements and information furnished to
the Administrative Agent and the Lenders in connection with the negotiation of
this Agreement and the other Loan Documents and the commitments by the Lenders to
provide all or part of the financing contemplated hereby do not contain any
untrue statements of a material fact or omit a material fact necessary to make
the material statements contained herein or therein not misleading, the
Administrative Agent and the Lenders acknowledging that as to any projections
furnished to the Administrative Agent and the Lenders, the Borrower only
represents that the same were prepared on the basis of information and
estimates the Borrower believed to be reasonable at the time.

 38
 

Section 6.8.           Trademarks, Franchises, and Licenses.  The Borrower and its Subsidiaries own,
possess, or have the right to use all necessary patents, licenses, franchises,
trademarks, trade names, trade styles, copyrights, trade secrets, know how, and
confidential commercial and proprietary information to conduct their businesses
as now conducted, without known conflict with any patent, license, franchise,
trademark, trade name, trade style, copyright or other proprietary right of any
other Person.

Section 6.9.           Governmental Authority and Licensing.  The Borrower and its Subsidiaries have
received all licenses, permits, and approvals of all federal, state, and local
governmental authorities, if any, necessary to conduct their businesses, in
each case where the failure to obtain or maintain the same could reasonably be
expected to have a Material Adverse Effect. 
No investigation or proceeding which, if adversely determined, could
reasonably be expected to result in revocation or denial of any material
license, permit or approval is pending or, to the knowledge of the Borrower,
threatened.

Section 6.10.        Good Title.  The Borrower and its Subsidiaries have good
and defensible title (or valid leasehold interests) to their assets as
reflected on the most recent consolidated balance sheet  of the Borrower and its Subsidiaries
furnished to the Administrative Agent and the Lenders (except for sales of
assets in the ordinary course of business), subject to no Liens other than such
thereof as are permitted by Section 8.8 hereof.

Section 6.11.        Litigation and Other Controversies.  Except as set forth on Schedule 6.11,
there is no litigation or governmental or arbitration proceeding or labor
controversy pending, nor to the knowledge of the Borrower threatened, against
the Borrower or any Subsidiary or any of their Property which if adversely
determined, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

Section 6.12.        Taxes.  All tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon the Borrower
or any Subsidiary or upon any of its Property, income or franchises, which are
shown to be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and as to which adequate reserves established in
accordance with GAAP have been provided. 
The Borrower does not know of any proposed additional tax assessment
against it or its Subsidiaries for which adequate provisions in accordance with
GAAP have not been made on their accounts. 
Adequate provisions in accordance with GAAP for taxes on the books of
the Borrower and each Subsidiary have been made for all open years, and for its
current fiscal period.

Section 6.13.        Approvals.  No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of any other
Person, is or will be necessary to the valid execution, delivery or performance
by the Borrower or any Subsidiary of any Loan Document, except for such
approvals which have been obtained prior to the date of this Agreement and
remain in full force and effect.

 39
 

Section 6.14.        Affiliate Transactions.  Except as set forth on Schedule 6.14,
neither the Borrower nor any Subsidiary is a party to any contracts or
agreements with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to the Borrower
or such Subsidiary than would be usual and customary in similar contracts or
agreements between Persons not affiliated with each other.

Section 6.15.        Investment Company.  Neither the Borrower nor any Subsidiary is an
“investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

Section 6.16.        ERISA.  The Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA. 
Neither the Borrower nor any Subsidiary has any contingent liabilities
with respect to any post-retirement benefits under a Welfare Plan, other
than liability for continuation coverage described in article 6 of
Title I of ERISA.

Section 6.17.        Compliance with Laws.  (a) The Borrower and its Subsidiaries
are in compliance with the requirements of all federal, state and local laws,
rules and regulations applicable to or pertaining to their Property or business
operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land
and toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b)       Without limiting the representations and
warranties set forth in Section 6.17(a) above, except for such matters,
individually or in the aggregate, which could not reasonably be expected to
result in a Material Adverse Effect, the Borrower represents and warrants
that:  (i) the Borrower and its
Subsidiaries, and each of the Premises, comply in all material respects with
all applicable Environmental Laws; (ii) the Borrower and its Subsidiaries
have obtained all governmental approvals required for their operations and each
of the Premises by any applicable Environmental Law; (iii) the Borrower
and its Subsidiaries have not, and the Borrower has no knowledge of any other
Person who has, caused any Release, threatened Release or disposal of any
Hazardous Material at, on, about, or off any of the Premises in any material
quantity and, to the knowledge of the Borrower, none of the Premises are
adversely affected by any Release, threatened Release or disposal of a
Hazardous Material originating or emanating from any other property;
(iv) none of the Premises contain and have contained any:  (1) underground storage tank,
(2) material amounts of asbestos containing building material,
(3) landfills or dumps, (4) hazardous waste management facility as defined
pursuant to RCRA or any comparable state law, or (5) site on or nominated
for the National Priority List promulgated pursuant to CERCLA or any state
remedial priority list promulgated or published pursuant to any comparable
state law; (v) the Borrower and its Subsidiaries have not used a material
quantity of any Hazardous Material and have conducted no Hazardous Material
Activity at any of the Premises; (vi) the Borrower and its Subsidiaries
have no material liability for response or corrective action, natural resource
damage or other harm pursuant to CERCLA, RCRA or any comparable state law; 

 40
 

(vii) the Borrower and its Subsidiaries are not
subject to, have no notice or knowledge of and are not required to give any
notice of any Environmental Claim involving the Borrower or any Subsidiary or
any of the Premises, and there are no conditions or occurrences at any of the
Premises which could reasonably be anticipated to form the basis for an
Environmental Claim against the Borrower or any Subsidiary or such Premises;
(viii) none of the Premises are subject to any, and the Borrower has no
knowledge of any imminent restriction on the ownership, occupancy, use or
transferability of the Premises in connection with any (1) Environmental
Law or (2) Release, threatened Release or disposal of a Hazardous
Material; and (ix) there are no conditions or circumstances at any of the
Premises which pose an unreasonable risk to the environment or the health or
safety of Persons.

Section 6.18.        Other Agreements.  Neither the Borrower nor any Subsidiary is in
default under the terms of any covenant, indenture or agreement of or affecting
such Person or any of its Property, which default if uncured could reasonably
be expected to have a Material Adverse Effect.

Section
6.19.        Solvency.  The Borrower and its Subsidiaries are
solvent, able to pay their debts as they become due, and have sufficient
capital to carry on their business and all businesses in which they are about
to engage.

Section 6.20.        No Broker Fees. No
broker’s or finder’s fee or commission will be payable with respect hereto or
any of the transactions contemplated thereby; and the Borrower hereby agrees to
indemnify the Administrative Agent and the Lenders against, and agree that they
will hold the Administrative Agent and the Lenders harmless from, any claim,
demand, or liability for any such broker’s or finder’s fees alleged to have
been incurred in connection herewith or therewith and any expenses (including
reasonable attorneys’ fees) arising in connection with any such claim, demand,
or liability.

Section 6.21.        No Default.  No Default or Event of
Default has occurred and is continuing.

SECTION 7.                                                    CONDITIONS
PRECEDENT.

Section 7.1.           All Credit Events.  At the time of each Credit Event hereunder:

(a)           each of the representations and
warranties set forth herein and in the other Loan Documents shall be and remain
true and correct as of said time, except to the extent the same expressly
relate to an earlier date;

(b)           no Default or Event of Default shall
have occurred and be continuing or would occur as a result of such Credit
Event;

(c)           in the case of a Borrowing the
Administrative Agent shall have received the notice required by
Section 1.6 hereof, in the case of the issuance of any Letter of Credit
the L/C Issuer shall have received a duly completed Application for such
Letter of Credit together with any fees called for by Section 2.1 hereof,
and, in the case of an

 41
 

extension or increase in
the amount of a Letter of Credit, a written request therefor in a form
acceptable to the L/C Issuer together with fees called for by
Section 2.1 hereof; and

(d)           such Credit Event shall not violate
any order, judgment or decree of any court or other authority or any provision
of law or regulation applicable to the Administrative Agent, the
L/C Issuer, or any Lender (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System) as
then in effect.

Each request for a Borrowing hereunder and each
request for the issuance of, increase in the amount of, or extension of the
expiration date of, a Letter of Credit shall be deemed to be a representation
and warranty by the Borrower on the date on such Credit Event as to the facts
specified in subsections (a) through (c), both inclusive, of this Section;
provided, however, that the Lenders may
continue to make advances under the Revolving Credit, in the sole discretion of
the Lenders with Revolving Credit Commitments, notwithstanding the failure of
the Borrower to satisfy one or more of the conditions set forth above and any
such advances so made shall not be deemed a waiver of any Default or Event of
Default or other condition set forth above that may then exist.

Section
7.2.           Initial Credit Event.  Before or concurrently with the initial
Credit Event:

(a)           the Administrative Agent shall have
received this Agreement duly executed by the Borrower and its Subsidiaries, as
Guarantors, and the Lenders;

(b)           if requested by any Lender, the
Administrative Agent shall have received for such Lender such Lender’s duly
executed Notes of the Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 1.11 hereof;

(c)           the Administrative Agent shall have
received the Security Agreement duly executed by the Borrower and its
Subsidiaries, together with (i) original stock certificates or other
similar instruments or securities representing all of the issued and
outstanding shares of capital stock or other equity interests in each
Subsidiary (66% of such capital stock in the case of any Foreign Subsidiary as
provided in Section 4.2 hereof) as of the Closing Date, (ii) stock
powers for the Collateral consisting of the stock or other equity interest in
each Subsidiary executed in blank and undated, (iii) UCC financing
statements to be filed against the Borrower and each Subsidiary, as debtor, in
favor of the Administrative Agent, as secured party, (iv) patent,
trademark, and copyright collateral agreements to the extent requested by the
Administrative Agent, and (v) deposit account, securities account, and commodity
account control agreements to the extent requested by the Administrative Agent;

(d)           the Administrative Agent shall have
received evidence of insurance required to be maintained under the Loan
Documents, naming the Administrative Agent as mortgagee and loss payee;

(e)           the Administrative Agent shall have
received copies of the Borrower’s and each Subsidiary’s articles of
incorporation and bylaws (or comparable organizational

 42
 

documents)
and any amendments thereto, certified in each instance by its Secretary or
Assistant Secretary;

(f)            the Administrative Agent shall have
received copies of resolutions of the Borrower’s and each Subsidiary’s Board of
Directors (or similar governing body) authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party and the consummation of the transactions contemplated hereby and thereby,
together with specimen signatures of the persons authorized to execute such
documents on the Borrower’s and each Subsidiary’s behalf, all certified in each
instance by its Secretary or Assistant Secretary;

(g)           the Administrative Agent shall have
received copies of the certificates of good standing for the Borrower and each
Subsidiary (dated no earlier than 30 days prior to the date hereof) from
the office of the secretary of the state of its incorporation or organization
and of each state in which it is qualified to do business as a foreign
corporation or organization;

(h)           the Administrative Agent shall have
received a list of the Borrower’s Authorized Representatives;

(i)            the Administrative Agent shall have
received the initial fees called for by Section 2.1 hereof;

(j)            the capital and organizational
structure of the Borrower and its Subsidiaries shall be satisfactory to the
Administrative Agent, the Lenders, and the L/C Issuer;

(k)           each Lender and the L/C Issuer
shall have received such evaluations and certifications as it may reasonably
require in order to satisfy itself as to the value of the Collateral, the
financial condition of the Borrower and its Subsidiaries, and the lack of
material contingent liabilities of the Borrower and its Subsidiaries;

(l)            the Administrative Agent shall have
received a compliance certificate confirming that (i) the Total Leverage Ratio
for the twelve (12) calendar month period ended June 30, 2007 is less than 2.00
to 1.0 and (ii) the Adjusted EBITDA for the 12-month period ended June 30, 2007
is at least $26,300,000, each calculated as if the indebtedness incurred on the
Closing Date were incurred on the first day of such 12-month period and on a pro forma basis giving effect to the Acquisition of the
Targets;

(m)          the initial Credit Event shall not
include a Revolving Loan in excess of $5,000,000 and the Borrower’s accounts
payable are at historically normal levels;

(n)           the Administrative Agent shall have
received (i) audited financial statements of the Borrower and Point.360 for the
fiscal years ended 2004, 2005, and 2006, and for GTN, Inc. for the fiscal years
ended 2005 and 2006, (ii) unaudited quarterly financial statements for the four
quarters ended June 30, 2007, for the Borrower and the

 43
 

Targets and (iii)
unaudited financial statements of the Borrower and the Targets for the five
fiscal months ended May 31, 2007, in each case, including an income
statement, a balance sheet, and a cash flow statement, and five-year projected
financial statements, and a closing balance sheet adjusted to give effect to
the initial Credit Event hereunder, and the Acquisition of the Targets, all in
form and substance reasonably acceptable to the Administrative Agent;

(o)           a certificate regarding the solvency
of the Borrower and its Subsidiaries, which includes a pro forma
balance sheet and cash flow projections and analyses for the Borrower and its
Subsidiaries, on a consolidated basis, after giving effect to the Acquisition
of the Targets, executed by the chief financial officer of the Borrower;

(p)           the Administrative Agent shall have
received a fairness opinion addressed to Point.360’s board of directors in
connection with the Acquisition of Point.360;

(q)           the Administrative Agent shall have
received a certificate executed on behalf of the Borrower by the chief
executive officer, chief financial officer or senior vice president for finance
of the Borrower either (i) attaching copies of all governmental consents,
licenses, and approvals required in connection with the execution, delivery,
and performance by the Borrower and Subsidiaries and the validity against the
Borrower and Subsidiaries of the Loan Documents to which it is a party, and
such governmental consents, licenses and approvals shall be in full force and
effect, or (ii) stating that no such governmental consents, license or
approvals are required;

(r)            [Intentionally omitted];

(s)           the Administrative Agent shall have
received a certified copy of the fully executed Point.360 Merger Agreement;

(t)            the Acquisition of Point.360 has
been approved by Point.360’s board of directors and (if necessary)
shareholders.  On the Closing Date, both
before and after giving effect to the Acquisition of Point.360, no injunction
or temporary restraining order which would prohibit or seek to unwind the
Acquisition of Point.360 or any component thereof, or would prohibit the making
of Loans or the issuance of Letters of Credit, or other litigation which would
reasonably be expected to have a Material Adverse Effect, shall be pending or,
to the knowledge of the Borrower, threatened;

(u)           the Administrative Agent shall have
received financing statement, tax, and judgment lien search results against the
Property of the Borrower and each Subsidiary evidencing the absence of Liens on
its Property except as permitted by Section 8.8 hereof;

(v)           the Administrative Agent shall have
received pay-off and lien release letters from secured creditors of the
Borrower, each Subsidiary and Point.360 setting forth, among other things, the
total amount of indebtedness outstanding and owing to them (or outstanding
letters of credit issued for the account of the Borrower or any Subsidiary) and
containing an undertaking to cause to be delivered to the Administrative

 44
 

Agent UCC termination
statements and any other lien release instruments necessary to release their
Liens on the assets of the Borrower and each Subsidiary, which pay-off
and lien release letters shall be in form and substance acceptable to the
Administrative Agent;

(w)          the Administrative Agent shall have
received the favorable written opinion of counsel to the Borrower and each
Subsidiary, in form and substance satisfactory to the Administrative Agent; and

(x)            the Administrative Agent shall have
received such other agreements, instruments, documents, certificates, and
opinions as the Administrative Agent may reasonably request.

SECTION 8.                                                    COVENANTS.

The Borrower agrees that, so long as any credit is available
to or in use by the Borrower hereunder, except to the extent compliance in any
case or cases is waived in writing pursuant to the terms of Section 13.13
hereof:

Section 8.1.           Maintenance of Business.  The Borrower shall, and shall cause each
Subsidiary to, preserve and maintain its existence, except as otherwise
provided in Section 8.10(c) hereof. 
The Borrower shall, and shall cause each Subsidiary to, preserve and
keep in force and effect all licenses, permits, franchises, approvals, patents,
trademarks, trade names, trade styles, copyrights, and other proprietary rights
necessary to the proper conduct of its business where the failure to do so
could reasonably be expected to have a Material Adverse  Effect.

Section 8.2.           Maintenance of Properties.  The Borrower shall, and shall cause each
Subsidiary to, maintain, preserve, and keep its property, plant, and equipment
in good repair, working order and condition (ordinary wear and tear excepted),
and shall from time to time make all needful and proper repairs, renewals,
replacements, additions, and betterments thereto so that at all times the
efficiency thereof shall be fully preserved and maintained, except to the
extent that, in the reasonable business judgment of such Person, any such
Property is no longer necessary for the proper conduct of the business of such
Person.

Section 8.3.           Taxes and Assessments.  The Borrower shall duly pay and discharge,
and shall cause each Subsidiary to duly pay and discharge, all taxes, rates,
assessments, fees, and governmental charges upon or against it or its Property,
in each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves are provided therefor.

Section 8.4.           Insurance.  The Borrower shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the

 45
 

Borrower shall insure, and shall cause each Subsidiary
to insure, such other hazards and risks (including, without limitation,
business interruption, employers’ and public liability risks) with good and
responsible insurance companies as and to the extent usually insured by Persons
similarly situated and conducting similar businesses.  The Borrower shall in any event maintain, and
cause each Subsidiary to maintain, insurance on the Collateral to the extent
required by the Collateral Documents. 
The Borrower shall, upon the request of the Administrative Agent,
furnish to the Administrative Agent and the Lenders a certificate setting forth
in summary form the nature and extent of the insurance maintained pursuant to
this Section.

Section 8.5.           Financial Reports.  The Borrower shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Administrative Agent, and each Lender such information
respecting the business and financial condition of the Borrower and each
Subsidiary as the Administrative Agent or such Lender may reasonably request;
and without any request, shall furnish to the Administrative Agent, and the
Lenders:

(a)           as soon as available, and in any
event no later than forty-five (45) days after the last day of each
fiscal quarter of each fiscal year of the Borrower, a copy of the consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as of the
last day of such fiscal quarter and the consolidated and consolidating
statements of income, retained earnings, and cash flows of the Borrower and its
Subsidiaries for the fiscal quarter and for the fiscal year-to-date
period then ended, each in reasonable detail showing in comparative form the
figures for the corresponding date and period in the previous fiscal year,
prepared by the Borrower in accordance with GAAP (subject to the absence of
footnote disclosures and year-end audit adjustments) and certified to by
its chief financial officer or another officer of the Borrower acceptable to
the Administrative Agent;

(b)           as soon as available, and in any
event no later than ninety (90) days after the last day of each fiscal year of
the Borrower, a copy of the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the last day of the fiscal year then ended
and the consolidated and consolidating statements of income, retained earnings,
and cash flows of the Borrower and its Subsidiaries for the fiscal year then
ended, and accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied in the
case of the consolidated financial statements by an unqualified opinion of KPMG
LLP or another firm of independent public accountants of recognized national
standing, selected by the Borrower and reasonably satisfactory to the
Administrative Agent and the Required Lenders, to the effect that the
consolidated financial statements have been prepared in accordance with GAAP
and present fairly in accordance with GAAP the consolidated financial condition
of the Borrower and its Subsidiaries as of the close of such fiscal year and
the results of their operations and cash flows for the fiscal year then ended
and that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were considered
necessary in the circumstances;

 46
 

(c)           within the period provided in
subsection (b) above, the written statement of the accountants who
certified the audit report thereby required that in the course of their audit
they have obtained no knowledge of any Default or Event of Default, or, if such
accountants have obtained knowledge of any such Default or Event of Default,
they shall disclose in such statement the nature and period of the existence
thereof;

(d)           promptly after receipt thereof, any
additional written reports, management letters or other detailed information
contained in writing concerning significant aspects of the Borrower’s or any
Subsidiary’s operations and financial affairs given to it by its independent
public accountants;

(e)           promptly after the sending or filing
thereof, copies of each financial statement, report, notice or proxy statement
sent by the Borrower or any Subsidiary to its stockholders or other equity
holders, and copies of each regular, periodic or special report, registration
statement or prospectus (including all Form 10-K, Form 10-Q and
Form 8-K reports) filed by the Borrower or any Subsidiary with any
securities exchange or the Securities and Exchange Commission or any successor
agency;

(f)            promptly after receipt thereof, a
copy of each audit made by any regulatory agency of the books and records of
the Borrower or any Subsidiary or of notice of any material noncompliance with
any applicable law, regulation or guideline relating to the Borrower or any
Subsidiary, or its business;

(g)           as soon as available, and in any
event no later than forty-five (45) days after the beginning of each
fiscal year of the Borrower, a copy of the Borrower’s consolidated and
consolidating business plan for such fiscal year, such business plan to show
the Borrower’s projected consolidated and consolidating revenues, expenses and
balance sheet on a quarter-by-quarter basis, such business plan to be in
reasonable detail prepared by the Borrower and in form satisfactory to the
Administrative Agent and the Required Lenders (which shall include a summary of
all assumptions made in preparing such business plan);

(h)           notice of any Change of Control;

(i)            promptly after knowledge thereof
shall have come to the attention of any responsible officer of the Borrower,
written notice of (i) any threatened or pending litigation or governmental
or arbitration proceeding or labor controversy against the Borrower or any
Subsidiary or any of their Property which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect or (ii) the
occurrence of any Default or Event of Default hereunder; and

(j)            with each of the financial
statements delivered pursuant to subsections (a) and (b) above, a written
certificate in the form attached hereto as Exhibit E signed by the chief
financial officer of the Borrower or another officer of the Borrower acceptable
to the Administrative Agent to the effect that to the best of such officer’s
knowledge and belief no Default or Event of Default has occurred during the
period covered by such

 47
 

statements or, if any
such Default or Event of Default has occurred during such period, setting forth
a description of such Default or Event of Default and specifying the action, if
any, taken by the Borrower or any Subsidiary to remedy the same.  Such certificate shall also set forth the
calculations supporting such statements in respect of Section 8.22  hereof.

Section 8.6.           Inspection.  The Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, and each Lender and each of
their duly authorized representatives and agents to visit and inspect any of
its Property, corporate books, and financial records, to examine and make
copies of its books of accounts and other financial records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
officers, employees and independent public accountants (and by this provision
the Borrower hereby authorizes such accountants to discuss with the Administrative
Agent, and such Lenders, the finances and affairs of the Borrower and its
Subsidiaries) at such reasonable times and intervals during normal business
hours as the Administrative Agent or any such Lender may designate and, so long
as no Default or Event of Default exists, with reasonable prior notice to the
Borrower.

Section 8.7.           Borrowings and Guaranties.
 The Borrower shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money, or incur liabilities for
interest rate, currency, or commodity cap, collar, swap, or similar hedging
arrangements, or be or become liable as endorser, guarantor, surety or
otherwise for any debt, obligation or undertaking of any other Person, or otherwise
agree to provide funds for payment of the obligations of another, or supply
funds thereto or invest therein or otherwise assure a creditor of another
against loss, or apply for or become liable to the issuer of a letter of credit
which supports an obligation of another, or subordinate any claim or demand it
may have to the claim or demand of any other Person; provided,
however, that the foregoing shall not restrict nor operate to
prevent:

(a)           the Obligations, Hedging Liability,
and Funds Transfer and Deposit Account Liability of the Borrower and its
Subsidiaries owing to the Administrative Agent and the Lenders (and their
Affiliates);

(b)           purchase money indebtedness and
Capitalized Lease Obligations of the Borrower and its Subsidiaries in an amount
not to exceed $5,000,000 in the aggregate at any one time outstanding;

(c)           obligations of the Borrower or any
Subsidiary arising out of interest rate, foreign currency, and commodity
hedging agreements entered into with financial institutions in connection with
bona fide hedging activities in the ordinary course of business and not for
speculative purposes;

(d)           endorsement of items for deposit or
collection of commercial paper received in the ordinary course of business;

 48

(e)           intercompany advances from time to
time owing by any Guarantor to the Borrower or another Guarantor or by the
Borrower to a Guarantor in the ordinary course of business to finance working
capital needs;

(f)            indebtedness of the Borrower or any
Subsidiary existing on the Closing Date and not otherwise permitted under this
Section and listed on Schedule 8.7, and any refinancings, refundings,
renewals and extensions thereof; and

(g)           unsecured indebtedness of the
Borrower and its Subsidiaries not otherwise permitted by this Section in an
amount not to exceed $5,000,000 in the aggregate at any one time outstanding.

Section 8.8.           Liens.  The Borrower shall not, nor shall it permit
any Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however,
that the foregoing shall not apply to nor operate to prevent:

(a)           Liens arising by statute in
connection with worker’s compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory
obligations or other similar charges (other than Liens arising under ERISA),
good faith cash deposits in connection with tenders, contracts or leases to
which the Borrower or any Subsidiary is a party or other cash deposits required
to be made in the ordinary course of business, provided in each case that the
obligation is not for borrowed money and that the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and adequate
reserves have been established therefor;

(b)           mechanics’, workmen’s, materialmen’s,
landlords’, carriers’ or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith by appropriate proceedings which prevent enforcement of
the matter under contest;

(c)           judgment liens and judicial
attachment liens not constituting an Event of Default under Section 9.1(g)
hereof and the pledge of assets for the purpose of securing an appeal, stay or
discharge in the course of any legal proceeding, provided that the aggregate
amount of such judgment liens and attachments and liabilities of the Borrower
and its Subsidiaries secured by a pledge of assets permitted under this
subsection, including interest and penalties thereon, if any, shall not be in
excess of $1,500,000 at any one time outstanding;

(d)           Liens on equipment of the Borrower or
any Subsidiary created solely for the purpose of securing indebtedness
permitted by Section 8.7(b) hereof, representing or incurred to finance
the purchase price of such Property, provided that no such Lien shall extend to
or cover other Property of the Borrower or such Subsidiary other than the respective
Property so acquired, and the principal amount of indebtedness secured by any
such Lien shall at no time exceed the purchase price of such Property, as
reduced by repayments of principal thereon;

 49
 

(e)           any interest or title of a lessor
under any operating lease;

(f)            easements, rights-of-way,
restrictions, and other similar encumbrances against real property incurred in
the ordinary course of business which, in the aggregate, are not substantial in
amount and which do not materially detract from the value of the Property
subject thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any Subsidiary;

(g)           Liens existing on any asset of any
Person at the time such Person becomes a Subsidiary or is merged or consolidated
with or into a Subsidiary which (i) were not created in contemplation of
or in connection with such event and (ii) do not extend to or cover any
other Property or assets of the Borrower or any Subsidiary, so long as any
Indebtedness for Borrowed Money related to any such liens is permitted under
Section 8.7;

(h)           Liens not otherwise permitted by this
Section and in existence on the Closing Date and described on Schedule 8.8; and

(i)            Liens granted in favor of the
Administrative Agent pursuant to the Collateral Documents.

Section 8.9.           Investments, Acquisitions, Loans and
Advances.  The Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly, make,
retain or have outstanding any investments (whether through purchase of stock
or obligations or otherwise) in, or loans or advances to (other than for travel
advances and other similar cash advances made to employees in the ordinary
course of business), any other Person, or acquire all or any substantial part
of the assets or business of any other Person or division thereof; provided, however, that the foregoing shall not apply to nor
operate to prevent:

(a)           investments in direct obligations of
the United States of America or of any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the United States
of America, provided that any such obligations shall mature within one year of
the date of issuance thereof;

(b)           investments in commercial paper rated
at least P-1 by Moody’s and at least A-1 by S&P maturing within
one year of the date of issuance thereof;

(c)           investments in certificates of
deposit issued by any Lender or by any United States commercial bank having
capital and surplus of not less than $100,000,000 which have a maturity of one
year or less;

(d)           investments in repurchase obligations
with a term of not more than seven (7) days for underlying securities of the
types described in subsection (a) above entered into with any bank meeting
the qualifications specified in subsection (c) above, provided all such
agreements require physical delivery of the securities securing such repurchase
agreement, except those delivered through the Federal Reserve Book Entry
System;

 50
 

(e)           investments in money market funds
that invest solely, and which are restricted by their respective charters to
invest solely, in investments of the type described in the immediately
preceding subsections (a), (b), (c), and (d) above;

(f)            the Borrower’s investment existing
on the date of this Agreement in its Foreign Subsidiaries and the Borrower’s
investments from time to time in its Domestic Subsidiaries, and investments
made from time to time by a Domestic Subsidiary in one or more of its Domestic
Subsidiaries;

(g)           intercompany advances made from time
to time by the Borrower or a Guarantor to another Guarantor or by a Guarantor
to the Borrower in the ordinary course of business to finance working capital
needs;

(h)           Permitted Acquisitions;

(i)            the Borrower’s and Subsidiaries’
investments existing on the date of this Agreement and listed on Schedule 8.9
hereof; and

(j)            investments in hedges, including
currency and interest rate hedges; provided such
investments shall be for non-speculative purposes;

(k)           other investments, loans, and
advances in addition to those otherwise permitted by this Section in an amount
not to exceed $5,000,000 in the aggregate at any one time outstanding.

In determining the amount of investments,
acquisitions, loans, and advances permitted under this Section, investments and
acquisitions shall always be taken at the original cost thereof (regardless of
any subsequent appreciation or depreciation therein), and loans and advances
shall be taken at the principal amount thereof then remaining unpaid.

Section 8.10.        Mergers, Consolidations and Sales.  The Borrower shall not, nor shall it permit
any Subsidiary to, be a party to any merger or consolidation, or sell,
transfer, lease or otherwise dispose of all or any part of its Property,
including any disposition of Property as part of a sale and leaseback transaction,
or in any event sell or discount (with or without recourse) any of its notes or
accounts receivable; provided, however,
that this Section shall not apply to nor operate to prevent:

(a)           the sale or lease of inventory in the
ordinary course of business;

(b)           the sale, transfer, lease or other
disposition of Property of the Borrower and its Subsidiaries to one another in
the ordinary course of its business;

(c)           the merger of any Subsidiary with and
into the Borrower or any other Subsidiary, provided that, in the case of any
merger involving (i) the Borrower, the Borrower is the corporation surviving
the merger and (ii) a Guarantor, a Guarantor or the Borrower is the surviving
entity;

 51
 

(d)           the sale of delinquent notes or
accounts receivable in the ordinary course of business for purposes of
collection only (and not for the purpose of any bulk sale or securitization
transaction);

(e)           the sale, transfer or other
disposition of any tangible personal property that, in the reasonable business
judgment of the Borrower or its Subsidiary, has become obsolete or worn out,
and which is disposed of in the ordinary course of business; and

(f)            the sale, transfer, lease or other
disposition of Property of the Borrower or any Subsidiary (including any
disposition of Property as part of a sale and leaseback transaction)
aggregating for the Borrower and its Subsidiaries not more than $1,000,000
during any fiscal year of the Borrower.

Section 8.11.        Maintenance of Subsidiaries.  The Borrower shall not assign, sell or
transfer, nor shall it permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock or other equity interests of a
Subsidiary; provided, however, that the foregoing
shall not operate to prevent (a) Liens on the capital stock or other
equity interests of Subsidiaries granted to the Administrative Agent pursuant
to the Collateral Documents, (b) the issuance, sale, and transfer to any
person of any shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary, and (c) any transaction permitted by
Section 8.10(c) above.

Section 8.12.        Dividends and Certain Other Restricted
Payments.  The Borrower
shall not, nor shall it permit any Subsidiary to, (a) declare or pay any
dividends on or make any other distributions in respect of any class or series
of its capital stock or other equity interests (other than dividends or
distributions payable solely in its capital stock or other equity interests) or
(b) directly or indirectly purchase, redeem, or otherwise acquire or
retire any of its capital stock or other equity interests or any warrants,
options, or similar instruments to acquire the same (collectively referred to
herein as “Restricted Payments”); provided, however, that the foregoing shall not operate to
prevent (i) the making of dividends or distributions by any Subsidiary to
the Borrower; and (ii) that so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, the repurchase by the
Borrower of its capital stock in an aggregate amount not to exceed $2,500,000
per fiscal year of the Borrower.

Section 8.13.        ERISA.  The Borrower shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Property.  The Borrower shall, and shall
cause each Subsidiary to, promptly notify the Administrative Agent and each
Lender of:  (a) the occurrence of
any reportable event (as defined in ERISA) with respect to a Plan,
(b) receipt of any notice from the PBGC of its intention to seek termination
of any Plan or appointment of a trustee therefor, (c) its intention to
terminate or withdraw from any Plan, and (d) the occurrence of any event
with respect to any Plan which would result in the incurrence by the Borrower
or any Subsidiary of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower or any Subsidiary with
respect to any post-retirement Welfare Plan benefit.

 52
 

Section 8.14.        Compliance with Laws.  (a) The Borrower shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all
federal, state, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect or result in a Lien upon any of
its Property.

(b)           Without limiting the agreements set
forth in Section 8.14(a) above, the Borrower shall, and shall cause each
Subsidiary to, at all times, do the following to the extent the failure to do
so, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect:  (i) comply
in all material respects with, and maintain each of the Premises in compliance
in all material respects with, all applicable Environmental Laws;
(ii) require that each tenant and subtenant, if any, of any of the
Premises or any part thereof comply in all material respects with all
applicable Environmental Laws; (iii) obtain and maintain in full force and
effect all material governmental approvals required by any applicable
Environmental Law for operations at each of the Premises; (iv) cure any
material violation by it or at any of the Premises of applicable Environmental
Laws; (v) not allow the presence or operation at any of the Premises of
any (1) landfill or dump or (2) hazardous waste management facility
or solid waste disposal facility as defined pursuant to RCRA or any comparable
state law; (vi) not manufacture, use, generate, transport, treat, store,
release, dispose or handle any Hazardous Material at any of the Premises except
in the ordinary course of its business and in de minimis amounts;
(vii) within ten (10) Business Days notify the Administrative Agent in
writing of and provide any reasonably requested documents upon learning of any
of the following in connection with the Borrower or any Subsidiary or any of
the Premises: (1) any material liability for response or corrective
action, natural resource damage or other harm pursuant to CERCLA, RCRA or any
comparable state law; (2) any material Environmental Claim; (3) any
material violation of an Environmental Law or material Release, threatened
Release or disposal of a Hazardous Material; (4) any restriction on the
ownership, occupancy, use or transferability arising pursuant to any
(x) Release, threatened Release or disposal of a Hazardous Material or
(y) Environmental Law; or (5) any environmental, natural resource,
health or safety condition, which could reasonably be expected to have a
Material Adverse Effect; (viii) conduct at its expense any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or abate any material
Release, threatened Release or disposal of a Hazardous Material as required by
any applicable Environmental Law, (ix) abide by and observe any
restrictions on the use of the Premises imposed by any governmental authority
as set forth in a deed or other instrument affecting the Borrower’s or any
Subsidiary’s interest therein; (x) promptly provide or otherwise make
available to the Administrative Agent any reasonably requested environmental
record concerning the Premises which the Borrower or any Subsidiary possesses
or can reasonably obtain; and (xi) perform, satisfy, and implement any
operation or maintenance actions required by any governmental authority or
Environmental Law, or included in any no further action letter or covenant not
to sue issued by any governmental authority under any Environmental Law.

Section 8.15.        Burdensome Contracts With Affiliates.  Except as set forth on Schedule 6.14, the
Borrower shall not, nor shall it permit any Subsidiary to, enter into any
contract, agreement or business arrangement with any of its Affiliates (other
than with Wholly-owned Subsidiaries)  on terms and
conditions which are less favorable to the Borrower or

 53
 

such Subsidiary than
would be usual and customary in similar contracts, agreements or business
arrangements between Persons not affiliated with each other.

Section 8.16.        No Changes in Fiscal Year.  The fiscal year of the Borrower and its
Subsidiaries ends on December 31 of each year; and the Borrower shall not,
nor shall it permit any Subsidiary to, change its fiscal year from its present
basis.

Section 8.17.        Formation of Subsidiaries.  (i) 
Promptly upon the formation or acquisition of any Domestic Subsidiary,
the Borrower shall provide the Administrative Agent and the Lenders notice
thereof and timely comply with the requirements of Section 4 hereof (at
which time Schedule 6.2 shall be deemed amended to include reference to
such Subsidiary).  Except for Foreign
Subsidiaries existing on the Closing Date and identified on Schedule 6.2
hereof, the Borrower shall not, nor shall it permit any Subsidiary to, form or
acquire any Foreign Subsidiary.

(ii)  In the event that Acquisition Corp. V has any
assets or transacts business (other than in connection with merger with and
into GTN, with GTN being the surviving corporation), Acquisition Corp. V shall
timely comply with the requirements of Section 4 hereof.

Section 8.18.        Change in the Nature of Business.  The Borrower shall not, nor
shall it permit any Subsidiary to, engage in any business or activity if as a
result the general nature of the business of the Borrower or any Subsidiary
would be changed in any material respect from the general nature of the
business engaged in by it as of the Closing Date.

Section 8.19.        Use of Proceeds.  The Borrower shall use the credit extended
under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.

Section 8.20.        No Restrictions.  Except as provided herein, the Borrower shall
not, nor shall it permit any Subsidiary to, directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to:  (a) pay dividends or
make any other distribution on any Subsidiary’s capital stock or other equity
interests owned by the Borrower or any other Subsidiary, (b) pay any
indebtedness owed to the Borrower or any other Subsidiary, (c) make loans
or advances to the Borrower or any other Subsidiary, (d) transfer any of
its Property to the Borrower or any other Subsidiary, or (e) guarantee the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and/or grant Liens on its assets to the Administrative Agent as
required by the Loan Documents.

Section 8.21.        Subordinated Debt.  The Borrower shall not, nor shall it permit
any Subsidiary to, (a) amend or modify any of the terms or conditions
relating to Subordinated Debt, (b) make any voluntary prepayment of
Subordinated Debt or effect any voluntary redemption thereof, or (c) make
any payment on account of Subordinated Debt which is prohibited under the terms
of any instrument or agreement subordinating the same to the Obligations.  Notwithstanding the foregoing, the Borrower
may agree to a decrease in the interest rate applicable thereto or to a
deferral of repayment of any of the principal of or interest on the
Subordinated Debt beyond the current due dates therefor.

 54
 

Section 8.22.        Financial Covenants.  (a) Total Leverage Ratio.  As of the last day of each fiscal quarter of
the Borrower ending during the relevant period set forth below, the Borrower
shall not permit the Total Leverage Ratio to be greater than the corresponding
ratio set forth opposite such period:

	
  Fiscal Quarter 

  ending on or about

  	
   

  	
  Total Leverage Ratio 

  shall not be greater than:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  09/30/07 through
  09/30/09

  	
   

  	
  2.50 to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12/31/09 and at all times thereafter

  	
   

  	
  2.25 to 1.0

  	
   

  

(b)           Fixed Charge Coverage
Ratio.  As of the last day of
each fiscal quarter of the Borrower, the Borrower shall maintain a Fixed Charge
Coverage Ratio of not less than 1.50 to 1.00.

(c)           Net Worth.  The Borrower shall at all times maintain Net
Worth of the Borrower and its Subsidiaries determined on a consolidated basis
in an amount not less than (i) $140,000,000  plus (ii) 50% of Net Income for each fiscal quarter of
the Borrower ending on June 30, 2007 and thereafter for which such Net Income
is a positive amount (i.e., there
shall be no reduction to the minimum amount of Net Worth required to be
maintained hereunder for any fiscal quarter in which Net Income is less than
zero), plus (iii) 50% of the aggregate
increases in shareholder equity by the Borrower and its Subsidiaries in
connection with the issuance of any equity securities of the Borrower or any of
its Subsidiaries (including the conversion of any Indebtedness for Borrowed
Money into equity securities of the Borrower)

Section 8.23.        Hedging Facilities.  Unless the Administrative Agent otherwise
consents in its sole discretion, not than ninety (90) days after the
Closing Date, the Borrower shall enter into and maintain in full force and
effect one or more hedging agreements in such amounts and on such terms as
shall result in effectively limiting the cost to the Borrower of changes in
LIBOR with respect to an aggregate notional principal amount not less than 50%
of the aggregate principal amount of the Term Loans outstanding on the Closing
Date for a period of at least three (3) years beginning on the Closing
Date.  The Borrower will not and will not
permit any of its Subsidiaries to, incur any Hedging Liabilities except for
purposes of hedging and not for speculative purposes.

Section 8.24.        Post-Closing Covenants.  (i) 
Not later than three (3) Business Day after the Closing Date (or such
later date as the Administrative Agent approves in its sole discretion), the
Borrower shall deliver to the Administrative Agent a Certificate of Merger
issued by the Secretary of State of the State of Delaware and the Secretary of
State of the State of California evidencing the merger of Point.360 with and
into the Borrower, with the Borrower being the surviving corporation.

(ii)  Not later than sixty (60) days after the
Closing Date (or such later date as the Administrative Agent approves in its
sole discretion), the Borrower shall deliver to the Administrative Agent an
amendment to the UCC financing statement filed against the Borrower,

 55
 

as debtor, and Key Bank
Financing, Inc., as secured party, amending the collateral description in such
UCC financing statement.  The amendment
to such UCC financing statement shall be in form and substance acceptable to
the Administrative Agent.

SECTION 9.                                   EVENTS
OF DEFAULT AND REMEDIES.

Section 9.1.           Events of Default.  Any one or more of the following shall
constitute an “Event of Default” hereunder:

(a)           default in the payment when due of
all or any part of the principal of any Loan (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
Reimbursement Obligation, or default for a period of five (5) Business Days in
the payment when due of any  fee or other
Obligation payable hereunder or under any other Loan Document;

(b)           default in the observance or
performance of any covenant set forth in Sections 8.1, 8.5, 8.7, 8.8, 8.9,
8.10, 8.11, 8.12, 8.21, 8.22, 8.23 or 8.24 hereof or of any provision in any Loan
Document dealing with the use, disposition or remittance of the proceeds of
Collateral or requiring the maintenance of insurance thereon;

(c)           default in the observance or
performance of any other provision hereof or of any other Loan Document which
is not remedied within thirty (30) days after the earlier of (i) the date
on which such failure shall first become known to any officer of the Borrower
or (ii) written notice thereof is given to the Borrower by the
Administrative Agent;

(d)           any representation or warranty made
herein or in any other Loan Document or in any certificate furnished to the
Administrative Agent or the Lenders pursuant hereto or thereto or in connection
with any transaction contemplated hereby or thereby proves untrue in any
material respect as of the date of the issuance or making or deemed making
thereof;

(e)           any event occurs or condition exists
(other than those described in subsections (a) through (d) above) which is
specified as an event of default under any of the other Loan Documents, or any
of the Loan Documents shall for any reason not be or shall cease to be in full
force and effect or is declared to be null and void, or any of the Collateral
Documents shall for any reason fail to create a valid and perfected first
priority Lien in favor of the Administrative Agent in any Collateral purported
to be covered thereby except as expressly permitted by the terms thereof, or
any Subsidiary takes any action for the purpose of terminating, repudiating or
rescinding any Loan Document executed by it or any of its obligations
thereunder;

(f)            default shall occur under any
Indebtedness for Borrowed Money issued, assumed or guaranteed by the Borrower
or any Subsidiary aggregating in excess of $1,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the

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acceleration of the
maturity of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated), or any such Indebtedness for Borrowed Money
shall not be paid when due (whether by demand, lapse of time, acceleration or
otherwise);

(g)           any judgment or judgments, writ or
writs or warrant or warrants of attachment, or any similar process or
processes, shall be entered or filed against the Borrower or any Subsidiary, or
against any of its Property, in an aggregate amount in excess of $1,500,000
(except to the extent fully covered by insurance pursuant to which the insurer
has accepted liability therefor in writing), and which remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days;

(h)           the Borrower or any Subsidiary, or
any member of its Controlled Group, shall fail to pay when due an amount or
amounts aggregating in excess of $1,000,000 which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $1,000,000 (collectively, a “Material
Plan”) shall be filed under Title IV of ERISA by the Borrower
or any Subsidiary, or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any Material Plan against the Borrower or any
Subsidiary, or any member of its Controlled Group, to enforce Section 515
or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within
thirty (30) Days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated;

(i)            any Change of Control shall occur;

(j)            the Borrower or any Subsidiary shall
(i) have entered involuntarily against it an order for relief under the
United States Bankruptcy Code, as amended, (ii) not pay, or admit in
writing its inability to pay, its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv) apply
for, seek, consent to or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its Property, (v) institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy
Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take
any corporate action in furtherance of any matter described in parts (i)
through (v) above, or (vii) fail to contest in good faith any appointment
or proceeding described in Section 9.1(k) hereof; or

(k)           a custodian, receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Borrower or
any Subsidiary, or any substantial part of any of its Property, or a proceeding
described in Section 9.1(j)(v) shall be instituted against the

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Borrower or any
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty (60) days.

Section 9.2.           Non-Bankruptcy
Defaults.  When any Event of
Default (other than those described in subsection (j) or (k) of
Section 9.1 hereof with respect to the Borrower) has occurred and is
continuing, the Administrative Agent shall, by written notice to the Borrower:
(a) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (b) if so directed
by the Required Lenders, declare the principal of and the accrued interest on
all outstanding Loans to be forthwith due and payable and thereupon all
outstanding Loans, including both principal and interest thereon, shall be and
become immediately due and payable together with all other amounts payable
under the Loan Documents without further demand, presentment, protest or notice
of any kind; and (c) if so directed by the Required Lenders, demand that
the Borrower immediately pay to the Administrative Agent the full amount then
available for drawing under each or any Letter of Credit, and the Borrower
agrees to immediately make such payment and acknowledges and agrees that the
Lenders would not have an adequate remedy at law for failure by the Borrower to
honor any such demand and that the Administrative Agent, for the benefit of the
Lenders, shall have the right to require the Borrower to specifically perform
such undertaking whether or not any drawings or other demands for payment have
been made under any Letter of Credit. 
The Administrative Agent, after giving notice to the Borrower pursuant
to Section 9.1(c) or this Section 9.2, shall also promptly send a
copy of such notice to the other Lenders, but the failure to do so shall not
impair or annul the effect of such notice.

Section 9.3.           Bankruptcy Defaults.  When any Event of Default described in
subsections (j) or (k) of Section 9.1 hereof with respect to the
Borrower has occurred and is continuing, then all outstanding Loans shall
immediately become due and payable together with all other amounts payable
under the Loan Documents without presentment, demand, protest or notice of any
kind, the obligation of the Lenders to extend further credit pursuant to any of
the terms hereof shall immediately terminate and the Borrower shall immediately
pay to the Administrative Agent the full amount then available for drawing
under all outstanding Letters of Credit, the Borrower acknowledging and
agreeing that the Lenders would not have an adequate remedy at law for failure
by the Borrower to honor any such demand and that the Lenders, and the
Administrative Agent on their behalf, shall have the right to require the
Borrower to specifically perform such undertaking whether or not any draws or
other demands for payment have been made under any of the Letters of Credit.

Section 9.4.           Collateral for Undrawn Letters of
Credit.  (a) If
the prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.9(b) or under
Section 9.2 or 9.3 above, the Borrower shall forthwith pay the amount
required to be so prepaid, to be held by the Administrative Agent as provided
in subsection (b) below.

(b)           All amounts prepaid pursuant to
subsection (a) above shall be held by the Administrative Agent in one or
more separate collateral accounts (each such account, and the credit balances,
properties, and any investments from time to time held therein, and any

 58
 

substitutions for such
account, any certificate of deposit or other instrument evidencing any of the
foregoing and all proceeds of and earnings on any of the foregoing being
collectively called the “Collateral Account”)
as security for, and for application by the Administrative Agent (to the extent
available) to, the reimbursement of any payment under any Letter of Credit then
or thereafter made by the L/C Issuer, and to the payment of the unpaid
balance of all other Obligations (and to all Hedging Liability and Funds
Transfer and Deposit Account Liability). 
The Collateral Account shall be held in the name of and subject to the
exclusive dominion and control of the Administrative Agent for the benefit of
the Administrative Agent, the Lenders, and the L/C Issuer.  If and when requested by the Borrower, the
Administrative Agent shall invest funds held in the Collateral Account from
time to time in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided
that the Administrative Agent is irrevocably authorized to sell investments
held in the Collateral Account when and as required to make payments out of the
Collateral Account for application to amounts due and owing from the Borrower
to the L/C Issuer, the Administrative Agent or the Lenders; provided, however, that (i) if the Borrower shall have
made payment of all obligations referred to in subsection (a) above
required under Section 1.9(b) hereof, at the request of the Borrower the
Administrative Agent shall release to the Borrower amounts held in the
Collateral Account so long as at the time of the release and after giving
effect thereto no Default or Event of Default exists, and (ii) if the
Borrower shall have made payment of all obligations referred to in
subsection (a) above required under Section 9.2 or 9.3 hereof, so
long as no Letters of Credit, Commitments, Loans or other Obligations, Hedging
Liability, or Funds Transfer and Deposit Account Liability remain outstanding,
at the request of the Borrower the Administrative Agent shall release to the
Borrower any remaining amounts held in the Collateral Account.

Section 9.5.           Notice of Default.  The Administrative Agent shall give notice to
the Borrower under Section 9.1(c) hereof promptly upon being requested to
do so by any Lender and shall thereupon notify all the Lenders thereof.

SECTION 10.                             CHANGE
IN CIRCUMSTANCES.

Section 10.1.        Change of Law.  Notwithstanding any other provisions of this
Agreement or any other Loan Document, if at any time any change in applicable
law or regulation or in the interpretation thereof makes it unlawful for any
Lender to make or continue to maintain any Eurodollar Loans or to perform its obligations
as contemplated hereby, such Lender shall promptly give notice thereof to the
Borrower and such Lender’s obligations to make or maintain Eurodollar Loans
under this Agreement shall be suspended until it is no longer unlawful for such
Lender to make or maintain Eurodollar Loans. 
The Borrower shall prepay on demand the outstanding principal amount of
any such affected Eurodollar Loans, together with all interest accrued thereon
and all other amounts then due and payable to such Lender under this Agreement;
provided, however, subject to all of the
terms and conditions of this Agreement, the Borrower may then elect to borrow
the principal amount of the affected Eurodollar Loans from such Lender by means
of Base Rate Loans from such Lender, which Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.

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Section 10.2.        Unavailability of Deposits or Inability
to Ascertain, or Inadequacy of, LIBOR.  If on or prior to the first day of any
Interest Period for any Borrowing of Eurodollar Loans:

(a)           the Administrative Agent determines
that deposits in U.S. Dollars (in the applicable amounts) are not being offered
to it in the interbank eurodollar market for such Interest Period, or that by
reason of circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or

(b)           the Required Lenders advise the
Administrative Agent that (i) LIBOR as determined by the Administrative Agent
will not adequately and fairly reflect the cost to such Lenders of funding
their Eurodollar Loans for such Interest Period or (ii) that the making or
funding of Eurodollar Loans become impracticable,

then the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Lenders, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise
to such suspension no longer exist, the obligations of the Lenders to make
Eurodollar Loans shall be suspended.

Section 10.3.        Increased Cost and Reduced Return.  (a) If, on or after the date hereof, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) or
the L/C Issuer with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:

(i)            shall subject any Lender (or its
Lending Office) or the L/C Issuer to any tax, duty or other charge with
respect to its Eurodollar Loans, its Notes, its Letter(s) of Credit, or its
participation in any thereof, any Reimbursement Obligations owed to it or its
obligation to make Eurodollar Loans, issue a Letter of Credit, or to
participate therein, or shall change the basis of taxation of payments to any
Lender (or its Lending Office) or the L/C Issuer of the principal of or
interest on its Eurodollar Loans, Letter(s) of Credit, or participations
therein or any other amounts due under this Agreement or any other Loan
Document in respect of its Eurodollar Loans, Letter(s) of Credit, any
participation therein, any Reimbursement Obligations owed to it, or its
obligation to make Eurodollar Loans, or issue a Letter of Credit, or acquire
participations therein (except for changes in the rate of tax on the overall
net income of such Lender or its Lending Office or the L/C Issuer imposed
by the jurisdiction in which such Lender’s or the L/C Issuer’s principal
executive office or Lending Office is located); or

(ii)           shall impose, modify or deem
applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any Eurodollar Loans
any such requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended by,

 60
 

any Lender (or its
Lending Office) or the L/C Issuer or shall impose on any Lender (or its
Lending Office) or the L/C Issuer or on the interbank market any other
condition affecting its Eurodollar Loans, its Notes, its Letter(s) of Credit,
or its participation in any thereof, any Reimbursement Obligation owed to it,
or its obligation to make Eurodollar Loans, or to issue a Letter of Credit, or
to participate therein;

and the result of any of the foregoing is to increase
the cost to such Lender (or its Lending Office) or the L/C Issuer of
making or maintaining any Eurodollar Loan, issuing or maintaining a Letter of
Credit, or participating therein, or to reduce the amount of any sum received
or receivable by such Lender (or its Lending Office) or the L/C Issuer
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender or L/C Issuer to be material, then, within
fifteen (15) days after demand by such Lender or L/C Issuer (with a copy
to the Administrative Agent), the Borrower shall be obligated to pay to such
Lender or L/C Issuer such additional amount or amounts as will compensate
such Lender or L/C Issuer for such increased cost or reduction.

(b)           If, after the date hereof, any
Lender, the L/ C Issuer, or the Administrative Agent shall have determined that
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Lending Office) or the L/C Issuer or any
corporation controlling such Lender or L/C Issuer with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has had the effect of
reducing the rate of return on such Lender’s or L/C Issuer ‘s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or L/C Issuer or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or L/C Issuer ‘s or such corporation’s policies with respect
to capital adequacy) by an amount deemed by such Lender or L/C Issuer to
be material, then from time to time, within fifteen (15) days after demand by
such Lender or L/C Issuer (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender or L/C Issuer, as applicable, such
additional amount or amounts as will compensate such Lender or L/C Issuer
for such reduction.

(c)           A certificate of a Lender or
L/C Issuer claiming compensation under this Section 10.3 and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive if reasonably determined.  In
determining such amount, such Lender or L/C Issuer may use any reasonable
averaging and attribution methods.

Section 10.4.        Lending Offices.  Each Lender may, at its option, elect to make
its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a “Lending Office”)
for each type of Loan available hereunder or at such other of its branches,
offices or affiliates as it may from time to time elect and designate in a
written notice to the Borrower and the Administrative Agent.  To the extent reasonably possible, a Lender
shall designate an alternative branch or funding office with respect to its
Eurodollar Loans to reduce any liability of the Borrower to such Lender under
Section 10.3 hereof or to avoid the

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unavailability of
Eurodollar Loans under Section 10.2 hereof, so long as such designation is
not otherwise disadvantageous to the Lender.

Section 10.5.        Discretion of Lender as to Manner of
Funding. 
Notwithstanding any other provision of this Agreement, each Lender shall
be entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder with respect to Eurodollar Loans
shall be made as if each Lender had actually funded and maintained each
Eurodollar Loan through the purchase of deposits in the interbank eurodollar market
having a maturity corresponding to such Loan’s Interest Period, and bearing an
interest rate equal to LIBOR for such Interest Period.

SECTION 11.                             THE
ADMINISTRATIVE AGENT.

Section 11.1.        Appointment and Authorization of
Administrative Agent. 
Each Lender and the L/C Issuer hereby appoints  Bank
of Montreal as the Administrative Agent under the Loan Documents and hereby
authorizes the Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto. 
The Lenders and L/C Issuer expressly agree that the Administrative
Agent is not acting as a fiduciary of the Lenders or the L/C Issuer in
respect of the Loan Documents, the Borrower or otherwise, and nothing herein or
in any of the other Loan Documents shall result in any duties or obligations on
the Administrative Agent or any of the Lenders or L/C Issuer except as expressly
set forth herein.

Section 11.2.        Administrative Agent and its Affiliates.  The Administrative Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise or refrain from exercising such rights and power
as though it were not the Administrative Agent, and the Administrative Agent
and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or any Affiliate of the Borrower
as if it were not the Administrative Agent under the Loan Documents.  The term “Lender” as
used herein and in all other Loan Documents, unless the context otherwise
clearly requires, includes the Administrative Agent in its individual capacity
as a Lender.  References in
Section 1 hereof to the Administrative Agent’s Loans, or to the amount
owing to the Administrative Agent for which an interest rate is being
determined, refer to the Administrative Agent in its individual capacity as a
Lender.

Section 11.3.        Action by Administrative Agent.  If the Administrative Agent receives from the
Borrower a written notice of an Event of Default pursuant to Section 8.5
hereof, the Administrative Agent shall promptly give each of the Lenders and
L/C Issuer written notice thereof. 
The obligations of the Administrative Agent under the Loan Documents are
only those expressly set forth therein. 
Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2
and 9.5.  Upon the occurrence of an Event
of Default, the Administrative Agent shall take such action to enforce its Lien
on the Collateral and to preserve and protect the Collateral as may be directed
by the Required Lenders.  Unless and
until the Required Lenders give such direction, the Administrative Agent may
(but shall not

 62

be obligated to) take or refrain from taking such
actions as it deems appropriate and in the best interest of all the Lenders and
L/C Issuer.  In no event, however,
shall the Administrative Agent be required to take any action in violation of
applicable law or of any provision of any Loan Document, and the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder or under any other Loan Document unless it first receives any further
assurances of its indemnification from the Lenders that it may require,
including prepayment of any related expenses and any other protection it
requires against any and all costs, expense, and liability which may be
incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall be entitled to
assume that no Default or Event of Default exists unless notified in writing to
the contrary by a Lender, the L/C Issuer, or the Borrower.  In all cases in which the Loan Documents do
not require the Administrative Agent to take specific action, the
Administrative Agent shall be fully justified in using its discretion in
failing to take or in taking any action thereunder.  Any instructions of the Required Lenders, or
of any other group of Lenders called for under the specific provisions of the
Loan Documents, shall be binding upon all the Lenders and the holders of the
Obligations.

Section 11.4.        Consultation with Experts.  The Administrative Agent may consult with
legal counsel, independent public accountants, and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.

Section 11.5.        Liability of Administrative Agent;
Credit Decision. 
Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection with the Loan Documents: 
(i) with the consent or at the request of the Required Lenders or
(ii) in the absence of its own gross negligence or willful
misconduct.  Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify:  (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the
covenants or agreements of the Borrower or any Subsidiary contained herein or
in any other Loan Document; (iii) the satisfaction of any condition
specified in Section 7 hereof, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity,
effectiveness, genuineness, enforceability, perfection, value, worth or collectibility
hereof or of any other Loan Document or of any other documents or writing
furnished in connection with any Loan Document or of any Collateral; and the
Administrative Agent makes no representation of any kind or character with
respect to any such matter mentioned in this sentence.  The Administrative Agent may execute any of
its duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the
L/C Issuer, the Borrower, or any other Person for the default or
misconduct of any such agents or attorneys-in-fact selected with
reasonable care.  The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, other document or statement (whether written or oral)
believed by it to be genuine or to be sent by the proper party or parties.  In particular and without limiting any of the
foregoing, the Administrative Agent shall have no responsibility for confirming
the accuracy of any compliance certificate or other document or instrument
received by it under the Loan Documents. 
The Administrative Agent may treat the payee of any Obligation as the
holder thereof until written notice of transfer shall have been filed

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with the Administrative Agent signed by such payee in
form satisfactory to the Administrative Agent. 
Each Lender and L/C Issuer acknowledges that it has independently
and without reliance on the Administrative Agent or any other Lender or
L/C Issuer, and based upon such information, investigations and inquiries
as it deems appropriate, made its own credit analysis and decision to extend
credit to the Borrower in the manner set forth in the Loan Documents.  It shall be the responsibility of each Lender
and L/C Issuer to keep itself informed as to the creditworthiness of the
Borrower and its Subsidiaries, and the Administrative Agent shall have no
liability to any Lender or L/C Issuer with respect thereto.

Section 11.6.        Indemnity.  The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.  The obligations of the Lenders under this
Section shall survive termination of this Agreement.  The Administrative Agent shall be entitled to
offset amounts received for the account of a Lender under this Agreement
against unpaid amounts due from such Lender to the Administrative Agent
hereunder (whether as fundings of participations, indemnities or otherwise),
but shall not be entitled to offset against amounts owed to the Administrative
Agent by any Lender arising outside of this Agreement and the other Loan
Documents.

Section 11.7.        Resignation of Administrative Agent and
Successor Administrative Agent.  The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders, the L/C Issuer, and
the Borrower.  Upon any such resignation
of the Administrative Agent, the Required Lenders shall have the right to
appoint a successor Administrative Agent. 
If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within thirty (30)
days after the retiring Administrative Agent’s giving of notice of resignation
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which may be any Lender hereunder or any
commercial bank, or an Affiliate of a commercial bank, having an office in the
United States of America and having a combined capital and surplus of at least
$200,000,000.  Upon the acceptance of its
appointment as the Administrative Agent hereunder, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Administrative Agent under the Loan Documents,
and the retiring Administrative Agent shall be discharged from its duties and
obligations thereunder.  After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent,
the provisions of this Section 11 and all protective provisions of the
other Loan Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent, but no successor
Administrative Agent shall in any event be liable or responsible for any
actions of its predecessor.  If the
Administrative Agent resigns and no successor is appointed, the rights and
obligations of such Administrative Agent shall be automatically assumed by the
Required Lenders and (i) the Borrower shall be directed to make all
payments due each Lender and L/C Issuer hereunder directly to such Lender
or L/C Issuer and (ii) the Administrative Agent’s

 64
 

rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Lenders and L/C Issuer
as their interests may appear.

Section 11.8.        L/C Issuer and Swing Line Lender.  The L/C Issuer shall act on behalf of
the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the Swing Line Lender shall act on behalf
of the Lenders with respect to the Swing Loans made hereunder.  The L/C Issuer and the Swing Line Lender
shall each have all of the benefits and immunities (i) provided to the
Administrative Agent in this Section 11 with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the Applications pertaining to
such Letters of Credit or by the Swing Line Lender in connection with Swing
Loans made or to be made hereunder as fully as if the term “Administrative
Agent”, as used in this Section 11, included the L/C Issuer and the
Swing Line Lender with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to such L/C Issuer or
Swing Line Lender, as applicable.

Section 11.9.        Hedging Liability and Funds Transfer and
Deposit Account Liability Arrangements.  By virtue of a Lender’s execution of this
Agreement or an assignment agreement pursuant to Section 13.12 hereof, as
the case may be, any Affiliate of such Lender with whom the Borrower or any
Subsidiary has entered into an agreement creating Hedging Liability or Funds
Transfer and Deposit Account Liability shall be deemed a Lender party hereto
for purposes of any reference in a Loan Document to the parties for whom the
Administrative Agent is acting, it being understood and agreed that the rights
and benefits of such Affiliate under the Loan Documents consist exclusively of
such Affiliate’s right to share in payments and collections out of the
Collateral and the Guaranties as more fully set forth in Section 3.1
hereof.  In connection with any such
distribution of payments and collections, or any request for the release of the
Guaranties and the Administrative Agent’s Liens in connection with the
termination of the Commitments and the payment in full of the Obligations, the
Administrative Agent shall be entitled to assume no amounts are due to any
Lender or its Affiliate with respect to Hedging Liability or Funds Transfer and
Deposit Account Liability unless such Lender has notified the Administrative
Agent in writing of the amount of any such liability owed to it or its
Affiliate prior to such distribution or payment or release of Guaranties and
Liens.

Section 11.10.      Designation of Additional Agents.  The Administrative Agent shall have the
continuing right, for purposes hereof, at any time and from time to time to
designate one or more of the Lenders (and/or its or their Affiliates) as “syndication
agents,” “documentation agents,” “book runners,” “lead arrangers,” “arrangers,”
or other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof.

Section 11.11.      Authorization to Release or Subordinate or
Limit Liens.  The
Administrative Agent is hereby irrevocably authorized by each of the Lenders
and the L/C Issuer to (a) release any Lien covering any Collateral
that is sold, transferred, or otherwise disposed of in accordance with the
terms and conditions of this Agreement and the relevant Collateral Documents
(including a sale, transfer, or disposition permitted by the terms of
Section 8.10 hereof or which has otherwise been consented to in accordance
with Section 13.13 hereof), (b) release or subordinate any Lien on
Collateral consisting of goods financed with purchase

 65
 

money indebtedness or under a Capital Lease to the
extent such purchase money indebtedness or Capitalized Lease Obligation, and
the Lien securing the same, are permitted by Sections 8.7(b) and 8.8(d)
hereof, (c) reduce or limit the amount of the indebtedness secured by any
particular item of Collateral to an amount not less than the estimated value
thereof to the extent necessary to reduce mortgage registry, filing and similar
tax, and (d) release Liens on the Collateral following termination or
expiration of the Commitments and payment in full in cash of the Obligations
and, if then due, Hedging Liability and Funds Transfer and Deposit Account
Liability.

Section 11.12.      Authorization to Enter into, and
Enforcement of, the Collateral Documents.  The Administrative Agent is hereby
irrevocably authorized by each of the Lenders and the L/C Issuer to
execute and deliver the Collateral Documents on behalf of each of the Lenders
and their Affiliates and the L/C Issuer and to take such action and
exercise such powers under the Collateral Documents as the Administrative Agent
considers appropriate, provided the
Administrative Agent shall not amend the Collateral Documents unless such
amendment is agreed to in writing by the Required Lenders.  Each Lender and L/C Issuer acknowledges
and agrees that it will be bound by the terms and conditions of the Collateral
Documents upon the execution and delivery thereof by the Administrative
Agent.  Except as otherwise specifically
provided for herein, no Lender (or its Affiliates) or L/C Issuer, other
than the Administrative Agent, shall have the right to institute any suit,
action or proceeding in equity or at law for the foreclosure or other
realization upon any Collateral or for the execution of any trust or power in
respect of the Collateral or for the appointment of a receiver or for the
enforcement of any other remedy under the Collateral Documents; it being
understood and intended that no one or more of the Lenders (or their
Affiliates) or L/C Issuer shall have any right in any manner whatsoever to
affect, disturb or prejudice the Lien of the Administrative Agent (or any
security trustee therefor) under the Collateral Documents by its or their
action or to enforce any right thereunder, and that all proceedings at law or
in equity shall be instituted, had, and maintained by the Administrative Agent
(or its security trustee) in the manner provided for in the relevant Collateral
Documents for the benefit of the Lenders, the L/C Issuer, and their
Affiliates.

SECTION 12.                             THE GUARANTEES.

Section 12.1.        The Guarantees.  To induce the Lenders and L/C Issuer to
provide the credits described herein and in consideration of benefits expected
to accrue to the Borrower by reason of the Commitments and for other good and
valuable consideration, receipt of which is hereby acknowledged, each
Subsidiary party hereto (including any Subsidiary executing an Additional
Guarantor Supplement in the form attached hereto as Exhibit F or such
other form acceptable to the Administrative Agent) hereby unconditionally and
irrevocably guarantees jointly and severally to the Administrative Agent, the
Lenders, and the L/C Issuer and their Affiliates, the due and punctual
payment of all present and future Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability, including, but not limited to, the due
and punctual payment of principal of and interest on the Loans, the Reimbursement
Obligations, and the due and punctual payment of all other Obligations now or
hereafter owed by the Borrower under the Loan Documents and the due and
punctual payment of all Hedging Liability and Funds Transfer and Deposit
Account Liability, in each case as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according
to the terms hereof

 66
 

and thereof (including all interest, costs, fees, and
charges after the entry of an order for relief against the Borrower or such
other obligor in a case under the United States Bankruptcy Code or any similar
proceeding, whether or not such interest, costs, fees and charges would be an
allowed claim against the Borrower or any such obligor in any such proceeding).  In case of failure by the Borrower or other
obligor punctually to pay any Obligations, Hedging Liability, or Funds Transfer
and Deposit Account Liability guaranteed hereby, each Guarantor hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by
the Borrower or such obligor.

Section 12.2.        Guarantee Unconditional.  The obligations of each Guarantor under this
Section 12 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged, or otherwise
affected by:

(a)           any extension, renewal, settlement,
compromise, waiver, or release in respect of any obligation of the Borrower or
other obligor or of any other guarantor under this Agreement or any other Loan
Document or by operation of law or otherwise;

(b)           any modification or amendment of or
supplement to this Agreement or any other Loan Document or any agreement
relating to Hedging Liability or Funds Transfer and Deposit Account Liability;

(c)           any change in the corporate
existence, structure, or ownership of, or any insolvency, bankruptcy,
reorganization, or other similar proceeding affecting, the Borrower or other
obligor, any other guarantor, or any of their respective assets, or any
resulting release or discharge of any obligation of the Borrower or other
obligor or of any other guarantor contained in any Loan Document;

(d)           the existence of any claim, set-off,
or other rights which the Borrower or other obligor or any other guarantor may
have at any time against the Administrative Agent, any Lender, the
L/C Issuer or any other Person, whether or not arising in connection
herewith;

(e)           any failure to assert, or any
assertion of, any claim or demand or any exercise of, or failure to exercise,
any rights or remedies against the Borrower or other obligor, any other
guarantor, or any other Person or Property;

(f)            any application of any sums by
whomsoever paid or howsoever realized to any obligation of the Borrower or
other obligor, regardless of what obligations of the Borrower or other obligor
remain unpaid;

(g)           any invalidity or unenforceability
relating to or against the Borrower or other obligor or any other guarantor for
any reason of this Agreement or of any other Loan Document or any agreement
relating to Hedging Liability or Funds Transfer and Deposit Account Liability
or any provision of applicable law or regulation purporting to prohibit the
payment by the Borrower or other obligor or any other guarantor of the

 67
 

principal of or interest on any Loan or any
Reimbursement Obligation or any other amount payable under the Loan Documents
or any agreement relating to Hedging Liability or Funds Transfer and Deposit
Account Liability; or

(h)           any other act or omission to act or
delay of any kind by the Administrative Agent, any Lender, the L/C Issuer,
or any other Person or any other circumstance whatsoever that might, but for
the provisions of this paragraph, constitute a legal or equitable discharge of
the obligations of any Guarantor under this Section 12.

Section 12.3.        Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances.  Each Guarantor’s obligations under this
Section 12 shall remain in full force and effect until the Commitments are
terminated, all Letters of Credit have expired, and the principal of and
interest on the Loans and all other amounts payable by the Borrower and the
Guarantors under this Agreement and all other Loan Documents and, if then
outstanding and unpaid, all Hedging Liability and Funds Transfer and Deposit
Account Liability shall have been paid in full. 
If at any time any payment of the principal of or interest on any Loan
or any Reimbursement Obligation or any other amount payable by the Borrower or
other obligor or any Guarantor under the Loan Documents or any agreement
relating to Hedging Liability or Funds Transfer and Deposit Account Liability
is rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of the Borrower or other obligor or of any
guarantor, or otherwise, each Guarantor’s obligations under this
Section 12 with respect to such payment shall be reinstated at such time as
though such payment had become due but had not been made at such time.

Section 12.4.        Subrogation.  Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability shall have been paid in full
subsequent to the termination of all the Commitments and expiration of all
Letters of Credit.  If any amount shall
be paid to a Guarantor on account of such subrogation rights at any time prior
to the later of (x) the payment in full of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability and all other
amounts payable by the Borrower hereunder and the other Loan Documents and
(y) the termination of the Commitments and expiration of all Letters of
Credit, such amount shall be held in trust for the benefit of the
Administrative Agent, the Lenders, and the L/C Issuer (and their
Affiliates) and shall forthwith be paid to the Administrative Agent for the
benefit of the Lenders and L/C Issuer (and their Affiliates) or be
credited and applied upon the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability, whether matured or unmatured, in accordance
with the terms of this Agreement.

Section 12.5.        Waivers.  Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein,
as well as any requirement that at any time any action be taken by the Administrative
Agent, any Lender, the L/C Issuer, or any other Person against the
Borrower or other obligor, another guarantor, or any other Person.

Section 12.6.        Limit on Recovery.  Notwithstanding any other provision hereof,
the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest

 68
 

amount which would render such Guarantor’s obligations
under this Section 12 void or avoidable under applicable law, including,
without limitation, fraudulent conveyance law.

Section 12.7.        Stay of Acceleration.  If acceleration of the time for payment of
any amount payable by the Borrower or other obligor under this Agreement or any
other Loan Document, or under any agreement relating to Hedging Liability or
Funds Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower or such obligor, all such amounts
otherwise subject to acceleration under the terms of this Agreement or the
other Loan Documents, or under any agreement relating to Hedging Liability or
Funds Transfer and Deposit Account Liability, shall nonetheless be payable by
the Guarantors hereunder forthwith on demand by the Administrative Agent made
at the request of the Required Lenders.

Section 12.8.        Benefit to Guarantors.  The Borrower and the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of the Borrower has a direct impact on the success of
each Guarantor.  Each Guarantor will
derive substantial direct and indirect benefit from the extensions of credit
hereunder.

Section 12.9.        Guarantor Covenants.  Each Guarantor shall take such action as the
Borrower is required by this Agreement to cause such Guarantor to take, and
shall refrain from taking such action as the Borrower is required by this
Agreement to prohibit such Guarantor from taking.

SECTION 13.                             MISCELLANEOUS.

Section 13.1.        Withholding Taxes.  (a) Payments Free of
Withholding.  Except as
otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the Borrower and the Guarantors under this Agreement or the other
Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which the Borrower or such Guarantor
is domiciled, any jurisdiction from which the Borrower or such Guarantor makes
any payment, or (in each case) any political subdivision or taxing authority
thereof or therein.  If any such
withholding is so required, the Borrower or such Guarantor shall make the
withholding, pay the amount withheld to the appropriate governmental authority
before penalties attach thereto or interest accrues thereon, and forthwith pay
such additional amount as may be necessary to ensure that the net amount
actually received by each Lender, the L/C Issuer, and the Administrative
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender, L/C Issuer, or the
Administrative Agent (as the case may be) would have received had such
withholding not been made.  If the
Administrative Agent, the L/C Issuer, or any Lender pays any amount in
respect of any such taxes, penalties or interest, the Borrower or such
Guarantor shall reimburse the Administrative Agent, the L/C Issuer or such
Lender for that payment on demand in the currency in which such payment was
made.  If the Borrower or such Guarantor
pays any such taxes, penalties or interest, it shall deliver official tax
receipts evidencing that payment or certified copies thereof to the Lender, the
L/C Issuer or Administrative Agent on whose account such withholding was
made (with a copy to the

 69
 

Administrative Agent if not the recipient of the
original) on or before the thirtieth (30th) day after payment.

(b)           U.S. Withholding Tax
Exemptions.  Each Lender or
L/C Issuer that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) shall submit to the Borrower and the Administrative
Agent on or before the date the initial Credit Event is made hereunder or, if
later, the date such financial institution becomes a Lender or L/C Issuer
hereunder, two (2) duly completed and signed copies of (i) either Form W-8 BEN
(relating to such Lender or L/C Issuer and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender or L/C Issuer, including fees, pursuant to the Loan Documents and
the Obligations) or Form W-8 ECI (relating to all amounts to be
received by such Lender or L/C Issuer, including fees, pursuant to the
Loan Documents and the Obligations) of the United States Internal Revenue
Service or (ii) solely if such Lender is claiming exemption from United States
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a Form W-8 BEN, or any successor
form prescribed by the Internal Revenue Service, and a certificate representing
that such Lender is not a bank for purposes of Section 881(c) of the Code,
is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code).  Thereafter
and from time to time, each Lender and L/C Issuer shall submit to the
Borrower and the Administrative Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing
authorities) and such other certificates as may be (i) requested by the
Borrower in a written notice, directly or through the Administrative Agent, to
such Lender or L/C Issuer and (ii) required under then-current
United States law or regulations to avoid or reduce United States withholding
taxes on payments in respect of all amounts to be received by such Lender or
L/C Issuer, including fees, pursuant to the Loan Documents or the
Obligations.  Upon the request of the
Borrower or the Administrative Agent, each Lender and L/C Issuer that is a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) shall submit to the Borrower and the Administrative Agent a
certificate to the effect that it is such a United States person.

(c)           Inability of Lender to
Submit Forms.  If any Lender
or L/C Issuer determines, as a result of any change in applicable law,
regulation or treaty, or in any official application or interpretation thereof,
that it is unable to submit to the Borrower or the Administrative Agent any
form or certificate that such Lender or L/C Issuer is obligated to submit
pursuant to subsection (b) of this Section 13.1 or that such Lender
or L/C Issuer is required to withdraw or cancel any such form or
certificate previously submitted or any such form or certificate otherwise
becomes ineffective or inaccurate, such Lender or L/C Issuer shall
promptly notify the Borrower and Administrative Agent of such fact and the
Lender or L/C Issuer shall to that extent not be obligated to provide any
such form or certificate and will be entitled to withdraw or cancel any
affected form or certificate, as applicable.

Section 13.2.        No Waiver, Cumulative Remedies.  No delay or failure on the part of the
Administrative Agent, the L/C Issuer, or any Lender, or on the part of the
holder or holders of any of the Obligations, in the exercise of any power or
right under any Loan Document shall

 70
 

operate as a waiver thereof or as an acquiescence in
any default, nor shall any single or partial exercise of any power or right
preclude any other or further exercise thereof or the exercise of any other
power or right.  The rights and remedies
hereunder of the Administrative Agent, the L/C Issuer, the Lenders, and of
the holder or holders of any of the Obligations are cumulative to, and not
exclusive of, any rights or remedies which any of them would otherwise have.

Section 13.3.        Non-Business Days.  If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such
payment shall be due and payable.  In the
case of any payment of principal falling due on a day which is not a Business
Day, interest on such principal amount shall continue to accrue during such
extension at the rate per annum then in effect, which accrued amount shall be
due and payable on the next scheduled date for the payment of interest.

Section 13.4.        Documentary Taxes.  The Borrower agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.

Section 13.5.        Survival of Representations.  All representations and warranties made
herein or in any other Loan Document or in certificates given pursuant hereto
or thereto shall survive the execution and delivery of this Agreement and the
other Loan Documents, and shall continue in full force and effect with respect
to the date as of which they were made as long as any credit is in use or
available hereunder.

Section 13.6.        Survival of Indemnities.  All indemnities and other provisions relative
to reimbursement to the Lenders and L/C Issuer of amounts sufficient to
protect the yield of the Lenders and L/C Issuer with respect to the Loans
and Letters of Credit, including, but not limited to, Sections 1.12, 10.3,
and 13.15 hereof, shall survive the termination of this Agreement and the other
Loan Documents and the payment of the Obligations.

Section 13.7.        Sharing of Set-Off.  Each Lender agrees with each other Lender a
party hereto that if such Lender shall receive and retain any payment, whether
by set-off or application of deposit balances or otherwise, on any of the
Loans or Reimbursement Obligations in excess of its ratable share of payments
on all such Obligations then outstanding to the Lenders, then such Lender shall
purchase for cash at face value, but without recourse, ratably from each of the
other Lenders such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Lenders (or interest therein)
as shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however,
that if any such purchase is made by any Lender, and if such excess payment or
part thereof is thereafter recovered from such purchasing Lender, the related
purchases from the other Lenders shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest.  For purposes of this
Section, amounts owed to or recovered by the L/C Issuer in connection with
Reimbursement Obligations in which Lenders have been

 71
 

required to fund their participation shall be treated
as amounts owed to or recovered by the L/C Issuer as a Lender hereunder.

Section 13.8.        Notices.  Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by
notice to the Administrative Agent and the Borrower given by courier, by United
States certified or registered mail, by telecopy or by other telecommunication
device capable of creating a written record of such notice and its
receipt.  Notices under the Loan
Documents to any Lender shall be addressed to its address or telecopier number
set forth on its Administrative Questionnaire; and notices under the Loans
Documents to the Borrower, any Guarantor, the Administrative Agent or
L/C Issuer shall be addressed to its respective address or telecopier
number set forth below:

	
  to the Borrower or any
  Guarantor:

  	
  to the Administrative Agent and L/C Issuer :

  
	
   

  	
   

  
	
  750 John W.
  Carpenter Freeway

  	
  Bank of Montreal

  
	
  Suite 700

  	
  115 South
  LaSalle Street

  
	
  Irving, Texas
  75039

  	
  Chicago,
  Illinois 60603

  
	
  Attention:

  	
  Omar Choucair

  	
  Attention:

  	
  Kathleen Collins

  
	
  Telephone:

  	
  972-581-2000

  	
  Telephone:

  	
  312-461-7077

  
	
  Telecopy:

  	
  972-581-2100

  	
  Telecopy:

  	
  312-461-4008

  

 

Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section or in the relevant Administrative
Questionnaire and a confirmation of such telecopy has been received by the
sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iii) if given by any other means, when
delivered at the addresses specified in this Section or in the relevant
Administrative Questionnaire; provided that  any notice given pursuant to Section 1 hereof shall be
effective only upon receipt.

Section 13.9.        Counterparts.  This Agreement may be executed in any number
of counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.

Section 13.10.      Successors and Assigns.  This Agreement shall be binding upon the
Borrower and the Guarantors and their successors and assigns, and shall inure
to the benefit of the Administrative Agent, the L/C Issuer, and each of
the Lenders, and the benefit of their respective successors and assigns,
including any subsequent holder of any of the Obligations.  The Borrower and the Guarantors may not
assign any of their rights or obligations under any Loan Document without the
written consent of all of the Lenders and, with respect to any Letter of Credit
or the Application therefor, the L/C Issuer.

Section 13.11.      Participants.  Each Lender shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the

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Loans made and Reimbursement Obligations and/or
Commitments held by such Lender at any time and from time to time to one or
more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant. 
Any agreement pursuant to which such participation  is granted shall provide that the granting
Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrower under this Agreement and the other Loan Documents
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of the Loan Documents, except that such agreement
may provide that such Lender will not agree to any modification, amendment or
waiver of the Loan Documents that would reduce the amount of or postpone any
fixed date for payment of any Obligation in which such participant has an
interest.  Any party to which such a
participation has been granted shall have the benefits of Section 1.12 and
Section 10.3 hereof.  The Borrower
authorizes each Lender to disclose to any participant or prospective
participant under this Section any financial or other information pertaining to
the Borrower or any Subsidiary.

Section 13.12.      Assignments.  (a) Any Lender may at any time assign to
one or more Eligible Assignees all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:

(i)            Minimum Amounts.  (A) In the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans and
participation interest in L/C Obligations at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and (B) in any case not described in
subsection (a)(i)(A) of this Section, the aggregate amount of the Commitment
(which for this purpose includes Loans and participation interest in L/C
Obligations outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Loans and
participation interest in L/C Obligations of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent or, if
“Effective Date” is specified in the Assignment and Acceptance, as of the
Effective Date) shall not be less than $2,500,000, in the case of any
assignment in respect of the Revolving Credit, or $1,000,000, in the case of
any assignment in respect of any Term Loan, unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed);

(ii)           Proportionate Amounts.    Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Credits
on a non-pro rata basis.

 73
 

(iii)          Required Consents.             No consent shall be required for
any assignment except to the extent required by Section 13.12(a)(i)(B)
and, in addition:

(a)           the consent of the Borrower (such
consent not to be unreasonably withheld or delayed) shall be required unless
(x) an Event of Default  has occurred
and is continuing at the time of such assignment or (y) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund;

(b)           the consent of the Administrative
Agent (such consent not to be unreasonably withheld or delayed) shall be
required for assignments in respect of (i) the Revolving Credit if such
assignment is to a Person that is not a Lender with a Commitment in respect of
such facility, an Affiliate of such Lender or an Approved Fund with respect to
such Lender or (ii) the Term Loans to a Person who is not a Lender, an
Affiliate of a Lender or an Approved Fund;

(c)           the consent of the L/C Issuer
(such consent not to be unreasonably withheld or delayed) shall be required for
any assignment that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit (whether or not then outstanding);
and

(d)           the consent of the Swing Line Lender
(such consent not to be unreasonably withheld or delayed) shall be required for
any assignment that increases the obligation of the assignee to participate in
exposure under one or more Swing Loans (whether or not then outstanding).

(iv)          Assignment and Acceptance.            The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and the assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided that the processing and
recordation fee shall not be required if the assignee is an Affiliate of the
assigning Lender.

(v)           No Assignment to Borrower
or Affiliates.  No such
assignment shall be made to the Borrower or any of its Affiliates or
Subsidiaries.

(vi)          No Assignment to Natural
Persons. No such assignment
shall be made to a natural person.

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section 13.12(b) hereof, from and after
the effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 13.6 and 13.15 with respect to

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facts and circumstances occurring prior to the
effective date of such assignment.  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with Section 13.11 hereof.

(b)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in Chicago, Illinois, a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

(c)           Any Lender may at any time pledge or
grant a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any such pledge or
grant to a Federal Reserve Bank, and this Section shall not apply to any such
pledge or grant of a security interest; provided that
no such pledge or grant of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or secured party
for such Lender as a party hereto; provided further, however,
the right of any such pledgee or grantee (other than any Federal Reserve Bank)
to further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.

(d)           Notwithstanding anything to the
contrary herein, if at any time the Swing Line Lender assigns all of its
Revolving Credit Commitments and Revolving Loans pursuant to subsection (a)
above, the Swing Line Lender may terminate the Swing Line.  In the event of such termination of the Swing
Line, the Borrower shall be entitled to appoint another Lender to act as the
successor Swing Line Lender hereunder (with such Lender’s consent); provided, however, that the failure of the Borrower to
appoint a successor shall not affect the resignation of the Swing Line
Lender.  If the Swing Line Lender
terminates the Swing Line, it shall retain all of the rights of the Swing Line
Lender provided hereunder with respect to Swing Loans made by it and
outstanding as of the effective date of such termination, including the right
to require Lenders to make Revolving Loans or fund participations in
outstanding Swing Loans pursuant to Section 1.7 hereof.

Section 13.13.      Amendments.  Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required
Lenders, and (c) if the rights or duties of the Administrative Agent, the
L/C Issuer, or the Swing Line Lender are affected thereby, the
Administrative Agent, the L/C Issuer, or the Swing Line Lender, as
applicable; provided that:

(i)            no amendment or waiver pursuant to
this Section 13.13 shall (A) increase any Commitment of any Lender
without the consent of such Lender or (B) reduce the

 75
 

amount of or postpone the date for any scheduled
payment of any principal of or interest on any Loan or of any Reimbursement
Obligation or of any fee payable hereunder without the consent of the Lender to
which such payment is owing or which has committed to make such Loan or Letter
of Credit (or participate therein) hereunder;

(ii)           no amendment or waiver pursuant to
this Section 13.13 shall, unless signed by each Lender, extend the
Revolving Credit Termination Date, change the definition of Required Lenders,
change the provisions of this Section 13.13, change the priority of payments
contained in Section 3.1 hereof, change the pro rata
sharing of payments contained in Section 13.7 hereof, release any material
guarantor or any substantial part of the Collateral (except as otherwise
provided for in the Loan Documents), or affect the number of Lenders required
to take any action hereunder or under any other Loan Document; and

(iii)          no amendment to Section 12 hereof
shall be made without the consent of the Guarantor(s) affected thereby.

Section 13.14.      Headings. Section
headings used in this Agreement are for reference only and shall not affect the
construction of this Agreement.

Section 13.15.      Costs and Expenses; Indemnification.  (a) The Borrower agrees to pay all
reasonable costs and expenses of the Administrative Agent in connection with
the preparation, negotiation, syndication, and administration of the Loan
Documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent, in connection with the preparation and
execution of the Loan Documents, and any amendment, waiver or consent related
thereto, whether or not the transactions contemplated herein are consummated,
together with any fees and charges suffered or incurred by the Administrative
Agent in connection with collateral filing fees, lien searches and with respect
to any owned real property, periodic environmental audits, fixed asset
appraisals and title insurance policies. 
The Borrower agrees to pay to the Administrative Agent, the
L/C Issuer and each Lender, and any other holder of any Obligations
outstanding hereunder, all costs and expenses reasonably incurred or paid by
the Administrative Agent, the L/C Issuer, such Lender, or any such holder,
including reasonable attorneys’ fees and disbursements and court costs, in
connection with any Default or Event of Default hereunder or in connection with
the enforcement of any of the Loan Documents (including all such costs and
expenses incurred in connection with any proceeding under the United States
Bankruptcy Code involving the Borrower or any Guarantor as a debtor
thereunder).  The Borrower further agrees
to pay all reasonable costs and expenses incurred by the Administrative Agent,
and any security trustee therefore, in monitoring, verifying, protecting, preserving
or enforcing the Liens on the Collateral, in protecting, preserving or
enforcing rights under the Loan Documents. 
The Borrower further agrees to indemnify the Administrative Agent, the
L/C Issuer, each Lender, and any security trustee therefor, and their
respective directors, officers, employees, agents, financial advisors, and
consultants (each such Person being called an “Indemnitee”)
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all reasonable fees and disbursements of
counsel for any such Indemnitee and all reasonable expenses of litigation or
preparation therefor, whether or not the Indemnitee is a party thereto, or any
settlement arrangement arising from or relating to any such

 76
 

litigation) which any of them may pay or incur arising
out of or relating to any Loan Document or any of the transactions contemplated
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan or Letter of Credit, other than those which arise from the
gross negligence or willful misconduct of the party claiming
indemnification.  The Borrower, upon
demand by the Administrative Agent, the L/C Issuer or a Lender at any
time, shall reimburse the Administrative Agent, the L/C Issuer or such
Lender for any reasonable legal or other expenses (including, without
limitation, all reasonable fees and disbursements of counsel for any such
Indemnitee) incurred in connection with investigating or defending against any
of the foregoing (including any settlement costs relating to the foregoing)
except if the same is directly due to the gross negligence or willful
misconduct of the party to be indemnified. 
To the extent permitted by applicable law, neither the Borrower nor any
Guarantor shall assert, and each such Person hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or the other
Loan Documents or any agreement or instrument contemplated hereby or thereby,
the transactions contemplated hereby or thereby, any Loan or Letter of Credit
or the use of the proceeds thereof.  The
obligations of the Borrower under this Section shall survive the termination of
this Agreement.

(b)           The Borrower unconditionally agrees
to forever indemnify, defend and hold harmless, and covenants not to sue for
any claim for contribution against, each Indemnitee for any damages, costs,
loss or expense, including without limitation, response, remedial or removal
costs and all fees and disbursements of counsel for any such Indemnitee,
arising out of any of the following:  (i)
any presence, release, threatened release or disposal of any hazardous or toxic
substance or petroleum by the Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (ii) the
operation or violation of any environmental law, whether federal, state, or
local, and any regulations promulgated thereunder, by the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), (iii) any claim for personal injury or property damage in
connection with the Borrower or any Subsidiary or otherwise occurring on or
with respect to its Property (whether owned or leased), and (iv) the inaccuracy
or breach of any environmental representation, warranty or covenant by the
Borrower or any Subsidiary made herein or in any other Loan Document evidencing
or securing any Obligations or setting forth terms and conditions applicable
thereto or otherwise relating thereto, except for damages arising from the
willful misconduct or gross negligence of the relevant Indemnitee.  This indemnification shall survive the payment
and satisfaction of all Obligations and the termination of this Agreement, and
shall remain in force beyond the expiration of any applicable statute of
limitations and payment or satisfaction in full of any single claim under this
indemnification.  This indemnification
shall be binding upon the successors and assigns of the Borrower and shall
inure to the benefit of each Indemnitee and its successors and assigns.

Section 13.16.      Set-off.  In addition to any rights now or hereafter
granted under the Loan Documents or applicable law and not by way of limitation
of any such rights, upon the occurrence of any Event of Default, each Lender,
the L/C Issuer, each subsequent holder of any Obligation, and each of
their respective affiliates, is hereby authorized by the Borrower and each
Guarantor at any time or from time to time, without notice to the Borrower, any
Guarantor or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate

 77
 

and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured, and in whatever currency denominated,
but not including trust accounts) and any other indebtedness at any time held
or owing by that Lender, L/C Issuer, subsequent holder, or affiliate, to
or for the credit or the account of the Borrower or such Guarantor, whether or
not matured, against and on account of the Obligations of the Borrower or such
Guarantor to that Lender, L/C Issuer, or subsequent holder under the Loan
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with the Loan Documents, irrespective
of whether or not (a) that Lender, L/C Issuer, or subsequent holder
shall have made any demand hereunder or (b) the principal of or the
interest on the Loans and other amounts due hereunder shall have become due and
payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.

Section 13.17.      Entire Agreement.  The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.

Section 13.18.      Governing Law.  This Agreement and the other Loan Documents
(except as otherwise specified therein), and the rights and duties of the
parties hereto, shall be construed and determined in accordance with the
internal laws of the State of Illinois.

Section 13.19.      Severability of Provisions.  Any provision of any Loan Document which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.  All
rights, remedies and powers provided in this Agreement and the other Loan
Documents may be exercised only to the extent that the exercise thereof does
not violate any applicable mandatory provisions of law, and all the provisions
of this Agreement and other Loan Documents are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement or
the other Loan Documents invalid or unenforceable.

Section 13.20.      Excess Interest.  Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, no such provision shall require
the payment or permit the collection of any amount of interest in excess of the
maximum amount of interest permitted by applicable law to be charged for the
use or detention, or the forbearance in the collection, of all or any portion
of the Loans or other obligations outstanding under this Agreement or any other
Loan Document (“Excess Interest”).  If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section shall govern and control,
(b) neither the Borrower nor any guarantor or endorser shall be obligated
to pay any Excess Interest, (c) any Excess Interest that the
Administrative Agent or any Lender may have received hereunder shall, at the
option of the Administrative Agent, be (i) applied as a credit against the
then outstanding principal amount of Obligations hereunder and accrued and
unpaid interest thereon (not to exceed the maximum amount permitted by
applicable law), (ii) refunded to the Borrower, or (iii) any
combination of the foregoing, (d) the interest rate payable hereunder or
under any other Loan Document shall be automatically subject to reduction

 78

to the maximum lawful contract rate allowed under applicable usury laws
(the “Maximum Rate”), and this Agreement and
the other Loan Documents shall be deemed to have been, and shall be, reformed
and modified to reflect such reduction in the relevant interest rate, and
(e) neither the Borrower nor any guarantor or endorser shall have any
action against the Administrative Agent or any Lender for any damages
whatsoever arising out of the payment or collection of any Excess Interest.  Notwithstanding the foregoing, if for any
period of time interest on any of Borrower’s Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on the Borrower’s Obligations shall remain at the Maximum Rate
until the Lenders have received the amount of interest which such Lenders would
have received during such period on the Borrower’s Obligations had the rate of
interest not been limited to the Maximum Rate during such period.

Section 13.21.      Construction.  The parties acknowledge and agree that the
Loan Documents shall not be construed more favorably in favor of any party
hereto based upon which party drafted the same, it being acknowledged that all
parties hereto contributed substantially to the negotiation of the Loan
Documents.  The provisions of this
Agreement relating to Subsidiaries shall only apply during such times as the
Borrower has one or more Subsidiaries.  NOTHING CONTAINED HEREIN SHALL BE DEEMED OR
CONSTRUED TO PERMIT ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY
COLLATERAL DOCUMENT, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN
ADDITION TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED IN
THE COLLATERAL DOCUMENTS.

Section 13.22.      Lender’s and L/C Issuer‘s Obligations
Several.  The
obligations of the Lenders and L/C Issuer hereunder are several and not
joint.  Nothing contained in this
Agreement and no action taken by the Lenders or L/C Issuer pursuant hereto
shall be deemed to constitute the Lenders and L/C Issuer a partnership,
association, joint venture or other entity.

Section 13.23.      Submission to Jurisdiction; Waiver of Jury
Trial.  The Borrower
and the Guarantors hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any Illinois
State court sitting in the City of Chicago  for purposes
of all legal proceedings arising out of or relating to this Agreement, the
other Loan Documents or the transactions contemplated hereby or thereby.  The Borrower and the Guarantors irrevocably
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.  THE BORROWER, THE GUARANTORS, THE
ADMINISTRATIVE AGENT, THE L/C ISSUER AND THE LENDERS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

Section 13.24.      USA Patriot Act.  Each Lender and L/C Issuer that is
subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”) hereby
notifies the Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify, and record information that identifies the
Borrower, which information

 79
 

includes the name and address of the Borrower and other information
that will allow such Lender or L/C Issuer to identify the Borrower in
accordance with the Act.

Section 13.25.       Confidentiality.  Each of the Administrative Agent, the
Lenders, and the L/C Issuer severally agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
to the extent any such Person has a need to know such Information (it being
understood that the Persons to whom such disclosure is made will first be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any
regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (A) any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement or (B) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to the Borrower or any
Subsidiary and its obligations, (g) with the prior written consent of the
Borrower, (h) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this Section or
(B) becomes available to the Administrative Agent, any Lender or the
L/C Issuer on a non-confidential basis from a source other than the
Borrower or any Subsidiary or any of their directors, officers, employees or
agents, including accountants, legal counsel and other advisors, (i) to rating
agencies if requested or required by such agencies in connection with a rating
relating to the Loans or Commitments hereunder, or (j) to entities which
compile and publish information about the syndicated loan market, provided that only basic information about the pricing and
structure of the transaction evidenced hereby may be disclosed pursuant to this
subsection (j).  For purposes of this Section, “Information” means all information received from the
Borrower or any of the Subsidiaries or from any other Person on behalf of the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, any Lender or the L/C Issuer on a
non-confidential basis prior to disclosure by the Borrower or any of its
Subsidiaries or from any other Person on behalf of the Borrower or any of the
Subsidiaries.

[SIGNATURE
PAGES TO FOLLOW]

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This Credit Agreement is entered into between us for the uses and
purposes hereinabove set forth as of the date first above written.

	
  

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  DG FastChannel, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  “Guarantors”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FastChannel Network, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  StarGuide Digital Networks,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Digital Generation Systems
  of New

  York, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  StarCom Mediatech, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-1
 

 

	
  

  	
  Musicam Express, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  StarGuide CCS, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  Starguide Consultants, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  DG Systems Acquisition
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  DG Systems Acquisition II
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  DG Systems Acquisition III
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

 S-2
 

 

	
  

  	
  Swan Systems, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  eCreativeSearch, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  Pathfire, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-3
 

 

	
  

  	
  “Administrative Agent and
  L/C Issuer “

  
	
   

  	
   

  
	
   

  	
  Bank of Montreal, as L/C Issuer and as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-4
 

 

	
  

  	
  “Lenders”

  
	
   

  	
   

  
	
   

  	
  BMO Capital Markets
  Financing Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-5
 

 

	
  

  	
  First Tennessee Bank National

  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-6
 

 

	
  

  	
  Webster Bank, National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-7
 

 

	
  

  	
  Wachovia Bank, National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-8
 

 

	
  

  	
  Bank of the West

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-9
 

 

	
  

  	
  First Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

 S-10

EXHIBIT A

NOTICE
OF PAYMENT REQUEST

[Date]

[Name of Lender]

[Address]

Attention:

Reference is made to the
Credit Agreement, dated as of August 9, 2007, among DG FastChannel, Inc.,
the Lenders party thereto, and Bank of Montreal, as Administrative Agent (as
extended, renewed, amended or restated from time to time, the “Credit Agreement”). 
Capitalized terms used herein and not defined herein have the meanings
assigned to them in the Credit Agreement. 
[The Borrower has failed to pay its Reimbursement Obligation in the
amount of $                    .  Your Revolver Percentage of the unpaid
Reimbursement Obligation is $                           ]
or [                                               
has been required to return a payment by the Borrower of a Reimbursement
Obligation in the amount of $                               .  Your Revolver Percentage of the returned
Reimbursement Obligation is $                            .]

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  as L/C Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

EXHIBIT B

NOTICE OF BORROWING

Date:                                   ,           

To:                       Bank of
Montreal, as Administrative Agent for the Lenders parties to the Credit
Agreement dated as of August 9, 2007 (as extended, renewed, amended or
restated from time to time, the “Credit Agreement”),
among DG FastChannel, Inc., certain Lenders which are signatories thereto, and
Bank of Montreal, as Administrative Agent

Ladies and Gentlemen:

The undersigned, DG FastChannel, Inc. (the “Borrower”), refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of
the Borrowing specified below:

1.            The Business Day of
the proposed Borrowing is                         ,
         .

2.            The aggregate amount
of the proposed Borrowing is $                               .

3.            The Borrowing is being
advanced under the [Revolving] [Term]
Credit.

4.            The Borrowing is to be
comprised of $                         
of [Base Rate] [Eurodollar] Loans.

[5.          The duration of the
Interest Period for the Eurodollar Loans included in the Borrowing shall be                             
months.]

The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
proposed Borrowing, before and after giving effect thereto and to the
application of the proceeds therefrom:

(a)          the representations and
warranties of the Borrower contained in Section 6 of the Credit Agreement
are true and correct as though made on and as of such date (except to the
extent such representations and warranties relate to an earlier date, in which
case they are true and correct as of such date); and

(b)          no Default or Event of
Default has occurred and is continuing or would result from such proposed
Borrowing.

	
  

  	
  DG FastChannel, Inc.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

EXHIBIT C

NOTICE OF
CONTINUATION/CONVERSION

Date:                             ,
           

To:                  Bank
of Montreal, as Administrative Agent for the Lenders parties to the Credit
Agreement dated as of August 9, 2007 (as extended, renewed, amended or
restated from time to time, the “Credit Agreement”)
among DG FastChannel, Inc., certain Lenders which are signatories thereto, and
Bank of Montreal, as Administrative Agent

Ladies and Gentlemen:

The undersigned, DG FastChannel, Inc. (the “Borrower”), refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of
the [conversion] [continuation] of the
Loans specified herein, that:

1.            The conversion/continuation Date is                          ,
           .

2.            The aggregate amount of the [Revolving]
[Term] Loans to be [converted] [continued]
is $                              .

3.            The Loans are to be [converted into] [continued as]
[Eurodollar] [Base Rate] Loans.

4.            [If applicable:]  The duration of the Interest Period for the [Revolving] [Term] Loans included in the [conversion] [continuation] shall be                       
months.

The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the proposed
conversion/continuation date, before and after giving effect thereto and to the
application of the proceeds therefrom:

(a)          the representations and warranties of
the Borrower contained in Section 6 of the Credit Agreement are true and
correct as though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case they
are true and correct as of such date); provided, however,
that this condition shall not apply to the conversion of an outstanding
Eurodollar Loan to a Base Rate Loan; and

(b)          no Default or Event of Default has
occurred and is continuing, or would result from such proposed [conversion] [continuation].

	
  

  	
  DG FastChannel, Inc.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

 

EXHIBIT D-1

TERM
NOTE

August 9, 2007

FOR
VALUE  RECEIVED, the undersigned, DG FastChannel, Inc., a Delaware
corporation  (the “Borrower”),
hereby promises to pay to                                                            
(the “Lender”) or its registered assigns at
the principal office of the Administrative Agent in Chicago, Illinois (or such
other location as the Administrative Agent may designate to the Borrower), in
immediately available funds, the aggregate unpaid principal amount of all Term
Loans made or maintained by the Lender to the Borrower pursuant to the Credit
Agreement, in installments in the amounts called for by Section 1.8(a) of
the Credit Agreement, commencing on                     ,
together with interest on the principal amount of such Term Loan from time to
time outstanding hereunder at the rates, and payable in the manner and on the
dates, specified in the Credit Agreement.

This Note is one of the
Term Notes referred to in the Credit Agreement dated as of August 9, 2007,
among the Borrower, the Guarantors party thereto, the Lenders and
L/C Issuer parties thereto, and Bank of Montreal, as Administrative Agent
(as extended, renewed, amended or restated from time to time, the “Credit Agreement”), and this Note and the holder hereof are
entitled to all the benefits and security provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof.  All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement.  This Note shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.

Voluntary prepayments may
be made hereon, certain prepayments are required to be made hereon,  and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.

The Borrower
hereby waives demand, presentment, protest or notice of any kind hereunder.

	
  

  	
  DG FastChannel, Inc.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

Exhibit D-2

Revolving Note

August 9, 2007

For Value Received,
the undersigned, DG FastChannel, Inc., a Delaware corporation  (the “Borrower”),
hereby promises to pay to                                         (the
“Lender”) or its registered assigns on
the Revolving Credit Termination Date of the hereinafter defined Credit
Agreement, at the principal office of the Administrative Agent in Chicago
Illinois (or such other location as the Administrative Agent may designate to
the Borrower), in immediately available funds, the aggregate unpaid principal
amount of all Revolving Loans made by the Lender to the Borrower pursuant to
the Credit Agreement, together with interest on the principal amount of each
Revolving Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates, specified in the Credit Agreement.

This Note is one of the Revolving Notes referred to in
the Credit Agreement dated as of August 9, 2007, among the Borrower, the
Guarantors party thereto, the Lenders and L/C Issuer parties thereto, and
Bank of Montreal, as Administrative Agent (as extended, renewed, amended or
restated from time to time, the “Credit Agreement”),
and this Note and the holder hereof are entitled to all the benefits and
security  provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof.  All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement.  This Note shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.

Voluntary prepayments may be made hereon, certain
prepayments are required to be made hereon, and this Note may be declared due
prior to the expressed maturity hereof, all in the events, on the terms and in
the manner as provided for in the Credit Agreement.

The Borrower hereby waives demand, presentment,
protest or notice of any kind hereunder.

	
  

  	
  DG FastChannel, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
					

 

EXHIBIT D-3

SWING NOTE

August 9, 2007

FOR
VALUE  RECEIVED, the undersigned, DG FastChannel, Inc., a Delaware
corporation (the “Borrower”), hereby promises to
pay to                                              
(the “Lender”) or its registered assigns on
the Revolving Credit Termination Date of the hereinafter defined Credit
Agreement, at the principal office of the Administrative Agent in Chicago,
Illinois (or such other location as the Administrative Agent may designate to
the Borrower), in immediately available funds, the aggregate unpaid principal
amount of all Swing Loans made by the Lender to the Borrower pursuant to the
Credit Agreement, together with interest on the principal amount of each Swing
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in the Credit Agreement.

This Note is the Swing
Note referred to in the Credit Agreement dated as of August 9, 2007, among
the Borrower, the Guarantors party thereto, the Lenders and L/C Issuer
parties thereto, and Bank of Montreal, as Administrative Agent (as extended,
renewed, amended or restated from time to time, the “Credit
Agreement”), and this Note and the holder hereof are entitled to all
the benefits and security provided for thereby or referred to therein, to which
Credit Agreement reference is hereby made for a statement thereof.  All defined terms used in this Note, except
terms otherwise defined herein, shall have the same meaning as in the Credit Agreement.  This Note shall be governed by and construed
in accordance with the internal laws of the State of Illinois.

Voluntary prepayments may
be made hereon, certain prepayments are required to be made hereon, and this
Note may be declared due prior to the expressed maturity hereof, all in the
events, on the terms and in the manner as provided for in the Credit Agreement.

The Borrower
hereby waives demand, presentment, protest or notice of any kind hereunder.

	
  

  	
  DG FastChannel, Inc.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
						

 

Exhibit E

DG FastChannel, Inc.

Compliance Certificate

To:                              Bank
of Montreal, as Administrative Agent under, and the Lenders and L/C Issuer
parties to, the Credit Agreement described below

This Compliance Certificate is furnished to the Administrative Agent,
the L/C Issuer, and the Lenders pursuant to that certain Credit Agreement
dated as of August 9, 2007, among us (as extended, renewed, amended or
restated from time to time, the “Credit Agreement”).  Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.             I am the duly elected                       of                                                   ;

2.             I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

3.             The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition or the
occurrence of any event which constitutes a Default or Event of Default during
or at the end of the accounting period covered by the attached financial
statements or as of the date of this Compliance Certificate, except as set
forth below;

4.             The financial statements required by Section 8.5 of
the Credit Agreement and being furnished to you concurrently with this
Compliance Certificate are true, correct and complete as of the date and for
the periods covered thereby; and

5.             The Schedule I hereto sets forth financial data and
computations evidencing the Borrower’s compliance with certain covenants of the
Credit Agreement, all of which data and computations are, to the best of my
knowledge, true, complete and correct and have been made in accordance with the
relevant Sections of the Credit Agreement.

Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The foregoing certifications, together with the
  computations set forth in Schedule I hereto and the financial 

  
	
  statements delivered with this Certificate in
  support hereof, are made and delivered this              day
  of                     20     .

  

 

	
  

  	
  DG FastChannel, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
					

 

 2

Schedule I

TO COMPLIANCE CERTIFICATE

DG FASTCHANNEL,
INC.

COMPLIANCE CALCULATIONS

for Credit Agreement dated as
of           

Calculations as of
                ,          

	
  A.           Total Leverage Ratio (Section 8.22(a))

  	
   

  	
   

  	
   

  
	
  1.             TotalFunded Debt

  	
   

  	
  $

  	
   

  	
   

  
	
  2.             NetIncome for past 4 quarters

  	
   

  	
   

  	
   

  
	
  3.             Interest Expense for past 4
  quarters

  	
   

  	
   

  	
   

  
	
  4.             Income taxes for past 4 quarters

  	
   

  	
   

  	
   

  
	
  5.             Depreciation and Amortization
  Expense for past 4 quarters

  	
   

  	
   

  	
   

  
	
  6.             Transaction Costs approved by the
  Administrative Agent

  	
   

  	
   

  	
   

  
	
  7.             Non-recurring costs approved by
  the Administrative Agent

  	
   

  	
   

  	
   

  
	
  8.             Extraordinary expenses approved
  by the Administrative Agent

  	
   

  	
   

  	
   

  
	
  9.             Restructuring chargers and other
  amounts approved by the Administrative Agent

  	
   

  	
   

  	
   

  
	
  10.          Sum
  of Lines A2, A3, A4, A5, A6, A7, A8 and A9 (“Adjusted EBITDA”)

  	
   

  	
   

  	
   

  
	
  11.           Ratio of Line A1 to A10

  	
   

  	
  :1.0

  	
   

  	
   

  
	
  12.           Line A11 ratio must not exceed

  	
   

  	
  :1.0

  	
   

  	
   

  
	
  13.           The Borrower is in compliance
  (circle yes or no)

  	
   

  	
  yes/no   

  	
   

  
	
  B.            Fixed
  Charge Coverage Ratio (Section 8.22(b))

  	
   

  	
   

  	
   

  
	
  1.             Adjusted EBITDA (Line A10)

  	
   

  	
  $

  	
   

  	
   

  
	
  2.             Principal payments for past
  4 quarters

  	
   

  	
   

  	
   

  
	
  3.             Cash Interest Expense for past 4
  quarters

  	
   

  	
   

  	
   

  
	
  4.             Cash Income taxes for past 4
  quarters

  	
   

  	
   

  	
   

  
	
  5.             Dividends paid for past 4
  quarters

  	
   

  	
   

  	
   

  
	
  6.             Cash paid for stock repurchases
  for past 4 quarters

  	
   

  	
   

  	
   

  
						

 

 

	
  7.             Sum of Lines B2, B3, B4, B5 and B6

  	
   

  	
   

  	
   

  
	
  8.             Ratio of Line B1 to Line B7

  	
   

  	
  :1.0

  	
   

  	
   

  
	
  9.             Line B8 ratio must not be less
  than

  	
   

  	
  1.50:1.0

  	
   

  	
   

  
	
  10.           The Borrower is in compliance
  (circle yes or no)

  	
   

  	
  yes/no

  	
   

  	
   

  
	
  C.            Net
  Worth (Section 8.21(c))

  	
   

  	
   

  	
   

  
	
  1.             Net Worth

  	
   

  	
  $

  	
   

  	
   

  
	
  2.             Line C1 shall not be less than

  	
   

  	
  $

  	
   

  	
   

  
	
  3.             The Borrower is in compliance
  (circle yes or no)

  	
   

  	
  yes/no

  	
   

  	
   

  
						

 

 2

EXHIBIT F

ADDITIONAL
GUARANTOR SUPPLEMENT

             ,       

Bank of Montreal, as Administrative Agent for the

Lenders and L/C Issuer parties to the Credit Agreement

dated as of August 9, 2007, among DG FastChannel,

Inc., as Borrower, the Guarantors referred to therein, the

Lenders and L/C Issuer parties thereto from time to

time, and the Administrative Agent (as extended,

renewed, amended or restated from time to time, the

“Credit Agreement”)

Ladies and Gentlemen:

Reference is made to the Credit Agreement described above.  Terms not defined herein which are defined in
the Credit Agreement shall have for the purposes hereof the meaning provided
therein.

The undersigned, [name of Guarantor],
a [jurisdiction of incorporation or organization]
hereby elects to be a “Guarantor” for
all purposes of the Credit Agreement, effective from the date hereof.  The undersigned confirms that the
representations and warranties set forth in Section 6 of the Credit
Agreement are true and correct as to the undersigned as of the date hereof and
the undersigned shall comply with each of the covenants set forth in
Section 8 of the Credit Agreement applicable to it.

Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 12 thereof, to the same extent and with the same force
and effect as if the undersigned were a signatory party thereto.

The undersigned acknowledges that this Agreement shall be effective
upon its execution and delivery by the undersigned to the Administrative Agent,
and it shall not be necessary for the Administrative Agent, the
L/C Issuer, or any Lender, or any of their Affiliates entitled to the
benefits hereof, to execute this Agreement or any other acceptance hereof.  This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Illinois.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of
  Subsidiary Guarantor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
				

 

EXHIBIT G

ASSIGNMENT AND ACCEPTANCE

Dated
                   ,        

Reference is made to the Credit Agreement dated as of August 9, 2007
(as extended, renewed, amended or restated from time to time, the “Credit Agreement”) among DG FastChannel, Inc., the
Guarantors party thereto, the Lenders and L/C Issuer parties thereto, and
Bank of Montreal, as Administrative Agent (the “Administrative
Agent”).  Terms defined in the
Credit Agreement are used herein with the same meaning.

                                                                                           
(the “Assignor”) and                                                     
(the “Assignee”) agree as follows:

1.             The Assignor hereby
sells and assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, the amount and specified percentage interest shown
on Annex I hereto of the Assignor’s rights and obligations under the
Credit Agreement as of the Effective Date (as defined below), including,
without limitation, the Assignor’s Commitments as in effect on the Effective
Date and the Loans, if any, owing to the Assignor on the Effective Date and the
Assignor’s Revolver Percentage of any outstanding L/C Obligations.

2.             The Assignor
(i) represents and warrants that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim, lien, or encumbrance of any kind; (ii) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

3.             The Assignee
(i) confirms that it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered to the Lenders
pursuant to Section 8.5(a) and (b)  thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) appoints and authorizes the Administrative Agent to take
such action as Administrative Agent on its behalf and to exercise such powers
under the Credit 

Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (v) specifies as its lending office (and address for notices) the
offices set forth on its Administrative Questionnaire.

4.             As consideration for
the assignment and sale contemplated in Annex I hereof, the Assignee shall
pay to the Assignor on the Effective Date in Federal funds the amount agreed
upon between them.  It is understood that
commitment and/or letter of credit fees accrued to the Effective Date with
respect to the interest assigned hereby are for the account of the Assignor and
such fees accruing from and including the Effective Date are for the account of
the Assignee.  Each of the Assignor and
the Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party’s interest therein and shall promptly pay the same to such other party.

5.             The effective date
for this Assignment and Acceptance shall be                 
(the “Effective Date”).  Following the execution of this Assignment
and Acceptance, it will be delivered to the Administrative Agent for acceptance
and recording by the Administrative Agent and, if required, the Borrower.

6.             Upon such acceptance
and recording, as of the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.

7.             Upon such acceptance
and recording, from and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee.  The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods
prior to the Effective Date directly between themselves.

 2
 

8.             This Assignment and
Acceptance shall be governed by, and construed in accordance with, the laws of
the State of Illinois.

	
  

  	
  [Assignor Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  [Assignee Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
					

 

Accepted
and consented this

       
day of                        

DG
FASTCHANNEL, INC.

	
  By

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
				

 

Accepted
and consented to by the Administrative

Agent and L/C Issuer
this       day of        

BANK OF MONTREAL,

as Administrative Agent
and L/C Issuer

	
  By

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
				

 

 3

ANNEX
I

TO ASSIGNMENT AND ACCEPTANCE

The assignee hereby purchases and assumes from the assignor the
following interest in and to all of the Assignor’s rights and obligations under
the Credit Agreement as of the effective date.

	
  Facility Assigned

  	
   

  	
  Aggregate 

  Commitment/Loans

  For All Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage Assigned

  of

  Commitment/Loans

  	
   

  
	
  Revolving Credit

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  Term Loan

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

SCHEDULE 1

COMMITMENTS

	
  Name of Lender

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Revolving Credit

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BMO Capital
  Markets Financing, Inc.

  	
   

  	
  $

  	
  19,000,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National
  Association

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Tennessee
  Bank National Association

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Webster Bank, National
  Association

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of the West

  	
   

  	
  $

  	
  6,000,000

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Bank

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  45,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  

 

SCHEDULE 6.2

SUBSIDIARIES

	
  Name

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Percentage

  Ownership

  	
   

  	
  Owner

  	
   

  
	
  FastChannel
  Network, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  Starguide
  Digital Networks, Inc.

  	
   

  	
  Nevada

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  Digital
  Generation Systems of New York, Inc.

  	
   

  	
  New
  York

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  StarCom
  Mediatech, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  Musicam Express,
  L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  StarGuide
  Digital Networks, Inc.

  	
   

  
	
  StarGuide CCS,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  StarGuide
  Digital Networks, Inc.

  	
   

  
	
  StarGuide
  Consultants, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  StarGuide
  CCS, Inc.

  	
   

  
	
  DG Systems
  Acquisition Corporation

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  DG Systems
  Acquisition II Corporation

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  DG Systems
  Acquisition III Corporation

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc.

  	
   

  
	
  Swan Systems,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  FastChannel
  Network, Inc.

  	
   

  
	
  eCreativeSearch,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  FastChannel
  Network, Inc.

  	
   

  
	
  Pathfire, Inc.

  	
   

  	
  Georgia

  	
   

  	
  100%

  	
   

  	
  DG
  FastChannel, Inc

  	
   

  
	
  DGFC Acquisition Corp.
  V.*

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  DG FastChannel, Inc

  	
   

  

 

*                    DGFC
Acquisition Corp. V. shall not be deemed a Subsidiary for purposes of the
Credit Agreement until such time that DGFC Acquisition Corp. V. owns any assets
or transacts any business.

SCHEDULE 6.11

LITIGATION

DG FASTCHANNEL, INC. 

Borrower has a
contractual arrangement with Verance Corporation. The agreements between the
companies provide for exclusivity in the automated verification segment of the
advertising delivery industry, as well as joint promotional and marketing
efforts.  In addition, Borrower is to
provide certain back office support services (e.g., help desk, order
processing) to Verance.  Borrower has
also made a $5 million investment in Verance and holds a minority equity
position in that company. Verance and Borrower have several disagreements
regarding the scope of this arrangement, and the status of and each party’s
responsibility for delays in the technological development and integration of
the Verance technology into Borrower’s delivery system. Verance has threatened
to terminate the relationship between Verance and Borrower and to initiate
litigation against Borrower for various alleged breaches and failures. The
parties are actively discussing their various concerns and disagreements and
hope to reach an amicable resolution of their differences, but no assurance can
be given that there will be no litigation between them.

The Company received an
Equal Employment Opportunity Commission claim on or about April 9, 2007
regarding an employee’s assertion that the Company violated Title I of the
Americans with Disabilities Act of 1991.

 2
 

SCHEDULE 6.14

AFFILIATE TRANSACTIONS

None.

 3
 

Schedule 8.7

Indebtedness

FASTCHANNEL
NETWORK, INC.

Silicon Valley
Bank – On January 7, 2005, Silicon Valley Bank issued a letter of credit with a
face amount of $350,000 for the benefit of JBS Funds 200 West Monroe, LLC.  This letter of credit is cash-collateralized.

Silicon Valley
Bank – On December 13, 2004, Silicon Valley Bank issued a letter of credit with
a face amount of $75,000 for the benefit of Memphis Investments A Wisconsin
LLC.  This letter of credit is
cash-collateralized.

POINT.360

Standard Loan Agreement by and between Bank of America N.A. and
Point.360 dated March 29, 2006.**

Promissory Notes dated December 30, 2005 and March 30, 2007 between
General Electric Capital Corporation and Point.360.**

**             To
be terminated on the date on which Borrower accepts for exchange, and exchanges
the Offer Consideration (as such term is defined in that certain Point.360
Merger Agreement) for, all Shares (as such term is defined in the Point.360
Merger Agreement) validly tendered and not withdrawn pursuant to the Offer (as
such term is defined in the Point.360 Agreement).

 4
 

SCHEDULE 8.8

LIENS

SEE
ATTACHED

 5

DG FASTCHANNEL, INC.

	
  Jurisdiction

  	
   

  	
  Search

  Date

  	
   

  	
  Type of

  Search

  	
   

  	
  Filing No.

  	
   

  	
  Filing

  Date

  	
   

  	
  Secured Party

  	
   

  	
  Collateral Type

  	
   

  
	
  Delaware Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20071484228

  	
   

  	
  04/20/7

  	
   

  	
  Key
  Equipment Finance

  Inc.

  	
   

  	
  Licenses, equipment,

  inventory and goods,

  accounts, contract

  rights and general

  intangibles, records,

  data, information

  and documentation

  	
   

  

 

FASTCHANNEL NETWORK, INC.

	
  Jurisdiction

  	
   

  	
  Search

  Date

  	
   

  	
  Type of

  Search

  	
   

  	
  Filing No.

  	
   

  	
  Filing

  Date

  	
   

  	
  Secured Party

  	
   

  	
  Collateral Type

  	
   

  
	
  Delaware Secretary of
  State

  	
   

  	
  06/22/07

  	
   

  	
  UCC

  	
   

  	
  43574847

  	
   

  	
  12/17/04

  	
   

  	
  Inter-Tel,
  Leasing, Inc.

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  51545004

  	
   

  	
  05/09/05

  	
   

  	
  Cisco
  Systems Capital Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  53273936

  	
   

  	
  10/21/05

  	
   

  	
  Leasing
  Technologies International, Inc.

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  53499309

  	
   

  	
  11/10/05

  	
   

  	
   

  	
   

  	
  Assignment of #53273936 to National City Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  53358760

  	
   

  	
  10/28/05

  	
   

  	
  Leasing
  Technologies International, Inc.

  	
   

  	
  Specific equipment

  	
   

  
	
  Dallas County Clerk - TX

  	
   

  	
  07/17/07

  	
   

  	
  State Tax Liens

  	
   

  	
  20070059294

  	
   

  	
  02/15/07

  	
   

  	
  State of Texas

  	
   

  	
  Tax Lien
  in the amount of $53,505.81(1)

  	
   

  

 

PATHFIRE, INC.

	
  Jurisdiction

  	
   

  	
  Search

  Date

  	
   

  	
  Type of

  Search

  	
   

  	
  Filing No.

  	
   

  	
  Filing

  Date

  	
   

  	
  Secured Party

  	
   

  	
  Collateral Type

  	
   

  
	
  Georgia Cooperative Authority

  	
   

  	
  07/06/07

  	
   

  	
  UCC

  	
   

  	
  007-2002-009246

  	
   

  	
  09/10/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2002-009634

  	
   

  	
  09/23/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  

 

(1)                                 The
state tax lien has been paid in full and should be terminated after the
Borrower delivers its annual tax filings to the State of Texas.

 

	
  Jurisdiction

  	
   

  	
  Search

  Date

  	
   

  	
  Type of

  Search

  	
   

  	
  Filing No.

  	
   

  	
  Filing

  Date

  	
   

  	
  Secured Party

  	
   

  	
  Collateral Type

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2002-009742

  	
   

  	
  09/25/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2002-009974

  	
   

  	
  10/01/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2002-010047

  	
   

  	
  10/03/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2002-011113

  	
   

  	
  10/31/02

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  060200300681

  	
   

  	
  01/16/03

  	
   

  	
  Cable News Network LP, LLLP

  	
   

  	
  CNN equipment listed on Exhibit A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2003-006330

  	
   

  	
  06/09/03

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2003-006866

  	
   

  	
  06/23/03

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2003-007182

  	
   

  	
  06/30/03

  	
   

  	
  IBM Credit Corporation

  	
   

  	
  Specific equipment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  007-2006-10644

  	
   

  	
  06/14/06

  	
   

  	
  Royal Bank America Leasing

  	
   

  	
  Specific equipment

  	
   

  

 

 

 2

SCHEDULE 8.9

EXISTING

INVESTMENTS

STOCK

	
  Owner

  	
   

  	
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Issuer’s 

  Jurisdiction 

  Under UCC 

  Section 

  9.305(a)(2)

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Stock

  Certificate

  No.

  	
   

  	
  Percentage

  of Shares

  	
   

  	
  No. of

  Shares

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  Verance

  Corporation

  	
   

  	
  Series
  B

  Convertible

  Preferred Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  B-1
  B-2

  	
   

  	
  13.4

  	
  %

  	
  6,286,146

  6,286,145

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  StarGuide

  Digital Networks, Inc.

  	
   

  	
  Class
  A

  Common Stock

  	
   

  	
  Nevada

  	
   

  	
  Y

  	
   

  	
  9

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  Digital
  Generation

  Systems of

  New York

  	
   

  	
  Common
  Stock

  	
   

  	
  New
  York

  	
   

  	
  Y

  	
   

  	
  3

  	
   

  	
  100

  	
  %

  	
  180

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  StarCom

  Mediatech, Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  2

  	
   

  	
  100

  	
  %

  	
  1,810

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  DG
  Systems

  Acquisition

  Corporation

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  1

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  DG
  Systems

  Acquisition II

  Corporation

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  1

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  DG
  Systems

  Acquisition III

  Corporation

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  2

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  FastChannel

  Network,
  Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  PM-1

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  Point.360*

  	
   

  	
  Common
  Stock

  	
   

  	
  California

  	
   

  	
  Y

  	
   

  	
  VDI
  3530

  	
   

  	
  16.15

  	
  %

  	
  1,108,674

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  Viewpoint

  Corporation

  	
   

  	
  Common Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  VC 0259

  	
   

  	
  13.2

  	
  %

  	
  10,750,000

  	
   

  

 

 

	
  Owner

  	
   

  	
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Issuer’s 

  Jurisdiction 

  Under UCC 

  Section 

  9.305(a)(2)

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Stock

  Certificate

  No.

  	
   

  	
  Percentage

  of Shares

  	
   

  	
  No. of

  Shares

  	
   

  
	
  StarGuide Digital
  Networks, Inc.

  	
   

  	
  StarGuide
  CCS, Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  12

  	
   

  	
  100

  	
  %

  	
  105

  	
   

  
	
  StarGuide CCS, Inc.

  	
   

  	
  StarGuide

  Consultants, Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  3

  	
   

  	
  100

  	
  %

  	
  100

  	
   

  
	
  FastChannel Network,
  Inc.

  	
   

  	
  eCreativeSearch,
  Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  2

  	
   

  	
  100

  	
  %

  	
  100

  	
   

  
	
  FastChannel Network,
  Inc.

  	
   

  	
  Swan
  Systems, Inc.

  	
   

  	
  Common
  Stock

  	
   

  	
  Delaware

  	
   

  	
  Y

  	
   

  	
  2

  	
   

  	
  100

  	
  %

  	
  100

  	
   

  
	
  DG FastChannel, Inc.

  	
   

  	
  Pathfire, Inc.

  	
   

  	
  Common Stock

  	
   

  	
  Georgia

  	
   

  	
  Y

  	
   

  	
  1

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  

 

LLC Interests:

	
  Owner

  	
   

  	
  Issuer

  	
   

  	
  Certificated 

  Y/N)

  	
   

  	
  Certificate

  No. (if any)

  	
   

  	
  No. of

  Pledged

  Units

  	
   

  	
  % of Outstanding LLC 

  Interests of Issuer

  	
   

  
	
  StarGuide Digital 

  Networks, Inc.

  	
   

  	
  Musicam

  	
   

  	
  N

  	
   

  	
  None

  	
   

  	
   

  	
   

  	
  100

  	
  %

  

 

* Borrower
will no longer own this stock as of the date on which Borrower accepts for
exchange, and exchanges the Offer Consideration (as such term is defined in
that certain Agreement and Plan of Merger and Reorganization by and among
Borrower, Point.360, a California corporation, and NEW 360, a California
corporation (the “Point.360 Agreement”) for, all Shares (as such term is
defined in the Point.360 Agreement) validly tendered and not withdrawn pursuant
to the Offer (as such term is defined in the Point.360 Agreement).

 2

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