Document:

exv10w6

Exhibit 10.6

FORM OF

CREDIT AGREEMENT

dated as of

June [__], 2011

among

COMPRESSCO PARTNERS, L.P.,

COMPRESSCO PARTNERS OPERATING, LLC and

COMPRESSCO PARTNERS SUB, INC.,

as the “Borrowers”,

THE OTHER LOAN PARTIES PARTY HERETO,

as Loan Guarantors

and

JPMORGAN CHASE BANK, N.A.,

as the “Lender”

CHASE BUSINESS CREDIT

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I Definitions
	 	 	1	 
	Section 1.01 Defined Terms
	 	 	1	 
	Section 1.02 Classification of Loans and Borrowings
	 	 	22	 
	Section 1.03 Terms Generally
	 	 	22	 
	Section 1.04 Accounting Terms; GAAP
	 	 	22	 
	ARTICLE II The Credits
	 	 	23	 
	Section 2.01 Commitment
	 	 	23	 
	Section 2.02 Loans and Borrowings
	 	 	23	 
	Section 2.03 Requests for Borrowings
	 	 	23	 
	Section 2.04 Protective Advances
	 	 	24	 
	Section 2.05 Letters of Credit
	 	 	24	 
	Section 2.06 Funding of Borrowings
	 	 	26	 
	Section 2.07 Interest Elections
	 	 	26	 
	Section 2.08 Termination and Reduction of Commitment; Increase in Commitment
	 	 	27	 
	Section 2.09 Repayment of Loans; Evidence of Debt
	 	 	28	 
	Section 2.10 Prepayment of Loans
	 	 	28	 
	Section 2.11 Fees
	 	 	29	 
	Section 2.12 Interest
	 	 	30	 
	Section 2.13 Alternate Rate of Interest
	 	 	31	 
	Section 2.14 Increased Costs
	 	 	31	 
	Section 2.15 Break Funding Payments
	 	 	32	 
	Section 2.16 Taxes
	 	 	32	 
	Section 2.17 Payments Generally; Allocation of Proceeds
	 	 	33	 
	Section 2.18 Indemnity for Returned Payments
	 	 	34	 
	Section 2.19 Mitigation
	 	 	34	 
	ARTICLE III Representations and Warranties
	 	 	34	 
	Section 3.01 Organization; Powers
	 	 	34	 
	Section 3.02 Authorization; Enforceability
	 	 	34	 
	Section 3.03 Governmental Approvals; No Conflicts
	 	 	35	 
	Section 3.04 Financial Condition; No Material Adverse Change
	 	 	35	 
	Section 3.05 Properties
	 	 	35	 
	Section 3.06 Litigation and Environmental Matters
	 	 	35	 
	Section 3.07 Compliance with Laws and Agreements
	 	 	36	 

i

 

	 	 	 	 	 
	 	 	Page	 
	Section 3.08 Investment Company Status
	 	 	36	 
	Section 3.09 Taxes
	 	 	36	 
	Section 3.10 ERISA
	 	 	36	 
	Section 3.11 Disclosure
	 	 	36	 
	Section 3.12 Material Agreements
	 	 	36	 
	Section 3.13 Solvency
	 	 	37	 
	Section 3.14 Insurance
	 	 	37	 
	Section 3.15 Capitalization and Subsidiaries
	 	 	37	 
	Section 3.16 Security Interest in Collateral
	 	 	37	 
	Section 3.17 Employment Matters
	 	 	37	 
	Section 3.18 Common Enterprise
	 	 	38	 
	ARTICLE IV Conditions
	 	 	38	 
	Section 4.01 Effective Date
	 	 	38	 
	Section 4.02 Each Credit Event
	 	 	40	 
	ARTICLE V Affirmative Covenants
	 	 	40	 
	Section 5.01 Financial Statements; Borrowing Base and Other Information
	 	 	40	 
	Section 5.02 Notices of Material Events
	 	 	43	 
	Section 5.03 Existence; Conduct of Business
	 	 	44	 
	Section 5.04 Payment of Obligations
	 	 	44	 
	Section 5.05 Maintenance of Properties
	 	 	45	 
	Section 5.06 Books and Records; Inspection Rights
	 	 	45	 
	Section 5.07 Compliance with Laws
	 	 	45	 
	Section 5.08 Use of Proceeds and Letters of Credit
	 	 	45	 
	Section 5.09 Insurance
	 	 	45	 
	Section 5.10 Casualty and Condemnation
	 	 	45	 
	Section 5.11 Appraisals
	 	 	46	 
	Section 5.12 Depository Banks
	 	 	46	 
	Section 5.13 Additional Collateral; Further Assurances
	 	 	46	 
	Section 5.14 Post-Effective Date Deliverables
	 	 	46	 
	ARTICLE VI Negative Covenants
	 	 	47	 
	Section 6.01 Indebtedness
	 	 	47	 
	Section 6.02 Liens
	 	 	48	 
	Section 6.03 Fundamental Changes
	 	 	50	 
	Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	50	 
	Section 6.05 Asset Sales
	 	 	52	 
	Section 6.06 Sale and Leaseback Transactions
	 	 	52	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 6.07 Swap Agreements
	 	 	52	 
	Section 6.08 Restricted Payments; Certain Payments of Indebtedness
	 	 	53	 
	Section 6.09 Transactions with Affiliates
	 	 	53	 
	Section 6.10 Restrictive Agreements
	 	 	54	 
	Section 6.11 Amendment of Certain Agreements
	 	 	54	 
	Section 6.12 Interest Coverage Ratio
	 	 	55	 
	ARTICLE VII Events of Default
	 	 	55	 
	ARTICLE VIII Miscellaneous
	 	 	57	 
	Section 8.01 Notices
	 	 	57	 
	Section 8.02 Waivers; Amendments
	 	 	58	 
	Section 8.03 Expenses; Indemnity; Damage Waiver
	 	 	58	 
	Section 8.04 Successors and Assigns
	 	 	60	 
	Section 8.05 Survival
	 	 	61	 
	Section 8.06 Counterparts; Integration; Effectiveness
	 	 	61	 
	Section 8.07 Severability
	 	 	62	 
	Section 8.08 Right of Setoff
	 	 	62	 
	Section 8.09 Governing Law; Jurisdiction; Consent to Service of Process
	 	 	62	 
	Section 8.10 WAIVER OF JURY TRIAL
	 	 	62	 
	Section 8.11 Headings
	 	 	63	 
	Section 8.12 Confidentiality
	 	 	63	 
	Section 8.13 Nonreliance; Violation of Law
	 	 	63	 
	Section 8.14 USA PATRIOT Act
	 	 	63	 
	Section 8.15 Disclosure
	 	 	63	 
	Section 8.16 Interest Rate Limitation
	 	 	63	 
	Section 8.17 Releases of Guarantees and Liens
	 	 	64	 
	Section 8.18 Limitation of Liability
	 	 	64	 
	ARTICLE IX Loan Guaranty
	 	 	64	 
	Section 9.01 Guaranty
	 	 	64	 
	Section 9.02 Guaranty of Payment
	 	 	65	 
	Section 9.03 No Discharge or Diminishment of Loan Guaranty
	 	 	65	 
	Section 9.04 Defenses Waived
	 	 	65	 
	Section 9.05 Rights of Subrogation
	 	 	66	 
	Section 9.06 Reinstatement; Stay of Acceleration
	 	 	66	 
	Section 9.07 Information
	 	 	66	 
	Section 9.08 Termination
	 	 	66	 
	Section 9.09 Taxes
	 	 	66	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	Section 9.10 Maximum Liability
	 	 	66	 
	Section 9.11 Contribution
	 	 	67	 
	Section 9.12 Liability Cumulative
	 	 	67	 
	ARTICLE X The Borrower Representative
	 	 	67	 
	Section 10.01 Appointment; Nature of Relationship
	 	 	67	 
	Section 10.02 Powers
	 	 	67	 
	Section 10.03 Employment of Agents
	 	 	68	 
	Section 10.04 Notices
	 	 	68	 
	Section 10.05 Successor Borrower Representative
	 	 	68	 
	Section 10.06 Execution of Loan Documents; Borrowing Base Certificate
	 	 	68	 
	Section 10.07 Reporting
	 	 	68	 

SCHEDULES:

Schedule 3.05 — Properties

Schedule 3.06 — Disclosed Matters

Schedule 3.12 -Material Agreements

Schedule 3.14 — Insurance

Schedule 3.15 — Capitalization and Subsidiaries

Schedule 6.01 — Existing Indebtedness

Schedule 6.02 — Existing Liens

Schedule 6.04 — Existing Investments

Schedule 6.10 — Existing Restrictions

EXHIBITS:

Exhibit A — Form of Opinion of Borrowers’ Counsel

Exhibit B — Form of Borrowing Base Certificate

Exhibit C — Form of Compliance Certificate

Exhibit D — Joinder Agreement

iv

 

     This CREDIT AGREEMENT, dated as of June [__], 2011 (as it may be amended or modified from time
to time, this “Agreement”), is by and among Compressco Partners, L.P., a Delaware limited
partnership (“Compressco Partners”), Compressco Partners Operating, LLC, a Delaware limited
liability company (“Compressco Operating”) and Compressco Partners Sub, Inc., a Delaware
corporation (“Compressco Sub” and together with Compressco Partners and Compressco
Operating, the “Borrowers” and each a “Borrower”), the other Loan Parties party
hereto, and JPMORGAN CHASE BANK, N.A. (the “Lender”).

     The parties hereto agree as follows:

ARTICLE I

Definitions

     SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Account” has the meaning assigned to such term in the Security Agreement.

     “Account Debtor” means any Person obligated on an Account.

     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which any Loan Party (a) acquires any going business
or all or substantially all of the assets of any Person, whether through purchase of assets, merger
or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of directors or other
similar management personnel of a Person (other than Equity Interests having such power only by
reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a
Person.

     “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period or for any CBFR Borrowing, an interest rate per annum equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

     “Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum equal
to the sum of (i) 2.50% per annum plus (ii) the Adjusted LIBO Rate for a one month interest period
on such day (or if such day is not a Business Day, the immediately preceding Business Day);
provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute
page) at approximately 11:00 a.m. London time on such day (without any rounding).

     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

     “Applicable Rate” means, for any day, (a) with respect to any Eurodollar Loan, 2.25%
per annum, (b) with respect to any CBFR Loan, 0.00% per annum, or (c) with respect to the
commitment fee payable hereunder, 0.425% per annum.

     “Approved Fund” has the meaning assigned to such term in Section 8.04(b).

     “Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Commitment and (ii) the Borrowing Base, minus (b) the Exposure, minus (c) without
duplication, Reserves, minus (d) the Availability Block.

     “Availability Block” means an amount equal to $3,000,000.

 

 

     “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitment.

     “Available Commitment” means, at any time, the Commitment minus the Exposure.

     “Banking Services” means each and any of the following bank services provided to any
Loan Party by the Lender or any of its Affiliates: (a) credit cards for commercial customers
(including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value
cards and (c) treasury management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate depository network
services).

     “Banking Services Obligations” of the Loan Parties means any and all obligations of
the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.

     “Banking Services Reserves” means all Reserves which the Lender from time to time
establishes in its Permitted Discretion for Banking Services then provided or outstanding.

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

     “Borrower” or “Borrowers” has the meaning assigned to such term in the
preamble to this Agreement.

     “Borrower Representative” means Compressco Partners, in its capacity as contractual
representative of the Borrowers pursuant to Article X.

     “Borrowing” means (a) Loans of the same Type, made, converted or continued on the same
date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect and
(b) a Protective Advance.

     “Borrowing Base” means, at any time, the sum of (a) 85% of the Loan Parties’ Eligible
Accounts at such time, plus (b) the lesser of (i) 60% of the Loan Parties’ Eligible
Inventory, valued at the lower of cost, determined on an average cost basis, or market value, and
(ii) the product of 85% multiplied by the Net Orderly Liquidation Value percentage identified in
the most recent inventory appraisal ordered by the Lender multiplied by the Loan Parties’ Eligible
Inventory, valued at the lower of cost, determined on an average cost basis, or market value,
plus (c) the lesser of (i) 90% of the net book value of the Loan Parties’ Eligible Service
and Rental Compressor Fleet Equipment (calculated based on a depreciation schedule not to exceed 12
years from the date of original purchase by the relevant Loan Party), and (ii) the product of 85%
multiplied by the Net Orderly Liquidation Value percentage identified in the most recent service
and rental compressor fleet appraisal ordered by the Lender multiplied by the net book value of the
Loan Parties’ Eligible Service and Rental Compressor Fleet Equipment (calculated based on a
depreciation schedule not to exceed 12 years from the date of original purchase by the relevant
Loan Party), plus (d) 80% of the Loan Parties’ Eligible New Service and Rental Compressor
Fleet Equipment, valued at cost or, in the event no service and rental compressor fleet appraisal
has been received by the Lender during the 12 month period immediately preceding the calculation
date, net book value, minus (e) Reserves. The maximum amount of Inventory which may be
included as part of the Borrowing Base is an amount equal to 25% of the Commitment in effect as of
the calculation date. The Lender may, in its Permitted Discretion and effective on delivery of
notice to the Borrower Representative with respect to clause (x) and on the third Business Day
after notice thereof to the Borrower Representative with respect to clauses (y) and (z), (x) during
the continuance of an Event of Default, reduce the advance rates set forth above, (y) adjust or
establish additional Reserves or (z) establish additional standards of eligibility.
Notwithstanding the above, with respect to the Borrowing Base in effect prior to receipt by the
Lender of the first appraisal delivered after the Effective Date, such Borrowing Base shall equal
the sum of (A) 85% of the Loan Parties’ Eligible Accounts, plus (B) 60% of the Loan
Parties’ Eligible Inventory, valued at the lower of cost, determined on an average cost basis, or
market value, plus (C) 90% of the net book value of the Loan Parties’ Eligible Service and
Rental Compressor Fleet Equipment

2

 

(calculated based on a depreciation schedule not to exceed 12 years from the date of original
purchase by the relevant Loan Party), minus (D) Reserves.

     “Borrowing Base Certificate” means a certificate, signed and certified as accurate and
complete by a Financial Officer, in substantially the form of Exhibit B or another form
which is acceptable to the Lender in its sole discretion.

     “Borrowing Request” means a request by the Borrower Representative for a Borrowing in
accordance with Section 2.03.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in Dallas, Texas are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.

     “Capital Expenditures” means, without duplication, any expenditure or commitment to
expend money for any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of Compressco Partners and its Subsidiaries
prepared in accordance with GAAP.

     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Cash Dominion” means the control by the Lender of the Loan Parties’ cash receipts and
the application thereof to the Exposure in accordance with Article VII of the Security Agreement

     “CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall not
on any day be less than the Adjusted One Month LIBOR Rate on such day (or if such day is not a
Business Day, the immediately preceding Business Day). Any change in the CB Floating Rate due to a
change in the Prime Rate or the Adjusted One Month LIBOR Rate shall be effective from and including
the effective date of such change in the Prime Rate or the Adjusted One Month LIBOR Rate,
respectively.

     “CBFR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the CB Floating Rate.

     “Change in Control” means (a) TETRA Technologies, Inc. shall cease to own, free and
clear of all Liens (other than Liens of the type described in clauses (a) and (f) of the definition
of Permitted Encumbrances), directly or indirectly, greater than 50% of the outstanding voting
Equity Interests of Compressco GP on a fully diluted basis; (b) Compressco GP shall cease to own,
free and clear of all Liens (other than Liens of the type described in clauses (a) and (f) of the
definition of Permitted Encumbrances), 100% of the outstanding general partner interests of
Compressco Partners; or (c) Compressco Partners shall cease to own, free and clear of all Liens
(other than Liens in favor of Lender and Permitted Encumbrances of the type described in clauses
(a) and (f) of the definition thereof), directly or indirectly, 100% of the outstanding voting
Equity Interests of each of the other Borrowers on a fully diluted basis.

     “Change in Law” means (a) the adoption of any law, rule, regulation or treaty
(including any rules or regulations issued under or implementing any existing law) after the date
of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation
or application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by the Lender (or, for purposes of Section 2.14(b), by any lending office of the Lender
or by the Lender’s holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement; provided that (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in
implementation thereof, and (ii) all

3

 

requests, rules, guidelines and directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or
the United States or foreign financial regulatory authorities, in each case pursuant to Basel III,
shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted,
issued or implemented; and provided, further, that clause (c) above shall not apply to any request,
guideline, or directive that is applicable to the Lender as a result of its own acts or practices
or those of any of its Affiliates that are not of general applicability.

     “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Loans or Protective Advances.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Collateral” means any and all personal property owned or leased by a Person covered
by the Collateral Documents and any and all other personal property of any Loan Party, now existing
or hereafter acquired, that may at any time be or become subject to a security interest or Lien in
favor of the Lender, to secure the Secured Obligations.

     “Collateral Access Agreement” has the meaning assigned to such term in the Security
Agreement.

     “Collateral Documents” means, collectively, the Security Agreement and any other
documents pursuant to which a Loan Party grants a Lien upon any personal property as security for
payment of the Secured Obligations.

     “Collection Account” has the meaning assigned to such term in the Security Agreement.

     “Commitment” means the commitment of the Lender to make Loans and issue Letters of
Credit hereunder, as such commitment may be increased or reduced from time to time pursuant to
Section 2.08. The initial amount of the Commitment is $20,000,000.

     “Compressco GP” means Compressco Partners GP Inc., a Delaware corporation.

     “Compressco Operating” means Compressco Partners Operating, LLC, a Delaware limited
liability company.

     “Compressco Partners” means Compressco Partners, L.P., a Delaware limited partnership.

     “Compressco Sub” means Compressco Partners Sub, Inc., a Delaware corporation.

     “Compressor Unit” means a wellhead compressor unit used by any Loan Party to provide
natural gas wellhead compression-based production enhancement services, including GasJack
compressor units and VJack compressor units.

     “Conflicts Committee” has the meaning given such term in Compressco Partners’
Partnership Agreement as in effect on the Effective Date or as otherwise amended, supplemented or
modified to the extent not prohibited by Section 6.11.

     “Contribution Agreement” means the Contribution, Conveyance and Assumption Agreement,
dated as of the date hereof, among Compressco, Inc., a Delaware corporation, Compressco Field
Services, Inc., an Oklahoma corporation, Compressco Canada, Inc., an Alberta corporation,
Compressco de Mexico, S. de R.L. de C.V., a Mexican limited liability corporation of variable
capital, Compressco GP, the Borrowers, Compressco Holdings, LLC, a Delaware limited liability
company, Compressco Netherlands B.V., a Netherlands private limited liability company, Compressco
Netherlands Cooperatief U.A., a Netherlands coöperatief, TETRA International Incorporated, a
Delaware corporation, Production Enhancement Mexico, S. de R.L. de C.V., a Mexican limited
liability corporation of variable capital and TETRA, together with the additional conveyance
documents and instruments contemplated or referenced thereunder.

4

 

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

     “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

     “Deposit Account Control Agreement” has the meaning assigned to such term in the
Security Agreement

     “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.

     “Disqualified Stock” means any Equity Interest, which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable for any consideration other than
Equity Interests not constituting Disqualified Stock, pursuant to a sinking fund obligation or
otherwise, or is redeemable for any consideration other than Equity Interests not constituting
Disqualified Stock at the sole option of the holder thereof (other than solely as a result of a
change of control or asset sale), in whole or in part, on or prior to the Maturity Date.

     “Document” has the meaning assigned to such term in the Security Agreement.

     “Domestic Subsidiary” means any direct or indirect Subsidiary of a Borrower that is
organized under the laws of the United States of America or any state thereof or the District of
Columbia, other than any such Subsidiary that is indirectly held through a Subsidiary that is not a
Domestic Subsidiary.

     “dollars” or “$” except as otherwise specified, refers to lawful money of the
United States of America.

     “EBIT” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such period, the sum of (i)
Interest Expense for such period, (ii) income tax expense (including any franchise taxes to the
extent based upon net income) for such period net of tax refunds, (iii) any extraordinary non-cash
charges for such period and (iv) any other non-cash charges for such period (but excluding any
non-cash charge in respect of an item that was included in Net Income in a prior period and any
non-cash charge that relates to the write-down or write-off of inventory), minus (b)
without duplication and to the extent included in Net Income, (i) any cash payments made during
such period in respect of non-cash charges described in clause (a)(iv) taken in a prior period and
(ii) any extraordinary non-cash gains and any non-cash items of income for such period, all
calculated for the Borrowers and their Subsidiaries on a consolidated basis in accordance with
GAAP.

     “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 8.02).

     “Eligible Accounts” means, at any time, the Accounts of a Loan Party which the Lender
determines in its Permitted Discretion are not ineligible for inclusion in the calculation of the
Borrowing Base pursuant to any of clauses (a) through (w) below. Without limiting the Lender’s
discretion provided herein, Eligible Accounts shall not include any Account:

     (a) which is not subject to a first priority perfected security interest (subject only
to Permitted Encumbrances of the type specified in clause (a) of the definition thereof) in
favor of the Lender;

     (b) which is subject to any Lien other than (i) a Lien in favor of the Lender and (ii)
a Permitted Encumbrance or other Lien permitted by Section 6.02 which in each case does not
have priority over the Lien in favor of the Lender;

5

 

     (c) (i) with respect to which the scheduled due date is more than 90 days after the
date of the original invoice therefor, (ii) which is unpaid more than 60 days after the
original due date therefor (“Overage”) (when calculating the amount under this
clause (ii), for the same Account Debtor, the Lender shall include the net amount of such
Overage and add back any credits, but only to the extent that such credits do not exceed the
total gross receivables from such Account Debtor, or (iii) which has been written off the
books of the Loan Parties or otherwise designated as uncollectible;

     (d) which is owing by an Account Debtor for which more than 50% of the Accounts owing
from such Account Debtor and its Affiliates are ineligible hereunder;

     (e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to all Loan Parties exceed 20% of the
aggregate amount of Eligible Accounts of all Loan Parties;

     (f) with respect to which any covenant, representation, or warranty contained in this
Agreement or in the Security Agreement has been breached or is not true;

     (g) which (i) does not arise from the sale or lease of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Lender (in its Permitted Discretion) which has been sent
to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon the
Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis, or (vi) relates to payments of interest;

     (h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not been performed
by such Loan Party or if such Account was invoiced more than once (but only with respect to
any Account arising from such additional invoice);

     (i) with respect to which any check or other instrument of payment has been returned
uncollected for any reason;

     (j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator of its
assets, (ii) has had possession of all or a material part of its property taken by any
receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any
request or petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or
federal bankruptcy laws (other than post petition accounts payable of an Account Debtor that
is a debtor in possession under the Bankruptcy Code and acceptable to the Lender in its
Permitted Discretion), (iv) has admitted in writing its inability, or is generally unable
to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its
business;

     (k) which is owed by any Account Debtor which has sold all or substantially all of its
assets;

     (l) which is owed by an Account Debtor which (i) does not maintain its chief executive
office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any
state of the U.S., Canada, or any province of Canada unless, in either case, such Account is
backed by a letter of credit acceptable to, and from an issuer acceptable to, the Lender in
its Permitted Discretion which is in the possession of, and is directly drawable by the
Lender;

     (m) which is owed in any currency other than U.S. dollars or Canadian dollars;

     (n) which is owed by (i) the government (or any department, agency, public corporation,
or instrumentality thereof) of any country other than the U.S. unless such Account is backed

6

 

by a letter of credit acceptable, and from an issuer acceptable to, to the Lender in
its Permitted Discretion which is in the possession of, and is directly drawable by, the
Lender, or (ii) the government of the U.S., or any department, agency, public corporation,
or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended
(31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and
any other steps necessary to perfect the Lien of the Lender in such Account have been
complied with to the Lender’s satisfaction;

     (o) which is owed by any Affiliate of any Loan Party or any employee, officer,
director, agent or stockholder of any Loan Party or any of its Affiliates;

     (p) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which
any Loan Party is indebted, but only to the extent of such indebtedness or is subject to any
security, deposit, progress payment, retainage or other similar advance made by or for the
benefit of an Account Debtor, in each case to the extent thereof;

     (q) which is subject to any counterclaim, deduction, defense, setoff or dispute but
only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

     (r) which is evidenced by any promissory note, chattel paper (other than leases entered
into in the ordinary course of business) or instrument regardless of whether the original of
which is in the possession of such Loan Party;

     (s) with respect to which such Loan Party has made any agreement with the Account
Debtor for any reduction thereof, other than discounts, corrections, and adjustments given
in the ordinary course of business, or any Account which was partially paid and such Loan
Party created a new receivable for the unpaid portion of such Account;

     (t) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including without
limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board;

     (u) which is for goods that have been sold under a purchase order or pursuant to the
terms of a contract or other agreement or understanding (written or oral) that indicates or
purports that any Person other than a Loan Party has or has had an ownership interest in
such goods, or which indicates any party other than such Loan Party as payee or remittance
party;

     (v) which was created on cash on delivery terms; or

     (w) which the Lender, in its Permitted Discretion, determines shall not be included in
Eligible Accounts based on such credit and collateral consideration as the Lender in its
Permitted Discretion deems reasonable.

     In the event that any one Account totaling (A) $500,000 or more at any time Borrowing Base
Certificates are required to be delivered quarterly and (B) $1,000,000 or more at all other times
which was previously an Eligible Account ceases to be an Eligible Account hereunder (other than as
a result of the payment by the applicable Account Debtor of such Eligible Account), such Loan Party
or the Borrower Representative shall notify the Lender thereof promptly, and in any event within 10
Business Days, after any Financial Officer becomes aware thereof. In determining the amount of an
Eligible Account, the face amount of an Account may, in the Lender’s Permitted Discretion, be
reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including any amount that such
Loan Party may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement
or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect
of such Account but not yet applied by such Loan Party to reduce the amount of such Account.

7

 

     “Eligible Inventory” means, at any time, the Inventory of each Loan Party which the
Lender determines in its Permitted Discretion is not ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses (a) through (q) below. Without limiting the Lender’s
discretion provided herein, Eligible Inventory shall not include any Inventory:

     (a) which is not subject to a first priority perfected Lien (subject only to Permitted
Encumbrances of the type specified in clause (a) of the definition thereof) in favor of the
Lender;

     (b) which is subject to any Lien other than (i) a Lien in favor of the Lender and (ii)
a Permitted Encumbrance or other Lien permitted by Section 6.02 which in each case does not
have priority over the Lien in favor of the Lender;

     (c) which is, in the Lender’s Permitted Discretion, slow moving, obsolete,
unmerchantable, defective, or unfit for sale or lease, not salable at prices approximating
at least the cost of such Inventory in the ordinary course of business or unacceptable due
to age, type, category and/or quantity;

     (d) with respect to which any covenant, representation, or warranty contained in this
Agreement or the Security Agreement has been breached or is not true and which does not
conform, in all material respects, to all standards imposed by any Governmental Authority;

     (e) in which any Person other than such Loan Party shall (i) have any direct or
indirect ownership, interest or title to such Inventory (other than Permitted Encumbrances
and other Liens permitted by Section 6.02 which in the case of Section 6.02, does not have
priority over the Lien in favor of the Lender) or (ii) be indicated on any purchase order or
invoice with respect to such Inventory as having or purporting to have an interest therein;

     (f) which is not finished goods or which constitutes work-in-process, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or display items,
bill-and-hold or ship-in-place goods, goods that are returned or marked for return,
repossessed goods, defective or damaged goods, goods held on consignment, or goods which are
not of a type held for sale in the ordinary course of business;

     (g) which is not located in the U.S. or Canada (subject to clause (a) above, including
perfection of Lender’s Lien under Canadian law) or is in transit with a common carrier from
vendors and suppliers;

     (h) which is located in any location leased by such Loan Party unless (i) the lessor
has delivered to the Lender a Collateral Access Agreement or (ii) a Reserve for rent,
charges, and other amounts due or to become due with respect to such facility has been
established by the Lender in its Permitted Discretion;

     (i) which is located in any third party warehouse or is in the possession of a bailee
(other than a third party processor) and is not evidenced by a Document, unless (i) such
warehouseman or bailee has delivered to the Lender a Collateral Access Agreement and such
other documentation as the Lender may require in its Permitted Discretion or (ii) an
appropriate Reserve has been established by the Lender in its Permitted Discretion;

     (j) which is being processed offsite at a location other than a Permitted Location or
outside processor, or is in transit to or from such location or outside processor;

     (k) which is the subject of a consignment by such Loan Party as consignor;

     (l) which is perishable;

8

 

     (m) which contains or bears any intellectual property rights licensed to such Loan
Party unless the Lender, in its Permitted Discretion, is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii)
violating any contract with such licensor, or (iii) incurring any liability with respect to
payment of royalties other than royalties incurred pursuant to sale of such Inventory under
the current licensing agreement;

     (n) which is not reflected in a current perpetual inventory report of such Loan Party;

     (o) for which reclamation rights have been asserted by the seller; or

     (p) which the Lender, in its Permitted Discretion, determines shall not be included in
Eligible Inventory based on such credit and collateral consideration as the Lender, in its
Permitted Discretion, deems reasonable.

     In the event that Inventory having a value of (A) $500,000 or more at any time Borrowing Base
Certificates are required to be delivered quarterly and (B) $1,000,000 or more at all other times
which was previously Eligible Inventory ceases to be Eligible Inventory hereunder (other than as a
result of the sale or use of such Eligible Inventory), such Borrower or the Borrower Representative
shall notify the Lender thereof promptly (and in any event not later than 10 Business Days) after
any Financial Officer becomes aware thereof.

     “Eligible New Service and Rental Compressor Fleet Equipment” means, at any time, the
New Service and Rental Compressor Fleet Equipment of each Loan Party which the Lender determines in
its Permitted Discretion is not ineligible for inclusion in the calculation of the Borrowing Base
pursuant to any of clauses (a) through (e) of the definition of Eligible Service and Rental
Compressor Fleet Equipment.

     “Eligible Service and Rental Compressor Fleet Equipment” means, at any time, the
Service and Rental Compressor Fleet Equipment (other than New Service and Rental Compressor Fleet
Equipment) of each Loan Party which the Lender determines in its Permitted Discretion is not
ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a)
through (g) below. Without limiting the Lender’s discretion provided herein, Eligible Service and
Rental Compressor Fleet Equipment shall not include any Service and Rental Compressor Fleet
Equipment:

     (a) which is not subject to a first priority perfected Lien in favor of the Lender
(subject only to Permitted Encumbrances of the type specified in clause (a) of the
definition thereof) in favor of the Lender;

     (b) which is subject to any Lien other than (i) a Lien in favor of the Lender and (ii)
a Permitted Encumbrance or other Lien permitted by Section 6.02 which is in each case does
not have priority over the Lien in favor of the Lender;

     (c) the full purchase price for which has not been paid;

     (d) which is at a location other than a Permitted Location;

     (e) which is not in good working order and condition (ordinary wear and tear excepted)
or in the process of being refurbished to good working order and condition, which
refurbishment will be completed within a reasonable period of time and for a reasonable
cost, or is not used or held for use in the ordinary course of business by a Loan Party;

     (f) which is subject to any agreement which restricts the ability of such Loan Party to
use, sell, transport or dispose of such Equipment (other than customary restrictions on the
use, sale, transportation or disposal of Equipment pursuant to leases of such Equipment or
service contracts entered into in the ordinary course of business and in which the Lender
has been granted a security interest to secure the Obligations) or which restricts the
Lender’s ability to take possession of, sell or otherwise dispose of such Equipment; or

9

 

     (g) which constitutes “Fixtures” under the applicable laws of the jurisdiction in which
such Equipment is located.

     “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

     “Equipment” has the meaning assigned to such term in the Security Agreement.

     “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with a Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the failure with respect to any Plan to meet the minimum funding
standards (as defined in Section 412 of the Code or Section 302 of ERISA) of the Plan, whether or
not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any Borrower or any of its ERISA Affiliates of a liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan under Section 4041 or 4042 of ERISA; (f)
the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any
Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any
Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

     “Eurodollar”, when used in reference to any Loan or Borrowing (other than a CBFR Loan
or Borrowing), refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

     “Event of Default” has the meaning assigned to such term in Article VII.

     “Excluded Taxes” means, with respect to any payment made by any Loan Party under any
Loan Document, any of the following Taxes imposed on or with respect to the Lender: (a) income or
franchise Taxes imposed on (or measured by) net income by the United States of America, or by the
jurisdiction under the laws of which the Lender is organized or in which its principal office or
applicable lending office is located, and (b) any branch profits Taxes imposed by the United States
of America or any similar Tax imposed by any other jurisdiction in which any Loan Party is located.

10

 

     “Exposure” means, at any time, the sum of the outstanding principal amount of Loans
and LC Exposure at such time.

     “Fabricated Cost” means the total costs (other than allocations of general and
administrative expenses) incurred in fabricating a particular item of PES Equipment, as determined
by the books and records of the Loan Parties, prepared in accordance with GAAP.

     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Lender from three Federal funds brokers of recognized standing selected by it.

     “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of Compressco GP in its capacity as general partner of the Borrower
Representative.

     “Fixtures” has the meaning assigned to such term in the Security Agreement.

     “Foreign Subsidiary” any direct or indirect Subsidiary of a Borrower that is organized
under the laws of any jurisdiction other than the United States of America or any state thereof or
the District of Columbia.

     “GAAP” means generally accepted accounting principles in the United States of America.

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

     “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness; provided, that
the term Guarantee shall not include endorsements for collection or deposit in the ordinary course
of business.

     “Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

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

     “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to a requirement to make deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person (excluding current accounts payable incurred in

11

 

the ordinary course of business), (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts payable incurred in the
ordinary course of business, deferred compensation and purchase price adjustments, earnouts and
deferred payments of a similar nature incurred in connection with a Permitted Acquisition), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty, (j) Disqualified Stock and (k) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor.

     “Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or with
respect to any payment made by any Loan Party under any Loan Document and (b) Other Taxes.

     “Interest Coverage Ratio” means, for any period, the ratio of (a) EBIT for such period
to (b) cash Interest Expense for such period.

     “Interest Election Request” means a request by the Borrower Representative to convert
or continue a Borrowing in accordance with Section 2.07.

     “Interest Expense” means, for any period, the sum (determined without duplication) of
interest expense (including that attributable to Capital Lease Obligations) of the Borrowers and
their Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrowers
and their Subsidiaries (including all amortization or writeoff of debt discount, debt issuance
costs, commissions, discounts and other fees and charges associated with Indebtedness (including
the Loans and any amendments to, or consents or waivers under, the Loan Documents) or owed with
respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in
respect of interest rates to the extent such net costs are allocable to such period in accordance
with GAAP), calculated on a consolidated basis for the Borrowers and their Subsidiaries for such
period in accordance with GAAP.

     “Interest Payment Date” means (a) with respect to any CBFR Loan, the first day of each
calendar month, (b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing
with an Interest Period of more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration after the first day of such
Interest Period, and (c) the Maturity Date.

     “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months thereafter, as the Borrower
Representative may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next succeeding Business
Day unless such next succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

     “Inventory” means “Inventory” as defined in the Security Agreement; provided, however,
that for purposes of this Agreement “Inventory” shall not include the Service and Rental Compressor
Fleet Equipment, all of which shall be included in “Equipment” for purposes of this Agreement.

12

 

     “IRS” means the United States Internal Revenue Service.

     “Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.

     “LC Collateral Account” has the meaning assigned to such term in Section 2.05(h).

     “LC Disbursement” means a payment made by the Lender pursuant to a Letter of Credit.

     “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit plus (b) the aggregate amount of all LC Disbursements that
have not yet been reimbursed by or on behalf of the Borrowers.

     “Lender” means JPMorgan Chase Bank, N.A., its successors and assigns.

     “Letter of Credit” means any letter of credit issued pursuant to this Agreement.

     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the Lender from time to
time for purposes of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time for any reason,
then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period. Notwithstanding the above, to the extent that
“LIBO Rate” or “Adjusted LIBO Rate” is used in connection with a CBFR Borrowing, such rate shall be
determined as modified by the definition of Adjusted One Month LIBOR Rate.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

     “Loan Documents” means this Agreement, any promissory notes issued pursuant to this
Agreement, any letter of credit applications submitted by a Borrower, or entered into by a
Borrower, with the Issuing Bank and relating to a Letter of Credit, the Collateral Documents, the
Loan Guaranty and all other agreements, instruments, documents and certificates identified in
Section 4.01 executed and delivered to, or in favor of, the Lender by or on behalf of any Loan
Party.

     “Loan Guarantor” means each Loan Party.

     “Loan Guaranty” means Article IX of this Agreement.

     “Loan Parties” means the Borrowers, the Borrowers’ Domestic Subsidiaries that are a
party to this Agreement and any other Person who becomes a party to this Agreement pursuant to a
Joinder Agreement and their successors and assigns.

     “Loans” means the loans and advances made by the Lender pursuant to this Agreement,
including Protective Advances.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, or condition, financial or otherwise, of the Borrowers and their Subsidiaries taken as
a whole, (b) the ability of any

13

 

Loan Party to perform any of its obligations under the Loan Documents to which it is a party,
(c) the Lender’s Liens on the Collateral or the priority of such Liens, or (d) the rights of or
benefits available to the Lender under any of the Loan Documents.

     “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrowers and their Subsidiaries in an aggregate principal amount exceeding $1,000,000. For
purposes of determining Material Indebtedness, the principal amount of the “obligations” of any
Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the Swap
Termination Value of such Swap Agreement.

     “Maturity Date” means the date that is four (4) years after the Effective Date (or if
such day is not a Business Day, the next preceding day that is a Business Day) or any earlier date
on which the Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

     “Maximum Liability” has the meaning assigned to such term in Section 9.10.

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

     “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA to which Borrower or any ERISA Affiliate makes or is obligated to make contributions, or
during the preceding six years, has made or been obligated to make contributions.

     “Net Book Value” means the net book value of a particular item of PES Equipment, as
determined by the books and records of the Loan Parties, prepared in accordance with GAAP.

     “Net Income” means, for any period, the consolidated net income (or loss) of the
Borrowers and their Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrowers or
any of their Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in
which the Borrowers or any of their Subsidiaries has an ownership interest, except to the extent
that any such income is actually received by a Borrower or Subsidiary in the form of dividends or
similar distributions, (c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary, (d) unrealized losses and gains from Swap
Agreements resulting from the application of the FASB (ASC) 815, and (e) any non-cash compensation
charge or expense realized from grants of Equity Interests or other rights to officers, directors
and employees.

     “Net Orderly Liquidation Value” means, with respect to Inventory and Service and
Rental Compressor Fleet Equipment of any Person, the orderly liquidation value thereof based upon
the most recent appraisal thereof conducted in accordance with Section 5.11 and expressed as a
percentage of average cost, market value, or net book value, as applicable of such Inventory or
Service and Rental Compressor Fleet Equipment, as applicable, net of all costs of liquidation
thereof.

     “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in
respect of such event including (i) any cash received in respect of any non-cash proceeds
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but excluding any
interest payments), but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar
payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third
parties (other than Affiliates) in connection with such event (including, without limitation, any
underwriting, brokerage, advisory and other selling or other professional fees and commissions),
(ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a Sale
and Leaseback Transaction or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to prepay or repay Indebtedness (other than
Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of

14

 

such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and
the amount of any reserves established to fund contingent liabilities reasonably estimated to be
payable, in each case during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good faith by a Financial
Officer).

     “New Service and Rental Compressor Fleet Equipment” means Service and Rental
Compressor Fleet Equipment purchased or completed by the applicable Loan Party since the date of
the most recent appraisal delivered to the Lender under Section 5.11 after the Effective Date.

     “Non-Paying Guarantor” has the meaning assigned to such term in Section 9.11.

     “Obligated Party” has the meaning assigned to such term in Section 9.02.

     “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of the Loan Parties owing to the Lender or any indemnified party arising
under the Loan Documents.

     “Omnibus Agreement” means the Omnibus Agreement dated as of the date hereof among
Compressco GP, Compressco Partners and TETRA as in effect on the Effective Date or as otherwise
amended, supplemented or modified to the extent not prohibited by Section 6.11.

     “Other Connection Taxes” means, with respect to the Lender, Taxes imposed as a result
of a present or former connection between the Lender and the jurisdiction imposing such Taxes
(other than a connection arising from the Lender having executed, delivered, enforced, become a
party to, performed its obligations under, received payments under, received or perfected a
security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan
Document), or sold or assigned an interest in any Loan Document).

     “Other Taxes” means any present or future stamp, court, documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, or from the registration,
receipt or perfection of a security interest under, or otherwise with respect to, any Loan
Document, except any such Taxes that are Other Connection Taxes imposed with respect to an
assignment.

     “Participant” has the meaning assigned to such term in Section 8.04(c).

     “Paying Guarantor” has the meaning assigned to such term in Section 9.11.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that
satisfies each of the following requirements:

     (a) the board of directors (or equivalent body) of the Person to be acquired shall not
have indicated publicly its opposition to the consummation of such Acquisition (which
opposition has not been publicly withdrawn);

     (b) the business acquired in connection with such Acquisition is a Permitted Business;

     (c) both before and after giving effect to such Acquisition and the Loans (if any)
requested to be made in connection therewith, each of the representations and warranties in
the Loan Documents is true and correct in all material respects (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to the extent
the Lender has been notified in writing by the Loan Parties that any representation or
warranty is not correct and the Lender has explicitly waived in writing

15

 

compliance with such representation or warranty) without duplicating any materiality
qualifier and no Default then exists, or would result therefrom;

     (d) with respect to any transaction involving acquisition consideration of more than
$10,000,000, unless the Lender shall otherwise agree, the Borrower Representative has
provided the Lender notice at least 15 days prior to the consummation of such Acquisition
and thereafter provides a copy of all business and financial information reasonably
requested by the Lender including pro forma financial statements, statements of cash flow,
and Availability projections;

     (e) if the Accounts, Inventory and Equipment acquired in connection with such
Acquisition are proposed to be included in the determination of the Borrowing Base, the
Lender shall have conducted an audit and field examination of such Accounts and Inventory
and received an appraisal of such Equipment, in each case, to its reasonable satisfaction;

     (f) if such Acquisition is an acquisition of the Equity Interests of a Person, the
Acquisition is structured so that at least 50% of the Equity Interests of the acquired
Person shall be owned by such Borrower on a fully diluted basis and, unless such Person is
or will be a Foreign Subsidiary, such Person becomes a Loan Party pursuant to the terms of
this Agreement;

     (g) if such Acquisition is an acquisition of Equity Interests, such Acquisition will
not result in any violation of Regulation U;

     (h) no Loan Party shall, as a result of or in connection with any such Acquisition,
assume or incur any direct or contingent liabilities (whether relating to environmental,
tax, litigation, or other matters) that could reasonably be expected to have a Material
Adverse Effect;

     (i) in connection with an Acquisition of the Equity Interests of any Person, all Liens
on property of such Person (other than Liens permitted by Section 6.02) shall be terminated
unless the Lender in its sole discretion consents otherwise, and in connection with an
Acquisition of the assets of any Person, all Liens (other than Liens permitted by Section
6.02) on such assets shall be terminated;

     (j) with respect to any transaction involving acquisition consideration of more than
$10,000,000, the Interest Coverage Ratio shall be greater than 2.5 to 1.0 for the 12 month
period ending on the last day of the fiscal quarter ending immediately prior to the date of
such Acquisition for which the required financial statements and the certificate required by
Section 5.01(d) have been delivered to Lender;

     (k) the Borrower Representative shall certify (and provide the Lender with a pro forma
calculation in form and substance reasonably satisfactory to the Lender) to the Lender that,
after giving effect to the completion of such Acquisition, Availability will not be less
than $5,000,000 (without giving effect to the Availability Block) on a pro forma basis after
giving effect to any Borrowing or the issuance of any Letter of Credit in connection with
such Acquisition; and

     (l) with respect to any Acquisition of any Person that will not become a Loan Party
upon the consummation of such Acquisition or any Acquisition of assets and property that
will not be owned or held by a Loan Party upon the consummation of such Acquisition, no
proceeds of any Loans may be used, directly or indirectly, to pay any of consideration for
such Acquisition unless on the date of and immediately after giving effect to such
Acquisition, the Borrowing Base exceeds the Commitment by an amount not less than 80% of the
Commitment.

     “Permitted Business” means any business in which the Loan Parties are engaged on the
Closing Date and any business activities that are similar, related, complementary or incidental
thereto.

     “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business judgment.

16

 

     “Permitted Encumbrances” means:

     (a) Liens imposed by law for Taxes assessments or other governmental charges or levies
which are not delinquent or which are being Properly Contested;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s,
suppliers’, construction and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days or which are
being Properly Contested;

     (c) pledges and deposits made in compliance with workers’ compensation, unemployment
insurance and other social security laws or regulations or securing deductibles,
self-insurance, insurance premiums, co-payment, co-insurance, retentions and similar
obligations to providers of insurance;

     (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;

     (e) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies, or under general
depositary agreements, and burdening only deposit accounts or other funds maintained with a
creditor depository institution, provided that no such deposit account is a dedicated cash
collateral account or is subject to restrictions against access by the depositor in excess
of those set forth by regulations promulgated by the Board and no such deposit account is
intended by any Loan Party to provide collateral to the depository institution;

     (f) judgment Liens in respect of judgments that do not constitute an Event of Default
under clause (k) of Article VII;

     (g) easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the affected property
or interfere with the ordinary conduct of business of any Loan Party;

     (h) Liens arising by virtue of precautionary UCC financing statement filing (or similar
filings under applicable law) regarding operating leases entered into by the Loan Parties in
the ordinary course of business;

     (i) leases, subleases, space leases, licenses or sublicenses, in each case in the
ordinary course of business and which do not interfere in any material respect with the
business of any Loan Party; and

     (j) options, put and call arrangements, rights of first refusal, setoff rights and
customary limitations and restrictions constituting negative pledges, in each case, in the
ordinary course of business, contained in, and limited to, specific leases, licenses,
conveyances, partnership agreements and co owners’ agreements, and similar conveyances and
agreements to the extent that any such Lien referred to in this clause does not materially
impair the use of the property covered by such Lien for the purposes for which such property
is held or materially impair the value of such property to the relevant Loan Party subject
thereto;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness,
except with respect to clause (f) above.

     “Permitted Investments” means:

17

 

     (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition thereof;

     (b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not less than
$500,000,000;

     (d) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial institution
satisfying the criteria described in clause (c) above; and

     (e) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7
under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and
(iii) have portfolio assets of at least $1,000,000,000.

     “Permitted Location” means (a) premises owned by a Loan Party that is not subject to a
Lien to secure Indebtedness for borrowed money (unless the holder of such Indebtedness has
delivered to the Lender a Collateral Access Agreement), (b) premises leased by a Loan Party where
(i) the lessor has delivered to the Lender a Collateral Access Agreement or (ii) a Reserve for
rent, charges, and other amounts due or to become due with respect to such facility has been
established by the Lender in its Permitted Discretion or (c) any other location within the United
States of America not otherwise owned or leased by a Loan Party and as to which the Borrower
Representative shall have provided written notice (including pursuant to a perfection certificate
or Borrowing Base Certificate) to the Lender identifying (which in the case of the location of the
Eligible Service and Rental Compressor Fleet Equipment located on a customer’s lease or fee-owned
real property, shall be sufficiently identified by name of customer, state, county, well name and,
if available, GPS coordinates) such location as an additional “Permitted Location”.

     “Permitted Partnership Distributions” means distributions by Compressco Partners to
the holders of its limited partnership interests required or permitted pursuant to its limited
partnership agreement or other organizational or governing documents as in effect on the Effective
Date or as otherwise amended, supplemented or modified to the extent not prohibited by Section
6.11.

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

     “PES Equipment” means Compressor Units, well monitoring assets, automated sand
separation assets and other equipment and assets, together with any tangible components thereof,
all related appliances, parts, accessories, appurtenances, accessions, additions, improvements and
replacements thereto, all other equipment or components of any nature from time to time
incorporated or installed therein and all substitutions for any of the foregoing.

     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     “Prepayment Event” means:

18

 

     (a) any sale, transfer or other disposition (including pursuant to a Sale and Leaseback
Transaction) of any property or asset of any Loan Party, other than dispositions described
in Section 6.05 (other than clauses (e), (f) and (g) thereof), that yields gross proceeds to
the Loan Parties (valued at the initial principal amount thereof in the case of non-cash
proceeds consisting of notes or other debt securities and valued at fair market value in the
case of other non-cash proceeds) in excess of $1,500,000 in any period of 12 consecutive
calendar months; or

     (b) any settlement of or payment in respect of any property or casualty insurance claim
or any condemnation proceeding relating to any asset of any Loan Party that yields gross
proceeds to any Loan Party (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $1,500,000; or

     (c) the incurrence by any Loan Party of any Indebtedness, other than Indebtedness
permitted under Section 6.01.

     “Prime Rate” means the rate of interest per annum publicly announced from time to time
by the Lender as its prime rate; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

     “Projections” has the meaning assigned to such term in Section 5.01(f).

     “Properly Contested” means, with respect to any obligation of any Person or any Lien
on any property of any Person, (a) the obligation or Lien is subject to a bona fide dispute
regarding amount or such Person’s liability to pay; (b) the obligation or Lien is being properly
contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c)
appropriate reserves have been established in accordance with GAAP; (d) non-payment of such
obligation could not reasonably be expected to have a Material Adverse Effect; (e) no Lien is
imposed on assets of such Person constituting Collateral, unless bonded and stayed to the
satisfaction of the Lender and junior to the Lender’s Liens on any or all of such Collateral and
(f) if such obligation or Lien results from entry of a judgment or other order, such judgment or
order is stayed pending appeal or other judicial review.

     “Protective Advance” has the meaning assigned to such term in Section 2.04.

     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     “Report” means reports prepared by the Lender or another Person showing the results of
appraisals, field examinations or audits pertaining to the assets of the Borrowers from information
furnished by or on behalf of the Borrowers, after the Lender has exercised its rights of inspection
pursuant to this Agreement.

     “Requirement of Law” means, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

     “Reserves” means any and all reserves which the Lender deems necessary, in its
Permitted Discretion, to maintain (including, without limitation, reserves for accrued and unpaid
interest on the Secured Obligations, Banking Services Reserves, volatility reserves, reserves for
rent at locations leased or occupied by any Loan Party and for consignee’s, warehousemen’s and
bailee’s charges, reserves for dilution of Accounts, reserves for Inventory shrinkage, reserves for
customs charges and shipping charges related to any Inventory in transit, reserves for Swap
Obligations, reserves for contingent liabilities of any Loan Party, reserves for uninsured losses
of any Loan Party, reserves for uninsured, underinsured, un indemnified or under indemnified
liabilities or potential liabilities with respect to any litigation and reserves for taxes, fees,
assessments, and other governmental charges) with respect to the Collateral or any Loan Party;
provided, however that Reserves shall bear a reasonable relation to

19

 

events or conditions that affect the Collateral; and provided, further, that, at the
request of the Borrower Representative, the Lender shall disclose to the Borrower Representative
the conditions or events based on which the Lender has established any Reserve and shall eliminate
or reduce such Reserve to the extent that the Borrowers remedy such condition or event to the
satisfaction of the Lender, leaving only such amount of such Reserve, if any, as the Lender
determines in its Permitted Discretion is required after giving effect to such remedy.

     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in any Borrower or any option, warrant or
other right to acquire any such Equity Interests in any Borrower.

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

     “Sale and Leaseback Transaction” has the meaning assigned to such term in Section
6.06.

     “SEC means the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

     “Secured Obligations” means all Obligations, together with all (a) Banking Services
Obligations and (b) Swap Obligations owing to the Lender or its Affiliates.

     “Security Agreement” means that certain Pledge and Security Agreement, dated as of the
date hereof, among the Loan Parties and the Lender, and any other pledge or security agreement
entered into after the date of this Agreement by any other Loan Party (as required by this
Agreement or any other Loan Document) granting a Lien on any property of any Loan Party to secure
the obligations and liabilities of any Loan Party under any Loan Document, or any other Person, as
the same may be amended, restated or otherwise modified from time to time.

     “Service and Rental Compressor Fleet Equipment” means completed natural gas wellhead
compression Equipment owned by a Loan Party and generally consisting of metal skid mounted
integrated power and compressor units and related liquids separation equipment, together with other
ancillary equipment used in performing wellhead compression services for customers and/or held for
or sale or lease.

     “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

     “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Secured Obligations to the written satisfaction
of the Lender.

     “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise

20

 

Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one
or more subsidiaries of the parent.

     “Subsidiary” means any direct or indirect subsidiary of a Loan Party.

     “Swap Agreement” means any agreement with respect to any swap, forward, future, credit
default or derivative transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of the Borrowers or the
Subsidiaries shall be a Swap Agreement.

     “Swap Obligations” of a Loan Party means any and all obligations of such Loan Party,
whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor), under
(a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.

     “Swap Termination Value” means, in respect of any one or more Swap Agreements, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Agreements, as determined by the counterparties to such Swap Agreements.

     “Taxes” means any present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.

     “TETRA” means TETRA Technologies, Inc., a Delaware corporation, and its successors.

     “Transactions” means (a) the contribution by TETRA and certain other Subsidiaries of
TETRA of a portion of their respective businesses, operations and related assets and liabilities in
accordance with the Contribution Agreement, (b) the issuance of Equity Interests of Compressco
Partners to certain Affiliates of TETRA, including Compressco GP, (c) the issuance to Compressco GP
of certain incentive distribution rights, (d) the execution and delivery of the Omnibus Agreement
among the Borrowers, TETRA and certain of its Subsidiaries, (e) the consummation of an offering and
sale to the public of Equity Interests consisting of common units in Compressco Partners pursuant
to an effective registration statement under the Securities Act filed on Form S-1 resulting in
Compressco Partners having not less than $9,000,000 of cash available for general corporate
purposes after giving effect to the payment of certain intercompany Indebtedness with the proceeds
thereof, (f) the execution, delivery and performance by the Borrowers of this Agreement, the
borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder and (g) the payment of all structuring fees, offering expenses and
other costs and expenses incurred in connection with the foregoing.

     “Transaction Documents” means the Contribution Agreement, the Omnibus Agreement, this
Agreement and the other Loan Documents.

     “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the CB Floating Rate.

     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Texas or any other state the laws of which are required to be applied in connection with the issue
of perfection of security interests.

21

 

     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

     “Withholding Agent” means any Loan Party and the Lender.

     SECTION 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings may be classified by Type (e.g., a “Eurodollar Loan” or a “Eurodollar
Borrowing”).

     SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, (e) any reference in any definition to the phrase
“at any time” or “for any period” shall refer to the same time or period for all calculations or
determinations within such definition, and (f) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

     SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if after the date hereof there occurs any change
in GAAP or in the application thereof on the operation of any provision hereof and the Borrower
Representative notifies the Lender that the Borrowers request an amendment to any provision hereof
to eliminate the effect of such change in GAAP or in the application thereof (or if the Lender
notifies the Borrower Representative that the Lender requests an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP
as in effect and applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance herewith. The Borrower
shall not be obligated to pay an amendment fee for any such amendment the sole purpose of which is
to effectuate such amendment.

ARTICLE II

The Credits

     SECTION 2.01 Commitment. Subject to the terms and conditions set forth herein, the
Lender agrees to make Loans to the Borrowers from time to time during the Availability Period in an
aggregate principal amount that will not result in the Exposure exceeding the sum of (a) the lesser
of (i) the Commitment or (ii) the Borrowing Base, minus (b) without duplication, Reserves,
minus (c) the Availability Block; subject to the Lender’s authority, in its sole
discretion, to make Protective Advances pursuant to the terms of Section 2.04. Within the
foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may
borrow, prepay and reborrow Loans.

     SECTION 2.02 Loans and Borrowings. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Type. Any Protective Advance shall be made in accordance
with the procedures set forth in Section 2.04.

     (b) Subject to Section 2.13, each Borrowing shall be comprised entirely of CBFR Loans or
Eurodollar Loans as the Borrower Representative may request in accordance herewith, provided that
all Borrowings

22

 

made on the Effective Date must be made as CBFR Borrowings. The Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of the Lender to make
such Loan; provided that any exercise of such option shall not affect the obligation of the
Borrowers to repay such Loan in accordance with the terms of this Agreement.

     (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $250,000 and not less than
$500,000. CBFR Borrowings may be in any amount. Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more than a
total of eight Eurodollar Borrowings outstanding.

     (d) Notwithstanding any other provision of this Agreement, the Borrower Representative shall
not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.

     SECTION 2.03 Requests for Borrowings. To request a Borrowing, the Borrower
Representative shall notify the Lender of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 10:00 a.m., Dallas, Texas time, three Business Days before the date of
the proposed Borrowing or (b) in the case of a CBFR Borrowing, not later than noon, Dallas, Texas
time, on the date of the proposed Borrowing; provided that no such notice shall be required
for any deemed request of a CBFR Borrowing to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(d). Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or facsimile to the Lender of a written Borrowing Request in
a form approved by the Lender and signed by the Borrower Representative. Each such telephonic and
written Borrowing Request shall specify the following information in compliance with Section 2.02:

	 	(i)	 	the name of the applicable Borrower;
	 
	 	(ii)	 	the aggregate amount of the requested Borrowing, a breakdown of
the separate wires comprising such Borrowing and the account number and any
other necessary identifying information for each deposit account (which shall be
a deposit account subject to a Deposit Account Control Agreement) into which the
proceeds of such Borrowing are to be deposited;
	 
	 	(iii)	 	the date of such Borrowing, which shall be a Business Day;
	 
	 	(iv)	 	whether such Borrowing is to be a CBFR Borrowing or a Eurodollar
Borrowing; and
	 
	 	(v)	 	in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a
CBFR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the applicable Borrowers shall be deemed to have selected an Interest Period of one
month’s duration.

     SECTION 2.04 Protective Advances. Subject to the limitations set forth below, the
Lender is authorized by the Borrowers, from time to time in the Lender’s sole discretion (but shall
have absolutely no obligation), to make Loans to the Borrowers, which the Lender, in its Permitted
Discretion, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion
thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (c) to pay any other amount chargeable to or required to be paid by the
Borrowers pursuant to the terms of this Agreement, including payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including costs, fees, and expenses as
described in Section 8.03) and other sums payable under the Loan Documents (any of such Loans are
herein referred to as “Protective Advances”); provided that, the aggregate amount
of Protective Advances outstanding at any time shall not at any time exceed $3,000,000;
provided further that, the aggregate amount of outstanding Protective Advances plus the
aggregate Exposure shall not exceed the Commitment. Protective Advances may be

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made even if the conditions precedent set forth in Section 4.02 have not been satisfied. The
Protective Advances shall be secured by the Liens in favor of the Lender in and to the Collateral
and shall constitute Obligations hereunder. All Protective Advances shall be CBFR Borrowings.

     SECTION 2.05 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the issuance of Letters of
Credit for its own account or for the account of another Loan Party, in a form reasonably
acceptable to the Lender at any time and from time to time during the Availability Period. In the
event of any inconsistency between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement submitted by the
Borrowers to, or entered into by the Borrowers with, the Lender relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.

     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower Representative shall deliver by hand or facsimile (or transmit by
electronic communication, if arrangements for doing so have been approved by the Lender) to the
Lender (prior to 9:00 am, Dallas, Texas time, at least two Business Days prior to the requested
date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the
date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section),
the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Lender, the applicable Borrower also shall submit a letter of credit application
on the Lender’s standard form in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal
or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed an amount equal to 25% of the Commitment then in effect and (ii) the total Exposure shall
not exceed the sum of (A) the lesser of (1) the Commitment or (2) the Borrowing Base, minus
(B) without duplication, Reserves, minus (C) the Availability Block.

     (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.

     (d) Reimbursement. If the Lender shall make any LC Disbursement in respect of a
Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Lender an
amount equal to such LC Disbursement (i) not later than 11:00 a.m., Dallas, Texas time, on the date
that such LC Disbursement is made, if the Borrower Representative shall have received notice of
such LC Disbursement prior to 9:00 a.m., Dallas, Texas time, on such date, or, (ii) if such notice
has not been received by the Borrower Representative prior to such time on such date, then not
later than 11:00 a.m., Dallas, Texas time, on (a) the Business Day that the Borrower Representative
receives such notice, if such notice is received prior to 9:00 a.m., Dallas, Texas time, on the day
of receipt, or (b) the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt; provided
that the Borrower shall, subject to the conditions to Borrowing set forth herein, be deemed to have
requested, and the Borrower does hereby request under such circumstances, such payment be financed
with a CBFR Borrowing in an equivalent amount and, to the extent so financed, the Borrowers’
obligation to make such payment shall be discharged and replaced by the resulting CBFR Borrowing.

     (e) Obligations Absolute. The Borrowers’ joint and several obligation to reimburse LC
Disbursements as provided in paragraph (d) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement 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 or herein, (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,

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(iii) payment by the Lender under a Letter of Credit against presentation of a draft or other
document that does not 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 Borrowers’ obligations hereunder. Neither the Lender nor any of its Related
Parties, 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 Lender; provided that the foregoing shall not be construed
to excuse the Lender from liability to the Borrowers to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to
the extent permitted by applicable law) suffered by any Borrower that are caused by the Lender’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 Lender (as finally determined
by a court of competent jurisdiction), the Lender 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 Lender may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless 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.

     (f) Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Lender shall promptly notify the applicable Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Lender has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrowers of their obligation to reimburse the Lender with respect to any
such LC Disbursement.

     (g) Interim Interest. If the Lender shall make any LC Disbursement, then, unless the
Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement,
at the rate per annum then applicable to CBFR Loans; provided that, if the Borrowers fail
to reimburse such LC Disbursement when due pursuant to paragraph (d) of this Section, then Section
2.12(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the
Lender.

     (h) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower Representative receives notice from the Lender demanding the
deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account
with the Lender, in the name and for the benefit of the Lender (the “LC Collateral
Account”), an amount in cash equal to 105% of the LC Exposure as of such date plus accrued and
unpaid interest thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default with respect to any
Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Lender
as collateral for the payment and performance of the Secured Obligations. The Lender shall have
exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral
Account and the Borrowers hereby grant the Lender a security interest in the LC Collateral Account.
Other than any interest earned on the investment of such deposits, which investments shall be made
at the option and sole discretion of the Lender and at the Borrowers’ risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in the LC Collateral Account. Moneys in the LC Collateral Account shall be applied by
the Lender for LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other Secured Obligations. If the Borrowers are required to provide an

25

 

amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three
Business Days after all such Events of Default have been cured or waived in accordance with this
Agreement.

     SECTION 2.06 Funding of Borrowings. The Lender shall make each Loan to be made by it
hereunder on the proposed date thereof available to the Borrowers by promptly sending by wire
transfer the amounts in immediately available funds to the deposit accounts identified in the
applicable Borrowing Request; provided that CBFR Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(d) or a Protective Advance shall be retained by the
Lender.

     SECTION 2.07 Interest Elections. (a) Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
Representative may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower Representative may elect different options with respect to
different portions of the affected Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section shall not apply to Protective Advances, which may
not be converted or continued.

     (b) To make an election pursuant to this Section, the Borrower Representative shall notify the
Lender of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Lender of
a written Interest Election Request in a form approved by the Lender and signed by the Borrower
Representative.

     (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:

	 	(i)	 	the Borrower and the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
	 
	 	(ii)	 	the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
	 
	 	(iii)	 	whether the resulting Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and
	 
	 	(iv)	 	if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one
month’s duration.

     (d) If the Borrower Representative fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to a CBFR Borrowing. Notwithstanding any contrary provision hereof,
if a Default has occurred and is continuing and the Lender so notifies the Borrower Representative,
then, so long as a Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to a CBFR Borrowing at the end of the Interest Period applicable thereto.

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     SECTION 2.08 Termination and Reduction of Commitment; Increase in Commitment. (a)
Unless previously terminated, the Commitment shall terminate on the Maturity Date.

     (b) The Borrowers may at any time terminate the Commitment upon (i) the payment in full of all
outstanding Loans, together with accrued and unpaid interest thereon and on any Letters of Credit,
(ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with
respect to each such Letter of Credit, the furnishing to the Lender of a cash deposit, or at the
discretion of the Lender a back up standby letter of credit satisfactory to the Lender, equal to
105% of the LC Exposure as of such date), (iii) the payment in full of the accrued and unpaid fees
and (iv) the payment in full of all reimbursable expenses and other Obligations together with
accrued and unpaid interest thereon.

     (c) The Borrowers may from time to time reduce the Commitment by an aggregate amount of up to
$5,000,000; provided that (i) each reduction of the Commitment shall be in an amount that
is an integral multiple of $2,500,000 and (ii) the Borrowers shall not reduce the Commitment if,
after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.10, the
sum of the Exposures would exceed the sum of (A) the lesser of (1) the Commitment or (2) the
Borrowing Base, minus (B) without duplication, Reserves, minus (C) the Availability
Block.

     (d) The Borrower Representative shall notify the Lender of any election to terminate or reduce
the Commitment under paragraph (b) or (c) of this Section at least five Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Each notice delivered by the Borrower Representative pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitment delivered by the
Borrower Representative may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Borrower Representative (by
notice to the Lender on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitment shall be permanent.

     (e) The Borrowers may request that the Lender agree, in its sole and absolute discretion, to
increase the Commitment by an aggregate amount of up to $20,000,000; provided that (i) any
such request for an increase shall be in a minimum amount of $5,000,000, (ii) the Borrower
Representative, on behalf of the Borrowers, may make a maximum of four such requests and (iii) the
procedures described in Section 2.08(f) have been satisfied.

     (f) Any amendment hereto for such an increase shall be in form and substance satisfactory to
the Lender in its sole and absolute discretion. As a condition precedent to such an increase, the
Borrowers shall deliver to the Lender a certificate of each Loan Party signed by an authorized
officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrowers, certifying that,
before and after giving effect to such increase, (A) the representations and warranties contained
in Article III and the other Loan Documents are true and correct, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and (B) no Default exists.

     SECTION 2.09 Repayment of Loans; Evidence of Debt. (a) The Borrowers hereby
unconditionally promise to pay (i) to the Lender for its account the then unpaid principal amount
of each Loan on the Maturity Date and (ii) to the Lender the then unpaid amount of each Protective
Advance on the earlier of the Maturity Date and demand by the Lender.

     (a) At all times that Cash Dominion is in effect, each Business Day, the Lender shall apply
all funds credited to the Collection Account on such Business Day or the immediately preceding
Business Day (at the discretion of the Lender, whether or not immediately available) first
to prepay any Protective Advances that may be outstanding and second to prepay the Loans
and to cash collateralize outstanding LC Exposure.

     (b) The Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrowers to the Lender resulting from each Loan made by the
Lender, including the amounts of principal and interest payable and paid to the Lender from time to
time hereunder.

27

 

     (c) The Lender shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrowers
to the Lender hereunder and (iii) the amount of any sum received by the Lender hereunder.

     (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of the Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrowers to
repay the Loans in accordance with the terms of this Agreement.

     (e) The Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrowers shall prepare, execute and deliver to the Lender a promissory note payable to
the order of the Lender (or, if requested by the Lender, to the Lender and its registered assigns)
and in a form approved by the Lender. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to Section 8.04) be
represented by one or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its registered
assigns).

     SECTION 2.10 Prepayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (e) of this Section.

     (b) In the event and on such occasion that the total Exposure exceeds the sum of (i) the
lesser of (A) the Commitment or (B) the Borrowing Base, minus (ii) without duplication,
Reserves, minus (iii) the Availability Block, the Borrowers shall prepay the Loans and cash
collateralize LC Exposure in an aggregate amount equal to such excess.

     (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
any Loan Party in respect of any Prepayment Event, the Borrowers shall, immediately after such Net
Proceeds are received by any Loan Party, prepay the Obligations as set forth in Section 2.10(e)
below in an aggregate amount equal to 100% of such Net Proceeds, provided that, in the case
of any event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if
the Borrower Representative shall deliver to the Lender a certificate of a Financial Officer to the
effect that the Loan Parties (1) have applied or (2) intend to apply the Net Proceeds from such
event (or a portion thereof specified in such certificate) within 180 days after receipt of such
Net Proceeds, as applicable, to acquire (or replace or rebuild) assets used or to be used in the
business of the Loan Parties, and certifying that no Default has occurred and is continuing, then
either (i) so long as Cash Dominion is not in effect, no prepayment shall be required pursuant to
this paragraph in respect of the Net Proceeds specified in such certificate or (ii) if Cash
Dominion is in effect, then, if the Net Proceeds specified in such certificate are to be applied by
(A) the Borrowers, then such Net Proceeds shall be applied by the Lender to reduce the outstanding
principal balance of the Loans (without a permanent reduction of the Commitment) and upon such
application, the Lender shall establish a Reserve against the Borrowing Base in an amount equal to
the amount of such proceeds so applied and (B) any Loan Party that is not the Borrower, such Net
Proceeds shall be deposited in a cash collateral account, and in the case of either (A) or (B),
thereafter, such funds shall be made available to the applicable Loan Party as follows:

     (1) the Borrower Representative shall request a Borrowing (specifying that the request
is to use Net Proceeds pursuant to this Section) or the applicable Loan Party shall request
a release from the cash collateral account be made in the amount needed;

     (2) so long as the conditions set forth in Section 4.02 have been met, the Lender shall
make such Borrowing or the Lender shall release funds from the cash collateral account; and

     (3) in the case of Net Proceeds applied against the Borrowing, the Reserve established
with respect to such insurance proceeds shall be reduced by the amount of such Borrowing;

28

 

provided that any such Net Proceeds therefrom that have not been so applied by the end of
such 180-day period shall be applied to prepay the Loans in an amount equal to such Net Proceeds
that have not been so applied.

     (d) All amounts prepaid pursuant to Section 2.10(c) shall be applied, first to prepay
any Protective Advances that may be outstanding and second to prepay the Loans without a
corresponding reduction in the Commitment and to cash collateralize outstanding LC Exposure.

     (e) The Borrower Representative shall notify the Lender by telephone (confirmed by facsimile)
of any prepayment hereunder (other than a prepayment pursuant to Section 2.10(b)) not later than
10:00 a.m., Dallas, Texas time, (i) in the case of prepayment of a Eurodollar Borrowing three
Business Days before the date of prepayment, or (ii) in the case of prepayment of a CBFR Borrowing
on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment
date and the principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice of termination of
the Commitment as contemplated by Section 2.08, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.08. Each partial prepayment of
any Borrowing shall be in an amount that would be permitted in the case of an advance of a
Borrowing (other than a prepayment pursuant to Section 2.10(b) and 2.10(c)) of the same Type as
provided in Section 2.02. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.

     SECTION 2.11 Fees. (a) The Borrowers agree to pay to the Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily amount of the Available Commitment
of the Lender during the period from and including the Effective Date to but excluding the date on
which the Lender’s Commitment terminates. Accrued commitment fees shall be payable in arrears on
the first day of each calendar quarter and on the date on which the Commitment terminates,
commencing on the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed.

     (b) The Borrowers agree to pay (i) to the Lender a letter of credit fee with respect to
Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest
rate applicable to Eurodollar Loans on the average daily amount of the Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on which the Lender’s
Commitment terminates and the date on which the Lender ceases to have any LC Exposure, and (ii) the
Lender’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Letter of credit fees accrued through and
including the last day of each calendar quarter shall be payable on the first day of each calendar
quarter following such last day, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the Commitment
terminates and any such fees accruing after the date on which the Commitment terminates shall be
payable on demand. Any other fees payable to the Lender pursuant to this paragraph shall be
payable within 10 days after demand. All letter of credit fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed.

     (c) The Borrowers agree to pay to the Lender an annual administration fee in the amount of
$20,000, which administration fee shall be payable annually in advance beginning on the Effective
Date and on each anniversary thereof during the term of the Commitment. The administration fee
shall be deemed fully earned by the Lender on the first day of the year and shall be due and
payable in full on that date.

     (d) The Borrowers agree to pay to the Lender a closing fee in an amount equal to $100,000.
The entire closing fee shall be deemed fully earned by the Lender and shall be due and payable in
full on the Effective Date.

     (e) The Borrowers agree to pay to the Lender at all times that Cash Dominion is in effect a
fee equal to the additional interest that the Borrowers would have paid in respect of the Loans, at
the CB Floating Rate plus the Applicable Margin for CBFR Loans, as if each check was received one
Business Day after application to the Loans. Such fee will be payable monthly in arrears.

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     (f) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Lender. Fees paid shall not be refundable under any circumstances.

     SECTION 2.12 Interest. (a) The Loans comprising each CBFR Borrowing shall bear
interest at the CB Floating Rate plus the Applicable Rate.

     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

     (c) Each Protective Advance shall bear interest at the CB Floating Rate plus the Applicable
Rate plus 2%.

     (d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of
Default, the Lender may, at its option, by notice to the Borrower Representative, declare that (i)
all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in
the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation
as provided hereunder.

     (e) Accrued interest on each Loan (for CBFR Loans, accrued through the last day of the prior
calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitment; provided that (i) interest accrued pursuant to paragraph (d)
of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than a prepayment of a CBFR Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date of such repayment
or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

     (f) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the CB Floating Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of
days elapsed. The applicable CB Floating Rate, Adjusted LIBO Rate or LIBO Rate shall be determined
by the Lender, and such determination shall be conclusive absent manifest error.

     SECTION 2.13 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

     (a) the Lender reasonably determines (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or
the LIBO Rate, as applicable, for such Interest Period; or

     (b) the Lender reasonably determines the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the cost to the Lender of making or
maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Lender shall give notice thereof to the Borrower Representative by telephone or facsimile
as promptly as practicable thereafter and, until the Lender notifies the Borrower Representative
that the circumstances giving rise to such notice no longer exist, (i) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as a CBFR Borrowing.

     SECTION 2.14 Increased Costs. (a) If any Change in Law shall:

	 	(i)	 	impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, the Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);

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	 	(ii)	 	impose on the Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein; or
	 
	 	(iii)	 	subject the Lender to any Taxes on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto (other than (A) Indemnified
Taxes and (B) Other Connection Taxes on gross or net income, profits or receipts
(including value-added or similar Taxes));

and the result of any of the foregoing shall be to increase the cost to the Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Eurodollar Loan)
or to increase the cost to the Lender of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by the Lender hereunder (whether
of principal, interest or otherwise), then the Borrowers will pay to the Lender such additional
amount or amounts as will compensate the Lender for such additional costs incurred or reduction
suffered.

     (b) If the Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the Lender’s capital or on the capital of
the Lender’s holding company, as a consequence of this Agreement or the Loans made by, Letters of
Credit issued by the Lender to a level below that which the Lender or the Lender’s holding company
could have achieved but for such Change in Law (taking into consideration the Lender’s policies and
the policies of the Lender’s holding company with respect to capital adequacy), then from time to
time the Borrowers will pay to the Lender such additional amount or amounts as will compensate the
Lender or the Lender’s holding company for any such reduction suffered.

     (c) A certificate of the Lender setting forth the amount or amounts necessary to compensate
the Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest
error. The Borrowers shall pay the Lender the amount shown as due on any such certificate within
10 days after receipt thereof.

     (d) Failure or delay on the part of the Lender to demand compensation pursuant to this Section
shall not constitute a waiver of the Lender’s right to demand such compensation; provided
that the Borrowers shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrower Representative of the Change in Law giving rise to such increased costs or
reductions and of the Lender’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

     SECTION 2.15 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section 2.08(d) and is
revoked in accordance therewith), then, in any such event, the Borrowers shall compensate the
Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to the Lender shall be deemed to include an amount determined by
the Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate
that would have been applicable to such Eurodollar Loan, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest Period for such
Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for
such period at the interest rate which the Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A certificate of the Lender setting forth any amount or amounts that the Lender
is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative
and shall be conclusive absent manifest error. The Borrowers shall pay the Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.

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     SECTION 2.16 Taxes. (a) Withholding of Taxes; Gross-Up. Each payment by any
Loan Party under any Loan Document shall be made without withholding for any Taxes, unless such
withholding is required by any law. If any Withholding Agent determines, in its sole discretion
exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may
so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount
payable by such Loan Party shall be increased as necessary so that, net of such withholding
(including such withholding applicable to additional amounts payable under this Section), the
Lender receives the amount it would have received had no such withholding been made.

     (b) Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

     (c) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver to the Lender
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Lender.

     (d) Indemnification by the Loan Parties. The Loan Parties shall jointly and severally
indemnify the Lender for any Indemnified Taxes that are paid or payable by the Lender in connection
with any Loan Document (including amounts paid or payable under this Section 2.16(d)) and any
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The
indemnity under this Section 2.16(d) shall be paid within 10 days after the Lender delivers to any
Loan Party a certificate stating the amount of any Indemnified Taxes so paid or payable by the
Lender and describing the basis for the indemnification claim. Such certificate shall be
conclusive of the amount so paid or payable absent manifest error.

     (e) Treatment of Certain Refunds. If the Lender determines, in its sole discretion,
exercised in good faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 2.16 (including additional amounts paid pursuant to this
Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to
the extent of indemnity payments made under this Section with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses (including any Taxes) of the Lender and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund). Such indemnifying party, upon the request of the Lender, shall repay to the Lender the
amount paid to the Lender (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event the Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the Lender to make available
its tax returns (or any other information relating to its taxes which it deems confidential) to the
Borrower or any other Person. Notwithstanding anything to the contrary in this Section 2.16(e), in
no event will the Lender be required to pay any amount to any indemnifying party pursuant to this
Section 2.16 if such payment would place the Lender in a less favorable position (on a net
after-Tax basis) than the Lender would have been in if the indemnification payments or additional
amounts giving rise to such refund had never been paid. This Section 2.16(e) shall not be
construed to require the Lender to make available its Tax returns (or any other information
relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

     SECTION 2.17 Payments Generally; Allocation of Proceeds. (a) The Borrowers shall
make each payment required to be made by them hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m., Dallas, Texas time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Lender, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be made to the Lender at its
offices at 10 South Dearborn Street, 22nd Floor, Chicago, Illinois. If any payment hereunder shall
be due on a day that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. All payments hereunder shall be made in dollars.

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     (b) Any proceeds of Collateral received by the Lender (i) not constituting either (A) a
specific payment of principal, interest, fees or other sum payable under the Loan Documents (which
shall be applied as specified by the Borrowers), (B) a mandatory prepayment (which shall be applied
in accordance with Section 2.10) or (C) amounts to be applied from the Collection Account when Cash
Dominion is in effect (which shall be applied in accordance with Section 2.09(a)) or (ii) after an
Event of Default has occurred and is continuing and the Lender so elects such funds shall be
applied ratably first, to pay any fees, indemnities, or expense reimbursements including
amounts then due to the Lender from the Borrowers, second, to pay interest due in respect
of the Protective Advances, third, to pay the principal of the Protective Advances,
fourth, to pay interest then due and payable on the Loans (other than the Protective
Advances), fifth, to prepay principal on the Loans (other than the Protective Advances) and
unreimbursed LC Disbursements, sixth, to pay an amount to the Lender equal to one hundred
five percent (105%) of the aggregate undrawn face amount of all outstanding Letters of Credit and
the aggregate amount of any unpaid LC Disbursements, to be held as cash collateral for such
Obligations, seventh, to payment of any amounts owing with respect to Banking Services and
Swap Obligations, and eighth, to the payment of any other Secured Obligation due to the
Lender by the Borrowers. Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower Representative, or unless a Default is in existence, the Lender
shall not apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration
date of the Interest Period applicable thereto or (b) in the event, and only to the extent, that
there are no outstanding CBFR Loans and, in any such event, the Borrowers shall pay the break
funding payment required in accordance with Section 2.15. The Lender shall have the continuing and
exclusive right to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Secured Obligations.

     (c) At the election of the Lender, all payments of principal, interest, LC Disbursements,
fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 8.03), and other sums payable under the Loan Documents, may be
paid from the proceeds of Borrowings made hereunder whether made following a request by the
Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or
may be deducted from any deposit account of any Borrower maintained with the Lender. Each Borrower
hereby irrevocably authorizes (i) the Lender to make a Borrowing for the purpose of paying each
payment of principal, interest and fees as it becomes due hereunder or any other amount due under
the Loan Documents and agrees that all such amounts charged shall constitute Loans (but such a
Borrowing may only constitute a Protective Advance if it is to reimburse costs, fees and expenses
as described in Section 8.03) and that all such Borrowings shall be deemed to have been requested
pursuant to Sections 2.03 or 2.04, as applicable and (ii) the Lender to charge any deposit account
of any Borrower maintained with the Lender for each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents.

     SECTION 2.18 Indemnity for Returned Payments. If after receipt of any payment which
is applied to the payment of all or any part of the Obligations, the Lender is for any reason
compelled to surrender such payment or proceeds to any Person because such payment or application
of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the
Obligations or part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not been received by the
Lender. The provisions of this Section 2.18 shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.18 shall survive the termination of this
Agreement.

     SECTION 2.19 Mitigation. If the Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to the Lender or any Governmental
Authority for the account of the Lender pursuant to Section 2.16, then the Lender shall use
reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of the Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14 or Section 2.16, as the case may be, in the
future and (ii) would not subject the Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by the Lender in connection with any such designation or assignment.

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ARTICLE III

Representations and Warranties

     Each Borrower, jointly and severally, represents and warrants to the Lender that:

     SECTION 3.01 Organization; Powers. Each Loan Party and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except as could not reasonably be expected, individually or in the aggregate, to have Material
Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.

     SECTION 3.02 Authorization; Enforceability. The Transactions are within each Loan
Party’s organizational powers and have been duly authorized by all necessary organizational actions
and, if required, actions by equity holders. The Loan Documents to which each Loan Party is a
party have been duly executed and delivered by such Loan Party and constitute a legal, valid and
binding obligation of such Loan Party, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.

     SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect
and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will
not violate any Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c)
will not violate or result in a default under any indenture, agreement or other instrument binding
upon any Loan Party or any of its Subsidiaries or the assets of any Loan Party or any of its
Subsidiaries, or give rise to a right thereunder to require any payment to be made by any Loan
Party or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of any Loan Party or any of its Subsidiaries, except Liens created pursuant to the
Loan Documents.

     SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The Borrowers
have heretofore furnished to the Lender (i) Compressco Partners’ unaudited pro forma consolidated
balance sheet as of March 31, 2011, and unaudited statements of income, partners equity and cash
flows as of and for the portion of the fiscal year ended March 31, 2011 (the “Pro Forma
Financials”), in each case reflecting on a pro-forma basis the transactions described therein,
and (ii) audited combined consolidated balance sheet and statements of income, shareholders equity
and cash flows of Compressco, Inc., and its subsidiaries, together with certain subsidiaries of
TETRA, conducting business in Mexico (collectively, the “Predecessor”) as of and for the
fiscal years 2009 and 2010, and (iii) unaudited combined consolidated balance sheet and statements
of income, shareholders equity and cash flows of the Predecessor as of and for fiscal quarter and
the portion of the fiscal year ended March 31, 2011 (collectively with the financial statements
described in clause (ii), the “Predecessor Financials”). The Pro Forma Financials present
fairly, in all material respects, the financial position and results of operations and cash flows
of Compressco Partners and its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, assuming that the transactions described therein had occurred as of the dates
specified therein. The Predecessor Financials present fairly, in all material respects, the
financial position and results of operations and cash flows of Compressco, Inc. and its
consolidated Subsidiaries, respectively, as of such dates and for such periods in accordance with
GAAP, subject to normal year-end audit adjustments (all of which, when taken as a whole, would not
be materially adverse) and the absence of footnotes.

     (b) Since December 31, 2010, no development or event has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect.

     SECTION 3.05 Properties. (a) As of the date of this Agreement, Schedule
3.05 sets forth the address of each parcel of real property that is owned or leased by each
Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its
terms and is in full force and effect, and no default by any party to any such lease or sublease
exists. Each of the Loan Parties and its Subsidiaries has good and indefeasible

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title to, or valid leasehold or other interests in, all of its real and personal property,
subject only to Permitted Encumbrances, other Liens permitted by Section 6.02, and any other
defects in title that could not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.

     (b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property necessary to its business as
currently conducted, except as would not be expected, individually or in the aggregate, to have a
Material Adverse Effect, a correct and complete list of which, as of the date of this Agreement, is
set forth on Schedule 3.05, and, except as set forth on Schedule 3.05, each Loan
Party’s rights thereto are not subject to any licensing agreement or similar arrangement. The use
thereof by each Loan Party and its Subsidiaries does not infringe in any material respect upon the
rights of any other Person, except as would not reasonably be expected to have a Material Adverse
Effect.

     SECTION 3.06 Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Loan Party, threatened against or affecting any Loan Party or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this
Agreement or the Transactions.

     (b) Except for the Disclosed Matters and any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect (i) no Loan
Party nor any of its Subsidiaries has received notice of any claim with respect to any
Environmental Liability or knows of any basis for any Environmental Liability and (ii) no Loan
Party nor any of its Subsidiaries (1) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any Environmental Law
or (2) has become subject to any Environmental Liability.

     (c) Since the date of this Agreement, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

     SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. No Default has occurred and is continuing.

     SECTION 3.08 Investment Company Status. No Loan Party nor any of its Subsidiaries is
an “investment company” as defined in the Investment Company Act of 1940.

     SECTION 3.09 Taxes. Each Loan Party and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being Properly
Contested. No tax liens have been filed (except tax liens that are being Properly Contested) and
no material claims are being asserted with respect to any such taxes.

     SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the
assets of all such underfunded Plans.

     SECTION 3.11 Disclosure. None of the reports, financial statements, certificates or
other information (including the S-1 Registration Statement) furnished by or on behalf of any Loan
Party to the Lender in

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connection with the negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time delivered and, if such
projected financial information was delivered prior to the Effective Date, as of the Effective
Date.

     SECTION 3.12 Material Agreements. All agreements and contracts to which any Loan
Party is a party or is bound as of the date of this Agreement that are individually material to the
business and operations of the Loan Parties taken as a whole are listed on Schedule 3.12
and all material agreements and contracts of any Loan Party with Affiliates of any Loan Party
(other than (i) agreements and contracts between or among any one or more Loan Parties only and not
involving any Affiliate that is not a Loan Party and (ii) agreements and contracts that are entered
into in accordance with the terms of the Omnibus Agreement) as of the date hereof are listed on
Schedule 3.12. No Loan Party, or with respect to the Omnibus Agreement and any material
agreement entered into in accordance with its terms, no Loan Party or Affiliate of such Loan Party
party to any such agreement, is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any material agreement or contract with
an Affiliate, including the Omnibus Agreement and any material agreement or contract entered into
in accordance with the terms of the Omnibus Agreement or (ii) any agreement to which it is a party
that is individually material to the business and operations of the Loan Parties taken as a whole
and, in each case, has or is otherwise required to be filed or summarized in any filing with the
SEC under applicable rules and regulations, except any default that would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

     SECTION 3.13 Solvency. (a) Immediately after the consummation of the Transactions to
occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (ii) the
present fair saleable value of the property of each Loan Party will be greater than the amount that
will be required to pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii)
each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, and (iv) no Loan Party will
have unreasonably small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted after the Effective Date.

     (b) No Loan Party intends to or believes that it will incur debts beyond its ability to pay
such debts as they mature, taking into account the timing of and amounts of cash to be received by
it and the timing of the amounts of cash to be payable on or in respect of its Indebtedness.

     SECTION 3.14 Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Effective Date. As
of the Effective Date, all premiums in respect of such insurance have been paid. The Borrowers
believe that the insurance maintained by or on behalf of the Borrowers and their Subsidiaries is
adequate.

     SECTION 3.15 Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a
correct and complete list of the name and relationship to the Borrowers of each Subsidiary of the
Borrowers as of the date hereof, (b) a true and complete listing of each class of each of the
Borrowers’ authorized Equity Interests, of which all of such issued Equity Interests are validly
issued, outstanding, fully paid and non-assessable as of the date hereof, and (c) the type of
entity of each Borrower and each of its Subsidiaries. All of the issued and outstanding Equity
Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect
to such ownership interests) duly authorized and issued and are fully paid and non-assessable.

     SECTION 3.16 Security Interest in Collateral. The provisions of the Security
Agreements create legal and valid Liens on all the Collateral described therein in favor of the
Lender, and when financing statements and other filings are filed in the appropriate offices and
other actions specified therein to be taken are taken with respect thereto, such Liens will
constitute perfected and continuing Liens on such Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party, and having priority over all other Liens on such

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Collateral subject to (a) Permitted Encumbrances and other Liens permitted by section 6.02, to
the extent any such Permitted Encumbrances or other Liens would have priority over the Liens in
favor of the Lender pursuant to any applicable law and (b) Liens perfected only by control or
possession (including possession of any certificate of title) to the extent the Lender has not
obtained or does not maintain control or possession of such Collateral.

     SECTION 3.17 Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of the
Borrowers, threatened. Except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, the hours worked by and payments made to employees of
the Loan Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such matters, and all
payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any
Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the Loan Party or such
Subsidiary.

     SECTION 3.18 Common Enterprise. Each Loan Party expects to derive benefit (and its
board of directors or other governing body has determined that it may reasonably be expected to
derive benefit), directly and indirectly, from the credit extended by the Lender to the Borrowers
hereunder. Each Loan Party has determined that execution, delivery, and performance of this
Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in
furtherance of its direct and/or indirect business interests, will be of direct and indirect
benefit to such Loan Party, and is in its best interest.

ARTICLE IV

Conditions

     SECTION 4.01 Effective Date. The obligations of the Lender to make Loans and to
issue Letters of Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 8.02):

     (a) Credit Agreement and Loan Documents. The Lender (or its counsel) shall have
received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of
such party or (B) written evidence satisfactory to the Lender (which may include facsimile or other
electronic transmission of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other
certificates, documents, instruments and agreements as the Lender shall reasonably request in
connection with the transactions contemplated by this Agreement and the other Loan Documents,
including a written opinion of the Loan Parties’ counsel, addressed to the Lender in substantially
the form of Exhibit A.

     (b) Financial Statements and Projections. The Lender shall have received (i) the Pro
Forma Financials, (ii) the Predecessor Financials, and (iii) satisfactory projections with respect
to Compressco Partners for fiscal years 2011 through 2013.

     (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Lender shall have received (i) a certificate of each Loan Party, dated the
Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the
resolutions of its general partner, Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the Financial Officers and any other officers of such
Loan Party (or such Loan Party’s general partner) authorized to sign the Loan Documents to which it
is a party, and (C) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or
operating, management or partnership agreement, and (ii) a long form good standing certificate for
each Loan Party from its jurisdiction of organization.

     (d) No Default Certificate. The Lender shall have received a certificate, signed by a
Financial Officer on the initial Borrowing date (i) stating that no Default has occurred and is
continuing, (ii) stating that the

37

 

representations and warranties contained in Article III are true and correct as of such date,
and (iii) certifying any other factual matters as may be reasonably requested by the Lender.

     (e) Fees. The Lender shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable fees and expenses of
legal counsel), on or before the Effective Date. All such amounts will be paid with proceeds of
Loans made on the Effective Date and will be reflected in the funding instructions given by the
Borrower Representative to the Lender on or before the Effective Date.

     (f) Lien Searches. The Lender shall have received the results of a recent lien search
in each of the jurisdictions where assets of the Loan Parties are located, and such search shall
reveal no liens on any of the assets of the Loan Parties except for Liens permitted by Section 6.02
or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation
satisfactory to the Lender.

     (g) Customer List. The Lender shall have received a true and complete customer list
for the Borrowers and their Subsidiaries, which list shall state the customer’s name, mailing
address and phone number.

     (h) Borrowing Base Certificate. The Lender shall have received a Borrowing Base
Certificate which calculates the Borrowing Base as of April 30, 2011.

     (i) Closing Availability. After giving effect to all Borrowings to be made on the
Effective Date and the issuance of any Letters of Credit on the Effective Date and payment of all
fees and expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and
obligations current, the Availability (calculated without giving effect to the Availability Block)
shall not be less than $20,000,000.

     (j) Transactions. The Transactions shall have been (or contemporaneously with this
Agreement becoming effective will be) consummated in accordance with the Transaction Documents
(other than those described in clause (g) thereof) and Lender shall have received reasonably
acceptable evidence that upon the consummation of the Transactions (other than those described in
clause (g) thereof) contemplated to occur on the Effective Date, the Borrowers, collectively, have
at least $9,000,000 in cash available for their use for general corporate purposes.

     (k) Pledged Stock; Stock Powers; Pledged Notes. The Lender shall have received (i)
the certificates representing the shares of Equity Interests pledged pursuant to the Security
Agreement, together with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Lender pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof.

     (l) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or under law or
reasonably requested by the Lender to be filed, registered or recorded in order to create in favor
of the Lender a perfected Lien on the Collateral described therein, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be
in proper form for filing, registration or recordation.

     (m) Insurance. The Lender shall have received evidence of insurance coverage in form,
scope, and substance reasonably satisfactory to the Lender and otherwise in compliance with the
terms of Section 5.09 and Section 4.12 of the Security Agreement.

     (n) Letter of Credit Application. The Lender shall have received a properly completed
letter of credit application (whether standalone or pursuant to a master agreement, as applicable)
if the issuance of a Letter of Credit will be required on the Effective Date.

     (o) Tax Withholding. The Lender shall have received a properly completed and signed
IRS Form W-8 or W-9, as applicable, for each Loan Party.

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     (p) Corporate Structure. The corporate and partnership structure, capital structure
and other material debt instruments, material accounts and governing documents of the Borrowers and
their Affiliates shall be acceptable to the Lender in its sole discretion.

     (q) Field Examination. The Lender or its designee shall have conducted a field
examination of the Borrowers’ Accounts, Inventory and related working capital matters and of the
Borrowers’ related data processing and other systems, the results of which shall be satisfactory to
the Lender in its sole discretion.

     (r) Legal Due Diligence. The Lender and its counsel shall have completed all legal due
diligence, the results of which shall be satisfactory to Lender in its sole discretion.

     (s) Other Documents. The Lender shall have received such other documents as the
Lender or its counsel may have reasonably requested.

The Lender shall notify the Borrowers of the Effective Date, and such notice shall be conclusive
and binding. Notwithstanding the foregoing, the obligations of the Lender to make Loans and to
issue Letters of Credit hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 8.02) at or prior to 2:00 p.m., Dallas,
Texas time, on June 30, 2011 (and, in the event such conditions are not so satisfied or waived, the
Commitment shall terminate at such time).

     SECTION 4.02 Each Credit Event. The obligation of the Lender to make a Loan on the
occasion of any Borrowing, and to issue, amend, renew or extend any Letter of Credit, is subject to
the satisfaction of the following conditions:

     (a) The representations and warranties of the Borrowers set forth in this Agreement shall be
true and correct in all material respects with the same effect as though made on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable (it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and correct in all material
respects only as of such specified date or, if applicable, as of the date of the most recent
updated schedule delivered pursuant to Section 5.01(o), and that any representation or warranty
which is subject to any materiality qualifier shall be required to be true and correct in all
respects).

     (b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have
occurred and be continuing.

     (c) After giving effect to any Borrowing or the issuance, amendment, renewal or extension of
any Letter of Credit, Availability is not less than zero.

     (d) If after giving effect to any Borrowing or the issuance, amendment, renewal or extension
of any Letter of Credit, Availability will be less than $10,000,000, the Lender shall have received
a Borrowing Base Certificate and all other reports and information required to be delivered
pursuant to Section 5.01(g) and (h) as of a date that is no earlier than 30 days prior to the
proposed date of such Borrowing or the proposed date of such issuance, amendment, renewal or
extension of any Letter of Credit.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section.

ARTICLE V

Affirmative Covenants

     Until the Commitment has expired or terminated and the principal of and interest on each Loan
and all fees payable hereunder have been paid in full and all Letters of Credit shall have expired
or terminated and all

39

 

LC Disbursements have been reimbursed, each Borrower covenants and agrees, jointly and
severally with all of the other Borrowers, with the Lender that:

     SECTION 5.01 Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Lender:

     (a) within 90 days after the end of each fiscal year of Compressco Partners, its audited
consolidated (and unaudited consolidating) balance sheet and related statements of operations,
partners’ equity and cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by Compressco Partners’
independent public accountants reasonably acceptable to the Lender (without a “going concern” or
like qualification or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of Compressco Partners and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
accompanied by any management letter prepared by said accountants;

     (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal
year of Compressco Partners, its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of the Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of Compressco Partners and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes;

     (c) to the extent Availability (calculated without giving effect to the Availability Block) is
less than $5,000,000 as of the last day of any fiscal month, within 20 days after the end of such
fiscal month of Compressco Partners, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such fiscal month and the
then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of the Financial Officers as presenting fairly in
all material respects the financial condition and results of operations of Compressco Partners and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal quarter-end adjustments and normal year-end audit adjustments and the absence of
footnotes;

     (d) concurrently with any delivery of financial statements under clause (a), (b) or (c) above,
a certificate of a Financial Officer in substantially the form of Exhibit C (i)
certifying, in the case of the financial statements delivered under clause (b), as presenting
fairly in all material respects the financial condition and results of operations of Compressco
Partners and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the absence of footnotes,
(ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect thereto, (iii) in the
case of the financials referred to in clause (a) or (b) above, setting forth reasonably detailed
calculations demonstrating compliance with Section 6.12 (if applicable) and (iv) stating whether
any change in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such certificate;

     (e) concurrently with any delivery of financial statements under clause (a) above, a
certificate of the accounting firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by accounting rules or
guidelines);

     (f) as soon as available, but in any event no later than the end of, and no earlier than 60
days prior to the end of, each fiscal year of Compressco Partners, a copy of the plan and forecast
(including a projected

40

 

consolidated balance sheet, income statement and funds flow statement) of the Borrowers for
each month of such fiscal year (the “Projections”) in form reasonably satisfactory to the
Lender;

     (g) as soon as available but in any event (i) so long as Exposure equals $0 at all times
during such calendar quarter, within 30 days after the end of each calendar quarter, a Borrowing
Base Certificate and supporting information in connection therewith as of the end of such calendar
quarter, (ii) so long as Exposure is greater than $0 at any time during any calendar month and
Availability (calculated without giving effect to the Availability Block) is greater than
$5,000,000 at all times during such calendar month, within 20 days after the end of each calendar
month, a Borrowing Base Certificate and supporting information in connection therewith as of the
end of such calendar month and (iii) so long as Exposure is greater than $0 at any time during any
calendar week and Availability (calculated without giving effect to the Availability Block) is less
than or equal to $5,000,000 at any time during such calendar week, within three Business Days after
the end of each calendar week, a Borrowing Base Certificate (limited to a roll-forward of Accounts)
as of the end of such calendar week, in each case, together with any additional reports with
respect to the Borrowing Base as the Lender may reasonably request;

     (h) as soon as available but in any event (i) so long as Exposure equals $0 at all times
during such calendar quarter, within 30 days after the end of each calendar quarter and (ii) so
long as Exposure is greater than $0 at any time during any calendar month, within 20 days after the
end of each calendar month, delivered electronically in a text formatted file reasonably acceptable
to the Lender, a worksheet of calculations prepared by the Loan Parties to determine Eligible
Accounts, Eligible Inventory, Eligible Service and Rental Compressor Fleet Equipment and Eligible
New Service and Rental Compressor Fleet Equipment, such worksheets describing (including by
category) the Accounts, Inventory and Service and Rental Compressor Fleet Equipment excluded from
Eligible Accounts, Eligible Inventory, Eligible Service and Rental Compressor Fleet Equipment and
Eligible New Service and Rental Compressor Fleet Equipment, respectively, and the reason for such
exclusion, which, with respect to such calculations delivered pursuant to clause (i) above, shall
be as of the end of such calendar quarter and, with respect to such calculations delivered pursuant
to clause (ii) above, shall be as of the end of such calendar month;

     (i) as soon as available but in any event within 30 days after the end of each calendar
quarter, as of the end of such quarter, delivered electronically in a text formatted file
reasonably acceptable to the Lender and certified as true and correct, in all material respects, by
a Financial Officer of the Borrowers:

     (A) a detailed aging of the Loan Parties’ Accounts including all invoices aged
by invoice date and due date (with an explanation of the terms offered) prepared in a
manner reasonably acceptable to the Lender, together with a summary specifying the
name and balance due for each Account Debtor;

     (B) a schedule detailing the Loan Parties’ Inventory, in form reasonably
satisfactory to the Lender, (1) by location (showing Inventory in transit and any
Inventory located with a third party under any consignment, bailee arrangement, or
warehouse agreement), by class (raw material, work-in-process and finished goods), by
product type, and by volume on hand, which Inventory shall be valued at the lower of
cost (determined on an average cost basis) or market and adjusted for Reserves as the
Lender has previously indicated to the Borrower Representative are deemed by the
Lender to be appropriate, and (2) including a report of any variances or other
results of Inventory counts performed by the Borrowers since the last Inventory
schedule (including information regarding sales or other reductions, additions,
returns, credits issued by Borrowers and complaints and claims made against the
Borrowers);

     (C) a schedule detailing the Loan Parties’ Service and Rental Compressor Fleet
Equipment located in the United States or Canada, in form reasonably satisfactory to
the Lender, by location (showing Equipment in transit and any Equipment located with
a third party) and by type (including whether such Equipment constitutes New Service
and Rental Compressor Fleet Equipment) which Equipment shall be valued at net book
value (calculated based on a depreciation schedule not to exceed 12 years from the
date of original purchase by the relevant Loan Party) or, with respect to New Service
and Rental Compressor Fleet Equipment, at cost or, if no appraisal of

41

 

such Equipment has been delivered to the Lender during the immediately preceding
12 month period, net book value, and adjusted for Reserves as the Lender has
previously indicated to the Borrower Representative are deemed by the Lender to be
appropriate;

     (D) a reconciliation of the Loan Parties’ Accounts, Inventory, Service and
Rental Compressor Fleet Equipment located in the United States and Canada, and New
Service and Rental Compressor Fleet Equipment located in the United States and Canada
between (1) the amounts shown in the Loan Parties’ general ledger and financial
statements and the reports delivered pursuant to clauses (A), (B) and (C) above, and
(2) the amounts and dates shown in the reports delivered pursuant to clauses (A), (B)
and (C) above and the Borrowing Base Certificate delivered pursuant to clause (g)
above as of such date;

     (E) a reconciliation of the loan balance per the Borrowers’ general ledger to
the loan balance under this Agreement;

     (F) a schedule and aging of the Borrowers’ accounts payable;

     (j) as soon as available but in any event within 30 days of the end of each calendar quarter,
as of the quarter then ended, and as may be requested by the Lender at any time a Default exists,
an updated customer list for the Borrowers and their Subsidiaries, which list shall state the
customer’s name, mailing address and phone number, delivered electronically in a text formatted
file acceptable to the Lender and certified as true and correct, in all material respects, by a
Financial Officer of the Borrowers;

     (k) promptly upon the Lender’s request at any time a Default exists:

	 	(i)	 	copies of invoices issued by the Borrowers in
connection with any Accounts, credit memos, shipping and delivery
documents, and other information related thereto;
	 
	 	(ii)	 	copies of purchase orders, invoices, and shipping
and delivery documents in connection with any Inventory or Equipment
purchased by any Loan Party; and
	 
	 	(iii)	 	a schedule detailing the balance of all
intercompany accounts of the Loan Parties;

     (l) as soon as reasonably practicable and in any event within 10 days of filing thereof,
copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service;

     (m) within 15 days of the first Business Day of each March and September, a certificate of
good standing for each Loan Party from the appropriate governmental officer in its jurisdiction of
incorporation, formation, or organization

     (n) reasonably promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed by any Borrower or any Subsidiary with
the SEC, or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by Compressco Partners to the
holders of its Equity Interests generally, as the case may be;

     (o) within 90 days after the end of each fiscal year of Compressco Partners (or more
frequently if desired by the Borrowers), supplements in writing to the Schedules hereto related to
Article III hereof to the extent necessary to ensure such representations and warranties are true
and correct (without giving effect to any limitation in such representations and warranties as to
date); provided that delivery or receipt of such supplements shall not constitute a waiver
by the Lender or a cure of any Default resulting from or in connection with the matters disclosed;
and

42

 

     (p) reasonably promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of any Borrower or any Subsidiary, or
compliance with the terms of this Agreement, as the Lender may reasonably request.

Documents required to be delivered pursuant to Section 5.01(a), (b) or (n) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be delivered electronically
and if so delivered, shall be deemed to have been delivered on the date (1) on which Compressco
Partners posts such documents, or provides a link thereto on Compressco Partners’ website on the
Internet; or (2) on which such documents are posted on Compressco Partners’ behalf on an Internet
or intranet website, if any, to which the Lender has access.

     SECTION 5.02 Notices of Material Events. The Borrowers will furnish to the Lender
written notice of the following reasonably promptly after any officer of the General Partner
becomes aware thereof (but in any event within any time period that may be specified below):

     (a) the occurrence of any Default;

     (b) receipt of any notice of any governmental investigation or any litigation commenced or
threatened against any Loan Party that (i) seeks damages in excess of $1,000,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets,
(iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding,
or seeks remedies in connection with, any Environmental Laws; (vi) contests any tax, fee,
assessment, or other governmental charge in excess of $500,000, or (vii) involves any product
recall;

     (c) any Lien (other than Permitted Encumbrances or Liens permitted by Section 6.02 which do
not have priority over Lender’s Liens) or claim made or asserted against any of the Collateral for
an amount in excess of $1,000,000;

     (d) any one event resulting in any loss, damage, or destruction to the Collateral in the
amount of $1,000,000 or more, whether or not covered by insurance;

     (e) within two Business Days of receipt thereof, any and all default notices received under or
with respect to any leased location or public warehouse where Collateral having a value greater
than $1,000,000 is located;

     (f) all material amendments to any agreement listed on Schedule 3.12, together with a copy of
each such amendment;

     (g) within two Business Days after the occurrence thereof, any Loan Party entering into a Swap
Agreement or an amendment thereto, together with copies of all agreements evidencing such Swap
Agreement or amendment;

     (h) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Borrowers and its
Subsidiaries in an aggregate amount exceeding $1,000,000; and

     (i) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower Representative setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.

     SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and will cause
each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and, except to the extent that the failure to do so would
reasonably be expected, individually or in

43

 

the aggregate, to have a Material Adverse Effect, the rights, qualifications, licenses,
permits, franchises, governmental authorizations, intellectual property rights, licenses and
permits required for to the conduct of its business, and, except to the extent that the failure to
do so would reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect, maintain all requisite authority to conduct its business in each jurisdiction in which its
business is conducted; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct
its business in substantially the same manner and in substantially the same fields of enterprise
constituting Permitted Businesses.

     SECTION 5.04 Payment of Obligations. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and
obligations, including Taxes, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being Properly Contested; provided, however,
each Loan Party will, and will cause each Subsidiary to, remit withholding taxes and other payroll
taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the
foregoing exceptions.

     SECTION 5.05 Maintenance of Properties. Each Loan Party will, and will cause each
Subsidiary to, keep and maintain all property required for the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

     SECTION 5.06 Books and Records; Inspection Rights. Each Loan Party will, and will
cause each Subsidiary to, (a) keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities and (b) permit any representatives designated by the Lender (including employees of the
Lender, or any consultants, accountants, lawyers and appraisers retained by the Lender), upon
reasonable prior notice, to visit and inspect its properties, to conduct at the Loan Party’s
premises, field examinations of the Loan Party’s assets, liabilities, book and records, including
examining and making extracts from its books and records, environmental assessment reports and
Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as reasonably requested.
The Loan Parties acknowledge that the Lender, after exercising its rights of inspection, may
prepare certain Reports pertaining to the Loan Parties’ assets for internal use by the Lender.

     SECTION 5.07 Compliance with Laws. Each Loan Party will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

     SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans will
be used only to provide for working capital and for general partnership and corporate purposes of
the Borrowers and the other Loan Parties, including (a) the making of Restricted Payments permitted
under Section 6.08, (b) the making of Capital Expenditures permitted hereunder and (c) the making
of Permitted Investments and Permitted Acquisitions in accordance with Section 6.04; provided that
no proceeds of any Loan may be used to make a Permitted Acquisition of any Person that will not
become a Loan Party upon the consummation of such Acquisition or the assets and properties acquired
in such Acquisition will not be owned or held by a Loan Party upon consummation of such
Acquisition, except as otherwise provided in clause (l) of the definition of Permitted Acquisition.
No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or
indirectly, (i) for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X or (ii) to make any Acquisition other than Permitted Acquisitions.
Letters of Credit will be issued only to support the general partnership and corporate purposes of
the Borrowers and the other Loan Parties.

     SECTION 5.09 Insurance. Each Loan Party will, and will cause each Subsidiary to,
maintain with financially sound and reputable carriers having a financial strength rating of at
least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and
against such risks (including (i) loss or damage by fire and loss in transit; (ii) employee theft,
premises theft, theft in transit, computer fraud, crimes related to funds transfers and credit card
related crimes; (iii) general liability and (iv) and such other hazards), as is customarily
maintained by companies of established repute engaged in the same or similar businesses operating
in the same or

44

 

similar locations and (b) all insurance required pursuant to the Collateral Documents. The
Borrowers will furnish to the Lender such information in reasonable detail as is reasonably
requested by the Lender as to the insurance so maintained.

     SECTION 5.10 Casualty and Condemnation. The Borrowers will (a) furnish to the Lender
written notice, reasonably promptly after any officer of the General Partner becomes aware thereof,
of any casualty or other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material portion of the Collateral
or interest therein under power of eminent domain or by condemnation or similar proceeding and (b)
ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents.

     SECTION 5.11 Appraisals. At any time that the Lender requests, the Borrowers will,
and will cause each Subsidiary to, provide the Lender with appraisals or updates thereof of their
Inventory and Service and Rental Compressor Fleet Equipment from an appraiser selected and engaged
by the Lender, and prepared on a basis satisfactory to the Lender, such appraisals and updates to
include, without limitation, information required by applicable law and regulations; provided,
however, that if (a) no Event of Default has occurred and is continuing, one such appraisal per
calendar year shall be at the sole expense of the Borrowers and (b) no Event of Default has
occurred and is continuing and so long as Availability (calculated without giving effect to the
Availability Block) is an amount less than $5,000,000 at any time during any calendar year or any
portion thereof, two such appraisals per calendar year shall be at the sole expense of the
Borrowers. All such appraisals and updates shall be commenced upon reasonable notice to the
Borrower Representative and performed during normal business hours of the relevant Loan Party,
except that at any time an Event of Default exists, one Business Day shall be deemed reasonable
notice.

     SECTION 5.12 Depository Banks. The Borrowers and their Subsidiaries will maintain
Bank of America, N.A. or another financial institution reasonably acceptable to the Lender as their
principal depository bank, including for the maintenance of operating, administrative, cash
management, collection activity, and other deposit accounts for the conduct of their business.

     SECTION 5.13 Additional Collateral; Further Assurances. (a) Subject to applicable
law, each Borrower and each Subsidiary that is a Loan Party shall, unless the Lender otherwise
consents, cause each of its Domestic Subsidiaries formed or acquired after the date of this
Agreement in accordance with the terms of this Agreement to become a Loan Party by executing a
Joinder Agreement. Upon execution and delivery thereof, each such Person (i) shall automatically
become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and
obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Lender in
any property of such Loan Party which constitutes Collateral.

     (b) Each Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued
and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% (or such greater
percentage that, due to a change in applicable law after the date hereof, (1) could not reasonably
be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S.
federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S.
parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of
the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned
by each Borrower or any Domestic Subsidiary to be subject at all times to a first priority,
perfected Lien in favor of the Lender pursuant to the terms and conditions of the Loan Documents or
other security documents as the Lender shall reasonably request.

     (c) Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to,
execute and deliver, or cause to be executed and delivered, to the Lender such documents,
agreements and instruments, and will take or cause to be taken such further actions (including the
filing and recording of financing statements, fixture filings and other documents and such other
actions or deliveries of the type required by Section 4.01, as applicable), which may be required
by law or which the Lender may, from time to time, reasonably request to carry out the terms and
conditions of this Agreement and the other Loan Documents and to ensure perfection and

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priority of the Liens created or intended to be created by the Collateral Documents, all at
the expense of the Loan Parties.

     SECTION 5.14 Post-Effective Date Deliverables. (a) No later than 30 days after the
Effective Date (or such later date as the Lender shall designate in its discretion), the Borrowers
shall deliver to the Lender a “desktop” appraisal of the Loan Parties’ Inventory and of the Loan
Parties’ Service and Rental Compressor Fleet Equipment from a firm or firms satisfactory to the
Lender, which appraisal shall be satisfactory to the Lender in its Permitted Discretion.

     (b) No later than 60 days after the Effective Date (or such later date as the Lender shall
designate in its discretion), the Lender shall have received each (i) Collateral Access Agreement
required to be provided pursuant to Section 4.13 of the Security Agreement and (ii) Deposit Account
Control Agreement required to be provided pursuant to Section 4.14 of the Security Agreement.

     (c) No later than 60 days after the Effective Date (or such later date as the Lender shall
designate in its discretion), the Lender shall have received an agreement, reasonably satisfactory
to the Lender, with Compressco GP to ensure the continued operation of the Borrowers following an
Event of Default for the purpose of collecting, assembling and liquidating the Collateral.

ARTICLE VI

Negative Covenants

     Until the Commitment has expired or terminated and the principal of and interest on each Loan
and all fees, expenses and other amounts payable under any Loan Document have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, each Loan Party executing this Agreement covenants and agrees, jointly and severally
with all of the other Loan Parties, with the Lender that:

     SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any Subsidiary to,
create, incur or suffer to exist any Indebtedness, except:

     (a) the Secured Obligations;

     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01;

     (c) intercompany Indebtedness between the Borrowers or between any Borrower and any Subsidiary
or between Subsidiaries to the extent permitted by Section 6.04(d) or (e), provided that
Indebtedness of any Borrower to any Subsidiary and Indebtedness of any Subsidiary that is a Loan
Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations
on terms reasonably satisfactory to the Lender;

     (d) Guarantees in respect of Indebtedness otherwise permitted pursuant to this Section 6.01,
provided that Guarantees by any Borrower or any Subsidiary that is a Loan Party of Indebtedness of
any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and shall be subordinated
to the Secured Obligations of the applicable Subsidiary on the same terms as the Indebtedness so
Guaranteed is subordinated to the Secured Obligations;

     (e) Indebtedness incurred to finance the acquisition, construction or improvement of any fixed
or capital assets, including office equipment, data processing equipment and motor vehicles
(whether or not constituting purchase money Indebtedness), including Capital Lease Obligations
(including Capital Lease Obligations arising from Sale and Leaseback Transactions permitted by
Section 6.06) and any Indebtedness assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof; provided that (i)
such Indebtedness is incurred or assumed prior to or within 120 days after such acquisition or the
completion of such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) at any time outstanding shall not exceed the greater of
(i) $2,500,000 and

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(ii) 25% of the excess of the Borrowing Base (calculated without giving effect to any
Reserves) over the Commitment (the “Excess Borrowing Base”);

     (f) Indebtedness which represents an extension, refinancing, replacement, or renewal (such
Indebtedness being referred to herein as the “Refinancing Indebtedness”) of any of the
Indebtedness described in clauses (b), (e), (i) and (o) hereof
(including any such Indebtedness that has previously been extended, refinanced, replaced, or
renewed pursuant to this clause (f)) (such Indebtedness being so extended, refinanced or renewed
being referred to herein as the “Refinanced Indebtedness”); provided that, (i) such
Refinancing Indebtedness does not increase the principal amount or interest rate of the Refinanced
Indebtedness, (ii) any Liens securing such Refinanced Indebtedness are not extended to any
additional property of any Loan Party, (iii) no Loan Party that is not originally obligated with
respect to repayment of such Refinanced Indebtedness is required to become obligated with respect
to such Refinancing Indebtedness, (iv) such Refinancing Indebtedness does not result in a
shortening of the average weighted maturity of such Refinanced Indebtedness, (v) the terms of such
Refinancing Indebtedness are not materially less favorable to the obligor thereunder than the
original terms of such Refinanced Indebtedness and (iv) if such Refinanced Indebtedness was
subordinated in right of payment to the Secured Obligations, then the terms and conditions of such
Refinancing Indebtedness must include subordination terms and conditions that are at least as
favorable to the Lender as those that were applicable to such Refinanced Indebtedness;

     (g) Indebtedness owed to any Person providing workers’ compensation, health, disability or
other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred in the ordinary course of
business;

     (h) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and
similar obligations, and Indebtedness in respect of letters of credit, bank guarantees or similar
instruments related thereto, in each case provided in the ordinary course of business;

     (i) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and
is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii)
the aggregate principal amount of Indebtedness permitted by this clause (i) at any time outstanding
shall not exceed the greater of (i) $2,500,000 and (ii) 25% of the Excess Borrowing Base;

     (j) Indebtedness under Swap Agreements permitted under Section 6.07;

     (k) subject to Section 5.12, cash management obligations and other Indebtedness in respect of
netting services, overdraft protections and similar arrangements in each case in the ordinary
course of business;

     (l) Indebtedness consisting of the financing of insurance premiums in the ordinary course of
business;

     (m) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face
amount of such Letter of Credit;

     (n) Indebtedness of any Subsidiary that is not a Loan Party; provided that, except as
otherwise permitted by clause (d) of this Section 6.01, only Subsidiaries that are not Loan Parties
are obligated to pay such Indebtedness or grant Liens on their Property to secure the obligations
under such Indebtedness;

     (o) other secured Indebtedness not otherwise listed in clauses (a) through (n) above, at any
time outstanding in an aggregate principal amount not exceeding $5,000,000; provided that such
Indebtedness is not secured by any Collateral;

     (p) other unsecured Indebtedness not otherwise listed in clauses (a) through (n) above at any
time outstanding in an aggregate principal amount not exceeding $10,000,000, but subject to the
limitations set forth in clause (d) of this Section 6.01 with respect to Subsidiaries that are not
Loan Parties.

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     SECTION 6.02 Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including, except as permitted in Section
6.05(c), accounts receivable) or rights in respect of any thereof, except:

     (a) Liens created pursuant to any Loan Document;

     (b) Permitted Encumbrances;

     (c) any Lien on any property or asset of any Borrower or any Subsidiary existing on the date
hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply
to any other property or asset of such Borrower or Subsidiary (other than proceeds of such property
or asset and accessions and additions to the original property to the extent subject to such Lien)
and (ii) such Lien shall secure only those obligations which it secures on the date hereof (other
than extensions, refinancings, replacements, or renewals thereof permitted pursuant to Section
6.01(f));

     (d) Liens on fixed or capital assets acquired, leased, constructed or improved by any Borrower
or any Subsidiary (other than Service and Rental Compressor Fleet Equipment or any other
Collateral constituting fixed or capital assets); provided that (i) such Liens secure
Indebtedness permitted by clause (e) of Section 6.01 or an extension, refinancing, replacement, or
renewal thereof permitted pursuant to Section 6.01(f), (ii) such Liens and the Indebtedness secured
thereby are incurred prior to or within 120 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (iv) such security interests
shall not apply to any other property or assets of such Borrower or Subsidiary or any other
Borrower or such Subsidiary (other than proceeds of such fixed or capital assets and accessions and
additions to the original property to the extent subject to such Lien);

     (e) any Lien existing on any property or asset (other than Accounts and Inventory) prior to
the acquisition thereof by any Borrower or any Subsidiary or existing on any property or asset
(other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof
prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such Person becoming a Loan
Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the
Loan Party (other than proceeds of such property or asset and accessions and additions to the
original property to the extent subject to such Lien)and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such Person becomes a Loan
Party, as the case may be and extensions, refinancings, replacements, or renewals thereof permitted
pursuant to Section 6.01(f) ;

     (f) Liens of a collecting bank arising in the ordinary course of business under Section 4-208
of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being
collected upon;

     (g) Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;

     (h) Liens granted by a Subsidiary that is not a Loan Party in favor of any Borrower or another
Loan Party in respect of Indebtedness owed by such Subsidiary;

     (i) Liens in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods in the ordinary course of
business;

     (j) Liens on deposits or other cash advances to or for the benefit of a seller of property in
a transaction permitted pursuant to Section 6.04 to be applied against the purchase price for such
property

     (k) Liens consisting of an agreement to transfer any property (other than with respect to a
transfer pursuant to Section 6.05(f)) in a disposition permitted under Section 6.05;

     (l) Liens in favor of a Loan Party securing Indebtedness permitted under Section 6.01 granted
by a Subsidiary that is not a Loan Party;

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     (m) Liens arising out of conditional sale, title retention, consignment (subject to Section
4.13 of the Security Agreement) or similar arrangements for sale of goods entered into in the
ordinary course of business or Liens arising by operation of law under Article 2 of the UCC or by
contract in favor of a reclaiming seller of goods or buyer of goods (including purchase money
security interests in favor of vendors in the ordinary course of business); and

     (n) Liens securing insurance premium financing under customary terms and conditions in respect
of insurance policies, provided that no such Lien may extend to or cover any property other than
the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded
insurance premiums related thereto;

     (o) Liens deemed to exist in connection with Investments in repurchase agreements constituting
Permitted Investments;

     (p) Liens on property of any Subsidiary that is not a Loan Party acquired in a Permitted
Acquisition or granted on Property of such Subsidiary in connection with a Permitted Acquisition of
such Subsidiary; and

     (q) Liens on property not constituting the Collateral and not otherwise permitted by this
Section so long as neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrowers and all Subsidiaries)
$5,000,000 at any one time.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any
time attach to any Loan Party’s (1) Accounts, other than those permitted under clause (a) of the
definition of Permitted Encumbrance and clause (a) above and clause (k) above only with respect to
a disposition permitted under Section 6.05(c), and (2) Inventory, other than those permitted under
clauses (a) and (b) of the definition of Permitted Encumbrance and clauses (a), (k), and (m) above,
if such Inventory would be Eligible Inventory but for such Lien.

     SECTION 6.03 Fundamental Changes. (a) No Loan Party will, nor will it permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Event of Default shall have occurred and be continuing
(i) any Loan Party (other than a Borrower) or any Subsidiary that is not a Loan Party may merge
into any other Loan Party in a transaction in which the surviving entity is a Loan Party; (ii) any
Subsidiary that is not a Loan Party may merge with any other Subsidiary that is not a Loan Party;
(iii) any Subsidiary may liquidate or dissolve if the Borrower which owns such Subsidiary
determines in good faith that such liquidation or dissolution is in the best interests of such
Borrower and is not materially disadvantageous to the Lender; (iv) any Borrower (other than
Compresso Partners) may merge with any other Borrower or any other Loan Party so long as the
surviving entity is a wholly owned Subsidiary and such surviving entity assumes all of such
Borrower’s obligations and liabilities hereunder and under the other Loan Documents by operation of
law or contract; (v) any Person may merge into a Loan Party in connection with a Permitted
Acquisition; and (vi) any Investment permitted by Section 6.04(d) may be structured as a merger,
consolidation or amalgamation; provided that any merger referred to in clause (i), (ii),
(iv), (v) or (vi) involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.

     (b) No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in
any business other than Permitted Businesses.

     SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date,
make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any Equity Interests, bonds, notes, debentures or other debt
securities of, or any assets constituting a business unit of, any Person (all of the foregoing,
“Investments”) except:

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     (a) Investments in cash and Permitted Investments subject to control agreements in favor of
the Lender or otherwise subject to a perfected security interest in favor of the Lender;

     (b) Investments in existence on the date of hereof and described in Schedule 6.04;

     (c) so long as no Default has occurred and is continuing, Permitted Acquisitions;

     (d) so long as no Event of Default has occurred and is continuing, Investments by the
Borrowers and their Subsidiaries in Equity Interests in their respective Subsidiaries,
provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant
to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign
Subsidiary referred to in Section 5.13) and (B) in the case of any Investment made by any Loan
Party in or to any Subsidiary that is not a Loan Party (other than Investments made in Equity
Interests of such Subsidiary with the proceeds of a substantially contemporaneous issuance of
Equity Interests of Compressco Partners), (i) such Investments in the aggregate, taken together
with Investments permitted by clause (B)(i) of Section 6.04(e), do not exceed $2,500,000 at any
time outstanding or (ii) on the date of and after giving effect to such Investment the Borrowing
Base exceeds the Commitment by an amount not less than 80% of the Commitment;

     (e) so long as no Event of Default has occurred and is continuing, loans or advances made by
any Borrower to any Subsidiary and made by any Subsidiary to any Borrower or any other Subsidiary,
provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a
promissory note pledged pursuant to the Security Agreement and (B) in the case of any loan or
advance made by a Loan Party to a Subsidiary that is not a Loan Party (other than any loan or
advance made to such Subsidiary with the proceeds of a substantially contemporaneous issuance of
Equity Interests of Compressco Partners), (i) such Investments in the aggregate, taken together
with Investments permitted by clause (B)(i) of Section 6.04(d), do not exceed $2,500,000 at any
time outstanding or (ii) on the date of and after giving effect to such loan or advance, the
Borrowing Base exceeds the Commitment by an amount not less than 80% of the Commitment;

     (f) Guarantees constituting Indebtedness permitted by Section 6.01, provided that in
the case of Guarantees by any Loan Party of Indebtedness of Subsidiaries that are not Loan Parties
the aggregate amount of Indebtedness guaranteed shall not exceed $2,500,000 at any time outstanding
(in each case determined without regard to any write-downs or write-offs);

     (g) loans or advances made by a Loan Party to its employees on an arms-length basis in the
ordinary course of business consistent with past practices for travel and entertainment expenses,
relocation costs and similar purposes up to a maximum of $100,000 in the aggregate at any one time
outstanding;

     (h) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or
other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with
respect to settlement of such Account Debtor’s Accounts in the ordinary course of business;

     (i) Investments in the form of Swap Agreements permitted by Section 6.07;

     (j) Investments of any Person existing at the time such Person becomes a Subsidiary of a
Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in
connection with a Permitted Acquisition) so long as such investments were not made in contemplation
of such Person becoming a Subsidiary or of such merger;

     (k) Investments received in connection with the dispositions of assets permitted by Section
6.05;

     (l) Investments constituting deposits described in clauses (c) and (d) of the definition of
the term “Permitted Encumbrances”;

50

 

     (m) accounts receivable or notes receivable arising, and trade credit granted, in the ordinary
course of business and other credits to suppliers or vendors in the ordinary course of business;

     (n) Investments (including debt obligations and Equity Interests) and other assets received in
connection with the bankruptcy or reorganization of suppliers and customers or in settlement or
delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary
course of business or received upon the foreclosure with respect to any secured investment or other
transfer of title with respect to any secured investment; and

     (o) other Investments at any time outstanding not to exceed $2,500,000.

     SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any Subsidiary to,
sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it,
nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary (other than to another Borrower or another Subsidiary in compliance with Section 6.04),
except:

     (a) sales, transfers, leases, and dispositions of (i) inventory and Service and Rental
Compressor Fleet Equipment in the ordinary course of business, (ii) used, obsolete, worn out or
surplus equipment or property, or (iii) property no longer used or useful in connection with the
business or operations of the Loan Parties;

     (b) sales, transfers, leases, and dispositions of assets (including sales, transfers, and
dispositions of Equity Interests) to any Borrower or any Subsidiary, provided that any such
sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;

     (c) sales, transfers, and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;

     (d) sales, transfers, and dispositions of Permitted Investments and other investments
permitted by clauses (i) and (k) of Section 6.04;

     (e) Sale and Leaseback Transactions permitted by Section 6.06;

     (f) dispositions resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any property or asset of any
Borrower or any Subsidiary;

     (g) sales, transfers, leases, and other dispositions of assets (other than Accounts (except as
permitted in clause (c) above) or Equity Interests in a Subsidiary unless all Equity Interests
owned by the Loan Parties in such Subsidiary are sold) that are not permitted by any other
paragraph of this Section, provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed
$2,500,000 during any fiscal year of the Borrowers;

     (h) leases, subleases, licenses and sublicenses in each case in the ordinary course of
business and that do not materially interfere with the business of the Borrowers or the
Subsidiaries.

provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by clauses (b) and (f) above) shall be made for fair value.

     SECTION 6.06 Sale and Leaseback Transactions. No Loan Party will, nor will it permit
any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property that it intends to
use for substantially the same purpose or purposes as the property sold or transferred (a “Sale
and Leaseback Transaction”), except for any such Sale and Leaseback Transaction with respect to
any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration
in an

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amount not less than the fair value of such fixed or capital asset and is consummated within
90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed
or capital asset.

     SECTION 6.07 Swap Agreements. No Loan Party will, nor will it permit any Subsidiary
to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate
risks to which any Borrower or any Subsidiary has actual exposure (other than those in respect of
Equity Interests of any Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into
in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from
one floating rate to another floating rate or otherwise) with respect to any interest-bearing
liability or investment of any Borrower or any Subsidiary.

     SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness. (a) No Loan
Party will, nor will it permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise)
to do so, except (i) each Borrower may declare and pay dividends with respect to its Equity
Interests solely in additional shares of its Equity Interests, (ii) Subsidiaries may declare and
pay dividends ratably with respect to their Equity Interests (other than Disqualified Stock), (iii)
so long no Event of Default has occurred and is continuing, the Borrowers may pay dividends or make
distributions to the holders of their Equity Interests in an aggregate amount not greater than the
amount necessary for such holders to pay their actual state and United States federal income tax
liabilities in respect of income earned by the Borrowers, (iv) the Borrower and each Subsidiary may
purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from
the substantially concurrent issue of new Equity Interests and (v) so long as no Default exists,
Compressco Partners may declare and make Permitted Partnership Distributions.

     (b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash, securities or other
property but excluding Permitted Partnership Distributions) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or
other property but excluding Permitted Partnership Distributions), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Indebtedness, except:

	 	(i)	 	payment of Indebtedness created under the Loan Documents;
	 
	 	(ii)	 	payment of regularly scheduled interest and principal payments as
and when due in respect of any Indebtedness, other than payments in respect of
the Subordinated Indebtedness prohibited by the subordination provisions
thereof;
	 
	 	(iii)	 	refinancings of Indebtedness to the extent permitted by Section
6.01;
	 
	 	(iv)	 	payment of secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness; and
	 
	 	(v)	 	so long as after giving effect to such payment Availability is
greater than $10,000,000 and no Default shall exist or be caused thereby, any
other payment or distribution of or in respect of any Indebtedness, including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness.

     SECTION 6.09 Transactions with Affiliates. No Loan Party will, nor will it permit
any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of
business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party
or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;
provided that, so long as no Event of Default exists, any sale, lease or like-kind exchange of PES
Equipment among Loan Parties and their Affiliates (other than transactions described in clause (b))
shall be deemed to satisfy the requirements of this clause (a)(ii) if such sale, lease, or exchange
is for consideration that is equivalent to the amount determined, pursuant to a transfer pricing
analysis prepared by a consultant that is not an Affiliate, to be the

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consideration that can be charged in such transaction consistent with the transfer pricing
laws, rules, and regulations applicable to such transaction, so long as, (x) with respect to any
sale or like-kind exchange, the consideration (A) attributed to any newly fabricated PES Equipment
is equal to or greater than the Fabricated Cost thereof and (B) attributed to any other PES
Equipment is equal to or greater than the Net Book Value thereof, and (y) with respect to any PES
Equipment that is being leased, the lease consideration is calculated by the consultant based on
such PES Equipment having a value that is not less than the amount for which such PES Equipment
could be transferred pursuant to the preceding clause (A) or (B), as applicable, if the transaction
were a sale rather than a lease, (b) transactions between or among any one or more Loan Parties not
involving any other Affiliate, (c) any Lien permitted by Section 6.02(h), any transaction permitted
by Section 6.03 other than a Permitted Acquisition, and any Investment permitted by Sections
6.04(d), 6.04(e), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment
permitted by Section 6.08, including Permitted Partnership Distributions, (f) loans or advances to
employees permitted under Section 6.04(g), (g) the payment of reasonable fees and expenses to
directors of any Borrower or any Subsidiary who are not employees of such Borrower or Subsidiary,
and compensation and employee benefit arrangements paid to, and indemnities provided for the
benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary
course of business, (h) any issuances of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment agreements, stock options and
stock ownership plans approved by a Borrower’s board of directors, (i) the Omnibus Agreement, the
Contribution Agreement and the limited partnership agreement of Compressco Partners as in effect on
the Effective Date and the transactions contemplated thereby, (j) any issuance (but not any
redemption or purchase) by Compressco Partners of its units (including incentive distribution
units) to the Compressco GP, and (k) any transactions approved by the Conflicts Committee.

     SECTION 6.10 Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan
Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets to secure the Secured Obligations, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any Equity Interests or to make or repay loans or
advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but
shall apply to any extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by
this Agreement if such restrictions or conditions apply only to the property or assets securing
such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in
leases restricting the assignment thereof or customary provisions in contracts restricting the
assignment thereof, (vi) the foregoing shall not apply to any agreement or other instrument of a
Person acquired in a Permitted Acquisition or other Investment permitted by Section 6.04 in
existence at the time of such Permitted Acquisition or other Investment (but not created in
connection therewith or in contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person so acquired, (vii) the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement
if such restrictions or conditions apply only to the property or assets securing such Indebtedness,
(viii) customary non-assignment provisions in purchase and sale or exchange agreements or similar
operational agreements or in licenses, easements or leases, in each case entered into in the
ordinary course of business and consistent with past practices, to the extent such provisions
restrict the transfer or assignment thereof, (ix) with respect to the sales, leases, transfers or
other dispositions of property in joint venture agreements and other similar agreements entered
into in the ordinary course of business, to the extent that the Investment in such joint venture is
permitted hereby, and (x) restrictions on cash or other deposits required by utility, insurance,
surety or bonding companies, in each case, under contracts entered into in the ordinary course of
business.

     SECTION 6.11 Amendment of Certain Agreements. No Loan Party will, nor will it permit
any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any
Subordinated

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Indebtedness, (b) its certificate of incorporation, by laws, operating, management or
partnership agreement or other organizational documents or (c) any other agreement listed on
Schedule 3.12 hereto (including any material agreement entered into in accordance with the
Omnibus Agreement), to the extent any such amendment, modification or waiver (i) would materially
and adversely affect the ability of any Loan Party to operate its business in the ordinary course
or the rights of the Lender under the Loan Documents, or (ii) could reasonably be expected to have
a Material Adverse Effect.

     SECTION 6.12 Interest Coverage Ratio. The Borrowers will not permit the Interest
Coverage Ratio, determined for the twelve (12) month period ending on each Relevant Date, to be
less than 2.5 to 1.0 as of any Relevant Date. “Relevant Date” means each of (i) the last day of
the fiscal quarter ending immediately preceding any date on which Availability (calculated without
giving effect to the Availability Block) is less than $5,000,000 and (ii) the last day of each
fiscal quarter from and after any date on which Availability (without giving effect to the
Availability Block) is less than $5,000,000 until Availability (without giving effect to the
Availability Block) has been greater than $5,000,000 for a period of 90 consecutive days and there
is no Default that has occurred and is continuing.

ARTICLE VII

Events of Default

     If any of the following events (“Events of Default”) shall occur:

     (a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;

     (b) the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of three Business Days;

     (c) any representation or warranty made or deemed made by or on behalf of any Loan Party or
any Subsidiary in this Agreement or any other Loan Document or any amendment or modification hereof
or thereof or waiver hereunder or thereunder, or in any report, certificate, or other document
furnished pursuant to or in connection with this Agreement or any other Loan Document or any
amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have
been materially incorrect when made or deemed made;

     (d) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence), 5.08 or 5.14 or in
Article VI;

     (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those which constitute a default under another Section of
this Article), and such failure shall continue unremedied for a period of (i) 10 days after the
earlier of any Loan Party’s knowledge of such breach or notice thereof from the Lender if such
breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03
through 5.07, 5.09, 5.10 or 5.12 of this Agreement or (ii) 30 days after the earlier of any Loan
Party’s knowledge of such breach or notice thereof from the Lender if such breach relates to terms
or provisions of any other provision of any Loan Document;

     (f) any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable (taking into account any grace period);

     (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof,

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prior to its scheduled maturity; provided that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness or the termination of a Swap Agreement other than as a result
of an event of default by a Loan Party thereunder;

     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or its debts, or
of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any
Subsidiary of any Loan Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;

     (i) any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any
Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, or (v) make a general assignment
for the benefit of creditors;

     (j) any Loan Party shall become unable, admit in writing its inability or fail generally to
pay its debts as they become due;

     (k) (i) one or more judgments for the payment of money in an aggregate amount in excess of
$1,000,000 shall be rendered against any Loan Party, any Subsidiary of any Loan Party or any
combination thereof and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary of any Loan
Party to enforce any such judgment; or (ii) any Loan Party or any Subsidiary of any Loan Party
shall fail within 30 days to discharge one or more non-monetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal or otherwise being Properly
Contested;

     (l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse Effect;

     (m) a Change in Control shall occur;

     (n) the occurrence of any “default”, as defined in any Loan Document (other than this
Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this
Agreement), which default or breach continues beyond any period of grace therein provided;

     (o) the occurrence of any default under the Omnibus Agreement which default could reasonably
be expected to have a Material Adverse Effect or the termination of the Omnibus Agreement for any
reason, unless, prior to such termination, arrangements reasonably satisfactory to the Lender have
been made for the services then being provided under the Omnibus Agreement and necessary for the
continued operation of the Loan Parties and their related businesses in the ordinary course to
continue to be provided (including by third parties or by the personnel of the Loan Parties) after
such termination;

     (p) the Loan Guaranty shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any
Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty to
which it is a party, or any Loan Guarantor shall deny that it has any further liability under the
Loan Guaranty to which it is a party, or shall give notice to such effect;

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     (q) any Collateral Document shall for any reason fail to create a valid security interest in
any Collateral purported to be covered thereby, other than as expressly permitted or contemplated
by such Collateral Document or any other Loan Agreement, or (ii) any Lien securing any Secured
Obligation shall cease to be a perfected, first priority Lien, subject only to Permitted
Encumbrances and Liens permitted by Section 6.02 that have priority as a matter of law;

     (r) any Collateral Document shall fail to remain in full force or effect or any action shall
be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document;
or

     (s) any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);

then, and in every such event (other than an event with respect to the Borrowers described in
clause (h) or (i) of this Article), and at any time thereafter during the continuance of such
event, the Lender may, by notice to the Borrower Representative, take either or both of the
following actions, at the same or different times: (i) terminate the Commitment, whereupon the
Commitment shall terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared
to be due and payable, together with accrued interest thereon and all fees and other obligations of
the Borrowers accrued hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and
in case of any event with respect to the Borrowers described in clause (h) or (i) of this Article,
the Commitment shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and
the continuance of an Event of Default, the Lender may increase the rate of interest applicable to
the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies
provided to the Lender under the Loan Documents or at law or equity, including all remedies
provided under the UCC.

ARTICLE VIII

Miscellaneous

     SECTION 8.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

	 	(i)	 	if to any Loan Party, to the Borrower Representative at:
 

Compressco Partners, L.P.

101 Park Avenue, Suite 1200

Oklahoma City, Oklahoma 73102

Attention: President

Facsimile No: (405) 702-9904
 

With a copy to:
 

TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, Texas 77380

Attn: Mr. Bruce Cobb

Facsimile No: (281) 364-2270

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	 	(ii)	 	if to the Lender, to JPMorgan Chase Bank, N.A. at:
 

2200 Ross Avenue, Floor 9

Mailcode TX1-2921

Dallas, Texas 75201

Attention: Portfolio Manager

Facsimile No: (214) 965-2594

     All such notices and other communications (i) sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when received or (ii)
sent by facsimile shall be deemed to have been given when sent, provided that if not given
during normal business hours for the recipient, shall be deemed to have been given at the opening
of business on the next Business Day for the recipient.

     (b) Notices and other communications to the Lender hereunder may be delivered or furnished by
electronic communications (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Lender; provided that the foregoing shall not apply to notices
pursuant to Article II or to compliance and no Event of Default certificates delivered pursuant to
Section 5.01(d) unless otherwise agreed by the Lender. The Lender or the Borrower Representative
(on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices or
communications. All such notices and other communications (i) sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such
as by the “return receipt requested” function, as available, return e-mail or other written
acknowledgement), provided that if not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at the opening of
business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.

     (c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto.

     SECTION 8.02 Waivers; Amendments. (a) No failure or delay by the Lender in
exercising any right or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Lender
hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Lender may have had notice or
knowledge of such Default at the time.

     (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may
be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement
or agreements in writing entered into by the Borrowers and the Lender, or (ii) in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered into by the Lender
and the Loan Party or Loan Parties that are parties thereto.

     SECTION 8.03 Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay (i) all
reasonable out-of-pocket expenses incurred by the Lender and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Lender (whether outside counsel or
the allocated costs of its internal legal department), in connection with the credit facilities
provided for herein, the preparation and administration of the

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Loan Documents or any amendments, modifications or waivers of the provisions of the Loan
Documents (whether or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Lender, including the fees, charges and
disbursements of any counsel for the Lender (whether outside counsel or the allocated costs of its
internal legal department), in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit. Expenses being reimbursed by the Borrowers under this Section
include, without limiting the generality of the foregoing, costs and expenses incurred in
connection with:

	 	(i)	 	appraisals and insurance reviews;
	 
	 	(ii)	 	field examinations and the preparation of Reports based on the
fees charged by a third party retained by the Lender or the internally allocated
fees for each Person employed by the Lender with respect to each field
examination (currently charged at a rate of $125 per hour per examiner plus out
of pocket expenses); provided, that, unless a Default shall have occurred and be
continuing, the Borrowers will reimburse such costs and expenses for up to two
such field examinations per calendar year;
	 
	 	(iii)	 	background checks regarding senior management and/or key
investors, as deemed necessary or appropriate in the sole discretion of the
Lender;
	 
	 	(iv)	 	taxes, fees and other charges for (A) lien and title searches and
title insurance (if applicable) and (B) filing financing statements and
continuations, and other actions to perfect, protect, and continue the Lender’s
Liens;
	 
	 	(v)	 	sums paid or incurred to take any action required of any Loan
Party under the Loan Documents that such Loan Party fails to pay or take;
	 
	 	(vi)	 	forwarding loan proceeds, and, to the extent applicable,
collecting checks and other items of payment, and establishing and maintaining
accounts and lock boxes costs; and
	 
	 	(vii)	 	expenses of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrowers as Loans or to another
deposit account, all as described in Section 2.17(c).

     (b) The Borrowers shall, jointly and severally, indemnify the Lender, and each Related Party
of the Lender (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes,
liabilities and related expenses, including the fees, charges and disbursements of any counsel for
any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with,
or as a result of (i) the execution or delivery of the Loan Documents or any agreement or
instrument contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by any Borrower or any of their Subsidiaries, or any
Environmental Liability related in any way to any Borrower or any of their Subsidiaries, (iv) the
failure of the Borrowers to deliver to the Lender the required receipts or other required
documentary evidence with respect to a payment made by the Borrowers for Taxes pursuant to Section
2.16, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be

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available to the extent that such losses, claims, damages, penalties, liabilities or related
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or wilful misconduct of such Indemnitee.WITHOUT LIMITATION
OF THE FOREGOING, IT IS THE INTENTION OF THE BORROWERS AND THE BORROWERS AGREE THAT THE FOREGOING
INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES,
LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR
PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF
SUCH (AND/OR ANY OTHER) INDEMNITEE.This Section 8.03(b) shall not apply with respect to Taxes other
than any Taxes that represent losses or damages arising from any non-Tax claim.

     (c) The relationship between any Loan Party on the one hand and the Lender on the other hand
shall be solely that of debtor and creditor. The Lender (i) shall not have any fiduciary
responsibilities to any Loan Party or (ii) does not undertake any responsibility to any Loan Party
to review or inform such Loan Party of any matter in connection with any phase of any Loan Party’s
business or operations. To the extent permitted by applicable law, no Loan Party shall assert, and
each 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 any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.

     (d) All amounts due under this Section shall be payable upon written demand therefor.

     SECTION 8.04 Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrowers may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrowers without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Related Parties of each of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

     (b) The Lender may assign to one or more assignees all or a portion of its 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, except in the case of an assignment to an Affiliate of
the Lender or an Approved Fund that in each case is organized under the laws of the United States
or a state thereof or the District of Columbia, the Borrowers must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld but which may be conditioned
on (i) in the case of an assignment that would result in there being more than one Lender,
amendments to the Loan Documents reasonably satisfactory to the Borrower Representative to conform
to customary agented syndicated transactions, including providing for an administrative agent
reasonably satisfactory to the Borrower Representative to represent the Lenders, and (ii) in the
case of an assignment to a Person not organized under the laws of the United State thereof or the
District of Columbia, amendments to this Agreement reasonably satisfactory to the Borrower
Representative to incorporate customary provisions relating to foreign lender, including provisions
relating to withholding tax payments and maintaining and evidencing exemptions therefrom); and
provided further that any consent of the Borrowers otherwise required under this
paragraph shall not be required if an Event of Default has occurred and is continuing. Subject to
notification of an assignment, the assignee shall be a party hereto and, to the extent of the
interest assigned, have the rights and obligations of the Lender under this Agreement, and the
Lender shall, to the extent of the interest assigned, be released from its obligations under this
Agreement (and, in the case of an assignment covering all of the Lender’s rights and obligations
under this Agreement, the Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.14, 2.15, 2.16 and 8.03). The Borrowers hereby agree to execute any
amendment and/or any other document that may be necessary to effectuate such an assignment,
including an amendment to this Agreement to provide for multiple lenders and an administrative
agent to act on behalf of such lenders. Any assignment or transfer by the Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by the Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

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     For the purposes of this Section 8.04(b), the term “Approved Fund” has the following
meaning:

          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) the Lender, (b) an
Affiliate of the Lender or (c) an entity or an Affiliate of an entity that administers or manages
the Lender.

          (c) The Lender may, without the consent of the Borrowers, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of the Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers shall continue to deal solely and directly
with the Lender in connection with the Lender’s rights and obligations under this Agreement.
Subject to paragraph (d) of this Section, the Borrowers agree that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were the
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of Sections 2.17 and 2.18
as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to
receive any greater payment under Section 2.14 or 2.16, with respect to any participation, than its
participating Lender would have been entitled to receive, except to the extent such entitlement to
receive a greater payment results from a Change in Law that occurs after the Participant acquired
the applicable participation.

     To the extent permitted by law, each Participant also shall be entitled to the benefits of
Section 8.08 as though it were a Lender, provided such Participant agrees to be subject to Section
2.17(c) as though it were a Lender.

          (d) The Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of the Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Lender, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release the Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for the Lender as a party hereto.

          SECTION 8.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf and notwithstanding
that the Lender, the Lender or any Lender may have had notice or knowledge of any Event of Default
or incorrect representation or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or any accrued interest on any Loan
or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Commitment has not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Commitment or the termination
of this Agreement or any provision hereof.

          SECTION 8.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Lender constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Lender and when the Lender shall
have received counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile or other electronic

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          transmission shall be effective as delivery of a manually executed counterpart of this
Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

          SECTION 8.07 Severability. Any provision of any Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

          SECTION 8.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other obligations at any time
owing by the Lender or such Affiliate to or for the credit or the account of the Borrowers or any
Loan Guarantor against any of and all the Secured Obligations held by the Lender, irrespective of
whether or not the Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The rights of the Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which the Lender may have.

          SECTION 8.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) The
Loan Documents (other than those containing a contrary express choice of law provision) shall be
governed by and construed in accordance with the internal laws (and not the law of conflicts) of
the State of Texas, but giving effect to federal laws applicable to national banks.

          (a) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any U.S. Federal or Texas State court sitting in
Dallas, Texas in any action or proceeding arising out of or relating to any Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such Texas State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Loan Party or its properties in the courts of any
jurisdiction.

          (b) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or any
other Loan Document in any court referred to in paragraph (a) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

          (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 8.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

          SECTION 8.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,

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IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 8.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

          SECTION 8.12 Confidentiality. The Lender agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and
other advisors (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required
by Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder 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 (i) any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Loan Parties and their obligations, (g) with the consent of the Borrower Representative or (h) to
the extent such Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Lender on a non-confidential basis from a source
other than the Borrowers. For the purposes of this Section, “Information” means all
information received from the Borrowers relating to the Borrowers or their business, other than any
such information that is available to the Lender on a non-confidential basis prior to disclosure by
the Borrowers; provided that, in the case of information received from the Borrowers after
the date hereof, such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.

          SECTION 8.13 Nonreliance; Violation of Law. The Lender hereby represents that it is
not relying on or looking to any margin stock for the repayment of the Borrowings provided for
herein. Anything contained in this Agreement to the contrary notwithstanding, the Lender shall not
be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

          SECTION 8.14 USA PATRIOT Act. The Lender 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”)
and hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Borrowers, which information includes the
names and addresses of the Borrowers and other information that will allow such Lender to identify
the Borrowers in accordance with the Act.

          SECTION 8.15 Disclosure. Each Loan Party hereby acknowledges and agrees that the
Lender and/or its Affiliates from time to time may hold investments in, make other loans to or have
other relationships with any of the Loan Parties and their respective Affiliates.

          SECTION 8.16 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such

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cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the
date of repayment, shall have been received by such Lender.

          SECTION 8.17 Releases of Guarantees and Liens.

          (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document,
at such time as the Loans and the other obligations under the Loan Documents (other than contingent
indemnification obligations and obligations under or in respect of Swap Agreements and Bank
Services Obligations) shall have been irrevocably paid in full, the Commitment has been terminated
and no Letters of Credit shall be outstanding (other than Letters of Credit that have been cash
collateralized or otherwise backstopped in a manner satisfactory to the Lender), the Collateral
shall be released from the Liens created by the Loan Documents, and the Collateral Documents and
all obligations (other than those expressly stated to survive such termination) of each Loan Party
under the Collateral Documents shall terminate, all without delivery of any instrument or
performance of any act by any Person; and

          (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any
Borrower or any Subsidiary in a transaction not prohibited by this Agreement, then the Lender, at
the request and sole expense of any Borrower or any Subsidiary, shall execute and deliver to such
Borrower or such Subsidiary at the Borrowers’ sole expense all releases or other documents
reasonably necessary or desirable for the release of the Liens created by the Collateral Documents
on such Collateral. At the request and sole expense of any Borrower, a Loan Party shall be
released from its obligations hereunder and under the other Loan Documents in the event that all
the Equity Interests of such Loan Party shall be disposed of in a transaction not prohibited by
this Agreement; provided that, unless otherwise waived by the Administrative Agent, the Borrower
Representative shall have delivered to the Administrative Agent, at least five (5) Business Days
prior to the date of the proposed release, a written request for release identifying the relevant
Loan Party and the terms of the disposition in reasonable detail, together with a certification by
the Borrower Representative stating that such transaction is in compliance with this Agreement and
the other Loan Documents.

          SECTION 8.18 Limitation of Liability. Compressco GP, as general partner of
Compressco Partners, shall not be liable for the obligations of any Loan Party under this Agreement
or any other Loan Document, including, without limitation, by reason of any payment obligation
imposed by governing state partnership statutes and any provision of the applicable limited
partnership agreement of Compressco Partners or any other Loan Party that requires Compressco GP to
restore a capital account deficit; provided that nothing in this Section 8.18 shall be
construed so as to prevent the Lender from commencing any action, suit or proceeding with respect
to or causing legal papers to be served upon Compressco GP for the purpose of (a) obtaining
jurisdiction over Compressco Partners or (b) obtaining any judgment, order or execution against
Compressco GP arising out of any fraud or intentional misrepresentation by Compressco GP in
connection with the Loan Documents or in order to recover moneys received by Compressco GP in
violation of the terms of this Agreement.

ARTICLE IX

Loan Guaranty

          SECTION 9.01 Guaranty. Each Loan Guarantor (other than those that have delivered a
separate Guaranty) hereby agrees that it is jointly and severally liable for, and absolutely and
unconditionally guarantees to the Lender the prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all
costs and expenses including, without limitation, all court costs and attorneys’ and paralegals’
fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred
by the Lender in endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or
any part of the Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by

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or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any
portion of the Guaranteed Obligations.

          SECTION 9.02 Guaranty of Payment. This Loan Guaranty is a guaranty of payment and
not of collection. Each Loan Guarantor waives any right to require the Lender to sue any Borrower,
any Loan Guarantor, any other guarantor, or any other Person obligated for all or any part of the
Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment
against any collateral securing all or any part of the Guaranteed Obligations.

          SECTION 9.03 No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise
provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and
absolute and not subject to any reduction, limitation, impairment or termination for any reason
(other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or
compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change
in the corporate existence, structure or ownership of any Borrower or any other Obligated Party
liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any resulting release or
discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or
other rights which any Loan Guarantor may have at any time against any Obligated Party, Lender, or
any other person, whether in connection herewith or in any unrelated transactions.

          (b) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff,
counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or
unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable
law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

          (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or
otherwise affected by: (i) the failure of the Lender to assert any claim or demand or to enforce
any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or
modification of or supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security
for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any
obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any
action or failure to act by the Lender with respect to any collateral securing any part of the
Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment
or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or
delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would
otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of the Guaranteed Obligations).

          SECTION 9.04 Defenses Waived. To the fullest extent permitted by applicable law,
each Loan Guarantor hereby waives any defense based on or arising out of any defense of any
Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any
Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not
provided for herein, as well as any requirement that at any time any action be taken by any Person
against any Obligated Party, or any other Person. Each Loan Guarantor confirms that it is not a
surety under any state law and shall not raise any such law as a defense to its obligations
hereunder. The Lender may, at its election, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure
or otherwise act or fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Obligated Party or exercise any other right or remedy available to it
against any Obligated Party, without affecting or impairing in any way the liability of such Loan
Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Loan
Guarantor waives any defense arising out of any such election even though

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that election may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated
Party or any security.

          SECTION 9.05 Rights of Subrogation. No Loan Guarantor will assert any right, claim
or cause of action, including, without limitation, a claim of subrogation, contribution or
indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties
and the Loan Guarantors have fully performed all their obligations to the Lender.

          SECTION 9.06 Reinstatement; Stay of Acceleration. If at any time any payment of any
portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan Guarantor’s
obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time
as though the payment had not been made and whether or not the Lender is in possession of this Loan
Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed
upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise
subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations
shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender.

          SECTION 9.07 Information. Each Loan Guarantor assumes all responsibility for being
and keeping itself informed of the Borrowers’ financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that the Lender shall not have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.

          SECTION 9.08 Termination. The Lender may continue to make loans or extend credit to
the Borrowers based on this Loan Guaranty until five days after it receives written notice of
termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lender for any Guaranteed Obligations created, assumed
or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for, all or any part of
that Guaranteed Obligations.

          SECTION 9.09 Taxes. Each payment of the Guaranteed Obligations will be made by each
Loan Guarantor without withholding for any Taxes, unless such withholding is required by law. If
any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so
required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full
amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.
If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be
increased as necessary so that, net of such withholding (including such withholding applicable to
additional amounts payable under this Section), the Lender receives the amount it would have
received had no such withholding been made.

          SECTION 9.10 Maximum Liability. The provisions of this Loan Guaranty are severable,
and in any action or proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if
the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this
Loan Guaranty to the contrary, the amount of such liability shall, without any further action by
the Loan Guarantors or the Lender, be automatically limited and reduced to the highest amount that
is valid and enforceable as determined in such action or proceeding (such highest amount determined
hereunder being the relevant Loan Guarantor’s “Maximum Liability”). This Section with
respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights
of the Lender to the maximum extent not subject to avoidance under applicable law, and no Loan
Guarantor nor any other Person shall have any right or claim under this Section with respect to
such Maximum Liability, except to the extent necessary so that the obligations of any Loan
Guarantor hereunder shall not be rendered voidable under applicable law. Each Loan Guarantor agrees
that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability
of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of
the Lender hereunder,

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provided that, nothing in this sentence shall be construed to increase any Loan
Guarantor’s obligations hereunder beyond its Maximum Liability.

          SECTION 9.11 Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall
contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable
Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article IX, each Non-Paying Guarantor’s “Applicable Percentage” with
respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on
which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s
Maximum Liability as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the
Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the
aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as
of such date (without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been determined for any
Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the
Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in
this provision shall affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of the Loan
Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty
from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in
full in cash of the Guaranteed Obligations. This provision is for the benefit of the Lender and
the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the
terms hereof.

          SECTION 9.12 Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article IX is in addition to and shall be cumulative with all liabilities of
each Loan Party to the Lender under this Agreement and the other Loan Documents to which such Loan
Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without
any limitation as to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

ARTICLE X

The Borrower Representative

          SECTION
10.01 Appointment; Nature of Relationship. Compressco Partners is hereby
appointed by each of the Borrowers as its contractual representative (herein referred to as the
“Borrower Representative”) hereunder and under each other Loan Document, and each of the
Borrowers irrevocably authorizes the Borrower Representative to act as the contractual
representative of such Borrower with the rights and duties expressly set forth herein and in the
other Loan Documents. The Borrower Representative agrees to act as such contractual representative
upon the express conditions contained in this Article X. Additionally, the Borrowers hereby
appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans, at
which time the Borrower Representative shall promptly disburse such Loans to the appropriate
Borrower, provided that, in the case of a Loan, such amount shall not exceed such Borrower’s
Availability. The Lender and its respective officers, directors, agents or employees, shall not be
liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken
by the Borrower Representative or the Borrowers pursuant to this Section 10.01.

          SECTION
10.02 Powers. The Borrower Representative shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Borrower Representative by the
terms of each thereof, together with such powers as are reasonably incidental thereto. The
Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the
Lender to take any action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.

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          SECTION
10.03 Employment of Agents. The Borrower Representative may execute any of
its duties as the Borrower Representative hereunder and under any other Loan Document by or through
authorized officers.

          SECTION
10.04 Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default or Event of Default hereunder referring to this
Agreement describing such Default or Event of Default and stating that such notice is a “notice of
default.” In the event that the Borrower Representative receives such a notice, the Borrower
Representative shall give prompt notice thereof to the Lender. Any notice provided to the Borrower
Representative hereunder shall constitute notice to each Borrower on the date received by the
Borrower Representative.

          SECTION
10.05 Successor Borrower Representative. Upon the prior written consent of
the Lender, the Borrower Representative may resign at any time, such resignation to be effective
upon the appointment of a successor Borrower Representative.

          SECTION
10.06 Execution of Loan Documents; Borrowing Base Certificate. The Borrowers
hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute
and deliver to the Lender the Loan Documents and all related agreements, certificates, documents,
or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents,
including without limitation, the Borrowing Base Certificates and the Compliance Certificates.
Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in
accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the
Borrower Representative of its powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

          SECTION
10.07 Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal month to the Borrower Representative a copy of its Borrowing
Base Certificate and any other certificate or report required hereunder or requested by the
Borrower Representative on which the Borrower Representative shall rely to prepare the Borrowing
Base Certificates and Compliance Certificates required pursuant to the provisions of this
Agreement.

[Signature Pages Follow]

67

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	BORROWERS:

COMPRESSCO PARTNERS, L.P.

 	 
	 	By:  	Compressco Partners GP Inc., its general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPRESSCO PARTNERS OPERATING LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPRESSCO PARTNERS SUB, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LOAN PARTIES:

[ADD LOAN GUARANTORS]

 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

-Signature Page to Credit Agreement-

 

 

EXHIBIT A

OPINION OF COUNSEL FOR THE LOAN PARTIES

[Effective Date]

[Draft to be Provided]

 

 

EXHIBIT B

BORROWING BASE CERTIFICATE

[TO BE PROVIDED]

Exhibit B

 

 

EXHIBIT C

COMPLIANCE CERTIFICATE

To: JPMorgan Chase Bank, N.A.

     This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of
June [__], 2011 (as amended, modified, renewed or extended from time to time, the “Agreement”)
among Compressco Partners, L.P., a Delaware limited partnership, Compressco Partners Operating,
LLC, a [_________] limited liability company and Compressco Partners Sub, Inc., a [_________]
corporation (the “Borrowers”), the other Loan Parties and JPMorgan Chase Bank, N.A., as Lender.
Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the
meanings ascribed thereto in the Agreement.

     THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWERS, THAT:

     1. I am the duly elected ___________ of the Borrower Representative;

     2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and conditions of the Borrowers and their
Subsidiaries during the accounting period covered by the attached financial statements [for
quarterly or monthly financial statements add: and such financial statements present fairly in all
material respects the financial condition and results of operations of the Borrowers and their
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal quarter-end adjustments and normal year-end audit adjustments and the absence of
footnotes];

     3. The examinations described in paragraph 2 did not disclose, except as set forth below, and
I have no knowledge of (i) the existence of any condition or event which constitutes a Default
during or at the end of the accounting period covered by the attached financial statements or as of
the date of this Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in Section 3.04 of the
Agreement;

     4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief executive
office, (iii) principal place of business, (iv) the type of entity it is or (v) its state of
incorporation or organization without having given the Lender the notice required by Section 4.15
of the Security Agreement;

     [5. Schedule I attached hereto sets forth financial data and computations evidencing
the Borrowers’ compliance with certain covenants of the Agreement, all of which data and
computations are true, complete and correct.]

     Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i)
nature of the condition or event, the period during which it has existed and the action which the
Borrowers have taken, are taking, or propose to take with respect to each such condition or event
or (i) the change in GAAP or the application thereof and the effect of such change on the attached
financial statements:

 

 

 

 

 

     The foregoing certifications, together with the computations set forth in Schedule I and
Schedule II hereto and the financial statements delivered with this Certificate in support hereof,
are made and delivered this _______ day of __________________.

_____________________________,

as Borrower Representative

By:

Name:

Title:

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

SCHEDULE I

Compliance as of _________, ____ with

Provisions of and of

the Agreement

 

 

EXHIBIT D

JOINDER AGREEMENT

     THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, ____, 20__, is entered into
between ______________________, a _________________ (the “New Subsidiary”) and JPMORGAN CHASE BANK,
N.A. (the “Lender”) under that certain Credit Agreement, dated as of June [__], 2011 (as the same
may be amended, modified, extended or restated from time to time, the “Credit Agreement”) among
Compressco Partners, L.P., a Delaware limited partnership, Compressco Partners Operating, LLC, a
[_________] limited liability company and Compressco Partners Sub, Inc., a [_________] corporation
(the “Borrowers”), the Loan Parties party thereto, and the Lender. All capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The New Subsidiary and the Lender, hereby agree as follows:

     1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this
Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a
“Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of
a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit Agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement, including without limitation (a) all
of the representations and warranties of the Loan Parties set forth in Article III of the Credit
Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the Credit Agreement
*[and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to
the limitations set forth in Section 9.10 of the Credit Agreement, hereby guarantees, jointly and
severally with the other Loan Guarantors, to the Lender and the Lender, as provided in Article X of
the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when
due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly
in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not
paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other
Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension
or renewal.]* *[The New Subsidiary has delivered to the Lender an executed Loan Guaranty.]*

     2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement,
executing and delivering such Collateral Documents (and such other documents and instruments) as
requested by the Lender in accordance with the Credit Agreement.

     3. The address of the New Subsidiary for purposes of Section 8.01 of the Credit Agreement is
as follows:

                                                            

                                                            

                                                            

                                                            

     4. The New Subsidiary hereby waives acceptance by the Lender of the guaranty by the New
Subsidiary upon the execution of this Agreement by the New Subsidiary.

 

 

     5. This Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute one and the same
instrument.

     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its
authorized officer, and the Lender, has caused the same to be accepted by its authorized officer,
as of the day and year first above written.

	 	 	 	 	 
	 	[NEW SUBSIDIARY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A.

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:Exhibit 10.2

Exhibit 10.2

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

among

CASTLE PINES CAPITAL LLC

as Administrative Agent

and

WELLS FARGO CAPITAL FINANCE, LLC

as Administrative Agent, Collateral Agent

and

CASTLE PINES CAPITAL LLC

AND THE OTHER LENDERS LISTED

ON THE SIGNATURE PAGES

HERETO

as Lenders

and

GTSI Corp.

as Reseller

May 31, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Administrative Provisions
	 	 	 	 
	 
	 	 	 	 
	2. Definitions; Rules of Construction
	 	 	2	 
	2.1. Listed Definitions
	 	 	2	 
	2.2. Other Definitions
	 	 	2	 
	2.3. References to Covered Person
	 	 	2	 
	2.4. References to Required Lenders; Minimum Exposure
	 	 	2	 
	2.5. Accounting Terms
	 	 	2	 
	2.6. Meaning of Satisfactory
	 	 	2	 
	2.7. Computation of Time Periods
	 	 	2	 
	2.8. General
	 	 	3	 
	 
	 	 	 	 
	3. Lenders’ Facilities
	 	 	3	 
	3.1. Revolving Loan Facility/Option for Extended Terms
	 	 	3	 
	3.2. Floorplan Loans
	 	 	8	 
	3.3. Swingline Facility
	 	 	11	 
	3.4. Letter of Credit Facility
	 	 	12	 
	3.5. Termination/Maturity/Renewal
	 	 	13	 
	3.6. Promise to Pay
	 	 	14	 
	 
	 	 	 	 
	4. Interest; Yield Protection
	 	 	14	 
	4.1. Interest on the Swingline Loan
	 	 	14	 
	4.2. Interest on Draws on Letters of Credit
	 	 	15	 
	4.3. Interest on the Floorplan Loan and Interim Floorplan Loan —Administrative
Agents and CPC as Lenders Only
	 	 	15	 
	4.5. Interest on Floorplan Loans
	 	 	17	 
	4.6. LIBOR Rate
	 	 	17	 
	4.7. LIBOR Increment
	 	 	17	 
	4.8. Time of Accrual
	 	 	17	 
	4.9. Computation; LIBOR Underlying Rate
	 	 	17	 
	4.10. Rate After Maturity and Rate After An Event of Default
	 	 	18	 
	4.11. Taxes
	 	 	19	 
	4.12. Capital Adequacy
	 	 	20	 
	4.13. Usury
	 	 	20	 
	 
	 	 	 	 
	5. Fees
	 	 	20	 
	5.1. Total Facility Fee
	 	 	20	 
	5.2. Letter of Credit Fee
	 	 	20	 
	5.3. Letter of Credit Issuance Fee
	 	 	20	 
	5.4. Other Letter of Credit Fees
	 	 	21	 
	5.5. Unused Line Fee
	 	 	21	 
	5.6. Calculation of Fees
	 	 	21	 
	 
	 	 	 	 
	6. Payments
	 	 	21	 
	6.1. Scheduled Payments on Loans; Applications to Loans
	 	 	21	 
	6.2. Special Requirement for Payments on Floorplan Loans and Interim Floorplan Loans
	 	 	24	 
	6.4 Reimbursement Obligations of Reseller
	 	 	25	 
	6.5 Manner of Payments and Timing of Application of Payments
	 	 	26	 
	6.6 Returned Instruments
	 	 	27	 
	6.7 Compelled Return of Payments or Proceeds
	 	 	27	 
	6.8 Due Dates Not on Business Days
	 	 	27	 

 

i

 

	 	 	 	 	 
	7. Procedure for Obtaining Advances
	 	 	27	 
	7.1. Reserved
	 	 	27	 
	7.2. Revolving Loan Advances
	 	 	27	 
	7.3. Floorplan Loan Advances
	 	 	27	 
	7.4. Repayment of the Swingline Loan and the Interim Floorplan Loan
	 	 	28	 
	7.5. Letters of Credit
	 	 	28	 
	7.6. Administrative Agents’ Right to Make Other Certain Advances
	 	 	29	 
	7.7. Fundings
	 	 	29	 
	7.8. Administrative Agents’ Availability Assumption
	 	 	30	 
	7.9. Disbursement
	 	 	31	 
	7.10. Restrictions on Advances
	 	 	31	 
	7.11. Each Advance Request and Request for a Letter of Credit a Certification
	 	 	31	 
	7.12. Requirements for Every Letter of Credit Request
	 	 	31	 
	7.13. Requirements for Every Advance Request
	 	 	32	 
	7.14. Exoneration of Administrative Agents and Lenders
	 	 	32	 
	 
	 	 	 	 
	8. Security; Guaranties
	 	 	32	 
	8.1. Landlord Consents
	 	 	32	 
	8.2. Mortgagee Consent Agreements
	 	 	32	 
	8.3. Security Agreements
	 	 	33	 
	8.4. Pledge Agreements
	 	 	33	 
	8.5. Collateral Assignments
	 	 	33	 
	8.6. Guaranties
	 	 	33	 
	 
	 	 	 	 
	9. Power of Attorney
	 	 	33	 
	 
	 	 	 	 
	10. Conditions of Lending
	 	 	34	 
	10.1. Conditions to Advance
	 	 	34	 
	10.2. Conditions to Subsequent Revolving Loan or Floorplan Loan Advances
	 	 	35	 
	 
	 	 	 	 
	11. Conditions to Issuance of Letters of Credit
	 	 	35	 
	11.1. Letter of Credit Application/Reimbursement Agreement
	 	 	35	 
	11.2. No Prohibitions
	 	 	35	 
	11.3. Representations and Warranties
	 	 	36	 
	11.4. No Default
	 	 	36	 
	11.5. Other Conditions
	 	 	36	 
	 
	 	 	 	 
	12. Representations and Warranties
	 	 	36	 
	12.1. Organization and Existence
	 	 	36	 
	12.2. Authorization
	 	 	36	 
	12.3. Due Execution
	 	 	36	 
	12.4. Enforceability of Obligations
	 	 	36	 
	12.5. Burdensome Obligations
	 	 	36	 
	12.6. Legal Restraints
	 	 	37	 
	12.7. Labor Contracts and Disputes
	 	 	37	 
	12.8. No Material Proceedings
	 	 	37	 
	12.9. Material Licenses
	 	 	37	 
	12.10. Compliance with Material Laws
	 	 	37	 

 

ii

 

	 	 	 	 	 
	12.11. Other Names
	 	 	38	 
	12.12. Prior Transactions
	 	 	38	 
	12.13. Capitalization
	 	 	38	 
	12.14. Solvency
	 	 	38	 
	12.15. Projections
	 	 	38	 
	12.16. Financial Statements and Records
	 	 	38	 
	12.17. No Change in Condition
	 	 	38	 
	12.18. No Defaults
	 	 	38	 
	12.19. Investments
	 	 	39	 
	12.20. Indebtedness
	 	 	39	 
	12.21. Indirect Obligations
	 	 	39	 
	12.22. Encumbrances
	 	 	39	 
	12.23. Capital Leases
	 	 	39	 
	12.24. Other Creditor Indebtedness and Subordinated Indebtedness
	 	 	39	 
	12.25. Tax Liabilities; Governmental Charges
	 	 	39	 
	12.26. Pension Benefit Plans
	 	 	39	 
	12.27. Welfare Benefit Plans
	 	 	40	 
	12.28. Retiree Benefits
	 	 	40	 
	12.29. Distributions
	 	 	40	 
	12.30. Real Property
	 	 	40	 
	12.31. State of Collateral and other Property
	 	 	41	 
	12.32. Chief Place of Business; Locations of Collateral
	 	 	43	 
	12.33. Representations and Warranties -Inventory
	 	 	43	 
	12.34. No Negative Pledges
	 	 	44	 
	12.35. Security Documents
	 	 	44	 
	12.36. S Corporation
	 	 	44	 
	12.37. Bank Accounts and Lockboxes
	 	 	44	 
	12.38. Margin Stock
	 	 	44	 
	12.39. Securities Matters
	 	 	45	 
	12.40. Investment Company Act, Etc
	 	 	45	 
	12.41. Filings
	 	 	45	 
	12.42. Broker’s Fees
	 	 	45	 
	12.43. Eligibility of Collateral
	 	 	45	 
	12.44. Loans to Shareholders
	 	 	45	 
	12.45. Office of Foreign Assets Control
	 	 	45	 
	12.46. Patriot Act
	 	 	45	 
	 
	 	 	 	 
	13. Modification and Survival of Representations
	 	 	46	 
	 
	 	 	 	 
	14. Affirmative Covenants
	 	 	46	 
	14.1. Use of Proceeds
	 	 	46	 
	14.2. Corporate Existence
	 	 	46	 
	14.3. Maintenance of Property and Leases
	 	 	46	 
	14.4. Inventory
	 	 	47	 
	14.5. Insurance
	 	 	47	 
	14.6. Payment of Taxes and Other Obligations
	 	 	47	 
	14.7. Compliance With Laws
	 	 	48	 
	14.8. Discovery and Clean-Up of Hazardous Material
	 	 	48	 
	14.9. Termination of Pension Benefit Plan
	 	 	48	 
	14.10. Notice to Administrative Agents and Lenders of Material Events
	 	 	49	 

 

iii

 

	 	 	 	 	 
	14.11. Names of Authorized Employees
	 	 	51	 
	14.12. Maintenance of Security Interests of Security Documents
	 	 	51	 
	14.13. Accounting System
	 	 	52	 
	14.14. Financial Statements; Annual Projections; Tax Returns
	 	 	52	 
	14.15. Other Financial Information
	 	 	53	 
	14.16. Other Information
	 	 	55	 
	14.17. Examinations and Site Visits by Administrative Agents
	 	 	55	 
	14.18. Verification of Accounts and Notices to Account Debtors
	 	 	55	 
	14.19. Appraisals of Collateral
	 	 	55	 
	14.20. Access to Officers and Auditors
	 	 	56	 
	14.21. Movement of Inventory
	 	 	56	 
	14.22. Titled Assets
	 	 	56	 
	14.23. Post-Closing Requirements
	 	 	56	 
	14.24. Further Assurances
	 	 	56	 
	 
	 	 	 	 
	15. Negative Covenants
	 	 	56	 
	15.1. Investments
	 	 	56	 
	15.2. Indebtedness
	 	 	57	 
	15.3. Payments on Other Creditor Indebtedness and Subordinated Indebtedness
	 	 	58	 
	15.4. Prepayments
	 	 	58	 
	15.5. Indirect Obligations
	 	 	58	 
	15.6. Security Interests
	 	 	58	 
	15.7. Acquisitions
	 	 	59	 
	15.8. Bailments; Consignments; Warehousing
	 	 	59	 
	15.9. Disposal of Property
	 	 	59	 
	15.10. Restricted Payments
	 	 	59	 
	15.11. Redemptions
	 	 	60	 
	15.12. Change of Control
	 	 	60	 
	15.13. Capital Structure; Equity Securities
	 	 	69	 
	15.14. Change of State of Formation; Change of Name
	 	 	60	 
	15.15. Change of Business
	 	 	60	 
	15.16. Transactions With Affiliates
	 	 	60	 
	15.17. Conflicting Agreements
	 	 	60	 
	15.18. Investment Banking and Finder’s Fees
	 	 	60	 
	15.19. Sale and Leaseback Transactions
	 	 	61	 
	15.20. New Subsidiaries
	 	 	61	 
	15.21. Fiscal Year
	 	 	61	 
	15.22. Leases
	 	 	61	 
	15.23. S Corporation Status
	 	 	61	 
	15.24. Depreciation Methodology
	 	 	61	 
	15.25. Tax Consolidation
	 	 	61	 
	15.26. Transactions Having a Material Adverse Effect on Covered Person
	 	 	61	 
	15.27. Storage; Chief Executive Officer; State of Incorporation
	 	 	61	 
	15.28. Like-Kind Exchange
	 	 	61	 
	 
	 	 	 	 
	16. Financial Covenants
	 	 	61	 
	16.1. Special Definitions
	 	 	61	 
	16.2. Minimum Tangible Net Worth
	 	 	63	 
	16.3. Maximum Total Liabilities to Tangible Net Worth
	 	 	63	 
	16.4. Minimum Current Ratio
	 	 	63	 
	16.5 Minimum Debt Service Coverage Ratio
	 	 	63	 

 

iv

 

	 	 	 	 	 
	17. Default
	 	 	63	 
	17.1. Events of Default
	 	 	63	 
	17.2. Cross-Default
	 	 	67	 
	17.3. Rights and Remedies
	 	 	67	 
	17.4. Application of Funds
	 	 	71	 
	17.5. Limitation of Liability; Waiver
	 	 	71	 
	17.6. Notice
	 	 	71	 
	 
	 	 	 	 
	18. Administrative Agents and Lenders
	 	 	72	 
	18.1. Appointment, Powers, and Immunities
	 	 	72	 
	18.2. Reliance by Administrative Agents
	 	 	72	 
	18.3. Employment of Administrative Agents and Counsel
	 	 	72	 
	18.4. Defaults
	 	 	73	 
	18.5. Rights as Lender
	 	 	73	 
	18.6. Indemnification
	 	 	73	 
	18.7. Notification of Lenders
	 	 	74	 
	18.8. Non-Reliance on Agent and Other Lenders
	 	 	74	 
	18.9. Resignation
	 	 	75	 
	18.10. Collections and Distributions to Lenders by Administrative Agent
	 	 	75	 
	18.11. Provision Regarding Payments
	 	 	75	 
	18.12. Restrictions on Actions by Lenders; Sharing of Payments
	 	 	75	 
	18.13. Release of Collateral
	 	 	76	 
	 
	 	 	 	 
	19. General
	 	 	76	 
	19.1. Lenders’ Right to Cure
	 	 	76	 
	19.2. Rights Not Exclusive
	 	 	77	 
	19.3. Survival of Agreements
	 	 	77	 
	19.4. Assignments
	 	 	77	 
	19.5. Payment of Expenses
	 	 	80	 
	19.6. General Indemnity
	 	 	81	 
	19.7. Letters of Credit
	 	 	82	 
	19.8. Changes in Accounting Principles
	 	 	83	 
	19.9. Loan Records
	 	 	83	 
	19.10. Other Security and Guaranties
	 	 	83	 
	19.11. Loan Obligations Payable in Dollars
	 	 	84	 
	19.12. Confidentiality
	 	 	84	 
	19.13. Reserved
	 	 	84	 
	19.14. Jury Trial Waiver; Service of Process; Forum:
	 	 	84	 
	 
	 	 	 	 
	20. Portal
	 	 	85	 
	 
	 	 	 	 
	21. Miscellaneous
	 	 	86	 
	21.1. Notices
	 	 	86	 
	21.2. Amendments and Modifications; Waivers and Consents; All Lenders
	 	 	86	 
	21.3. Replacement of Holdout Lender
	 	 	87	 
	21.4. Course of Dealing
	 	 	88	 
	21.5. Rights Cumulative
	 	 	88	 
	21.6. Successors and Assigns
	 	 	88	 
	21.7. Severability
	 	 	88	 
	21.8. Counterparts
	 	 	88	 
	21.9. Governing Law; No Third Party Rights
	 	 	89	 
	21.10. Counterpart Facsimile Execution
	 	 	89	 
	21.11. No Other Agreements
	 	 	89	 
	21.12. Waiver of Right to Seek Punitive and Exemplary Damages
	 	 	89	 
	21.13. Negotiated Transaction
	 	 	89	 
	21.14. Incorporation By Reference
	 	 	89	 
	21.15. Customer Identification — USA Patriot Act Notice
	 	 	89	 

 

v

 

EXHIBITS

	 	 	 
	Exhibit 2.1

	 	Definitions
	Exhibit 3

	 	Lenders Facilities and Pro-Rata Shares
	Exhibit 7.13

	 	Form of Advance Request for Revolving Loan Advances
	Exhibit 10.1.1

	 	Documents and Requirements List
	Exhibit 12

	 	Disclosure Schedules
	Exhibit 14.14

	 	Form of Compliance Certificate
	Exhibit 14.15.1

	 	Borrowing Base Certificate
	Exhibit 18.13.2

	 	Release Documentation
	Exhibit 19.4.1

	 	Assignment and Acceptance

SCHEDULES

	 	 	 
	Schedule 2

	 	Guarantors
	Schedule 3.4.2

	 	Letters of Credit
	Schedule 6.3.3.2

	 	Equity Issued in Connection with Stock Splits or Options
	Schedule 12.1

	 	Organization and Existence
	Schedule 12.12

	 	Mergers or Consolidations since December 31, 2008
	Schedule 12.13

	 	Subsidiaries; Ownership of Capital Stock
	Schedule 12.19

	 	Investments
	Schedule 12.21

	 	Indirect Obligations
	Schedule 12.23

	 	Capital Leases
	Schedule 12.26.5

	 	Multi-employer Plans
	Schedule 12.30

	 	Real Property Owned or Leased
	Schedule 12.31.2

	 	Location of Reseller’s Inventory
	Schedule 12.31.3

	 	Location of Reseller’s Equipment; Security Interests Granted by
Reseller
	Schedule 12.31.4

	 	Copyright Collateral; Patent Collateral Trademark Collateral
	Schedule 12.32.1

	 	Chief Executive Office and Principal Place of Business;
Location of the books and records; and
Chattel paper; records of Accounts
	Schedule 12.32.2

	 	Counties within such States and the Canadian Provinces
and other foreign jurisdictions in which any Covered Person
conducts its business
	Schedule 12.32.3

	 	Location of Reseller’s Office Furniture and Equipment
	Schedule 12.34

	 	Negative Pledges
	Schedule 12.38

	 	Bank Accounts and Lockboxes
	Schedule 15.16

	 	Transactions with Affiliates

 

vi

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT effective as of May 31, 2011, by and among
GTSI Corp., a Delaware corporation (“Reseller”), Castle Pines Capital LLC, a Delaware
limited liability company (as an individual administrative agent, or as a lender, as the context
may require, “CPC”) and Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, formerly known as Wells Fargo Foothill, LLC (in its capacity as the collateral agent for
the benefit of Lenders, the “Collateral Agent,” in its capacity as an individual
administrative agent, “WFF” and, together with CPC, “Administrative Agents”), CPC
as lender and the other lenders listed on Exhibit 3 and the signature pages hereto (and
their respective successors and permitted assigns), as “Lenders”, agree as follows.

W I T N E S S E T H

WHEREAS, Reseller, certain of the Lenders, Administrative Agents and Collateral Agent are
parties to that certain Amended and Restated Credit Agreement dated as of October 19, 2010 as
amended February 24, 2011 and February 25, 2011 (as amended and supplemented, the “Existing
Credit Agreement”), whereunder Reseller has access to a Revolving Loan Facility, Swingline
Facility, Interim Floorplan Loan Facility and Letter of Credit Facility up to a Total Facility
Limit of $100,000,000;

WHEREAS, Reseller, Lenders, Administrative Agent and Collateral Agent now desire to amend and
restate the Existing Credit Agreement to, among other things, restate the Existing Credit Agreement
to reflect certain amendments thereto;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree to amend and restate the Existing Credit Agreement to read
as follows:

1. Administrative Provisions.

(a) Effective Date. This Credit Agreement (this “Agreement”) is effective May 31,
2011 (“Effective Date”).

(b) Reaffirmation; Security Interests.

(i) Reseller hereby unconditionally reaffirms, acknowledges, represents, warrants, and
confirms that as of the Effective Date (i) Reseller has no defenses to its obligations under
the Existing Credit Agreement, this Agreement and the other Loan Documents, and (ii)
Reseller has no claim against any Administrative Agent, Collateral Agent or any Lender
arising from or in connection with the Existing Credit Agreement, this Agreement or the
other Loan Documents and any and all such claims are forever waived, released and discharged
(the foregoing is not intended to waive any manifest errors in the Administrative Agents’,
Collateral Agent’s or any Lender’s records with respect to the Loan Obligations).

(ii) Reseller hereby unconditionally reaffirms, acknowledges, represents, warrants, and
confirms that as of the Effective Date each of the Loan Documents, including without
limitation, each Security Document executed on or prior to the date hereof, are and remain
in full force and effect in all respects, and constitute the legal, valid and binding
obligations of Reseller enforceable against Reseller in accordance with their terms, except
to the extent that the enforceability thereof against Reseller may be limited by bankruptcy,
insolvency or other laws affecting the enforceability of creditors’ rights generally or by
equity principles of general application. Reseller hereby unconditionally reaffirms,
acknowledges, represents, warrants, and
confirms without qualification the grant prior to the date hereof by Reseller in favor
of Collateral Agent of the Security Interest in the Collateral.

 

 

 

2. Definitions; Rules of Construction.

	 	2.1.	 	Listed Definitions. Capitalized words defined in Exhibit 2.1 have such defined
meanings wherever used in this Agreement and the other Loan Documents.

	 
	 	2.2.	 	Other Definitions. If a capitalized word in this Agreement is not defined in
Exhibit 2.1, it shall have such meaning as defined elsewhere herein, or if not
defined elsewhere herein, the meaning defined in the UCC.

	 
	 	2.3.	 	References to Covered Person. The words “Covered Person”, “a Covered Person”, “any
Covered Person”, “each Covered Person” and “every Covered Person” refer to Reseller and each
of its now existing or later acquired, created or organized Subsidiaries separately. The
words “Covered Persons” refers to Reseller and its now existing or later acquired, created
or organized Subsidiaries collectively.

	 
	 	2.4.	 	References to Required Lenders; Minimum Exposure. Subject to the provisions of
Section 7.8 with regards to a Defaulting Lender, the words “Required
Lenders” mean any three or more non-Affiliate Lenders whose shares of Lenders’ Exposure
at the relevant time aggregate more than 50.1% (subject to the terms of Section 7.8)
provided that, if there are fewer than four Lenders, “Required Lenders”
shall mean all Lenders. CPC, in its capacity as a Lender, agrees at all times to hold a
pro-rata portion of the Aggregate Facilities at least equal to or greater than the Aggregate
Facility of each other Lender individually; provided, however, after an acceleration of the
Loan Obligations or during an Existing Default, CPC shall be permitted to assign all or any
portion of its Facilities and the foregoing restriction shall not be applicable after any
such assignment. Solely for purposes of determining the Required Lenders, CPC and Wells
Fargo Foothill LLC shall be deemed to be Affiliates of one another.

	 
	 	2.5.	 	Accounting Terms. Unless the context otherwise requires, accounting terms herein that
are not defined herein shall be determined under GAAP. Unless expressly provided otherwise
herein, all financial measurements contemplated hereunder respecting Reseller shall be made
and calculated for Reseller and all of its now existing or later acquired, created or
organized Subsidiaries, if any, on a consolidated and consolidating basis in accordance with
GAAP.

	 
	 	2.6.	 	Meaning of Satisfactory. Whenever herein a document or matter is required to be
satisfactory to Administrative Agents or satisfactory to Lenders or satisfactory to Required
Lenders, unless expressly stated otherwise such document must be reasonably satisfactory to
Administrative Agents, Lenders or Required Lenders (as applicable) in both form and
substance, and, unless expressly stated otherwise herein, Administrative Agents, Lenders or
Required Lenders (as applicable) shall have the Permitted Discretion to determine whether
the document or matter is satisfactory.

	 
	 	2.7.	 	Computation of Time Periods. In computing or defining periods of time from a specified
date to a later specified date, and in computing hereunder the accrual of interest or fees,
the word “from” means “from and including” and the words “to” and “until” shall each mean
“to but excluding”. Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed, and references in this
Agreement to months and years are to calendar months and calendar years unless otherwise
specified.

 

2

 

	 	2.8.	 	General. Unless the context of this Agreement clearly requires otherwise: (a)
references to the plural include the singular and vice versa; (b) references to any Person
include such Person’s successors and assigns but, if applicable, only if such successors and
assigns are permitted by this
Agreement; (c) references to one gender include all genders; (d) “including” is not
limiting; (e) “or” has the inclusive meaning represented by the phrase “or;” (f) the words
“hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Agreement refer to this
Agreement as a whole, including its Exhibits, and not to any particular provision of this
Agreement; (g) the word “Section” or “section” and “Page” or “page” refer to a section or
page, respectively, of, and the word Exhibit refers to an Exhibit to, this Agreement unless
it expressly refers to something else; (h) reference to any agreement, document, or
instrument (including this Agreement and any other Loan Document or other agreement,
document or instrument defined herein), means such agreement, document, or instrument as
amended, modified, restated or replaced and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof, and includes all attachments thereto
and documents incorporated therein, if any; and (i) general and specific references to any
Law means such Law as amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time. Section captions and the Table of Contents are for convenience
only and shall not affect the interpretation or construction of this Agreement or the other
Loan Documents.

3. Lenders’ Facilities. Subject to the terms and conditions hereof, and in reliance upon the
Representations and Warranties:

3.1. Revolving Loan Facility/Option for Extended Terms.

3.1.1. Aggregate Amount. Subject to the limitations in Section 3.1.3
and subject to each of the other terms herein, each Lender agrees to make available
to Reseller, from the Effective Date to the Termination Date, such Lender’s Pro-Rata
Share (as listed on Exhibit 3 hereto) of Revolving Loan Advances not to
exceed, in the aggregate, the Revolving Loan Maximum Available Amount. Subject to
the limitations in Section 3.1.3 and elsewhere herein, payments and
prepayments that are applied to reduce the Aggregate Revolving Loan may be
reborrowed through Revolving Loan Advances. Each Lender’s Revolving Loan Facility
is its Pro-Rata Share (as listed on Exhibit 3 hereto) of the Aggregate
Revolving Loan Facility. Upon any reduction of the Aggregate Revolving Loan
Facility Limit pursuant to this Agreement, each Lender’s Revolving Loan Facility
will automatically reduce by such Lender’s Pro-Rata Share of such reduction of the
Aggregate Revolving Loan Facility Limit.

3.1.2. Option for Extended Terms. At the election of Reseller upon providing
one (1) Business Day’s notice and subject to the limits set forth in Section
3.1.1, Revolving Loan Advances may be used to pay for Floorplanned Inventory on
the Payment Due Date for such Floorplanned Inventory (each such Revolving Loan
Advance may be referred to herein as an “Extended Pay Outstanding”).
Specifically payment for identified Floorplanned Inventory (by Transaction
Statement) cannot be designated beyond the Extended Payment Due Date.

3.1.3. Limitation on Revolving Loan Advances. No Revolving Loan Advance will
be made which would result in the Aggregate Revolving Loans exceeding the Revolving
Loan Maximum Available Amount and no Revolving Loan Advance will be made on or after
the Termination Date. Lenders may, however, in their absolute discretion make such
Revolving Loan Advances, but shall not be deemed by doing so to have increased the
Revolving Loan Maximum Available Amount and shall not be obligated to make any such
Revolving Loan Advances thereafter. The “Revolving Loan Maximum Available
Amount” (which can be a negative number) on any date shall be a Dollar amount
equal to the least of (a) the amount by which (i) the Aggregate Revolving Loan
Facility Limit exceeds (ii) the sum of (A) the outstanding principal

 

3

 

amount of the Swingline Loans, plus (B) the Letter of Credit Exposure,
(b) the amount by which (i) the Total Facility Limit exceeds (ii) the sum of (A) the
Floorplan Loan Advances, plus (B) the Interim Floorplan Loan Advances,
plus (C) unfunded Approvals, plus (D) the outstanding principal
amount of the Swingline Loans, plus (E) the Letter of Credit Exposure, and
(c) the amount by which (i) the Borrowing Base exceeds (ii) the sum of (A) the
Floorplan Loan Advances, plus (B) the Interim Floorplan Loan Advances,
plus (C) the outstanding principal amount of the Swingline Loans,
plus (D) the Letter of Credit Exposure, plus (E) the amount of the
Other Creditor Indebtedness (unless a subordination agreement satisfactory to
Administrative Agents has been executed between Administrative Agents and the holder
of such Other Creditor Indebtedness). The maximum amount of the Swingline Loans on
any date shall be Twenty-Five Million Dollars ($25,000,000) (the “Maximum
Swingline Amount”). Notwithstanding anything contained in this Agreement to the
contrary, at no time may the Aggregate Floorplan Loans, Interim Floorplan Loans,
unfunded Approvals, Aggregate Revolving Loans (including Extended Pay Outstandings),
Swingline Loans and the Letter of Credit Exposure exceed the Total Facility Limit,
except as permitted in Section 3.2.10.

3.1.4. Revolving Notes. At the request of a Lender, the obligation of Reseller
hereunder to repay such Lender’s Revolving Loan shall be evidenced by a promissory
note payable to the order of such Lender in a maximum principal amount equal to the
amount of its Revolving Loan Facility and otherwise satisfactory to Administrative
Agents.

3.1.5. Borrowing Base. The Borrowing Base” on any date shall equal the
sum of:

(a) 85% of the total outstanding principal balance of all Eligible Accounts
that are not Eligible Government Accounts, as certified in the Borrowing Base
Certificate most recently furnished to Administrative Agents as required in
Section 14.15.1.1; plus

(b) 90% of the total outstanding principal balance of all Eligible Government
Accounts, as certified in the Borrowing Base Certificate most recently furnished to
Administrative Agents as required in Section 14.15.1.1; plus

(c) 100% of the cost of the Floorplanned Inventory as certified in the
Borrowing Base Certificate most recently furnished to Administrative Agents as
required in Section 14.15.1.1; minus

(d) the sum of (i) the Bank Product Reserve and (ii) the aggregate amount of
reserves against the Borrowing Base, if any, established by Administrative Agents
pursuant to Section 3.1.7.

3.1.6. Eligible Accounts. “Eligible Accounts” include all of
Reseller’s Accounts other than the following, unless approved in writing by
Administrative Agents in each case:

(a) any Account with respect to which Collateral Agent for the benefit of
Lenders does not have a valid and enforceable, perfected Security Interest having a
first priority;

(b) any Account which remains unpaid as of (i) 91 days after the original date
of the applicable invoice, except the foregoing period shall be (ii) 121 days for
any Eligible Government Account;

 

4

 

(c) without duplication, any Commercial Account of a single Account Debtor if
25% or more of the balances due on all Commercial Accounts of such Account Debtor
are ineligible under clause (b)(i), above; provided that the above limitation in
this clause (c) shall not apply with respect to Accounts owed by Lockheed Martin
Corporation or any Subsidiary thereof (collectively, “Lockheed Martin”);

(d) without duplication, any Account of a single Account Debtor if 50% or more
of the balances due on all Accounts of such Account Debtor are ineligible under
clause (b)(ii), above; provided that the above limitation in this clause (d) shall
not apply with respect to Accounts owed by the Office of Defense Finance and
Accounting Service Agency of the United States Government;

(e) any Account of an Account Debtor that is a Subsidiary or an Affiliate of
Reseller or an employee, officer, director or manager of Reseller or any Subsidiary
or Affiliate thereof, or, so long as neither is an Affiliate of Reseller for purpose
of this clause (e), any Account of Eyak or Northtide, to the extent such Account
when added to all other Accounts of Eyak and Northtide outstanding at any time
exceeds $1,500,000;

(f) any Account, other than a Government Account, of an Account Debtor that
does not maintain its chief executive office within the United States or Canada and
any Account with respect to which the Account Debtor is the government of any
foreign country or any municipality or other political subdivision thereof, or any
department, agency, public corporation or other instrumentality thereof;

(g) any Account which is created from the rental or lease of any Inventory not
owned by Reseller;

(h) any Account with respect to goods or services whose delivery or performance
has been rejected, refused, or cancelled by the Account Debtor or whose earlier
acceptance has been revoked;

(i) any Account arising from the delivery of goods or performance of services
for which an invoice has not been sent to the Account Debtor within ten (10)
Business Days after such delivery or performance (provided, with respect to
services, the invoice shall be sent within ten (10) Business Days after the end of
each month for services rendered in the prior month);

(j) any Account of an Account Debtor that is the subject of a bankruptcy or
similar insolvency proceeding, has made an assignment for the benefit of creditors,
has acknowledged that it is unable to pay its debts as they mature, or whose assets
have been transferred to a receiver or trustee, or who has ceased business as a
going concern;

(k) any Account of an Account Debtor whose obligation to pay the Account is
conditional upon the Account Debtor’s approval or is otherwise subject to any
repurchase obligation or return right, as with sales made on a bill-and-hold basis
(unless the Account Debtor has an absolute obligation to pay such Account pursuant
to a written agreement, the Inventory associated with such Account is physically
segregated from all other Inventory and appropriately reflected in Reseller’s books
and records, and such Inventory is kept at premises owned or leased by Reseller;
provided, however, the aggregate amount of all accounts which represent sales on a
bill-and-hold arrangement included in Eligible Accounts shall not exceed
$15,000,000), guarantied sale, sale-and-return, sale on approval (except with
respect to Accounts in connection with which Account Debtors that are entitled to
return Inventory solely on the basis of the quality of such Inventory) or
consignment basis

 

5

 

(l) any Account of an Account Debtor (i) that has disputed liability or made
any claim with respect to any other Account due from such Account Debtor, or that
has any right of set-off against such Account (unless the Account Debtor is a
Governmental Authority and such set-off right exists as a result of claims unrelated
to the Account and arises out of a Law), or (ii) to which Reseller is indebted in
any way (unless the Account Debtor (i) and Reseller have entered into an agreement
acceptable to the Collateral Agent in which the related set-off rights of the
Account Debtor have been waived or (ii) is a Governmental Authority and such
indebtedness is unrelated to the Account and arises out of a Law), but in respect of
either clause (i) or (ii) above, only to the extent of such disputed liability,
claim, right of set-off or indebtedness;

(m) any Account subject to a chargeback from a volume discount or an
advertising discount, but only to the extent of such chargeback or discount;

(n) Accounts with respect to which any of the representations, warranties,
covenants and agreements contained in Section 12.31.1 are not or have ceased
to be complete and correct or have been breached;

(o) any Account of an Account Debtor with respect to particular goods still in
the possession of the creditor on the Account or included in Inventory of such
creditor and against which the Account Debtor has filed a financing statement under
the UCC or has obtained or purported to have obtained a Security Interest;

(p) any Account with respect to which any of the covenants and agreements
contained in any of the Loan Documents or any of the Representations and Warranties
are not or have ceased to be complete and correct or have been breached;

(q) any Account which is evidenced by a promissory note or other instrument or
by chattel paper or which has been reduced to judgment;

(r) any Account which arises out of a sale or lease not made in the ordinary
course of Reseller’s business;

(s) any Account (other than a Government Account) for which payment terms
greater than net 30 days from the date of invoice are provided or permitted, any
Government Account with payment terms greater than net 60 days from the date of
invoice are provided or permitted;

(t) any Account (except as set forth in clause (u) below) owing from any
supplier or Vendor of Reseller except to the extent and only to such extent any such
Account is greater than the amounts then owing to any such Vendor by Reseller,
subject in all cases to all other eligibility requirements contained herein;

(u) any Account owing from a supplier or Vendor of any Reseller under any
rebate, subsidy, incentive or similar program, but only to the extent of the amount
of such rebate, subsidy, incentive or similar program, unless such Account is
otherwise acceptable to Administrative Agents in their sole discretion;

(v) any Account owing to any Person other than Reseller;

(w) any Account arising from the leasing of Inventory which remains unpaid as
of (i) 91 days after the original date of the applicable invoice, except the
foregoing period shall be (ii) 121 days for any Eligible Government Account,

(x) with regard to any Account arising from the provision of services, such
Accounts that (i) consist of progress billings (such that the obligation of the
Account
Debtors with respect to such Accounts is conditioned upon such Reseller’s
satisfactory completion of any further performance under the agreement giving rise
thereto), and (ii) is invoiced prior to the performance of the applicable services
to the extent that such services have not yet been performed,

 

6

 

(y) any Account with respect to which, in whole or in part, a check or checks
or other instruments for the payment of money (the face amount of which checks and
instruments in the aggregate are in excess of 25% of the amount of the Account) have
been received, presented for payment and returned uncollected for any reason until
payment in good funds is made on such checks and instruments;

(z) any Account not owned by Reseller or which Reseller invoices or collects on
behalf of any other Person other than Reseller;

(aa) any Account with respect to which (i) Reseller is prohibited by the Law of
the state where the Account Debtor is located from bringing an action in the courts
of that state to enforce such Account Debtor’s obligation to pay the Account; or
(ii) Reseller has not taken all appropriate actions to ensure access to the courts
of the state where the Account Debtor is located, including, where necessary, the
filing of a Notice of Business Activities Report or other similar filing with the
applicable state agency or the qualification by such Reseller as a foreign
corporation authorized to transact business in such state, unless Reseller’s failure
to make such filing may be cured retroactively under the Law of such states;

(bb) any Account as to which Administrative Agents have determined in their
Permitted Discretion that the prospect of payment or collection thereof on a timely
basis is impaired or the respective Account Debtor is uncreditworthy;

(cc) each Account that is not payable in Dollars;

(dd) any Account with respect to which the delivery of goods or performance of
services is supported by a surety bond unless (i) the Account Debtor has delivered
to Reseller an irrevocable letter of credit issued or confirmed by a bank
satisfactory to Administrative Agents and payable only in the United States of
America and in Dollars, sufficient to cover such Account, in form and substance
satisfactory to Administrative Agents and if required by Collateral Agent, the
original of such letter of credit has been delivered to Collateral Agent or
Collateral Agent’s agent or (ii) such Account is subject to credit insurance payable
to Administrative Agents issued by an insurer and on terms and in an amount
acceptable to Administrative Agents;

(ee) other than a Government Account arising from payment made by a credit
card, debit card or similar instrument issues, authorized or otherwise sponsored by
a Government Authority, any Account arising from payment made by credit card, debit
card or similar instrument; or

(ff) any Account owing by an individual.

In addition to the foregoing, and without limiting the foregoing eligibility
requirements, with respect to all Accounts from Account Debtors which are Affiliates
of each other (“Subject Accounts”), to the extent such Subject Accounts are
Eligible Accounts, the portion of such Subject Accounts (to the extent they are
Eligible Accounts) in excess of 20% of the aggregate of all Eligible Accounts shall
be deemed ineligible. The foregoing sentence is not applicable to the United States
government and agencies thereof.

 

7

 

3.1.7. Modifications of Eligibility Criteria. Administrative Agents retain the
right to (a) establish Contra Reserves; (b) from time to time, after reasonable
notice to Reseller, establish reserves against the Borrowing Base in such amounts as
Administrative Agents shall in the exercise of their Permitted Discretion deem
necessary or appropriate, with respect to (i) wages owed to Reseller’s non-exempt
employees pursuant to the Fair Labor Standards Act, as amended, (ii) material
changes in the levels of price adjustments, damages, unearned discounts, returned
products or other matters for which credit memoranda are issued in the ordinary
course of Reseller’s business; (iii) material increases in dilution related to
Accounts as determined in the most recent audit conducted by Administrative Agents
(provided that, to the extent reserves have already been established under clause
(ii) above relating to dilution, such reserves shall not be taken under this clause
(ii), and provided further that the determination of a material increase in dilution
shall be in Administrative Agents’ sole discretion) and (iv) slow moving Inventory;
and (c) if a material adverse change in the value of the Collateral occurs that
comprises the Borrowing Base, and, to the extent not already reflected in the
computation of the Borrowing Base, to modify any standards of eligibility set forth
in the definition of “Eligible Account” in Section 3.1.6.

3.2. Floorplan Loans.

3.2.1. Floorplan Loan Facility Generally. Subject to the terms herein, each
Lender shall, by funding such Lender’s Pro-Rata Share thereof as provided for
herein, make available to Reseller such Lender’s Pro-Rata Share (as listed on
Exhibit 3) of Floorplan Loan Advances not to exceed, in the aggregate, the
Floorplan Loan Maximum Available Amount. The “Floorplan Loan Maximum Available
Amount” on any date shall be a Dollar amount equal to the amount by which (a)
the Aggregate Floorplan Loan Facility Limit exceeds (b) the sum of (i) the Aggregate
Revolving Loans (including the Extended Pay Obligations), plus (ii) the
outstanding Swingline Loans, plus (iii) the Letter of Credit Exposure
plus, (iv) the Interim Floorplan Loan Advances, plus (v) the
Floorplan Loan Advances, plus (vi) unfunded Approvals, plus (vii)
the amount of the Other Creditor Indebtedness (unless a subordination agreement
satisfactory to Administrative Agents has been executed among Administrative Agents
and the holder(s) of such Other Creditor Indebtedness). Each Lender’s Floorplan
Loan Facility is its Pro-Rata Share of the Aggregate Floorplan Loan Facility. All
Floorplan Loan Advances for Floorplanned Inventory will be made directly to Approved
Vendors and not to Reseller. Subject to the terms of this Agreement, payments and
prepayments that are applied to reduce the Aggregate Floorplan Loans may be
reborrowed through subsequent Floorplan Loan Advances, subject to the terms and
conditions of this Agreement and the Loan Documents. From and after the date on
which Administrative Agents have actual knowledge of an Event of Default under
Section 17.1.1 or under Section 17.1.11, no further Approvals will
be issued and, except with respect to unfunded Approvals for Floorplan Loan Advances
issued prior to knowledge of such Event of Default, no further Floorplan Loan
Advances shall be made. Each Lender shall be obligated to fund its Pro Rata Share
of all Floorplan Loan Advances for Approvals once issued (except any Approvals
issued contrary to the terms of the preceding sentence) regardless as to whether at
the time of issuance there is an Existing Default or after the date of issuance of
any Approval an Event of Default occurs. From and after the date on which
Administrative Agents have actual knowledge of any other Event of Default, no
further Approvals will be issued if CPC so chooses in its discretion to no longer
issue Approvals or if Required Lenders direct CPC to no longer issue Approvals, and
if CPC so chooses or Required Lenders so direct, except with respect to unfunded
Approvals, no further
Floorplan Loan Advances shall be made. From and after the date on which
Administrative Agents have actual knowledge of any Event of Default under
Section 17.1.11, Administrative Agents shall use commercially reasonable
efforts to cancel all Approvals for which shipment has not occurred. The Floorplan
Loan Facility will not be evidenced by promissory notes.

 

8

 

3.2.2. Interim Floorplan Loan Advances. To reduce the frequency of fundings of
Floorplan Loan Advances by Lenders, but subject to the limitations in Section
3.2.4 and elsewhere herein, CPC may in its absolute discretion make Interim
Floorplan Loan Advances for the account of and benefit of Reseller with respect to
an Approval issued by CPC from time to time from the Effective Date, to the
effective date of any termination of the Aggregate Floorplan Loan Facility. From
and after the date on which Administrative Agents have actual knowledge of an Event
of Default under Section 17.1.1 or under Section 17.1.11, no further
Interim Floorplan Loan Advances shall be made. From and after the date on which
Administrative Agents have actual knowledge of any other Event of Default, at the
sole discretion of Administrative Agents, no further Interim Floorplan Loan Advances
shall be made. Subject to the limitations in Section 3.2.4 and elsewhere
herein, payments and prepayments that are applied to reduce the Interim Floorplan
Loan may be reborrowed for new Inventory purchases through Interim Floorplan Loan
Advances. The Interim Floorplan Loan Facility will not be evidenced by promissory
notes.

3.2.3. Terminations of Vendor Agreements.

(i) Upon termination of a Vendor Agreement or upon a material adverse change
with respect to a Vendor Agreement, CPC may in its absolute discretion, cease to
fund requests for Approvals and make Floorplan Loan Advances with respect to such
Vendor (each, a “Vendor Termination”). If a Vendor Agreement is terminated
by a Vendor, CPC agrees to provide written notice to Reseller of such termination
within one Business Day of CPC’s receipt of such termination notice (each, a
“Pre-Termination Notice”) from the Vendor, and Reseller agrees that if there
is no Existing Default, the provision to Reseller by CPC of the same period of
pre-termination notice as provided to CPC by the applicable terminating Vendor shall
be given and is reasonable and sufficient.

(ii) If a Vendor Termination occurs due to the termination of a Vendor
Agreement by CPC, Reseller agrees that if there is no Existing Default, 60 days
prior notice of such Vendor Termination shall be given and is reasonable and
sufficient. During either notice period described above, CPC may make Interim
Floorplan Loan Advances as provided in Section 3.2.2, and Lenders will
continue to fund Floorplan Loan Advances for Approvals (which have not been
cancelled by CPC prior to the shipment of Inventory by the terminating Vendor)
issued on or before the expiration of such notice period and in either case,
repayment shall be in accordance with the applicable Transaction Statement and
Monthly Billing Statement.

(iii) Reseller will not be relieved from any obligation to Administrative
Agents or Lenders arising out of Floorplan Loans or Interim Floorplan Loans made
before the effective termination date of the Vendor Termination or made after the
effective termination date of the Vendor Termination in connection with Approvals
issued on or before such effective termination date, which Approvals have not been
cancelled by CPC prior to the shipment of Inventory by the terminating Vendor.
Notwithstanding a termination of a Vendor Agreement as described above,
Administrative Agents and Lenders will retain all of their rights, interests and
remedies hereunder and in all
Collateral until Reseller has indefeasibly paid all of the Loan Obligations in
full in cash, all Letters of Credit have expired and the Letter of Credit Exposure
is irrevocably reduced to zero.

 

9

 

3.2.4. Limitations on Interim Floorplan Loan Advances. The maximum amount of
the Interim Floorplan Loan amount on any date shall be Twenty-Five Million Dollars
($25,000,000). Administrative Agents shall not be obligated to make any particular
Interim Floorplan Loan Advance, the making of any particular Interim Floorplan Loan
Advance at any particular time being absolutely discretionary. Administrative
Agents will not without the prior consent (which may be written or oral) of each
Lender, knowingly make any Interim Floorplan Loan Advance which would cause the
aggregate amount of the Interim Floorplan Loan plus the Aggregate Floorplan
Loan to exceed the limitations set forth herein as of the date immediately prior to
the making of any such Interim Floorplan Loan Advance. Administrative Agents shall
not be obligated to fund any Interim Floorplan Loan Advances after the effective
date of termination of the Aggregate Floorplan Loan Facility or the Interim
Floorplan Loan Facility.

3.2.5. Operation of Floorplan Loan Facility and Interim Floorplan Loan
Facility. Subject to the terms of this Agreement, the Floorplan Loan Facility and
Interim Floorplan Loan Facility may be used by Reseller from time to time to
purchase Floorplanned Inventory from a Vendor approved by Administrative Agents in
their sole and absolute discretion (each an “Approved Vendor” and,
collectively, the “Approved Vendors”).

3.2.6. Floorplan Loan Approvals. Reseller and each Lender acknowledge and
agree that: (i) CPC may issue Approvals on a date that is prior to the date of the
funding of any Floorplan Loan Advance or Interim Floorplan Loan Advance that are
based on such Approvals; (ii) once an Approval has been issued, then Administrative
Agents may, and subject to the provisions of Section 3.2.1, may require
Lenders, to fund the related Advance at any time, notwithstanding (A) any Default or
Event of Default that may arise on or prior to the date of any such Advance, (B)
whether the Loan Obligations have been accelerated, (C) whether the Facilities have
been terminated, or (D) whether any such Advance shall occur after the effective
date of termination of the Aggregate Floorplan Loan Facility for an Approval issued
on or prior to such date; and (iii) each Lender shall be obligated to fund its
Pro-Rata Share of any such Advance once an Approval has been issued for such Advance
and after receipt of an invoice by CPC from the applicable Approved Vendor
regardless of whether such Advance has been funded by CPC. A request from an
Approved Vendor (with respect to Reseller) to CPC to finance Floorplanned Inventory
will be deemed to be a request from Reseller for a Floorplan Loan Advance or an
Interim Floorplan Loan Advance, as the case may be.

3.2.7. Inventory not Available for Floorplan Loans and Interim Floorplan Loans.
Only Approved Vendors will be eligible to receive proceeds of Aggregate Floorplan
Loans and Interim Floorplan Loans for Floorplanned Inventory. Administrative Agents
or Required Lenders may, at any time and with reasonable notice to Reseller, elect
not to finance any inventory sold by particular Approved Vendors, including any
Approved Vendors who are in default of their obligations to CPC or with respect to
which CPC or Administrative Agents deem themselves reasonably insecure. Except with
respect to Approvals issued by CPC on or before the effective date of the
termination of the Aggregate Floorplan Loan Facility, Lenders shall not be obligated
to fund any Floorplan Loan Advances after such date.

 

10

 

3.2.8. Repurchase Agreements. CPC has entered into agreements with Vendors who
are expected to receive proceeds of the Aggregate Floorplan Loans and the Interim
Floorplan Loans (each being a “Vendor Agreement” and collectively, the
“Vendor Agreements”). Neither Administrative Agents, CPC nor any Lender
makes any representation or warranty regarding the Vendor Agreements, including
regarding the enforceability thereof, whether any particular item of Inventory
purchased by Reseller is subject to repurchase rights, or any repurchase rights that
may be set forth therein. Each Lender and Reseller acknowledges and agrees that CPC
may take or refrain from taking any actions under or in connection with the Vendor
Agreements in CPC’s Permitted Discretion. No Vendor is a third party beneficiary of
this Agreement or the other Loan Documents.

3.2.9. Floorplan Loan Pay Down Provision. Regardless of the payment terms
pertaining to any Loans or anything contained in this Agreement to the contrary, if
at the time of any determination, the sum of Reseller’s total outstanding Loan
Obligations exceeds the Borrowing Base, Reseller will immediately pay to
Administrative Agents the sum of such excess.

3.2.10. Overtrade Advances 3.2.11. CPC, in its individual capacity as Lender,
may in its absolute discretion at any time and without notice or consent to or from
any other Lender or Reseller issue Approvals, which, when added to all other
outstanding Loan Obligations may exceed the Total Facility Limit (“Overtrade
Advances”), provided that the sum of Aggregate Floorplan Loans, Interim Floorplan
Loans, Aggregate Revolving Loans (including Extended Pay Outstandings), Swingline
Advances and Letter of Credit Exposure may not exceed $100,000,000. All Overtrade
Advances shall be secured by all of the Collateral. In addition, the Overtrade
Advances may have the benefit of collateral, other than the Collateral, including,
without limitation, a guaranty from one or more Approved Vendors.

3.3. Swingline Facility.

3.3.1. Swingline Advances. To reduce the frequency of fundings of Revolving
Loan Advances by Lenders, but subject to the limitations in Section 3.3.3
and elsewhere herein, CPC may (provided an Advance Request in the form of
Exhibit 7.13 is received by CPC) in its absolute discretion make Swingline
Advances to Reseller from time to time from the Effective Date to the Termination
Date. From and after the date on which Administrative Agents have actual knowledge
of an Event of Default under Section 17.1.1 or Section 17.1.11, no
further Swingline Advances shall be made. Subject to the limitations in Section
3.3.3 and elsewhere herein, payments and prepayments that are applied to reduce
the Swingline Loan may be reborrowed through Swingline Advances.

3.3.2. Termination of Swingline Facility. CPC may terminate the Swingline
Facility at any time in its absolute discretion. If CPC terminates the Swingline
Facility, Reseller agrees that no prior notice of any kind is required. Reseller
will not be relieved from any obligation to CPC arising out of the Swingline
Facility made before the effective termination date of the Swingline Facility.
Notwithstanding a termination of the Swingline Facility, Administrative Agents and
Lenders will retain all of their rights, interests and remedies hereunder and in all
Collateral until Reseller has indefeasibly paid all of the Loan Obligations in full
in cash, all Letters of Credit have expired and the Letter of Credit Exposure is
irrevocably reduced to zero.

 

11

 

3.3.3. Limitations on Swingline Advances. CPC shall not be obligated to make
any particular Swingline Advance, the making of any particular Swingline Advance
at any particular time being absolutely discretionary. In any event, no
Swingline Advance will be made on or after the Termination Date, and no Swingline
Advance will be made which would result in the Swingline Loan exceeding the Maximum
Swingline Amount. CPC may, however, in its absolute discretion make such Swingline
Advances, but shall not be deemed by doing so to have increased the Maximum
Swingline Amount and shall not be obligated to make any such Swingline Advance
thereafter. CPC will not, without the prior consent (which may be written or oral)
of each Lender, knowingly make any Swingline Advance which would cause the aggregate
amount of the Aggregate Revolving Loan to exceed the Revolving Loan Maximum
Available Amount as of such date immediately prior to the making of any such
Swingline Advance. The Maximum Swingline Amount on any date for any Swingline
Advance shall be a Dollar amount equal to the lesser of (a) Twenty-Five Million
Dollars ($25,000,000) less the outstanding principal amount of any Swingline Loans
and (b) the amount by which the Revolving Loan Maximum Available Amount as of such
date exceeds the Aggregate Revolving Loans.

3.4. Letter of Credit Facility.

3.4.1. Subject to the terms and conditions set forth herein, Letter of Credit
Issuer will issue standby letters of credit and commercial (documentary) letters of
credit for the account of Reseller from time to time from the Effective Date to the
Termination Date, but only if the Letter of Credit Exposure will not as a result of
such issuance exceed the least of (a) Twenty-Five Million Dollars ($25,000,000), (b)
the amount by which (i) the Aggregate Revolving Loan Facility Limit exceeds (ii) the
sum of (A) the outstanding principal amount of the Aggregate Revolving Loans,
plus (B) the outstanding principal amount of the Swingline Loans, (c) the
amount by which (i) the Total Facility Limit exceeds (ii) the sum of (A) the
Floorplan Loan Advances, plus (B) the Interim Floorplan Loan Advances,
plus (C) unfunded Approvals, plus (D) the outstanding principal
amount of the Swingline Loans, plus (E) the outstanding principal amount of
the Aggregate Revolving Loans, and (d) the amount by which (i) the Borrowing Base
exceeds (ii) the sum of (A) the Floorplan Loan Advances, plus (B) the
Interim Floorplan Loan Advances, plus (C) unfunded Approvals, plus
(D) the outstanding principal amount of the Aggregate Revolving Loans, plus
(E) the outstanding principal amount of the Swingline Loans, plus (E) the
amount of the Other Creditor Indebtedness (unless a subordination agreement
satisfactory to Administrative Agents has been executed between Administrative
Agents and the holder of such Other Creditor Indebtedness). At the request of
Reseller, Letter of Credit Issuer together with Administrative Agents and the
Lenders will consider in their sole discretion, the increase of the Letter of Credit
Exposure to an amount in excess of Twenty-Five Million Dollars ($25,000,000),
provided that such increase shall not increase the Aggregate Revolving Loan Facility
Limit.

3.4.2. On the Effective Date, Letter of Credit Issuer shall be deemed to have
sold and transferred to each other Lender, and such other Lender shall be deemed to
have purchased and received from Letter of Credit Issuer, a pro-rata undivided
interest and participation in each Letter of Credit listed on Schedule 3.4.2, the
reimbursement obligation of Reseller with respect thereto, and any guaranty thereof
or collateral therefor. After the Effective Date, immediately upon the issuance by
Letter of Credit Issuer of a Letter of Credit in accordance with the terms and
conditions of this Agreement, Letter of Credit Issuer shall be deemed to have sold
and transferred to each other Lender, and such other Lender shall be deemed to have
purchased and received from Letter of Credit Issuer, a pro-rata undivided interest
and participation in such Letter of Credit, the
reimbursement obligation of Reseller with respect thereto, and any guaranty
thereof or collateral therefor. Each Lender’s (including Letter of Credit Issuer’s)
pro-rata undivided interest shall be the same as its Pro-Rata Share of the Aggregate
Revolving Loan Facility.

 

12

 

3.4.3. Subject to the terms below, the expiration date of any Letter of Credit
will not be later than the earlier of (a) the first anniversary of the date of
issuance or (b) a Business Day that is not later than the date which is 25 days
prior to the Termination Date; provided, however, that the expiration date
for a Letter of Credit may be later than such date if Letter of Credit Issuer and
Administrative Agents each consent to such issuance and Reseller provides to Letter
of Credit Issuer at the time of issuance cash collateral satisfactory to Letter of
Credit Issuer and Administrative Agents as security for Reseller’s obligation to
reimburse Letter of Credit Issuer for 105% of all draws and expenses thereunder
(“Cash Collateral”). The Cash Collateral is a part of the Collateral.
Reseller agrees that (a) should Letter of Credit Issuer not qualify as a “Lender”
upon the Effective Date, or (b) if a Letter of Credit has been issued and the
Aggregate Revolving Loan Facility is subsequently terminated or the Letter of Credit
Facility is subsequently terminated or a Termination Date will occur so that the
expiry of such Letter of Credit(s) is beyond the Termination Date, then Reseller
shall, (i) on the Effective Date in the case of clause (a) above, or (ii) within
five Business Days prior to the Termination Date in the case of clause (b) above,
provide Letter of Credit Issuer with Cash Collateral. In the case of clause (a)
above, such Cash Collateral shall be released and refunded to Reseller on the date
on which Letter of Credit Issuer becomes a Lender hereunder. Administrative Agents
and Lenders shall be entitled to make one or more Revolving Loans to provide Cash
Collateral if Reseller does not timely provide Cash Collateral and all such
Revolving Loans shall be a part of the Loan Obligations secured by the Collateral.
Letter of Credit Issuer shall hold Cash Collateral for the benefit of Lenders and
Administrative Agents as security for the Letters of Credit and the other Loan
Obligations in an account at Letter of Credit Issuer in the name of Letter of Credit
Issuer.

3.4.4. Should Wells Fargo Bank, N.A., resign as Letter of Credit Issuer and
should any subsequent Letter of Credit Issuer subsequently resign as a Lender under
the terms of this Agreement, then such Letter of Credit Issuer shall also resign as
Letter of Credit Issuer and all Letter of Credit obligations then outstanding shall
be assumed by Wells Fargo Bank, N.A. and Wells Fargo Bank, N.A. shall thereafter
become Letter of Credit Issuer.

3.5. Termination/Maturity/Renewal.

3.5.1. At any time there is an Existing Default irrespective of any provision
in this Agreement to the contrary, Administrative Agents or Required Lenders may
terminate the Facilities, accelerate the Loan Obligations or take such other actions
as they may be permitted to take hereunder (including under Section 17.3),
the other Loan Documents or at law or in equity. Notwithstanding a termination,
Administrative Agents and Lenders will retain all of their rights, interests and
remedies hereunder and in all Collateral until Reseller has indefeasibly paid all of
the Loan Obligations in full in cash, all Letters of Credit have expired and the
Letter of Credit Exposure is irreversibly zero.

3.5.2. Reseller may, at any time, elect to terminate the Facilities, provided
that Reseller pays to Administrative Agents, for the ratable benefit of Lenders (a)
the outstanding principal amount of the Loans (b) all interest accrued hereunder
with respect to the Loans, if any, to the date set for termination, plus (c) a
prepayment fee equal to (i)
1.75% of the Total Facility Limit if the Facilities are terminated before the
first anniversary of the Effective Date (ii) 1.00% of the Total Facility Limit if
the Facilities are terminated on or after the first anniversary of the Effective
Date but before the second anniversary of the Effective Date and (iii) 0.50% of the
Total Facility Limit if the Facilities are terminated on or after the second
anniversary of the Effective Date.

 

13

 

Notwithstanding a termination, Administrative Agents and Lenders will retain all of
their rights, interests and remedies hereunder and in all Collateral until Reseller
has indefeasibly paid all of the Loan Obligations in full in cash, all Letters of
Credit have expired and the Letter of Credit Exposure is irreversibly zero.
Notwithstanding the foregoing, if CPC’s relationship is terminated with an Approved
Vendor such that Reseller may no longer obtain Floorplan Loan Advances with respect
to such Approved Vendor, then Reseller shall not be obligated to pay the foregoing
prepayment fee if within 60 days of the termination of the relationship between CPC
and such Approved Vendor, Reseller elects to terminate the Facilities and make all
payments required by this Section (other than the prepayment fee) within 60 days
after such election to terminate.

3.5.3. If the Facilities are not sooner terminated as contemplated by
Section 3.5.2 of this Agreement, then, notwithstanding anything contained in
this Agreement to the contrary, the Facilities shall automatically terminate on the
Termination Date (defined below) unless no fewer than sixty (60) days prior to
 _____, 2014, Administrative Agents, Reseller and all of Lenders affirmatively
agree in writing, in each of their respective sole and absolute discretion, to renew
the Facilities for an additional 365-day period on the terms and conditions
contained herein (a “Renewal”).
If no Renewal has occurred,
“Termination Date” means the earliest of: (a) the termination of the
Facilities by Administrative Agents or Required Lenders pursuant to the provisions
of Section 3.5.1, (b) sixty (60) days after written notice is delivered by
Administrative Agents or Required Lenders to Reseller informing Reseller of the
determination by Administrative Agents or Required Lenders to terminate the
Facilities in their sole discretion or (c)
 _____, 2014. Notwithstanding the
foregoing, if one or more Renewals have occurred, “Termination Date” means
the earliest of (a) the termination of the Facilities by Administrative Agents or
Required Lenders pursuant to the provisions of Section 3.5.1, (b) sixty (60)
days after written notice is delivered by Administrative Agents or Required Lenders
to Reseller informing Reseller of the determination by Administrative Agents or
Required Lenders to terminate the Facilities in their sole discretion or (c) the
date which is the last day of the 365-day period for which the Facilities were most
recently extended pursuant to a Renewal. None of Administrative Agents nor any
Lender shall be obligated to provide Reseller notice (written or oral) of a
Termination Date arising pursuant to Section 3.5.1. If written evidence of
a Renewal is not executed by Administrative Agents, all of Lenders and Reseller as
required herein, then this Agreement and the Loan Documents shall terminate on the
Termination Date without further action or notice by any Party.

	 	3.6.	 	Promise to Pay. Reseller hereby promises to pay to Lenders and Administrative Agents
the Loan Obligations (including principal, interest, fees, costs, and expenses) in Dollars
in full as and when due and payable under the terms of this Agreement and the other Loan
Documents.

4. Interest; Yield Protection.

	 	4.1.	 	Interest on the Swingline Loan. The Swingline Loan shall accrue interest at a rate per
annum equal to the LIBOR Rate.

 

14

 

	 	4.2.	 	Interest on Draws on Letters of Credit. The unreimbursed amount of each draw on a
Letter of Credit shall accrue interest at a rate per annum equal to the LIBOR Rate.

	 
	 	4.3.	 	Interest on the Floorplan Loan and Interim Floorplan Loan —Administrative Agents and CPC
as Lenders Only.

4.3.1. Indebtedness under each Transaction Statement shall bear interest at the rate
specified in, and shall be payable in accordance with, the Monthly Billing
Statement. After the occurrence and during the continuation of an Event of Default,
Indebtedness under each Transaction Statement shall bear interest at the Default
Rate.

4.3.2. Reseller, Administrative Agents and each Lender agree that certain financial
terms of any Floorplan Loan Advance or Interim Floorplan Loan Advance made under
this Agreement, whether regarding interest rates, other fees, maturities, or other
financial terms, are not set forth herein because such terms depend, in part, upon
the availability of Vendor discounts, payment terms or other incentives, prevailing
economic conditions, Administrative Agents or CPC’s floor planning volume with
Reseller and with Reseller’s Vendors, and other economic factors which may vary over
time. Reseller, Administrative Agents and each Lender further agree that it is
therefore in their mutual best interest to set forth in this Agreement only the
general terms of the Floorplan Loan Facility and the Interim Floorplan Loan
Facility. Upon agreeing to finance a particular item of inventory for Reseller, CPC
will send Reseller a Transaction Statement identifying such Inventory and the
Payment Due Date (each being a “Transaction Statement”). CPC may, without
the consent of Lenders or Required Lenders, change any aspect or portion of any
Transaction Statement. Unless Reseller notifies Administrative Agents in writing of
any objection within 15 days after a Transaction Statement is mailed or sent
electronically to Reseller: (a) the amount shown on such Transaction Statement will
be an account stated; (b) Reseller will have agreed to all terms shown on such
Transaction Statement; (c) Reseller will have agreed that Administrative Agents are
financing the items of Inventory referenced in such Transaction Statement at
Reseller’s request; and (d) such Transaction Statement will be incorporated herein
by reference, will be made a part hereof as if originally set forth herein, and will
constitute an addendum hereto. If Reseller objects to the terms of any Transaction
Statement, Reseller agrees to pay Administrative Agent for such Inventory in
accordance with the most recent terms for similar Inventory to which Reseller has
not objected (or, if there are no prior terms, at the lesser of the Prime Rate plus
two percent (2.0%) per annum or at the maximum lawful contract rate of interest
permitted under Law).

4.3.3. Reseller will pay to CPC the interest (on the Interim Floorplan Loan) for its
own account and to CPC (on the Aggregate Floorplan Loan) for its own account on the
outstanding principal amount of the Interim Floorplan Loans and the Aggregate
Floorplan Loans, respectively, at the rate(s) and in the amount(s) shown on the
applicable Transaction Statement, or if Reseller objects thereto, then in such
amount(s) as provided in Section 4.3.2. All interest due and owing as set
forth in the Monthly Billing Statement shall be retained by CPC for its own account
(on the Interim Floorplan Loans and on the Aggregate Floorplan Loans). Except for
volume purchase discounts provided to Reseller by a Vendor, all discounts and
subsidies from a Vendor shall be for the sole account of CPC. Principal received by
Administrative Agents from Reseller on the Aggregate Floorplan Loans will be paid to
Lenders as set forth in Section 18.10. The interest shown in each Monthly
Billing Statement will: (a) be computed based on a 360 day year; (b) be calculated
by multiplying the Daily Charge (as defined below) by the actual number of days in
the applicable billing period; and (c) accrue from the Payment

 

15

 

Due Date until Administrative Agents receive full payment as provided in this Agreement for each
item of such Collateral. The “Daily Charge” is the product of the Daily
Rate (as defined below) multiplied by the Average Daily Balance (as defined below).
The “Daily Rate” is the quotient of the annual rate shown in the Monthly
Billing Statement divided by 360. The “Average Daily Balance” is the
quotient of (a) the sum of the outstanding principal under the Aggregate Floor Plan
Facility plus the Interim Floorplan Loan Facility on each day of a billing period
for each item of Collateral identified on a Transaction Statement or in the Monthly
Billing Statement, divided by (b) the actual number of days in such billing period.
With respect to the Interim Floorplan Loans and the Floorplan Loans, the annual
interest rate relating to any item of Collateral financed thereby will be calculated
from the Payment Due Date, regardless of any period during which any finance charge
subsidy shall be paid or payable by any third party.

4.3.4. On a monthly basis, CPC will send Reseller a billing statement identifying
principal financed plus accrued interest, due to Administrative Agents on the
Interim Floorplan Loans and to CPC, as a Lender, on the Floorplan Loan Facility (the
“Monthly Billing Statement”). Except as otherwise provided in a Monthly
Billing Statement, the charges specified in each Monthly Billing Statement will be
due and payable on the Payment Due Date in accordance with the terms of such Monthly
Billing Statement.

All Extended Pay Outstandings shall be deemed to be Revolving Loan Advances hereunder. Each
Revolving Loan Advance or any part of a Revolving Loan Advance shall be a LIBOR Rate
Advance. Each LIBOR Rate Advance when made will be a LIBOR Rate Loan that bears interest at
the LIBOR Rate.

4.4. Interest on Floorplan Loans

(i) Administrative Agents, Reseller and each Lender acknowledge and agree that the rate of
return paid on any Floorplan Loan or Interim Floorplan Loan is dependent on numerous
factors, including discounts and subsidies offered by Vendors. Accordingly, Administrative
Agents, Reseller and each Lender agrees that due to the difficulty in determining the actual
rate of return on any particular Floorplan Loan or Interim Floorplan Loan or with respect to
any particular invoice underlying any such Loan Lenders (other than CPC) will be paid the
interest rate specified in this Agreement. With respect to each Lender (other than CPC),
CPC shall pay to each Lender interest on each Floorplan Loan Advance for such Lender based
on the interest rates set forth in Section 4.6 and 4.7 and, if applicable,
4.10, and as provided in Section 6.1.1 from the date of funding by such
Lender to CPC of its Pro-Rata Share of such Floorplan Loan Advance to the Payment Due Date.
Each Floorplan Loan Advance or any part of a Floorplan Loan Advance owing to a Lender (other
than CPC) shall be considered a LIBOR Rate Loan for interest rate calculation purposes.

(ii) After the Payment Due Date with respect to each Advance, after the Termination Date (to
the extent interest remains owing) or upon the occurrence and during the continuance of any
other Event of Default, and subject to clause (iii) below, Administrative Agents shall
distribute interest to each Lender (including CPC as a Lender) out of cash or good collected
funds representing interest due by Reseller, each Lender’s Pro Rata Share.

(iii) If any Lender is a Defaulting Lender (as defined in Section 7.8.1) and such
default continues for more than two Business Days, then for as long as such Lender is a
Defaulting Lender, the Advance so funded by Administrative Agents shall constitute a special
class of Advances hereunder (the “Defaulted Advances”), and (a) such Defaulting
Lender shall cease to be entitled to receive any interest payable by CPC pursuant to clause
(i) hereof or distributable
by Administrative Agents pursuant to clause (ii) hereof with respect to such Defaulted
Advances, and (b) in addition to the rights of Administrative Agents set forth in
Sections 7.8.1 and 7.8 3, any interest payable by CPC or collected by
Administrative Agents thereafter, shall be applied first to repayment in full of the
Defaulted Advances before application of such Collections and other monies to any other
Advances.

 

16

 

	 	4.5.	 	LIBOR Rate. Except as set forth in Section 4.3.1, the “LIBOR RATE” for any
LIBOR Rate Loan is the LIBOR Underlying Rate (which will fluctuate as described in
Section 4.8) plus the applicable LIBOR Increment as provided in Section 4.6.

	 
	 	4.6.	 	LIBOR Increment. The applicable LIBOR Increment with respect to (a) Swingline Loans,
(b) unreimbursed amounts of each draw on a Letter of Credit, (c) Extended Pay Outstandings
and (d) each Revolving Loan Advance, shall be three percentage points (3%) per annum. The
applicable LIBOR Increment with respect to (i) Floorplan Loans and Interim Floorplan Loans
and (ii) the interest CPC shall pay to each Lender with respect to each Floorplan Loan
Advance for such Lender, shall be two and three-fourths percentage points (2.75%) per annum.

	 
	 	4.7.	 	Time of Accrual. Interest shall accrue on all principal amounts outstanding from the
date when first outstanding to the date when no longer outstanding. Amounts shall be deemed
outstanding until payments are applied thereto as provided herein.

	 
	 	4.8.	 	Computation; LIBOR Underlying Rate. Interest shall be computed for the actual days
elapsed over a year deemed to consist of 360 days for all LIBOR Rate Loans. The LIBOR Rate
for each LIBOR Rate Loan shall be the rate determined by Administrative Agents pursuant to
this Agreement. For each LIBOR Rate Loan, the LIBOR Rate shall fluctuate as provided for
herein. The “Libor Underlying Rate” shall be the interest rate per annum equal to
the quotient (rounded to the nearest 0.001%) of: on the Effective Date, and for each
calendar week thereafter, commencing on Wednesday of such week, the one month LIBOR Rate per
annum, as determined by Administrative Agents, as adjusted from time to time in
Administrative Agents’ Permitted Discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs, as reported by The Wall
Street Journal and identified as the “London Interbank Offered Rate”, on each Monday
immediately preceding or if any such Monday is not a Business Day, then on the Business Day
immediately preceding such Monday. If for any reason such rate is not available in The Wall
Street Journal, the term “LIBOR Underlying Rate” means, for any LIBOR Rate Loan, the rate
per annum, as determined by Administrative Agent, as adjusted from time to time in
Administrative Agents’ Permitted Discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs, appearing on Reuters Screen
LIBOR Page as the London Interbank Offered Rate for deposits in Dollars at approximately
11:00 a.m. (London time) for an interest period of one month, on (a) each Monday immediately
preceding, or (b) if any such Monday is not a Business Day, then on the Business Day
immediately preceding such Monday; provided, however, if more than one rate is specified on
Reuters Screen LIBOR Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/1000 of one percent (1%).

	 
	 	 	 	Such rate may not be the lowest rate of interest charged by either Administrative Agent or
any Lender to its respective customers or a favored rate and may not correspond with future
increases or decreases in interest rates charged by other lenders or market interest rates
in general, and is used herein as a reference rate.

	 
	 	4.9.	 	Rate After Maturity and Rate After An Event of Default.

	 
	 	 	 	Reseller shall pay interest on each of the Loans after their Maturity, and if Administrative
Agents or Required Lenders so determine in their absolute discretion, on the Loans after the
occurrence
and during the continuance of an Event of Default, at a rate per annum equal to the LIBOR
Rate plus four and one-half percentage points (4.5%) (the “Default Rate”).

 

17

 

	 	4.10.	 	Taxes.

4.10.1. Any and all payments by Reseller to or for the account of any Lender or
Administrative Agents hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all current or future Taxes,
excluding, in the case of each Lender and each Administrative Agent, (a)
Taxes imposed on its income by any Governmental Authority, and (b) franchise Taxes
imposed on it, by the jurisdiction (or any political subdivision thereof) under the
Laws of which such Lender (or its Applicable Lending Office) or such Administrative
Agent (as the case may be) is organized or any political subdivision thereof. If
Reseller shall be required by Law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Lender or an
Administrative Agent, (a) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional
sums payable under this Section) such Lender or such Administrative Agent receives
an amount equal to the sum it would have received had no such deductions been made,
(b) Reseller shall make such deductions, (c) Reseller shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance with
Law, and (d) Reseller shall furnish to Administrative Agents, at the common notice
address referred to herein, the original or a certified copy of a receipt evidencing
payment thereof.

4.10.2. In addition, Reseller agrees to pay any and all present or future stamp or
documentary taxes and any other excise or property taxes or charges or similar
levies which arise from any payment made under this Agreement or any other Loan
Document or from the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as
“Impositions”), except income and franchise Taxes imposed by any
Governmental Authority referred to in Section 4.10.1.

4.10.3. Reseller agrees to indemnify each Lender and each Administrative Agent for
the full amount of Taxes and Impositions (including any Taxes or Impositions imposed
or asserted by any jurisdiction on amounts payable under this Section) that are
required to be paid by Reseller hereunder but are paid by such Lender or such
Administrative Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto; provided, however,
that neither Administrative Agent nor any Lender shall have any obligation to pay
any such Taxes, Impositions or other liability.

4.10.4. Each Lender organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement in
the case of each Lender listed on the signature pages hereof and on or prior to the
date on which it becomes a Lender in the case of each other Lender, and from time to
time thereafter if requested in writing by Reseller or Administrative Agents (but
only so long as such Lender remains lawfully able to do so), shall provide Reseller
and Administrative Agents with (a) Internal Revenue Service form W-8BEN or W-8ECI,
as appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding Tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in the
United States, (b) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service, and
(c) any other form or certificate required by any Governmental Authority (including
any certificate required by Code Sections 871(h) and 881(c)), certifying that such
Lender is entitled to an exemption from or a reduced rate of Tax on payments
pursuant to this Agreement or any of the other Loan Documents.

 

18

 

4.10.5. For any period with respect to which a Lender has failed to provide Reseller
and Administrative Agents with the appropriate form pursuant to Section
4.10.4 (unless such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under this
Section 4.10 with respect to Taxes imposed by or within the United States;
provided, however, that should a Lender, which is otherwise exempt
from or subject to a reduced rate of withholding Tax, become subject to Taxes
because of its failure to deliver a form required hereunder, Reseller shall take
such action as such Lender shall reasonably request to assist such Lender to recover
such Taxes.

4.10.6. If Reseller is required to pay additional amounts to or for the account of
any Lender or Administrative Agents pursuant to this Section, then such Lender or
the affected Administrative Agent will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the Permitted
Discretion of such Lender or such Administrative Agent, as the case may be, is not
otherwise disadvantageous to such Lender or such Administrative Agent, as the case
may be. Each Lender agrees, with respect to the provisions of this Section
4.11, to treat Reseller in a manner substantially similar to that of its other
similarly situated customers.

4.10.7. Within 30 days after the date of any payment of Taxes described in this
Section 4.10, Reseller shall furnish to Administrative Agents the original
or a certified copy of a receipt evidencing such payment.

4.10.8. Without prejudice to the survival of any other agreement of Reseller
hereunder, the agreements and obligations of Reseller contained in this Section
shall survive the termination of the Facilities and the indefeasible payment in full
of the Loan Obligations.

	 	4.11.	 	Capital Adequacy.

4.11.1. If, after the date hereof, any Lender or Administrative Agent shall have
reasonably determined that the adoption after the date hereof of any Law regarding
capital adequacy or any change after the date hereof therein or in the
interpretation or administration thereof after the date hereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or any request or directive after the date hereof regarding
capital adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank, or comparable agency (each, a “Change in Law”) has or would
have the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender’s obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy), then from time to time
upon demand Reseller shall pay to such Lender such additional amount or amounts as
will reasonably compensate such Lender for such reduction, provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated after December 1, 2009 by the Bank for
International Settlements, the Basel Committee on Banking on Banking Regulation and
Supervisory Practices (or any successor or similar authority) shall be deemed to be
a Change in Law, regardless of the date enacted, adopted or issued.

 

19

 

4.11.2. Each Lender shall promptly notify Reseller and Administrative Agents of any
event of which it has knowledge, occurring after the date hereof, which will entitle
such Lender to compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the Permitted Discretion of such
Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under
this Section shall furnish to Reseller and Administrative Agents a statement setting
forth the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods. Each Lender
agrees, with respect to the provisions of this Section, to treat Reseller in a
manner substantially similar to that of its other similarly situated customers.

	 	4.12.	 	Usury. Notwithstanding any provisions to the contrary in Section 4 or
elsewhere in any of the Loan Documents, Reseller shall not be obligated to pay interest at a
rate which exceeds the maximum rate permitted by Law. If, but for this Section
4.13, Reseller would be deemed obligated to pay interest at a rate which exceeds the
maximum rate permitted by Law, or if any of the Loan Obligations is paid or becomes payable
before its originally scheduled Maturity or is otherwise accelerated and as a result
Reseller has paid or would be obligated to pay interest at such an excessive rate, then (a)
Reseller shall not be obligated to pay interest to the extent it exceeds the interest that
would be payable at the maximum rate permitted by Law; (b) if the outstanding Loan
Obligations have not been accelerated as provided in Section 17.3.2, any such excess
interest that has been paid by Reseller shall be refunded; (c) if the outstanding Loan
Obligations have been accelerated as provided in Section 17.3.2, any such excess
that has been paid by Reseller shall be applied to the Loan Obligations as provided in
Section 17.4; and (d) the effective rate of interest shall be deemed automatically
reduced to the maximum rate permitted by Law.

5. Fees.

	 	5.1.	 	Closing Fee. Reseller shall pay to Administrative Agents for the account of each
Lender with a Revolving Loan Facility a closing fee for the period from the date hereof
through the Termination Date (the “Closing Fee”) in an amount equal to the
sum of 0.50% multiplied by the amount of such Lender’s Pro-Rata Share of the Total Facility
Limit in effect on such date.

	 
	 	5.2.	 	Letter of Credit Fee. Reseller shall pay to Administrative Agents for the account of
each Lender with a Revolving Loan Facility (pro rata based on each Lender’s Revolving Loan
Facility), a non-refundable recurring Letter of Credit Fee for each Letter of Credit issued
by Letter of Credit Issuer. The Letter of Credit Fee for any Letter of Credit shall be an
amount equal to the aggregate undrawn amount of such Letter of Credit multiplied by 2.00%
(per annum). The Letter of Credit Fee for each Letter of Credit shall be payable in advance
on the date of issuance for the remaining portion of the quarter when issued and quarterly
thereafter on the last day of each full calendar quarter thereafter while such Letter of
Credit is outstanding and upon maturity or termination thereof pro-rata for the remaining
portion of the quarter in which such maturity or termination occurs.

	 
	 	5.3.	 	Letter of Credit Issuance Fee. Reseller shall pay to Letter of Credit Issuer a
nonrefundable, issuance fee equal to $500 for the issuance of each Letter of Credit issued
by Letter of Credit
Issuer (“Issuance Fee”). The Issuance Fee due for any Letter of Credit shall be
payable in advance, on the issuance date of each Letter of Credit.

 

20

 

	 	5.4.	 	Other Letter of Credit Fees. Reseller shall pay to Letter of Credit Issuer such Letter
of Credit Issuer’s other customary fees for issuance, amendment, or renewal of a Letter of
Credit and, as Letter of Credit Issuer and Reseller may agree with respect to each Letter of
Credit, for each negotiation of a draft drawn under such Letter of Credit.

	 
	 	5.5.	 	Unused Line Fee. Reseller shall pay to Administrative Agents, for the account of each
Lender (pro rata based on each Lender’s Revolving Loan Facility) an unused line fee for the
period from the date hereof through the end of the Termination Date equal in the aggregate
to 0.25% per annum of the average daily unborrowed amount of the Total Facility Limit in
effect during the period for which payment is made (the “Unused Line Fee”). The
Unused Line Fee shall be payable monthly in arrears on the last day of each month until the
Termination Date. The Parties agree that such Unused Line Fee constitutes reasonable
consideration for Administrative Agents’ taking of appropriate actions to be able to make
available to Reseller the amount of the Total Facility Limit for such period.

	 
	 	5.6.	 	Calculation of Fees. All of the foregoing fees shall be calculated by Administrative
Agents and payable by Reseller. All of the foregoing fees and all other fees payable
hereunder to Administrative Agents or any Lender that are based on an annual percentage
shall be calculated on the basis of a year deemed to consist of 360 days and for the actual
number of days elapsed. Once paid, all such fees shall be deemed to be fully earned and
nonrefundable under any circumstances. These fees are a part of the Loan Obligations and
are secured by all of the Collateral. Administrative Agents are hereby authorized to make
an Advance to pay such fees.

6. Payments.

	 	6.1.	 	Scheduled Payments on Loans; Applications to Loans.

	 	6.1.1.	 	Interest.

6.1.1.1. Revolving Loans/Extended Pay Outstandings. Reseller shall pay to
Administrative Agents for their own account and the account of Lenders
interest accrued on each Aggregate Revolving Loan, and to CPC for its own
account interest accrued on the Swingline Loan monthly in arrears beginning
on the second Business Day of the first month beginning after the Effective
Date and continuing on the second Business Day of each month thereafter, and
on the Termination Date. Reseller shall pay interest accrued on each
Revolving Loan and the Swingline Loan after the Termination Date at the
Default Rate. Reseller shall pay to Administrative Agents for their own
account and the account of Lenders interest on each Extended Pay Outstanding
on the Extended Payment Due Date with respect to each such Extended Pay
Outstanding. Subject to the terms of this Agreement, interest on the
Revolving Loans and the Extended Pay Outstanding payable to Lenders shall be
distributed by Administrative Agents monthly in arrears beginning on the
second Business Day of the first month after the Effective Date and
continuing on the second Business Day of each month thereafter, and on the
Termination Date.

6.1.1.2. Floorplan Loans. CPC will send to Reseller a Monthly Billing
Statement describing all interest accrued on the Aggregate Floorplan Loans
and the Interim Floorplan Loans. Subject to the terms of Sections
4.3 and 4.5 and elsewhere in this Agreement, interest on the
Floorplan Loans payable to Lenders, other than CPC shall be distributed by
Administrative Agents monthly in arrears (with the
right of set off in favor of Administrative Agents and CPC as set forth in
Section 4.5) beginning on the second Business Day of the first month
after the Effective Date and continuing on the second Business Day of each
month thereafter, and on the Termination Date.

 

21

 

6.1.1.3. Revolving Loan Advances to pay Interest and Principal Obligations.
Reseller hereby authorizes Administrative Agents to, at their option, deem
principal or interest then due and payable by Reseller under this Agreement
to be paid by causing Lenders to make Revolving Loans to Reseller in such
amount(s). Administrative Agents agree to give Reseller prompt written
notice of any amount so charged to any Revolving Loan made by the Lenders
pursuant to this Section 6.1.1.3. Upon request by Administrative
Agents, Reseller shall promptly deliver a Borrowing Base Certificate in
compliance with Section 14.15.1.1.

	 	6.1.2.	 	Principal

6.1.2.1. Revolving Loans. Reseller shall, and shall cause each other
Covered Person to, direct all Account Debtors to remit payments on their
Accounts to one or another lockboxes maintained at financial institutions
acceptable to Administrative Agents, each under a lockbox agreement with
each such financial institution satisfactory to Administrative Agents
(collectively, the “Lockboxes”) with all payments received in any
such Lockboxes being deposited into an account at such financial institution
(all such accounts that may exist from time to time, are collectively
referred to as the “Blocked Accounts”). Each of the Blocked
Accounts and Lockboxes shall be blocked in favor of Collateral Agent or
Administrative Agents pursuant to one or more agreements satisfactory to
Administrative Agents. Reseller hereby assigns and grants to Collateral
Agent for the benefit of Lenders, a Security Interest which shall at all
times have a first priority position in any and all Blocked Accounts and
Lockboxes and other deposit accounts, including the Securities Account, the
Operating Account and any and all other operating accounts, as security for
payment and performance of the Loan Obligations. Each of the Parties
acknowledges and agrees that without further consent by Reseller or any
financial institution where the Blocked Accounts are located, only
Administrative Agents shall have the right, power and authority, which
right, power and authority is irrevocable, to demand, collect, withdraw,
receipt for or sue for all amounts that enter the Lockboxes and the Blocked
Accounts, and each such financial institution will follow only the
directions or instructions of Administrative Agents (including directions or
instructions to transfer amounts or funds out of the Lockboxes and the
Blocked Accounts) with respect to the Lockboxes and the Blocked Accounts,
the contents thereof, and all proceeds thereof. All payments received in
the Lockboxes, Blocked Accounts and other proceeds of Collateral and other
funds (including credit card receipts) Reseller receives directly (other
than from Floorplan Loan Advances, Interim Floorplan Loan Advances,
Revolving Loan Advances and Swingline Advances), shall be paid to
Administrative Agents, as payment on the Advances, as provided for herein.

 

22

 

(a) Subject to Section 6.1.2.1(b), payments shall be paid or
applied by Administrative Agents (in each case up to the outstanding
principal amount of the applicable Loan) (i) first, to reduce the
Swingline Loan to zero, (ii) second, to the extent of any excess, for
the account of each
Lenders pro rata, to reduce the Aggregate Revolving Loans or Extended
Pay Outstandings of each Lender and (iii) third, if there is no
Existing Default, to deposit to the Securities Account, but if there
is an Existing Default then retained by Administrative Agents until
same may be applied as provided herein (without any obligation to pay
Reseller interest on such funds) or, if there is an Existing Default,
distributed by Administrative Agents to the other Lenders after
consultation by Administrative Agents with the other Lenders. To the
extent that monies have been deposited by Administrative Agents to
the Securities Account pursuant to Section 6.1.2.1(a)(iii)
above, on a date payment(s) are owed by Reseller with respect to
Interim Floorplan Loans and the Aggregate Floorplan Loans, Reseller
shall remit all such payments to Administrative Agents, which
payments shall be applied by Administrative Agents, first, to the
Interim Floorplan Loans then due of Administrative Agents and,
thereafter, to the Aggregate Floorplan Loans then due of Lenders, as
applicable.

(b) Prior to 12:00 p.m. (Local Time) on Thursday of each calendar
week (a “Settlement Date”), based on funds collected pursuant
to Section 6.1.2.1 as of 3:00 p.m. (Local Time) on the
Business Day immediately preceding such Settlement Date (under all
circumstances, including during the existence of any Event of
Default), each Lender shall, to the extent it does not hold its
Pro-Rata Share of the funded portion of the outstanding Aggregate
Floorplan Loans (including any amounts for which an Approval has been
issued), and Aggregate Revolving Loans, but excluding any Swingline
Loan or Interim Floorplan Loan (which will be settled to zero as a
part of the settlement), purchase from or sell to one or more other
Lenders, at par, which may occur by a funding through Administrative
Agents, that portion of its Loans as is necessary for it to
thereafter hold its Pro-Rata Share of the funded portion of the
outstanding Aggregate Floorplan Loans and Aggregate Revolving Loans.
In order that the foregoing settlement among Lenders can be effected
on each Settlement Date, Administrative Agents shall, on or before
10:00 a.m. (Local Time) on such Settlement Date, (i) notify each
Lender who shall purchase a Loan, of the principal amount of the Loan
to be purchased, and each Lender shall make immediately available to
Administrative Agents by 12:00 p.m. (Local Time) on such Settlement
Date funds consisting solely of Dollars in the amount of such
principal amount of the Loan to be purchased in accordance with such
remittance instructions as may be given by Administrative Agents to
Lenders from time to time, and (ii) notify each Lender who shall sell
a Loan, of the principal amount of the Loan to be sold, and
Administrative Agents shall make immediately available to such
selling Lenders by 12:00 p.m. (Local Time) on such Settlement Date,
to the extent provided by purchasing Lenders, funds consisting solely
of Dollars in the amount of such principal amount of the Loan to be
sold in accordance with such remittance instructions as may be given
by Lenders to Administrative Agents from time to time.

6.1.2.2. Administrative Agents may, at any time, in their sole discretion,
cause the Settlement Date to occur more frequently, including each Business
Day of
each week. Administrative Agents shall notify each Lender that a given
Business Day shall be a Settlement Date by no later than 1:00 p.m. (Local
Time) on the Business Day immediately preceding any such date; provided,
however, if the Settlement Date occurs more frequently than once a week,
then once Administrative Agents give such notice, no further notices shall
be required.

 

23

 

	 	6.2.	 	Special Requirement for Payments on Floorplan Loans and Interim Floorplan Loans.
Reseller will immediately pay Administrative Agents the principal indebtedness owed
Administrative Agents and Lenders on each item of Collateral financed by Lenders and
Administrative Agents (as shown on the Transaction Statement identifying such Collateral)
under the Floorplan Loan Facility or the Interim Floorplan Loan Facility on the earliest
occurrence of any of the following events: (a) when such Collateral is lost, stolen or
damaged; and (b) when otherwise required under the terms of any financing program agreed to
in writing by Reseller and Administrative Agents. Any third party discount, rebate,
subsidy, bonus or credit granted to Reseller for any Collateral will not reduce the Loan
Obligations until Administrative Agents have received payment as provided in this Agreement.

	 
	 	6.3	 	Prepayments.

	 	6.3.1.	 	Voluntary Prepayments. Subject to the limitations in the following
sentences, except for mandatory prepayments and funds received by Administrative
Agents as contemplated by Section 6.1, Reseller may wholly prepay any Loan
that is included in the Aggregate Revolving Loan or the Swingline Loan, or prepay
any Floorplan Loan or Interim Floorplan Loan, at any time and may make a partial
prepayment thereon from time to time, without penalty or premium if Reseller pays
any amount that is due as a consequence of the prepayment as otherwise provided for
in this Agreement. All such prepayments, unless otherwise expressly stated in
writing by Reseller to Administrative Agents prior to the making of such prepayment,
will be deemed made on the Swingline Loan until it is reduced to zero, thereafter to
the Aggregate Revolving Loan until it is reduced to zero, and thereafter to the
Interim Floorplan Loan if due until it is reduced to zero, thereafter to the
Aggregate Floorplan Loan if due until it is reduced to zero, and (with, in each
case, the payment of any and all penalties and premiums due hereunder in connection
therewith), and will be applied by Lenders to reduce the Revolving Loans and the
Floorplan Loans, as appropriate, in accordance with their respective Pro-Rata
Shares.

	 
	 	6.3.2	 	Mandatory Prepayments.

6.3.2.1. Revolving Loans/Extended Pay Outstandings. If at any time the
Aggregate Revolving Loans plus Swingline Loans exceed the Revolving Loan Maximum
Available Amount (which can be a negative number), whether as a result of optional
Swingline Advances made by Administrative Agents as contemplated by Section
3.3.3, Extended Pay Outstandings or otherwise, Reseller shall on demand by
Administrative Agents in their discretion (or Administrative Agents shall as
directed by Required Lenders), make a payment in the amount of the difference to
Administrative Agents for the account of Administrative Agents on the Swingline Loan
and Lenders on the Aggregate Revolving Loans, including any Extended Pay
Outstandings. Each such prepayment will be applied by Administrative Agents and
Lenders first to reduce the Swingline Loan until it is reduced to zero, then to
reduce the Aggregate Revolving Loans, including any Extended Pay Outstandings (and
consequently a ratable portion of each Lender’s Revolving Loans).

6.3.2.2 Floorplan Loan Facility. On any date that the Interim Floorplan Loans
plus the Aggregate Floorplan Loans exceed the Floorplan Loan Maximum Available
Amount, then Reseller shall, on such date, after demand by Administrative Agent
in its discretion (or Administrative Agents shall as directed by Required Lenders),
pay such excess to Administrative Agents for the pro-rata benefit of Lenders and
failure to pay such excess on such date shall be an immediate Event of Default.

 

24

 

	 	6.3.3.	 	Other Mandatory Prepayments.

6.3.3.1. Proceeds from Sales of Assets. If any Covered Person sells any of its
assets in a single transaction or related series of transactions that are not in the
ordinary course of business, Reseller shall make a payment to Administrative Agents
for the benefit of Lenders in the amount of the gross proceeds therefrom less the
sum of (a) (i) all amounts paid to the holders of Indebtedness secured by Permitted
Encumbrances that have a first priority security position, (ii) reasonable selling
expenses and (iii) the increment in federal, state and local income Taxes, if any,
and applicable transfer Taxes, if any, payable as a consequence of such sale.
Notwithstanding the foregoing, Reseller need not make such prepayment unless the net
proceeds from such sale or sales exceed $2,000,000 in the aggregate in any calendar
year, in the aggregate for all Covered Persons, and (b) none of the proceeds from
the sale or sales of Reseller’s membership interest in Eyak shall be payable to
Administrative Agents as provided above in this Section 6.3.3.1.

6.3.3.2. Proceeds from Sale of Securities or Indebtedness. If after the
Execution Date, Reseller issues any equity (except equity issued in connection with
stock splits or options listed or referenced on Disclosure Schedule 6.3.3.2,
or dividends payable in stock) or debt securities, or warrants or options therefor,
or otherwise incur any Indebtedness other than Permitted Indebtedness, Reseller
shall promptly, but in any event within two Business Days after such sale, make a
payment to Administrative Agents for the benefit of Lenders, based on each Lender’s
Pro-Rata Share, to be applied to the Loan Obligations, in an aggregate amount equal
to the gross proceeds therefrom less reasonable brokers’ and underwriters’ fees and
commissions and other reasonable issuing expenses.

6.3.3.3. Insurance Proceeds. All Insurance Proceeds shall be applied by
Administrative Agents to the Loan Obligations.

Every prepayment under this Section that is required to be applied to reduce the Aggregate
Revolving Loan shall be distributed by Administrative Agents to Lenders in accordance with their
Pro-Rata Shares of the Aggregate Revolving Loan Facility and applied by Lenders to reduce their
Revolving Loans in accordance with their respective Pro-Rata Shares of the Aggregate Revolving Loan
Facility. If application to the Revolving Loans of any prepayment required under this Section
reduces the Revolving Loans (and consequently the Aggregate Revolving Loan) to zero, then unless
otherwise agreed among Reseller and Administrative Agents, the remaining amount of such prepayment
shall be applied by Lenders to reduce the Floorplan Loans then due and payable under the applicable
Transaction Statement to zero (and consequently the Aggregate Floorplan Loan); thereafter any
remaining funds shall be remitted to Reseller.

	 	6.4	 	Reimbursement Obligations of Reseller. Reseller hereby unconditionally agrees to
immediately pay to Letter of Credit Issuer on demand at Letter of Credit Issuer’s Applicable
Lending Office all amounts required to pay all drafts drawn under Letters of Credit issued
for the account of Reseller and all reasonable expenses incurred by Letter of Credit Issuer
in connection with such Letters of Credit and in any event and without demand to remit to
Letter of Credit Issuer (which may be through obtaining Advances if permitted under
Section 3.1) sufficient funds
to pay all debts and liabilities arising under any Letter of Credit issued for the account
of such Reseller.

 

25

 

6.5 Manner of Payments and Timing of Application of Payments.

6.5.1 Payment Requirement. Unless expressly provided to the contrary elsewhere herein,
Reseller shall make each payment on the Loan Obligations to Administrative Agents for the
account of Lenders (based on each Lender’s Pro-Rata Share) as required under the Loan
Documents at the Applicable Lending Office of Administrative Agents on the date when due,
without deduction, set-off or counterclaim. All such payments will be distributed by
Administrative Agents to Lenders as provided in Section 18.10 for application to the
Loan Obligations as provided herein.

6.5.2 Application of Payments and Proceeds. All immediately available funds collected
pursuant to Section 6.1.2.1 at or before 9:30 a.m. (Local Time) on a Business Day
excluding a Settlement Date, will be distributed by Administrative Agents as provided in
Section 6.1.2.1(a) and (b). Such funds received on a day that is not a
Business Day, or if on a Business Day, after 9:30 a.m. (Local Time), will be deemed received
on the immediately following Business Day, and distributed by Administrative Agents on a
Settlement Date as provided in Section 18.10. The amount so distributed to a Lender
will be applied by such Lender to the relevant Loan Obligation on the Business Day when
received. Reseller will also pay to Administrative Agents, for their own account, such fees
as Administrative Agents generally charge their customers for each check returned unpaid for
insufficient funds (an “NSF Check”) (such payment repays Administrative Agents’
estimated administrative costs; it does not waive any Default or Event of Default caused by
the NSF check).

6.5.3 Interest Calculation. Interest shall begin accruing, and be owing and payable on
an Advance on the day such Advance is made by a Lender to Administrative Agents.
Section 6.5.2 notwithstanding, for purposes of interest calculation only, (a) a
payment by check, draft or other instrument received at or before 10:00 a.m. (Local Time) on
a Business Day shall be deemed to have been applied to the relevant Loan Obligation on the
second following Business Day, (b) a payment by check, draft or other instrument received on
a day that is not a Business Day or after 10:00 a.m. (Local Time) on a Business Day shall be
deemed to have been applied to the relevant Loan Obligation on the third following Business
Day, (c) a payment by ACH (Automatic Clearing House) received at or before 8:00 a.m. (Local
Time) on a Business Day shall be deemed to have been applied to the relevant Loan Obligation
on the Business Day when it is received, (d) a payment by ACH received on a day that is not
a Business Day or after 8:00 a.m. (Local Time) on a Business Day shall be deemed to have
been applied to the relevant Loan Obligation on the following Business Day following the
date of receipt, (e) a payment in cash received at or before 10:00 a.m. (Local Time) on a
Business Day shall be deemed to have been applied to the relevant Loan Obligation on the
Business Day when it is received, (f) a payment in cash received on a day that is not a
Business Day or after 10:00 a.m. (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the next Business Day following receipt, (g) a
payment by wire transfer received at or before 10:00 a.m. (Local Time) on a Business Day
shall be deemed to have been applied to the relevant Loan Obligation on the Business Day
received, (h) a payment in cash or by wire transfer received on a day that is not a Business
Day or after 10:00 a.m. (Local Time) on a Business Day shall be deemed to have been applied
to the relevant Loan Obligation on the Business Day following receipt, (i) a payment
received in the Lockboxes at or before 10:00 a.m. (Local Time) on a Business Day shall be
deemed to have been applied to the relevant Loan Obligation on the next Business Day
following receipt, and (j) a payment received in the Lockboxes on a day that is not a
Business Day or after 10:00 a.m. (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation
on the second Business Day following receipt. Payments on the Aggregate Floorplan Loan
or Interim Floorplan Loan that are funded by Revolving Loan Advances shall be deemed to be
made on the Aggregate Floorplan Loan or Interim Floorplan Loan for interest calculation
purposes on the day made.

 

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	 	6.6	 	Returned Instruments. If a payment is made by ACH, check, draft or other instrument and
the ACH item, check, draft or other instrument is returned unpaid, any application of the
payment to the Loan Obligations will be reversed and will be treated as never having been
made.

	 
	 	6.7	 	Compelled Return of Payments or Proceeds. If an Administrative Agent or any Lender is
for any reason compelled to surrender any payment or any proceeds of the Collateral because
such payment or the application of such proceeds is for any reason invalidated, declared
fraudulent, set aside, or determined to be void or voidable as a preference, an
impermissible setoff, or a diversion of trust funds, then this Agreement and the Loan
Obligations to which such payment or proceeds was applied or intended to be applied shall be
revived as if such application was never made; and Reseller shall be liable to pay to such
Administrative Agent or such Lender, and shall indemnify such Administrative Agent or such
Lender for and hold such Administrative Agent or such Lender harmless from any loss with
respect to, the amount of such payment or proceeds surrendered. This Section shall be
effective notwithstanding any contrary action that such Administrative Agent or such Lender
may take in reliance upon its receipt of any such payment or proceeds. Any such contrary
action so taken by such Administrative Agent or such Lender shall be without prejudice to
such Administrative Agent or such Lender’s rights under this Agreement and shall be deemed
to have been conditioned upon the application of such payment or proceeds having become
final and indefeasible. The provisions of this Section shall survive termination of the
Facilities and the indefeasible payment and satisfaction of all of the Loan Obligations.

	 
	 	6.8	 	Due Dates Not on Business Days. Notwithstanding anything herein to the contrary, if any
payment required hereunder becomes due on a date that is not a Business Day, then such due
date shall be deemed to be the next Business Day.

7. Procedure for Obtaining Advances.

	 	7.1	 	Reserved.

	 
	 	7.2.	 	Revolving Loan Advances. Reseller may request subsequent Revolving Loan Advances at any
time, but not more often than once each Business Day, by submitting a request therefor to
Administrative Agents as provided in Section 7.13. All requests for a Revolving Loan
Advance must be submitted by Reseller. Administrative Agents may treat every request for a
Revolving Loan Advance as a request for a Swingline Advance to the extent the requested amount
does not exceed the Maximum Swingline Amount and as a request for a Revolving Loan Advance in
the amount of the excess. Every request for a Revolving Loan Advance shall be irrevocable. A
request for a Revolving Loan Advance received by Administrative Agents on a day that is not a
Business Day or that is received by Administrative Agents after 9:30 a.m. (Local Time) on a
Business Day shall be treated as having been received by Administrative Agents at 9:30 a.m.
(Local Time) on the next Business Day.

	 
	 	7.3.	 	Floorplan Loan Advances. CPC may treat every request for a Floorplan Loan Advance as a
request for an Interim Floorplan Loan Advance to the extent the requested amount does not
exceed the Interim Floorplan Loan Facility and as a request for a Floorplan Loan Advance in
the amount of the excess (to the extent the requested amount does not exceed the Floorplan
Loan Maximum Available Amount when added to the Aggregate Floorplan Loans and the Interim
Floorplan Loans).

 

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	 	7.4.	 	Repayment of the Swingline Loan and the Interim Floorplan Loan.

7.4.1. CPC may in its absolute discretion on any Business Day give notice to Lenders of
the amount of the Swingline Loan or Interim Floorplan Loan after application of all payments
to be applied thereto as provided elsewhere herein. Such notice shall be given no later
than Noon (Local Time) and may include a demand that the Swingline Loan or the Interim
Floorplan Loan be fully paid. If CPC demands that the Swingline Loan or the Interim
Floorplan Loan be fully paid, then prior to 1:00 p.m. (Local Time) on such date, Lenders
shall remit funds to CPC sufficient to reduce the Swingline Loan or the Interim Floorplan
Loan to zero. The aggregate of such remittances shall be treated, respectively, as a
Revolving Loan Advance and the Aggregate Revolving Loan increased accordingly (in the case
of payments on the Swingline Loan) and as a Floorplan Loan Advance and the Aggregate
Floorplan Loan increased accordingly (in the case of payments on the Interim Floorplan
Loan). Each such remittance by a Lender shall be made in accordance with its Pro-Rata Share
of the Aggregate Revolving Loan Facility or the Floorplan Loan Facility and shall be made
notwithstanding that (a) the amount of the aggregate of such remittances by Lenders may not
be in the minimum amount for Revolving Loan Advances otherwise required hereunder, (b) any
conditions to Advances in Section 10 may not be then satisfied, (c) there is an
Existing Default, (d) the aggregate amount of such remittances by Lenders would result in
the Aggregate Revolving Loan exceeding the Revolving Loan Maximum Available Amount, or (e)
such remittances by Lenders may be made after the Termination Date; provided, however, that
in no event shall any Lender be required to make any such remittance that would result in
the sum of (i) the Revolving Loan of such Lender, plus (ii) such Lender’s Pro-Rata Share of
the Letter of Credit Exposure exceeding such Lender’s Revolving Loan Facility.

7.4.2. If for any reason, including the commencement of a proceeding in bankruptcy with
respect to Reseller, remittances by Lenders as provided above cannot be made on the date
otherwise required above, then each Lender shall be deemed automatically to have purchased
from CPC as of such date an undivided interest and participation in the Swingline Loan and
the Interim Floorplan Loan equal to such Lender’s Pro-Rata Share, so as to cause such Lender
to share in the Swingline Loan and the Interim Floorplan Loan in accordance with its
Pro-Rata Share. Each Lender shall remit its Pro-Rata Share of the Swingline Loan and the
Interim Floorplan Loan to CPC promptly on demand. All interest payable with respect to such
Lender’s Pro-Rata Share of the Swingline Loan and the Interim Floorplan Loan shall be for
the account of CPC to the date such remittance is made, and shall be for the account of and
remitted by CPC to such Lender (except in the case of the Floorplan Loan, at the rate
designated in Section 4.5 with respect to CPC and the other Lenders) as a
participant from such date. Further, until such remittance is made, such Lender shall pay
to CPC, on demand, interest on such Lender’s Pro-Rata Share of the Swingline Loan and the
Floorplan Loan at the Federal Funds Rate, and such Lender shall be subject to the
restrictions contained in Section 7.8.

	 	7.5.	 	Letters of Credit. Reseller may request the issuance of a Letter of Credit by
submitting an issuance request to Letter of Credit Issuer and executing the reimbursement
agreement required under Section 11.1 no fewer than five Business Days prior to the
requested issue date for such Letter of Credit.

 

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	 	7.6.	 	Administrative Agents’ Right to Make Other Certain Advances.

7.6.1. Payment of Loan Obligations. Administrative Agents shall have the right
to make Revolving Loan Advances at any time and from time to time to cause timely
payment of any of the Loan Obligations, including to pay interest or principal on
the Swingline Loan, the Interim Floorplan Loan, the Aggregate Floorplan Loan
and the Aggregate Revolving Loan, and to pay any fees owing to Lenders or
Administrative Agents; provided, however, with respect to third party fees,
if there is no Existing Default, Administrative Agents shall use their reasonable
efforts to give prior notice to Reseller of the payment of any such fees from an
Advance (but shall have no liability for their failure to notify Reseller, and any
such failure shall not give rise to a claim or cause of action by Reseller against
either Administrative Agent or any Lender). If there is no Existing Default,
Administrative Agents shall use reasonable efforts to notify Reseller (but shall
have no liability for their failure to notify Reseller and such failure shall not
give rise to a claim or cause of action by Reseller against either Administrative
Agent or any Lender) on the day it makes any payment or pays any interest owing
hereunder or any fees owing to Lenders or Administrative Agents. Administrative
Agents may select the Advance Date for any such Advance, but such Advance Date may
only be a Business Day. Administrative Agents will use reasonable efforts to
promptly give notice to Reseller after any such Advance is made, but failure to give
such notice shall not give rise to any liability on the part of either
Administrative Agent or any Lender.

7.6.2. Payments to Other Creditors. Subject to Section 19.1, if
Administrative Agents become obligated to reimburse or pay to any creditor of
Reseller any amount to obtain a release of such creditor’s Security Interest in any
of the Collateral, other than Permitted Security Interests, then Administrative
Agents shall have the right (but shall have no obligation) to make Advances for that
purpose. Administrative Agents may select the Advance Date for any such Advance,
but such Advance Date may only be a Business Day.

	 	7.7.	 	Fundings.

7.7.1. Advances. Other than if a Swingline Advance will be made by CPC or
Interim Floorplan Loan Advance will be made by CPC, not later than 10:00 a.m. (Local
Time) on each Advance Date for a Floorplan Loan Advance or Revolving Loan Advance,
Administrative Agents shall promptly notify each Lender of the amount of the
Floorplan Loan Advance or the Revolving Loan Advance to be made on that Advance
Date. In each case then, each Lender shall make immediately available to
Administrative Agents by 12:00 p.m. (Local Time) on the Advance Date funds
consisting solely of Dollars in the amount of its Pro-Rata Share of such Floorplan
Loan Advance or Revolving Loan Advance, rounded to the nearest penny, in accordance
with such remittance instructions as may be given by Administrative Agents to
Lenders from time to time.

7.7.2. Draws on Letters of Credit. If a draw is made on a Letter of Credit and
Reseller does not reimburse the amount of such draw in full to Letter of Credit
Issuer immediately on demand, Letter of Credit Issuer shall promptly notify
Administrative Agents of such failure. Upon Administrative Agents’ receipt of such
notice from Letter of Credit Issuer, Administrative Agents may notify each Lender
thereof and shall have the right to cause a Revolving Loan Advance to be made,
regardless whether such Revolving Loan Advance would result in the Aggregate
Revolving Loan exceeding the Revolving Loan Maximum Available Amount or regardless
as to whether there is an Existing Default, by notifying each Lender of the draw,
the amount of the Revolving Loan Advance required to fund reimbursement of such
draw, and the amount of such Lender’s ratable share of such Revolving Loan Advance.
The Advance Date and time for such Revolving Loan Advance shall not be later than
12:00 p.m. (Local Time) on the first Business Day following Administrative Agents’
delivery of such notice to Lenders. By no later than such Advance Date and time,
each Lender shall make immediately available
to Administrative Agents funds consisting solely of Dollars in the amount of
its Pro-Rata Share of such Revolving Loan Advance, rounded to the nearest penny, in
accordance with such remittance instructions as may be given by Administrative
Agents to each Lender from time to time.

 

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7.7.3. All Fundings Ratable. All fundings of Advances (other than Swingline
Advances and Interim Floorplan Loan Advances) shall be made by Lenders as provided
herein in accordance with their Pro-Rata Shares of the respective Aggregate
Facilities, as applicable. Except as otherwise expressly provided herein, a Lender
shall not be obligated to fund Revolving Loan Advances that would result in such
Lender’s Revolving Loan plus such Lender’s Pro-Rata Share of the Letter of Credit
Exposure exceeding its Revolving Loan Facility, fund Floorplan Loan Advances that
would result in its Floorplan Loan exceeding its Floorplan Loan Facility or make
available any more than its Pro-Rata Share of any Advance.

	 	7.8.	 	Administrative Agents’ Availability Assumption.

7.8.1. Unless Administrative Agents have been given written notice by a Lender
prior to an Advance Date that such Lender does not intend to make immediately
available to Administrative Agents such Lender’s Pro-Rata Share of the Advance which
Administrative Agents may be obligated to make on the Advance Date, including any
Advance that may be made based on the issuance of an Approval, Administrative Agents
may assume that such Lender has made the required amount available to Administrative
Agents on the Advance Date and Administrative Agents may, in reliance upon such
assumption, make available to Reseller a corresponding amount. Failure of any
Lender to make immediately available its Pro-Rata Share of any Advance of the
Swingline Loan, any Floorplan Loan (whether based on the issuance of an Approval or
otherwise), the Interim Floorplan Loan (whether based on the issuance of an Approval
or otherwise), any Revolving Loan or any other amount then owing hereunder by a
Lender upon demand shall make such Lender a “Defaulting Lender”. If such
corresponding amount is not in fact made immediately available to Administrative
Agents by such Defaulting Lender on the Advance Date, Administrative Agents shall be
entitled to recover such corresponding amount on demand from such Defaulting Lender.
If such Defaulting Lender does not pay such corresponding amount immediately upon
Administrative Agents’ demand therefor, then Administrative Agents shall promptly
notify Reseller and the other Lenders and Reseller shall pay such corresponding
amount to Administrative Agents within one (1) Business Day. Administrative Agents
shall also be entitled to recover, either from such Defaulting Lender or Reseller,
interest on such corresponding amount for each day from the date such corresponding
amount was made available by Administrative Agents to Reseller to the date such
corresponding amount is recovered by Administrative Agents, at a rate per annum
equal to either (a) if paid by such Lender, the cost to Administrative Agents of
funding such amount at the Federal Funds Rate, or (b) if paid by Reseller, the
applicable rate for the Advance in question determined from the request therefor.
Each Lender shall be obligated only to fund its Pro-Rata Share of an Advance subject
to the terms and conditions hereof, regardless of the failure of another Lender to
fund its Pro-Rata Share thereof.

7.8.2. Each remittance or payment or Advance required to be made by a Lender
shall be made in accordance with its Pro-Rata Share and shall be made
notwithstanding that (a) the amount of the aggregate of such remittances by Lenders
may not be in the minimum amount for Revolving Loan Advances or Floorplan Loan
Advances or otherwise required

 

30

 

hereunder, (b) any conditions to Advances in
Section 10 may not be then satisfied, (c) there is an Existing Default, (d) the aggregate amount of
such remittances by Lenders would result in the Aggregate Revolving Loan exceeding
the Revolving Loan Maximum Available Amount, or the aggregate amount of such
remittances by Lenders would result in the Aggregate Floorplan Loan plus the
Interim Floorplan Loan exceeding the value of the Collateral advanced against
thereunder or the Aggregate Floorplan Loan Facility, or (e) such remittances by
Lenders may be made after the effective date of termination of the Aggregate
Revolving Loan Facility or the Aggregate Floorplan Loan Facility, as the case may
be, provided that, after giving effect to any such Advance, the Aggregate Revolving
Loan Facility Limit and the Aggregate Floorplan Loan and Interim Floorplan Loan
Advances shall not exceed the Aggregate Floorplan Loan Facility Limit.

7.8.3. In addition, with respect to any Defaulting Lender, until a payment or
Advance is paid to Administrative Agents (with interest as described above), (a)
such Defaulting Lender shall permit Administrative Agents the unconditional and
irrevocable right of setoff against any amounts (including payments of principal,
interest, and fees, as well as indemnity payments) received by Administrative Agents
hereunder for the benefit of any such Defaulting Lender, and (b) if such failure to
pay shall continue for a period of three Business Days, result in any such
Defaulting Lender forfeiting any right to vote on any matter that Required Lenders
or all Lenders are permitted to vote for hereunder (and the calculation of Required
Lenders shall exclude such Defaulting Lender’s interest in Lenders’ Exposure);
provided, however, once such a failure is cured, then such Lender shall,
subsequent thereto, have all rights hereunder.

	 	7.9.	 	Disbursement. Provided that all conditions precedent herein to a requested Advance or,
if applicable, a Swingline Advance or Interim Floorplan Loan Advance, have been satisfied,
including with respect to any Floorplan Loan Advance or Interim Floorplan Loan Advance and
the requirements of any agreements with any Approved Vendors, Administrative Agents will
make the amount of such requested Advance available to Reseller or in the case of an Interim
Floorplan Loan Advance or a Floorplan Loan Advance to the appropriate Approved Vendor, on
the applicable Advance Date in immediately available funds in Dollars at the Applicable
Lending Office.

	 
	 	7.10.	 	Restrictions on Advances. No more than one Revolving Loan Advance and no more than
one Swingline Advance will be made on any one day pursuant to a request for a Revolving Loan
Advance. Advances will only be made for the purposes permitted in Section 14.1.

	 
	 	7.11.	 	Each Advance Request and Request for a Letter of Credit a Certification. Each
submittal of a request for an Advance and each submittal of a request for the issuance of a
Letter of Credit by an Authorized Employee shall constitute a certification by Reseller that
(a) there is no Existing Default, (b) all conditions precedent hereunder to the making of
the requested Advance have been satisfied or waived in writing by Required Lenders, and (c)
the Representations and Warranties are then true, with such exceptions as have been
disclosed to Lenders in writing by Reseller or any Guarantor making such Representations and
Warranties from time to time and are satisfactory to Required Lenders, and will be true on
the Advance Date, as applicable, as if then made with such exceptions.

	 
	 	7.12.	 	Requirements for Every Letter of Credit Request. Only a written request (which may be
mailed, personally delivered or delivered by facsimile as provided in this Agreement) from
an Authorized Employee to Administrative Agents or an electronic initiation over an online
service provided by Letter of Credit Issuer that specifies the amount, requested issue date
(which shall be a Business Day and in no event later than 30 days before the Termination
Date) and beneficiary
of the requested Letter of Credit and other information necessary for its issuance shall be
treated as a request for issuance of a Letter of Credit together with such Letter of Credit
applications and reimbursement agreements as Letter of Credit Issuer may reasonably request.

 

31

 

	 	7.13.	 	Requirements for Every Advance Request. Subject to the terms of Section 10
and the other provisions of this Agreement, with regards to Swingline Loans and Revolving
Loan Advances, only a request (which shall be in writing in the form of Exhibit 7.13
and mailed, personally delivered or delivered by facsimile as provided in Section
21.1) from an Authorized Employee to Administrative Agents, which Administrative Agents
are entitled to rely on and assume for all purposes it is genuine and accurate in all
respects) that specifies the amount of the Advance to be made, and the Advance Date for the
requested Advance shall be treated as a request for an Advance. In addition, for purposes
of this Section 7.13, Administrative Agents will accept an electronic transmission
from an Authorized Employee if any such electronic transmission contains the text contained
in Exhibit 7.13. Any such electronic transmission from an Authorized Employee shall
be deemed to be signed and fully executed by an Authorized Employee and be treated as if it
were personally delivered or delivered by facsimile to Administrative Agents.
Administrative Agents shall have no liability for accepting any such electronic
transmission, and Administrative Agents shall be entitled to rely upon and assume any such
electronic transmission was duly and properly sent by such Authorized Employee. No Advance
Date for any requested Advance may be other than a Business Day. With regards to Swingline
Loans, a request for an Advance must be given prior to 9:30 a.m., Local Time, on the Advance
Date for such Advance. With regards to a Revolving Loan, a request for an Advance must be
given prior to 9:30 a.m., Local Time, on the Advance Date for such Advance. Subject to the
terms of Section 10 and the other provisions of this Agreement, Floorplan Loan
Advances and Interim Floorplan Loan Advances will be funded in accordance with CPC’s
procedures.

	 
	 	7.14.	 	Exoneration of Administrative Agents and Lenders. Neither Administrative Agents nor
any Lender shall incur any liability to Reseller for treating a request that meets the
express requirements of Sections 7.12 or 7.13 as a request for the issuance
of a Letter of Credit or an Advance, as applicable, if Administrative Agents believe in good
faith that the Person making the request is an Authorized Employee of Reseller or if, in the
case of a request for a Letter of Credit, it is properly electronically initiated. Neither
Administrative Agents nor any Lender shall incur any liability to Reseller for failing to
treat any such request as a request for an Advance, or issuance of a Letter of Credit, as
applicable, if Administrative Agents have exercised Permitted Discretion in determining that
the Person making the request is not an Authorized Employee.

8. Security; Guaranties. As security for the payment and performance of the Loan Obligations,
and also as security for the payment and performance of all Obligations to Administrative Agents,
Reseller shall, prior to, on or after the Execution Date and from time to time thereafter execute
and deliver, or cause to be executed by each Covered Person and delivered, to Administrative Agents
such security agreements, mortgages and other security documents as they relate to the Collateral
as reasonably requested by Administrative Agents from time to time, including the following
documents, each satisfactory to Administrative Agents and Required Lenders:

	 	8.1.	 	Landlord Consents. With respect to any real property leased by Reseller or any other
Covered Person, whether on, prior to or after the Effective Date, Reseller shall cause to be
delivered to Administrative Agents such landlord agreements as Administrative Agents shall
request in the exercise of their Permitted Discretion.

	 
	 	8.2.	 	Mortgagee Consent Agreements. With respect to any real property owned by Reseller or
any other Covered Person, whether on, prior to or after the Effective Date if there shall be
a mortgagee or other lienholder with respect to such real property, Reseller shall cause to
be
delivered to Administrative Agent such consents from each such mortgagee or lienholder as
Administrative Agents shall request in the exercise of their Permitted Discretion.

 

32

 

	 	8.3.	 	Security Agreements. Security agreements granting to Collateral Agent for the benefit
of Lenders a Security Interest at all times having a first priority position under the UCC
in all of the Goods, Equipment, Accounts, Inventory, Instruments, Documents, Chattel Paper,
General Intangibles and other personal property of Reseller, any other Covered Person and
every Subsidiary of Reseller or any other Covered Person, whether now owned or hereafter
acquired, and all proceeds thereof, subject only to Permitted Security Interests affecting
such property.

	 
	 	8.4.	 	Pledge Agreements. Equity pledge agreements granting to Collateral Agent for the
benefit of Lenders a Security Interest at all times having a first priority position in all
of each Covered Person’s interest in the capital stock, membership interests, and other
securities (and all options and warrants therefor) of every Subsidiary of Reseller, now or
hereafter issued and outstanding, and all proceeds thereof.

	 
	 	8.5.	 	Collateral Assignments. Each of the following collateral assignments from Reseller or
any other Covered Person, each subject to no other Security Interests except Permitted
Security Interests affecting the item assigned:

8.5.1. Account and Lockbox Assignments. Assignments assigning to Collateral Agent
for the benefit of Lenders all of Reseller’s or such other Covered Person’s rights and
interest in all Blocked Accounts and Lockboxes and other deposit accounts, including the
Operating Account, the Securities Account and all other operating accounts.

8.5.2. Intellectual Property Assignments. Assignments assigning to Collateral
Agent for the benefit of Lenders all of Reseller’s or such other Covered Person’s rights
and interest, to the extent assignable, in all Intellectual Property.

	 	8.6.	 	Guaranties. The guaranty of the Loan Obligations by each Guarantor, if any, pursuant
to one or more written Guaranties satisfactory to Administrative Agents.

9. Power of Attorney. Reseller hereby authorizes (and shall cause each other Covered Person
to do the same) Administrative Agents and irrevocably appoints Administrative Agents (acting by any
of their officers) as Reseller’s agent and attorney-in-fact (which appointment is coupled with an
interest and is therefore irrevocable) to do any of the following until all of the Loan Obligations
are fully and indefeasibly paid and satisfied in cash, there are no Letters of Credit outstanding
and the Letter of Credit Exposure is irreversibly zero, and the Facilities are terminated:

	 	9.1.	 	At any time while there is an Existing Default, (a) demand payment of any Account; (b)
enforce payment of any Account by legal proceedings or otherwise; (c) exercise all of
Reseller’s rights and remedies in proceedings brought to collect any Account; (d) sell or
assign any Account upon such terms, for such amount and at such time or times as
Administrative Agents deem advisable; (e) settle, adjust, compromise, extend or renew any
Account; (f) discharge and release any Account; (g) prepare, file and sign Reseller’s name
on any proof of claim in bankruptcy or other similar documents against an Account Debtor;
(h) notify the postal authorities of any change of the address for delivery of Reseller’s
mail to any address designated by Administrative Agents and open and process all mail
addressed to Reseller or deposited into any postal box; (i) endorse Reseller’s name on any
verification of Accounts and notices thereof to Account Debtors; (j) make one or more
Revolving Loan Advances or Floorplan Loan Advances to pay the costs and expenses of any of
the foregoing; and (k) do anything that Administrative Agent deems necessary in its
Permitted Discretion to assure that the Loan Obligations are fully and indefeasibly paid
and satisfied in cash and that Reseller comply with each covenant and agreement contained
herein and in the other Loan Documents.

 

33

 

	 	9.2.	 	At any time, (a) take control in any manner of any item of payment or proceeds of any
Account; (b) have access to any lockbox into which Reseller’s mail is deposited; endorse
Reseller’s name upon any items of payment of Collateral and apply the proceeds thereof to
the Loan Obligations as provided herein; (c) endorse Reseller’s name upon any chattel
paper, document, instrument, invoice, or similar document or agreement relating to any
Account or other item of the Collateral; and (d) execute in Reseller’s name and on
Reseller’s behalf or file any financing statement or amendments thereto, or such mortgages,
deeds of trust or other security documents deemed necessary or appropriate by
Administrative Agents to assure the perfection or continued perfection of Collateral
Agent’s Security Interests in the Collateral for the benefit of Lenders.

The foregoing power of attorney and authorization shall be deemed irrevocable, but shall be
automatically revoked upon the full and indefeasible payment in cash of all of the Loan
Obligations, the expiration or termination of all Letters of Credit and reduction of the Letter of
Credit Exposure to zero, and the termination of the Facilities.

10. Conditions of Lending.

	 	10.1.	 	Conditions to Advance. Lenders will have no obligation to fund any Revolving Loan
Advance or Floorplan Loan Advance or grant any request by Reseller to pay for Floorplanned
Inventory on the Extended Payment Due Date, unless:

10.1.1. Listed Documents and Other Items. Administrative Agents shall have
received on or before the Effective Date all of the documents and other items listed
or described in Exhibit 10.1.1, with each being satisfactory to Lenders and
(as applicable) duly executed and (also as applicable) sealed, attested,
acknowledged, certified, or authenticated.

10.1.2. Default. There shall be no Existing Default and no Default or Event of
Default will occur as a result of such Advance being requested or made or the
application of the proceeds thereof.

10.1.3. Perfection of Security Interests. Every Security Interest required to
be granted by Reseller to Administrative Agents under Section 8 shall have
been perfected and shall be, except for Permitted Security Interests, or as
otherwise satisfactory to Lenders, a first priority Security Interest.

10.1.4. Representations and Warranties. The Representations and Warranties
shall be true and correct in all material respects.

10.1.5. Material Adverse Change. Since March 31, 2009, there shall not have
been any change which has or is reasonably likely to have a Material Adverse Effect
on all Covered Persons as a whole.

10.1.6. Pending Material Proceedings. There shall be no pending Material
Proceedings.

10.1.7. Payment of Fees. Reseller shall have paid and reimbursed to
Administrative Agents and Lenders all fees, costs and expenses that are payable or
reimbursable to Administrative Agent and Lenders hereunder on or before the
Effective Date.

10.1.8. Tax Returns. Administrative Agents shall have received the
consolidated annual federal tax returns and filings of Reseller for the past three
fiscal years (except for tax returns which (a) Reseller is not yet required to have
filed and (b) have not yet been filed), and be satisfied with the content thereof.

 

34

 

10.1.9. Other Items. Administrative Agents shall have received such other
consents, approvals, opinions, certificates, documents or information as it, in the
exercise of Permitted Discretion, deems necessary or CPC shall have issued an
Approval as necessary.

	 	10.2.	 	Conditions to Subsequent Revolving Loan or Floorplan Loan Advances. No Lender will
have an obligation to fund any Revolving Loan Advance or Floorplan Loan Advance unless:

10.2.1. General Conditions. All of the conditions in Section 10.1
(except the conditions in Sections 10.1.2 and 10.1.5) shall have
been and shall remain satisfied or waived.

10.2.2. Representations and Warranties. The Representations and Warranties are
then true (or is true and correct in all material respects if such representation or
warranty is not by its terms already qualified as to materiality), with such
exceptions as have been disclosed to Lenders in writing by Reseller or each
Guarantor from time to time and are satisfactory to Lenders, and will be true (or is
true and correct in all material respects if such representation or warranty is not
by its terms already qualified as to materiality), as of the time of such Advance,
as if then made with such exceptions.

10.2.3. Approvals. With regards to a Floorplan Loan Advance or Interim
Floorplan Loan Advance, an Approval has been issued by CPC.

10.2.4. Default. Subject to Sections 3.2.2 and 3.3.1, there
shall be no Existing Default and no Default or Event of Default will occur as a
result of such Advance being requested or made or the application of the proceeds
thereof.

10.2.5. Borrowing Base. After giving effect to (a) Revolving Loan Advance, the
Revolving Loan Maximum Available Amount shall not be negative; and (b) a Floorplan
Loan Advance, Resellers have sufficient liquidity to remit any required payment
pursuant to Section 3.2.9.

11. Conditions to Issuance of Letters of Credit. Without in any manner limiting Letter of
Credit Issuer’s discretion hereunder, as conditions precedent to the issuance of any Letter of
Credit:

	 	11.1.	 	Letter of Credit Application/Reimbursement Agreement. Reseller shall have executed
and delivered to Letter of Credit Issuer a letter of credit application/reimbursement
agreement satisfactory to Letter of Credit Issuer and Administrative Agents under which
Reseller further evidences its obligation to reimburse to Letter of Credit Issuer on demand
the amount of each draw on such Letter of Credit as provided in Section 3.4,
together with interest from the date of the draw at the rate provided in Section 4.2
and (without duplication) all reasonable expenses incurred by Letter of Credit Issuer in
connection with such Letter of Credit.

	 
	 	11.2.	 	No Prohibitions. No order, judgment or decree of any Governmental Authority shall
exist which purports by its terms to enjoin or restrain Letter of Credit Issuer or any other
Lender from issuing such Letter of Credit, and no Law or request or directive (whether or
not having the force of law) from any Governmental Authority with jurisdiction over Letter
of Credit Issuer or any other Lender shall exist which prohibits, or requests that Letter of
Credit Issuer or any other Lender refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular, or imposes upon Letter of Credit Issuer or any other
Lender with respect to such Letter of Credit any restriction or reserve or capital
requirement (for which Letter of Credit Issuer or any other Lender is not otherwise
compensable by Reseller hereunder).

 

35

 

	 	11.3.	 	Representations and Warranties. The Representations and Warranties are then true (or
is true and correct in all material respects if such representation or warranty is not by
its terms already qualified as to materiality), with such exceptions as have been disclosed
to Lenders in writing by Reseller or each Guarantor from time to time and are satisfactory
to Lenders, and will be true or is true and correct in all material respects if such
representation or warranty is not by its terms already qualified as to materiality), as of
the time of the issuance of such Letter of Credit, as if then made with such exceptions.

	 
	 	11.4.	 	No Default. There shall be no Existing Default and no Default or Event of Default is
reasonably likely to occur as a result of such Letter of Credit being issued or a draw
thereon being made or paid.

	 
	 	11.5.	 	Other Conditions. All of the conditions to an Advance in Section 10.1 shall
have been and shall remain satisfied or waived.

12. Representations and Warranties. Except as otherwise described in the Disclosure Schedule,
Reseller represents and warrants to Administrative Agents, Lenders and Letter of Credit Issuer, at
all times while any of the Loan Obligations are outstanding and until such time as the Facilities
are terminated, as follows:

	 	12.1.	 	Organization and Existence. Each Covered Person is duly organized and existing in
good standing under the Laws of the State of its organization and is duly qualified to
conduct business and is in good standing in every State where the nature or extent of its
business or properties require it to be qualified to conduct business, except where the
failure to so qualify is not reasonably likely to have a Material Adverse Effect. Each
Covered Person has the power and authority to own its properties and carry on its business
as now being conducted. With respect to each Covered Person, the following information is
fully, accurately and completely set forth in the Disclosure Schedule Section 12.1:
(a) the full and exact legal name of each Covered Person, (b) State of
organization/formation of such Covered Person, (c) the tax identification number (FEIN) of
each Covered Person, and (d) the charter number (if available) of each Covered Person.

	 
	 	12.2.	 	Authorization. Each Covered Person is duly authorized to execute and perform every
Loan Document to which such Covered Person is a party, and Reseller is duly authorized to
borrow hereunder, and this Agreement and the other Loan Documents have been duly authorized
by all requisite organizational action of each Covered Person. No consent, approval or
authorization of, or declaration or filing with, any Governmental Authority, and no consent
of any other Person, is required in connection with any Covered Person’s execution, delivery
or performance of this Agreement and the other Loan Documents to which it is a party, except
for those already duly obtained.

	 
	 	12.3.	 	Due Execution. Every Loan Document to which a Covered Person is a party has been
executed on behalf of such Covered Person by a Person duly authorized to do so.

	 
	 	12.4.	 	Enforceability of Obligations. Each of the Loan Documents to which a Covered Person
is a party constitutes the legal, valid and binding obligation of such Covered Person,
enforceable against such Covered Person in accordance with its terms, except to the extent
that the enforceability thereof against such Covered Person may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally
or by equitable principles of general application.

	 
	 	12.5.	 	Burdensome Obligations. No Covered Person is a party to or bound by any Contract or
is subject to any provision in the Charter Documents of such Covered Person which would, if
performed by such Covered Person, result in a Default or Event of Default either immediately
or upon the elapsing of time.

 

36

 

	 	12.6.	 	Legal Restraints. The execution and performance of any Loan Document by a Covered
Person does not and will not violate or constitute a default under the Charter Documents of
such Covered Person, any Material Agreement of such Covered Person, or any Material Law, and
does not and will not, except as expressly contemplated or permitted in this Agreement,
result in any Security Interest being imposed on any of such Covered Person’s property.

	 
	 	12.7.	 	Labor Contracts and Disputes. There is no collective bargaining agreement or other
labor contract covering employees of a Covered Person. As of the date hereof (and to
Reseller’s knowledge after making due inquiry, as of the date of each Advance), no union or
other labor organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of a Covered Person. There is no pending or, to Reseller’s
knowledge, threatened, strike, work stoppage or other material labor dispute against or
affecting any Covered Person or its employees, which has or would be reasonably likely to
have a Material Adverse Effect.

	 
	 	12.8.	 	No Material Proceedings. There are no Material Proceedings pending or, to the best
knowledge of Reseller, threatened.

	 
	 	12.9.	 	Material Licenses. All Material Licenses have been obtained or exist for each Covered
Person.

	 
	 	12.10.	 	Compliance with Material Laws. Each Covered Person is in compliance with all
Material Laws. Without limiting the generality of the foregoing:

12.10.1. General Compliance with Environmental Laws. The operations of every
Covered Person comply with all applicable Environmental Laws except where the
failure to be in compliance would not reasonably be likely to give rise to a
Material Adverse Effect.

12.10.2. Proceedings. None of the operations of any Covered Person are the subject
of any judicial or administrative complaint, order or proceeding alleging the
violation of any applicable Environmental Laws which would reasonably be likely to
give rise to a Material Adverse Effect.

12.10.3. Investigations Regarding Hazardous Materials. None of the operations of
any Covered Person are the subject of investigation by any Governmental Authority
regarding the improper transportation, storage, disposal, generation or release into
the environment of any Hazardous Material, the results of which have or are
reasonably likely to have a Material Adverse Effect, or reduce materially the value
of the Collateral.

12.10.4. Notices and Reports Regarding Hazardous Materials. No notice or report
under any Environmental Law indicating a past or current spill or release into the
environment of any Hazardous Material has been filed since December 31, 2004, or is
required to be filed, by any Covered Person.

12.10.5. Hazardous Materials on Real Property. No Covered Person has at any time,
and to Reseller’s knowledge, no other Person has at any time during any Covered
Person’s occupancy of such real property, transported, stored, disposed of,
generated or released any Hazardous Material on the surface, below the surface, or
within the boundaries of any real property owned or operated by such Covered Person
or any improvements thereon in violation of Law which would reasonably be likely to
have a Material Adverse Effect. No property of any Covered Person is subject to a
Security Interest in favor of any Governmental Authority for any liability under any
Environmental Law or damages arising from or costs incurred by such Governmental
Authority in response to a spill or release of Hazardous Material into the
environment.

 

37

 

12.10.6. Environmental Property Transfer Acts. No environmental property transfer
acts are applicable to the transactions contemplated by this Agreement and each
Covered Person has provided all notices and obtained all necessary environmental
permit transfers and consents, if any, required to consummate the transactions
contemplated by this Agreement, to perfect Collateral Agent’s Security Interests for
the benefit of Lenders and to operate such Covered Person’s business as presently or
proposed to be operated.

12.10.7. Fair Labor Standards Act. The operations of every Covered Person comply in
all material respects with the Fair Labor Standards Act, as amended.

	 	12.11.	 	Other Names. Except as disclosed in writing to Administrative Agents from time to
time with no fewer than 30 days prior written notice to Administrative Agent (a) no Covered
Person has used any name other than the full name which identifies such Covered Person in
this Agreement, and (b) the only trade name or style under which a Covered Person sells
Inventory or creates Accounts, or to which instruments in payment of Accounts are made
payable, is the name which identifies such Covered Person in this Agreement.

	 
	 	12.12.	 	Prior Transactions. Except as disclosed in the Disclosure Schedule Section
12.12, since December 31, 2008, no Covered Person has been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person, or acquired
any of its property outside of the ordinary course of business.

	 
	 	12.13.	 	Capitalization. Reseller’s and each other Covered Person’s authorized capital stock,
partnership interests and membership interests and issued and outstanding capital stock,
partnership interests and membership interests is as described in the Disclosure Schedule
Section 12.13, and all issued and outstanding shares, partnership interests and
membership interests of Reseller and each other Covered Person are validly issued and
outstanding, fully paid and non-assessable, and are owned beneficially and of record by the
Persons listed.

	 
	 	12.14.	 	Solvency. Reseller and each other Covered Person is Solvent prior to and after
giving effect to, the making of each Advance and after giving effect to the contribution
provisions of Section 17.3.9.

	 
	 	12.15.	 	Projections. The projections of Reseller’s financial condition, results of
operations, and cash flow for the 12-month period ending December 31, 2009, a copy of which
has been delivered to Administrative Agents, represent Reseller’s good faith best estimate
of Reseller’s future financial performance for the periods set forth therein. Such
projections have been prepared on the basis of the assumptions set forth therein, which
Reseller believes at the time of preparation thereof to be fair and reasonable in light of
current and reasonably foreseeable business conditions.

	 
	 	12.16.	 	Financial Statements and Records. The Financial Statements are complete and correct
in all material respects, have been prepared in accordance with GAAP, and fairly reflect the
financial condition, results of operations and cash flows of the Persons covered thereby as
of the dates and for the periods stated therein subject to, in the case of interim Financial
Statements, the absence of footnotes and normal year-end adjustments. Reseller keeps
correct and accurate records itemizing and describing its Accounts and the unpaid balance of
each and its Inventory and the cost of such Inventory.

	 
	 	12.17.	 	No Change in Condition. Since the date of the most recent balance sheet included in
the Financial Statements most recently delivered to Lenders as required herein, there has
been no change which has or is reasonably likely to have a Material Adverse Effect.

	 
	 	12.18.	 	No Defaults. No Covered Person has breached or violated or has defaulted under any
Material Agreement, or has defaulted with respect to any Material Obligation of such Covered
Person which has continued beyond any cure periods set forth in the applicable underlying
agreements. No Event of Default has occurred and is continuing.

 

38

 

	 	12.19.	 	Investments. No Covered Person has any Investments in other Persons except existing
Permitted Investments, the Operating Account, the Securities Account and the Investments
disclosed on the Disclosure Schedule.

	 
	 	12.20.	 	Indebtedness. No Covered Person has any Indebtedness except Permitted Indebtedness.

	 
	 	12.21.	 	Indirect Obligations. No Covered Person has any Indirect Obligations except existing
Permitted Indirect Obligations.

	 
	 	12.22.	 	Encumbrances. None of the real property purported to be owned by a Covered Person is
subject to any Encumbrances except Permitted Encumbrances.

	 
	 	12.23.	 	Capital Leases. No Covered Person has an interest as a lessee under any Capital
Leases other than Capital Leases that are Permitted Indebtedness.

	 
	 	12.24.	 	Other Creditor Indebtedness and Subordinated Indebtedness. There is no breach or
default with respect to the Other Creditor Indebtedness, which has continued beyond any cure
periods set forth in the applicable underlying agreements and the Other Creditor
Indebtedness has been incurred in accordance with this Agreement.

	 
	 	12.25.	 	Tax Liabilities; Governmental Charges. Except with respect to good standing
qualifications as set forth in the first sentence of Section 12.1, each Covered
Person has filed or caused to be filed all material tax reports and returns required to be
filed by it with any Governmental Authority, except where extensions have been properly
obtained. Each Covered Person has paid or made adequate provision for payment of all Taxes
of such Covered Person, except Taxes which are being diligently contested in good faith by
appropriate proceedings and as to which such Covered Person has established adequate
reserves in conformity with GAAP. No Security Interest for any such Taxes has been filed
and no claims are being asserted with respect to any such Taxes which have or would be
reasonably likely to have a Material Adverse Effect. There are no material unresolved
issues concerning any liability of a Covered Person for any Taxes which, have or would be
reasonably likely to have a Material Adverse Effect.

	 
	 	12.26.	 	Pension Benefit Plans. All Pension Benefit Plans maintained by each Covered Person
or an ERISA Affiliate of such Covered Person qualify under Code Section 401 and are in
compliance with the provisions of ERISA, except when the failure to comply has not or would
not be reasonably likely to have a Material Adverse Effect. Except with respect to events
or occurrences which do not have and are not reasonably likely to have a Material Adverse
Effect:

12.26.1. Prohibited Transactions. None of such Pension Benefit Plans has
participated in, engaged in or been a party to any non-exempt Prohibited Transaction
as defined in ERISA or the Code, and no officer, director or employee of such
Covered Person or of an ERISA Affiliate of such Covered Person has committed a
breach of any of the responsibilities or obligations imposed upon fiduciaries by
Title I of ERISA.

12.26.2. Claims. There are no claims, pending or, to Reseller’s knowledge after
making due inquiry, threatened, involving any such Pension Benefit Plan by a current
or former employee (or beneficiary thereof) of such Covered Person or ERISA
Affiliate of such Covered Person, nor is there any reasonable basis to anticipate
any claims involving any such Pension Benefit Plan which would likely be
successfully maintained against such Covered Person or such ERISA Affiliate.

 

39

 

12.26.3. Reporting and Disclosure Requirements. There are no violations of any
reporting or disclosure requirements with respect to any such Pension Benefit Plan
and none of such Pension Benefit Plans has violated any Law, including ERISA and the
Code.

12.26.4. Accumulated Funding Deficiency. No such Pension Benefit Plan has (a)
incurred an accumulated funding deficiency (within the meaning of Code Section
412(a)), whether or not waived; (b) been a Pension Benefit Plan with respect to
which a Reportable Event (to the extent that the reporting of such events to the
PBGC within thirty days of the occurrence has not been waived) has occurred and is
continuing; or (c) been a Pension Benefit Plan with respect to which there exist
conditions or events which have occurred that present a significant risk of
termination of such Pension Benefit Plan by the PBGC.

12.26.5. Multi-employer Plan. All Multi-employer Plans to which any Covered Person
contributes or is obligated to contribute are listed in Disclosure Schedule
Section 12.26.5. No Covered Person or ERISA Affiliate of such Covered
Person has received notice that any such Multi-employer Plan is in reorganization or
has been terminated within the meaning of Title IV of ERISA, and no such
Multi-employer Plan is reasonably expected to be in reorganization or to be
terminated within the meaning of Title IV of ERISA.

	 	12.27.	 	Welfare Benefit Plans. No Covered Person or ERISA Affiliate of any Covered Person
maintains a Welfare Benefit Plan that has a liability which, if enforced or collected, has
or is reasonably likely to have a Material Adverse Effect. Each Covered Person and each
ERISA Affiliate of any Covered Person has complied in all respects with the applicable
requirements of Code Section 4980B pertaining to continuation coverage as mandated by COBRA,
except any failure that does not have or is reasonably likely not to have a Material Adverse
Effect.

	 
	 	12.28.	 	Retiree Benefits. No Covered Person or ERISA Affiliate of such Covered Person has an
obligation to provide any Person with any medical, life insurance, or similar benefit
following such Person’s retirement or termination of employment (or to such Person’s
beneficiary subsequent to such Person’s death) other than (a) such benefits provided to
Persons at such Person’s sole expense and (b) obligations under COBRA.

	 
	 	12.29.	 	Distributions. No Restricted Payments (as defined in Section 15.10) have
been declared, paid or made upon or in respect of any capital stock or other securities of
Reseller on and after the Execution Date, except as expressly permitted hereby.

	 
	 	12.30.	 	Real Property. Disclosure Schedule Section 12.30 contains a correct and
complete list of (a) the street addresses and a general description of all real property
owned or leased by each Covered Person, and (b) a list of all leases, subleases, and
licenses of real property by each Covered Person, with such Covered Person identified for
each as the lessee, sublessee, licensee, lessor, sublessor, or licensor, as is the case,
together with the street addresses and a general description of the real property involved
and the names and addresses of the other parties to such leases, subleases, and licenses.
Each of such leases, subleases, and licenses is valid and enforceable against Reseller or
the applicable Covered Person, and is in full force and effect, and no material default by
such Covered Person, or to Reseller’s knowledge, any other party to any such lease,
sublease, or license exists which has not been waived or cured.

 

40

 

	 	12.31.	 	State of Collateral and other Property. Each Covered Person has good and marketable
or merchantable title to all real and personal property purported to be owned by it or
reflected in the Financial Statements, except for personal property sold or leased in the
ordinary course of
business after the date of the Initial Financial Statements as permitted by and in
accordance with the terms of the Loan Documents. There are no Security Interests on any of
the property purported to be owned by any Covered Person, including the Collateral, except
Permitted Security Interests. Except for Inventory with an aggregate value less than
$500,000 at any time, each item of Inventory purported to be owned or leased by a Covered
Person is in good operating condition and repair and is suitable for the use to which it is
customarily put by its owner, ordinary wear and tear and damage by acts of God excepted.
Without limiting the generality of the foregoing:

12.31.1. Accounts. With respect to each Account scheduled, listed or referred
to in reports submitted by any Covered Person to Administrative Agents pursuant to
the Loan Documents, except as disclosed therein:

(a) the Account arose from a bona fide transaction completed in accordance with
the terms of any documents pertaining to such transaction;

(b) the Account is not evidenced by a judgment and there is no material dispute
respecting it;

(c) the amount of the Account as shown on the applicable Covered Person’s books
and records and all invoices and statements which may be delivered to Administrative
Agent with respect thereto are owing to the applicable Covered Person and are not in
any way contingent;

(d) there are to such Covered Person’s knowledge after making due inquiry, no
set-offs, counterclaims or disputes existing or asserted with respect to the Account
and the applicable Covered Person has not made any agreement with any Account Debtor
for any deduction therefrom except a discount or allowance allowed by the applicable
Covered Person in the ordinary course of its business for prompt payment;

(e) there are to such Covered Person’s knowledge after making due inquiry, no
facts, events or occurrences which in any way materially impairs the validity or
enforcement of the Account or materially reduces the amount payable thereunder as
shown on the applicable Covered Person’s books and records and all invoices and
statements delivered to Administrative Agents with respect thereto;

(f) the Account is assignable as contemplated hereby;

(g) the Account arose in the ordinary course of the applicable Covered Person’s
business;

(h) to such Covered Person’s knowledge after making due inquiry, the Account
Debtor with respect to the Account has the capacity to contract;

(i) the services furnished, goods sold or goods leased giving rise to the
Account are not subject to any Security Interest except the perfected Security
Interest granted to Collateral Agent for the benefit of Lenders and except the
Permitted Security Interests;

(j) there are no proceedings or actions which are pending or, to such Covered
Person’s knowledge after making due inquiry, threatened against the Account Debtor
with respect to the Account;

(k) each Account, as applicable, is in compliance with the provisions of STARK
and the Anti-kickback Statute; and

 

41

 

(l) no payments have been or will be made on the Account except payments
promptly delivered to the Blocked Accounts at the financial institutions as provided
in this Agreement.

12.31.2. Inventory. With respect to Inventory of Reseller:

(a) such Inventory (except for Inventory in transit or in the possession of
such Covered Person’s customers) is located at one or another of the premises listed
in Disclosure Schedule Section 12.31.2 as being a location of Reseller’s
Inventory;

(b) the applicable Covered Person has good and merchantable title to such
Inventory or a good and valid leasehold interest as lessee to such Inventory,
subject to no Security Interest whatsoever except for the perfected Security
Interest granted to Collateral Agent for the benefit of Lenders and except for
Permitted Security Interests;

(c) such Inventory is of good and merchantable quality, free from any known
material defects;

(d) such Inventory is not subject to any known licensing, patent, royalty,
trademark, trade name or copyright agreements with any third parties; and

(e) the completion of manufacture and sale, lease, or other disposition of such
Inventory by Administrative Agents or Lenders following an Event of Default shall
not require the consent of any Person which has not been obtained and shall not
constitute a breach or default under any contract or agreement to which any Covered
Person is a party or to which the Inventory is subject.

12.31.3. Equipment. With respect to each Covered Person’s owned equipment:

(a) such Covered Person has good and marketable title thereto;

(b) none of such equipment is subject to any Security Interests except for the
perfected Security Interest granted to Collateral Agent for the benefit of Lenders
pursuant hereto and except for Permitted Security Interests; and

(c) such equipment (except for equipment in transit) is located at one or
another of the premises listed in Disclosure Schedule Section 12.31.3 as a
location of such Covered Person’s equipment. With respect to each Covered Person’s
equipment, such equipment is of good and merchantable quality, free from any
material defects, ordinary wear and tear and damage by acts of God excepted.

12.31.4. Intellectual Property. With respect to the Intellectual Property of
the Covered Persons:

(a) Disclosure Schedule Section 12.31.4 contains a complete and correct
list of all of each Covered Person’s Intellectual Property,

(b) the Covered Person listed in the Disclosure Schedule as the owner thereof
owns all right, title and interest in, under and to such Intellectual Property,
subject to no licenses or any interest therein or other agreements relating thereto,
except for the Intellectual Property Assignments;

(c) none of such Intellectual Property is subject to any pending or, to such
Covered Person’s knowledge, threatened challenge;

(d) to the knowledge of such Covered Person, such Covered Person has not
committed any patent, trademark, trade name, service mark or copyright infringement,
and the present conduct of such Covered Person’s business does not infringe any
patents, trademarks, trade name rights, service marks, copyrights, publication
rights, trade secrets or other proprietary rights of any Person; and

 

42

 

(e) there are no claims or demands of any Person pertaining to, or any
proceedings which are pending or, to the knowledge of such Covered Person,
threatened, which challenge such Covered Person’s rights in respect of any
proprietary or confidential information or trade secrets used in the conduct of such
Covered Person’s business.

12.31.5. Documents, Instruments and Chattel Paper. All documents, instruments
and chattel paper describing, evidencing or constituting Collateral, and all
signatures and endorsements thereon by a Covered Person are complete, valid, and
genuine, and all goods evidenced by such documents, instruments and chattel paper
are owned by a Covered Person free and clear of all Security Interests other than
Permitted Security Interests.

	 	12.32.	 	Chief Place of Business; Locations of Collateral.

12.32.1. The chief executive office and principal place of business of each Covered
Person is identified in Disclosure Schedule Section 12.32.1 and the location
of the books and records of each Covered Person, and all of such Covered Person’s
chattel paper and all records of Accounts, are located only at the places listed and
so identified in Disclosure Schedule Section 12.32.1;

12.32.2. the States in which any Covered Person is qualified to conduct its business
and the respective counties within such States and the Canadian Provinces and other
foreign jurisdictions in which any Covered Person conducts its business are listed
and so identified in Disclosure Schedule Section 12.32.2; and

12.32.3. all of the Inventory is located at the locations listed in Disclosure
Schedule Section 12.31.2; all office furniture and equipment is located at
the locations listed in Disclosure Schedule Section 12.32.3.

	 	12.33.	 	Representations and Warranties -Inventory. All Inventory, except for Inventory in
transit and Inventory sold in the ordinary course of business, (a) will at all times be kept
only at the locations indicated on Schedule 12.31.2; (b) Reseller now keeps and will
keep correct and accurate records itemizing and describing the kind, type, quality and
quantity of Inventory, Reseller’s cost therefor and the selling price thereof or the
rental/lease rate thereof, the daily withdrawals therefrom and the additions thereto; (c)
except as may be permitted by Section 14.12.2, Inventory is not and will not be
stored with a bailee, repairman, warehouseman or similar party without Administrative
Agent’s prior written consent, and if Administrative Agents consent (which such consent
shall not be unreasonably withheld or delayed), Reseller will, concurrently with delivery to
such party, cause any such party to issue and deliver to Administrative Agents, in form
acceptable to Administrative Agents, warehouse receipts, in Administrative Agents’ name
evidencing the storage of such Inventory, and waivers of warehouseman’s liens in favor of
Administrative Agents; (d) Reseller will timely pay or cause to be timely paid all taxes,
rents, business taxes, and other charges relating to the premises where the Inventory is
located which Reseller is contractually or legally obligated to pay, except those amounts
which Reseller is diligently contesting in good faith by appropriate proceedings provided
Reseller has established adequate reserves therefor in accordance with GAAP and there is no
Existing Default or no Event of Default would reasonably be likely to occur as a result
thereof; and (e) except as may be
permitted by Section 14.12.2, a landlord consent of the type described in
Section 8.1, satisfactory to Administrative Agents in their Permitted Discretion,
has been obtained for each location in which Reseller keeps Inventory.

 

43

 

	 	12.34.	 	No Negative Pledges. Except as set forth in Disclosure Schedule Section
12.34, no Covered Person is a party to or bound by any Contract which prohibits the
creation or existence of any Security Interest upon or assignment or conveyance of any of
the Collateral or any other asset (regardless of type or nature) of any Covered Person.

	 
	 	12.35.	 	Security Documents.

12.35.1. Security Agreements. Each Security Agreement is effective to grant to
Administrative Agent for the pro-rata benefit of Lenders an enforceable Security
Interest in the Personal Property Collateral described therein. Upon appropriate
filing (as to all Personal Property Collateral in which a Security Interest may be
perfected under the applicable State’s UCC by filing a financing statement or
statements) or Administrative Agent’s taking possession (as to items of the Personal
Property Collateral of which a secured party must take possession to perfect a
Security Interest under the applicable State’s UCC) or Administrative Agents’ taking
control (as to the items of the Personal Property Collateral of which a secured
party must take control to perfect a Security Interest under the applicable State’s
UCC), Administrative Agents will have a fully perfected Security Interest in the
Personal Property Collateral described in each Security Agreement, subject only to
Permitted Security Interests affecting such Personal Property Collateral.

12.35.2. Collateral Assignments.

12.35.2.1. Blocked Account Agreements. The Blocked Account Agreements are
effective to grant to Collateral Agent for the benefit of Lenders an
enforceable first priority Security Interest in the Blocked Accounts.

12.35.2.2. Intellectual Property Assignments. Each Intellectual Property
Assignment is effective to grant to Collateral Agent for the benefit of
Lenders an enforceable first priority Security Interest in all the
Intellectual Property described therein, subject only to Permitted Security
Interests affecting such Intellectual Property.

12.35.2.3. Pledge Agreement. Each Pledge Agreement is effective to grant to
Collateral Agent for the benefit of Lenders an enforceable first priority
Security Interest in all the stock, membership interests, and other
securities described therein.

	 	12.36.	 	S Corporation. There is no election for any Covered Person in effect under Section
1362(a) of the Code to be treated as an S Corporation as defined in Section 1361(a) of the
Code.

	 
	 	12.37.	 	Bank Accounts and Lockboxes. No Covered Person has any lockbox other than the
Lockboxes allowed or required hereunder. No Covered Person has any bank accounts other than
the bank accounts allowed or required hereunder. All bank accounts maintained by any
Covered Person with any bank or other financial institution are described in Disclosure
Schedule Section 12.38.

	 
	 	12.38.	 	Margin Stock. No Covered Person is engaged or will engage, principally or as one of
its important activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U), and no part of the proceeds
of any Advance 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 or for any purpose which violates,
or which would be inconsistent with, the provisions of Regulation U. None of the
transactions contemplated by any of the Loan Documents will violate Regulations T, U or X of
the FRB.

 

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	 	12.39.	 	Securities Matters. No proceeds of any Advance will be used to acquire any security
in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of
1934, as amended.

	 
	 	12.40.	 	Investment Company Act, Etc.No Covered Person is an investment company registered or
required to be registered under the Investment Company Act of 1940, or a company controlled
(within the meaning of such Investment Company Act) by such an investment company or an
affiliated person of, or promoter or principal underwriter for, an investment company, as
such terms are defined in the Investment Company Act of 1940. No Covered Person is subject
to regulation under the Federal Power Act, the Interstate Commerce Act or any other Law
limiting or regulating its ability to incur Indebtedness for money borrowed.

	 
	 	12.41.	 	Filings. All registration statements, reports, proxy statements and other documents,
if any, required to be filed by Reseller with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended, have been filed, and such filings are complete and accurate in all material
respects and contain no untrue statements of material fact or omit to state any material
facts required to be stated therein or necessary in order to make the statements therein not
misleading.

	 
	 	12.42.	 	Broker’s Fees. No broker or finder is entitled to compensation for services rendered
with respect to the transactions contemplated by this Agreement.

	 
	 	12.43.	 	Eligibility of Collateral. Each Account which Reseller, expressly or by implication,
requests Administrative Agent to classify as an Eligible Account will, as of the time when
such request is made, conform in all respects to the requirements of such classification set
forth in the definition of Eligible Accounts herein.

	 
	 	12.44.	 	Loans to Officers and Directors. Except for travel or similar expenses made in the
ordinary course of business, no loans or advances have since December 31, 2006, been made to
any officer or director of Reseller by Reseller.

	 	12.45.	 	Office of Foreign Assets Control. No Reseller (a) is a Person whose property or interest
in property is blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b) engages
in any dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such Person in any manner violative of Section 2 of such
executive order, or (c) is a Person on the list of Specially Designated Nationals and
Blocked Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

	 	12.46.	 	Patriot Act. Each Credit Party is in compliance, in all material respects, with (a)
the Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any other enabling legislation or executive order relating thereto, and (b) the
Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.

 

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13. Modification and Survival of Representations. Reseller may at any time propose to Lenders
in writing to modify Representations and Warranties. If the proposed modifications are
satisfactory to Required Lenders as evidenced by their written assent thereto, then such
Representations and Warranties shall be deemed and treated as so modified. If such proposed
modifications are not satisfactory to Required Lenders, then such proposed modifications shall not
be deemed or treated as modifying such Representations and Warranties. All such Representations
and Warranties, as made or deemed made as of a particular time, shall survive execution of each of
the Loan Documents and the making of every Advance, and may be relied upon by Administrative Agent
and Lenders as being true and correct as of the date when made or deemed made until all of the Loan
Obligations are fully and indefeasibly paid in cash, no Letters of Credit are outstanding and the
Letter of Credit Exposure is irreversibly zero and the Facilities are terminated.

14. Affirmative Covenants. Reseller covenants and agrees that, until all of the Loan
Obligations are fully and indefeasibly paid in cash, no Letters of Credit are outstanding and the
Letter of Credit Exposure is irreversibly zero and the Facilities are terminated, Reseller shall,
and Reseller shall cause each Covered Person to do, the following:

	 	14.1.	 	Use of Proceeds. Use the proceeds of Swingline Advances, Interim Floorplan Loan
Advances, the initial and subsequent Floorplan Loan Advances and the initial and subsequent
Revolving Loan Advances solely to pay fees and expenses incurred by Reseller in connection
with the Loan Documents (including fees and expenses of Administrative Agents), to repay
Reseller’s Indebtedness in existence on the Effective Date, to the extent not Permitted
Indebtedness, to fund working capital, to purchase Inventory, and for general corporate
purposes, including as contemplated by Section 15.7.

	 
	 	14.2.	 	Corporate Existence. Each Covered Person shall maintain its existence in good
standing and shall maintain in good standing its right to transact business in those states
in which it is now or hereafter doing business, except where the failure to so qualify will
not have and will not be reasonably likely to have a Material Adverse Effect. Each Covered
Person shall obtain and maintain all Material Licenses for such Covered Person.

	 
	 	14.3.	 	Maintenance of Property and Leases. Maintain in good condition and working order
(ordinary wear and tear and damage by acts of God excepted), and repair and replace as
required, all buildings, equipment, machinery, fixtures, Inventory, and other real and
personal property owned or leased by such Covered Person whose useful economic life has not
elapsed and which is necessary for the ordinary conduct of the business of such Covered
Person, except where failure to do so does not have or is not reasonably likely to have a
Material Adverse Effect. Each Covered Person shall maintain in good standing and free of
defaults all of its leases of buildings, equipment, machinery, fixtures, Inventory, and
other real and personal property whose useful economic life has not elapsed and which is
necessary for the ordinary conduct of the business of such Covered Person, except where the
failure to be in good standing or free of default would not reasonably be likely to give
rise to a Material Adverse Effect. No Covered Person shall permit any of its owned
equipment, owned Inventory, or other property to become a fixture to real property or an
accession to other personal property unless Collateral Agent has a valid, perfected and
first priority Security Interest for the benefit of Lenders in such real or personal
property.

 

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	 	14.4.	 	Inventory. Keep its Inventory and equipment, taken as a whole, in good and
merchantable condition (subject to ordinary wear and tear) at its own expense and shall hold
such Inventory and equipment for sale or lease, or to be furnished in connection with the
rendition of services, in the ordinary course of such Covered Person’s business, on terms
which do not include bill-and-hold
(unless (a) such sales on a bill-and-hold basis are subject to a written contract which
expressly provides that the Account Debtor is obligated on the Account notwithstanding the
fact that the Inventory has not been shipped to such Account Debtor, and (b) if such
Inventory subject to bill-and-hold is kept at premises owned or leased by Reseller such
Inventory subject to bill-and-hold is segregated from all Inventory of Reseller or any other
Covered Person and clearly marked as being the property of such Account Debtor), guarantied
sale, sale and return, sale on approval, consignment or similar repurchase or return terms.

	 
	 	14.5.	 	Insurance. At all times keep insured or cause to be kept insured, in insurance
companies having a rating of at least “A-” by Best’s Rating Service, all property owned or
leased by it of a character usually insured by others carrying on businesses similar to that
of such Covered Person in such manner and to such extent and covering such risks as such
properties are usually insured. At all times, all Inventory shall be insured for full
replacement value. Each Covered Person shall carry business interruption insurance in such
amounts, in such manner and to such extent and covering such risks as businesses similar to
that of such Covered Person are usually insured, with all such policies showing Collateral
Agent as lender loss payee for the benefit of Lenders. Each Covered Person shall timely pay
all premiums for such insurance. Each Covered Person shall at all times carry insurance, in
insurance companies having a rating of at least “A-” by Best’s Rating Service, against
liability on account of damage to persons or property (including product liability insurance
and insurance required under all Laws pertaining to workers’ compensation) and covering all
other liabilities common to such Covered Person’s business, in such manner and to such
extent as such coverage is usually carried by others conducting businesses similar to that
of such Covered Person. At all times, Reseller shall maintain replacement value insurance
for all Collateral on any ocean, waterway, interstate, highway, or other public way. All
policies of liability insurance maintained hereunder shall name each Administrative Agent as
an additional insured for the benefit of Lenders; all policies of property insurance
maintained hereunder with respect to the Collateral shall reflect Collateral Agent’s
interest therein as a lender loss payee on an accord #27 form for the benefit of Lenders.
Administrative Agents are authorized, but not obligated, as the attorney-in-fact for
Reseller, and every other Covered Person and for the benefit of Lenders, (a) upon the
occurrence and during the continuance of an Event of Default, without Reseller’s or any
other Covered Person’s consent, to adjust and compromise proceeds payable under such
policies of insurance, (b) to collect, receive and give receipts for such proceeds in the
name of Reseller or any other Covered Person, Administrative Agents and Lenders, and (c) to
endorse Reseller’s or any other Covered Person’s name upon any instrument in payment
thereof. Such power granted to Administrative Agents shall be deemed coupled with an
interest and shall be irrevocable (until all of the Loan Obligations are fully and
indefeasibly paid in cash and the Facilities have terminated) as set forth in Section
9. All policies of insurance maintained hereunder shall contain a clause providing that
such policies may not be canceled, reduced in coverage or otherwise modified without 30
days’ prior written notice to Administrative Agents. Reseller shall or shall cause any
other Covered Person upon request of Administrative Agents at any time to furnish to
Administrative Agents updated evidence of insurance (in the form required as a condition to
Administrative Agents’ lending hereunder) for such insurance.

	 
	 	14.6.	 	Payment of Taxes and Other Obligations. Promptly pay and discharge or cause to be
paid and discharged, as and when due, any and all income taxes, federal or otherwise,
lawfully assessed and imposed upon it, and any and all lawful taxes, rates, levies, and
assessments whatsoever upon its properties and every part thereof, or upon the income or
profits therefrom and all claims of materialmen, mechanics, carriers, warehousemen,
landlords and other like Persons for labor, materials, supplies, storage or other items or
services which if unpaid might be or become a Security Interest or charge upon any of its
property; provided, however, that a Covered Person may diligently contest in good faith by
appropriate proceedings the validity of
any such taxes, rates, levies, or assessments and claims, provided such Covered Person has
established adequate reserves therefor in conformity with GAAP on the books of such Covered
Person, and no Security Interest, other than a Permitted Security Interest, results from
such non-payment.

 

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	 	14.7.	 	Compliance With Laws. Comply with all Material Laws. Without limiting the generality
of the foregoing:

14.7.1. Environmental Laws. Each Covered Person shall comply and shall use
commercially reasonable efforts to ensure compliance by all of its tenants,
subtenants and other occupants, if any, with all Environmental Laws, any of which if
not so complied with will or is reasonably likely to have a Material Adverse Effect.

14.7.2. Pension Benefit Plans. Each Covered Person and each ERISA Affiliate of
such Covered Person shall at all times make prompt payments or contributions to meet
the minimum funding standards under ERISA and the Code with respect to any Pension
Benefit Plan maintained by such Covered Person or such ERISA Affiliate, and shall
comply with all reporting and disclosure requirements and all provisions of the Code
and ERISA applicable to any Pension Benefit Plan maintained by such Covered Person
or such ERISA Affiliate.

	 	14.8.	 	Discovery and Clean-Up of Hazardous Material.

Upon any Covered Person receiving notice of any violation of Environmental Laws or
any similar notice described in Section 14.10.4, or upon any Covered Person
otherwise discovering Hazardous Material on any property owned or leased by such
Covered Person which is in violation of, or which would result in liability under,
any Environmental Law, the violation of which or which liability will or is
reasonably likely to have a Material Adverse Effect, Reseller shall: (a) promptly
take such acts as may be necessary to prevent danger or harm to the property or any
Person therein as a result of such Hazardous Material; (b) with respect to the
Collateral, at Administrative Agents’ reasonable request, and at Reseller’s sole
cost and expense, obtain and deliver to Administrative Agents promptly, but in no
event later than 90 days after such request, a then currently dated environmental
assessment of the property certified to Administrative Agents and any future holder
of the Loan Obligations, a proposed plan for responding to any environmental
problems described in such assessment, and an estimate of the costs thereof; and (c)
take all necessary steps to initiate and expeditiously complete all removal,
remedial, response, corrective and other action to eliminate any such environmental
problems, and keep Administrative Agent informed of such actions and the results
thereof.

	 	14.9.	 	Termination of Pension Benefit Plan. Shall not terminate or amend any Pension Benefit
Plan maintained by such Covered Person and each ERISA Affiliate if such termination or
amendment would result in any liability to such Covered Person or such ERISA Affiliate under
ERISA or any increase in current liability for the plan year for which such Covered Person
or such ERISA Affiliate is required to provide security to such Pension Benefit Plan under
the Code.

 

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	 	14.10.	 	Notice to Administrative Agents and Lenders of Material Events. Promptly upon any
Responsible Officer of Reseller obtaining knowledge or notice thereof, give notice to
Administrative Agents and each Lender of (a) any breach of any of the covenants in
Sections 14, 15, or 16; (b) any Default or Event of Default; (c) the
commencement of any Material Proceeding; and (d) any loss of or damage to any assets of a
Covered Person or the commencement of any proceeding for the condemnation or other taking of
any of the assets of a
Covered Person, if such loss, damage or proceeding has or is reasonably likely to have a
Material Adverse Effect, whether or not Insurance Proceeds are likely to be payable as a
consequence of such loss, damage or proceeding. In addition,

14.10.1. Reseller shall furnish to Administrative Agents from time to time all
information which Administrative Agents reasonably request with respect to the
status of any Material Proceeding.

14.10.2. Reseller shall furnish to Administrative Agents from time to time all
information which Administrative Agents reasonably request with respect to any
Pension Benefit Plan established by a Covered Person or an ERISA Affiliate of any
Covered Person.

14.10.3. Reseller shall deliver notice to Administrative Agents of the establishment
of any Pension Benefit Plan by a Covered Person or an ERISA Affiliate of such
Covered Person.

14.10.4. Reseller shall promptly inform Administrative Agents of its receipt of, and
deliver to Administrative Agents a copy of, any (a) notice that any violation of any
Environmental Law or Employment Law may have been committed or is about to be
committed by any Covered Person that has or which would reasonably be likely to have
a Material Adverse Effect, (b) notice that any administrative or judicial complaint
or order has been filed or is about to be filed against any Covered Person alleging
violations of any Environmental Law or Employment Law or requiring such Covered
Person to take any action in connection with the release of any Hazardous Material
into the environment, which has or would reasonably be likely to have a Material
Adverse Effect, (c) notice from a Governmental Authority or private party alleging
that a Covered Person may be liable or responsible for costs associated with a
response to or cleanup of a release of Hazardous Material into the environment or
any damages caused thereby, which has or would reasonably be likely to have a
Material Adverse Effect, (d) notice that a Covered Person is subject to federal,
state or local investigation regarding the improper transportation, storage,
disposal, generation or release into the environment of any Hazardous Material which
has or would reasonably be expected to have a Material Adverse Effect, or (e) notice
that any properties or assets of a Covered Person are subject to a Security Interest
in favor of any Governmental Authority for any liability under any Environmental Law
or damages arising from or costs incurred by such Governmental Authority in response
to a release of Hazardous Material into the environment.

14.10.5. Reseller shall deliver to Administrative Agents notice of each of the
following events promptly after they occur: (a) the failure of any Covered Person
or ERISA Affiliate of such Covered Person to make any required installment or any
other required payment to any Pension Benefit Plan in sufficient amount to comply
with ERISA and the Code on or before the due date for such installment or payment;
(b) the occurrence of any Reportable Event, or a prohibited transaction or
accumulated funding deficiency (as those terms are defined in ERISA), with respect
to any Pension Benefit Plan maintained or contributed to by a Covered Person or an
ERISA Affiliate of such Covered Person; (c) receipt by a Covered Person or ERISA
Affiliate of such Covered Person of any notice from a Multi-employer Plan regarding
the imposition of withdrawal liability; and (d) receipt by a Covered Person or ERISA
Affiliate of such Covered Person of any notice of the institution, or a Covered
Person’s expectancy of the institution, of any proceeding or receipt by such Covered
Person or such ERISA Affiliate of any notice of the taking, or such Covered Person’s
or such ERISA Affiliate’s expectancy of the

 

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taking, of any other action which may result in the termination of any Pension
Benefit Plan maintained or contributed to by such Covered Person or such ERISA
Affiliate, or the withdrawal or partial withdrawal by a Covered Person or ERISA
Affiliate of such Covered Person from any Pension Benefit Plan, and the filing or
receipt by a Covered Person or ERISA Affiliate of such Covered Person of any such
notice and filing or receipt of all subsequent reports or notices under ERISA with
or from the IRS, the PBGC, or the DOL relating to the same; and, in addition to such
notice, deliver to Administrative Agent a certificate of a Responsible Officer of
Reseller, setting forth details as to such events and the action that the affected
Covered Person or ERISA Affiliate of such Covered Person proposes to take with
respect thereto. For purposes of this Section, each Covered Person and any ERISA
Affiliate of such Covered Person shall be deemed to know all facts known by the
administrator of any Plan of which such Covered Person or such ERISA Affiliate is
the plan sponsor.

14.10.6. Reseller shall promptly deliver to Administrative Agents notice of any
default or event of default, or the occurrence of any event which would with the
passage of time, giving of notice or otherwise, constitute a default or event of
default with respect to any of the Permitted Indebtedness in excess of $500,000.

14.10.7. Reseller shall promptly deliver notice to Administrative Agents of the
assertion by the holder of any capital stock or any other equity interest in a
Covered Person or any Indebtedness of a Covered Person in the outstanding principal
amount in the aggregate in excess of $500,000 that a default exists with respect
thereto or that such Covered Person is not in compliance with the terms thereof, or
of the threat or commencement by such holder of any enforcement action because of
such asserted default or noncompliance.

14.10.8. Reseller shall, promptly after becoming aware thereof, deliver notice to
Administrative Agents of any pending or threatened strike, work stoppage, or other
material labor dispute affecting a Covered Person which could reasonably be likely
to have a Material Adverse Effect.

14.10.9. Reseller shall promptly deliver notice to Administrative Agents of any
change in the name, State of incorporation or organization or form of any Covered
Person.

14.10.10. Reseller shall, promptly after becoming aware thereof, deliver notice to
Administrative Agents of any event that has or is reasonably likely to have a
Material Adverse Effect on all Covered Persons taken as a whole.

14.10.11. Reseller shall, promptly after becoming aware thereof, deliver notice to
Administrative Agents of an actual or alleged violation of any Material Law
applicable to a Covered Person or the property of a Covered Person.

14.10.12. Reseller shall notify Administrative Agents promptly in writing of any
fact or condition of which Reseller is aware which adversely affects the value of
the Collateral taken as a whole, including disclosing the amount of such loss or
depreciation in value and disclosing any adverse fact or condition or the occurrence
of any event which causes loss or depreciation in the value of the Collateral of
more than $500,000 taken as a whole. Reseller shall provide such additional
information to Administrative Agents regarding the amount of any loss or
depreciation in value of the Collateral as Administrative Agents may request from
time to time.

 

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	 	14.11.	 	Names of Authorized Employees. Reseller shall keep on file with Administrative
Agents at all times an appropriate instrument naming each Authorized Employee.

	 
	 	14.12.	 	Maintenance of Security Interests of Security Documents.

14.12.1. Preservation and Perfection of Security Interests. Promptly, upon the
reasonable request of Administrative Agents and at Reseller’s expense, execute,
acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter file or record in the appropriate governmental office, any document or
instrument supplementing or confirming the Security Documents or otherwise
reasonably deemed necessary by Administrative Agents to create, preserve or perfect
any Security Interest purported to be created by the Security Documents or to fully
consummate the transactions contemplated by the Loan Documents. The foregoing
actions by Reseller shall include, (a) filing financing or continuation statements,
and amendments thereof, and executing such mortgages, deeds of trust, assignments or
security agreements, satisfactory to Administrative Agents; (b) delivering to
Collateral Agent the original certificates of title for motor vehicles, or
applications therefor duly executed, with Collateral Agent’s Security Interest for
the benefit of Lenders properly shown thereon; (c) delivering to Collateral Agent
the originals of all instruments, documents and chattel paper in excess of $500,000
in the aggregate, and all other Collateral of which Collateral Agent determines it
should have physical possession in order to perfect and protect Collateral Agent’s
Security Interest for the benefit of Lenders therein, duly endorsed or assigned to
Collateral Agent without restriction; (d) delivering to Collateral Agent warehouse
receipts covering any portion of the Collateral located in warehouses and for which
warehouse receipts are issued; (e) upon the occurrence and during the continuance of
an Event of Default, transferring Inventory to warehouses designated by Collateral
Agent; (f) delivering to Collateral Agent all letters of credit on which Reseller is
named beneficiary; (g) placing a durable notice of the existence of Collateral
Agent’s Security Interest for the benefit of Lenders, acceptable to Administrative
Agents, upon such items of the Collateral as are designated by Administrative
Agents; and (h) placing a notice of the existence of Collateral Agent’s Security
Interest for the benefit of Lenders, acceptable to Administrative Agents, upon those
writings evidencing the Collateral and the books and records of Reseller pertaining
to the Collateral, as designated by Administrative Agents.

14.12.2. Collateral Held by Warehouseman, Bailee, etc. If any Inventory which
is purchased by Reseller pursuant to the Aggregate Floorplan Loan Facility or
Interim Floorplan Loan Facility with a value in excess of $500,000 for each location
is at any time in the possession or control of a warehouseman, bailee or any of
Reseller’s agents or processors (not including any lessee or other person to whom
Inventory is leased or rented in the ordinary course of such Covered Person’s
business), then Reseller shall notify Administrative Agents thereof and shall notify
such Person of Collateral Agent’s Security Interest for the benefit of Lenders in
such Collateral and, upon Administrative Agents’ request, instruct such Person to
hold all such Collateral for Collateral Agent’s account subject to Administrative
Agents’ instructions. If at any time any Inventory which is purchased by Reseller
pursuant to the Aggregate Floorplan Loan Facility or Interim Floorplan Loan Facility
with a value in excess of $500,000 for each location is located on any premises that
are not owned by Reseller (not including any lessee or other person to whom
Inventory is leased or rented in the ordinary course of such Covered Person’s
business, or other locations where Reseller is not obligated to pay rent for up to
30 consecutive days) then Reseller shall obtain or cause to be obtained
written waivers or consents, satisfactory to Administrative Agents, of all
present and future Security Interests to which the owner or lessor or any mortgagee
of such premises may be entitled to assert against the Collateral.

 

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14.12.3. Compliance With Terms of Security Documents. Comply with all of the
terms, conditions and covenants in the Security Documents to which such Covered
Person is a party.

	 	14.13.	 	Accounting System. Maintain a system of accounting established and administered in
accordance with GAAP. Without limiting the generality of the foregoing:

14.13.1. Account Records. Each Covered Person shall maintain a record of
Accounts at its principal place of business that itemizes each Account of such
Covered Person and describes the names and addresses of the Account Debtors on such
Accounts, all relevant invoice numbers, invoice dates, and shipping dates, and the
due dates, collection histories, and aging of such Accounts.

14.13.2. Inventory Records. Each Covered Person shall maintain an inventory
system satisfactory to Administrative Agents. Reseller shall cause returns and
allowances, as between such Reseller and its Account Debtors to be on substantially
the same basis and in accordance with the usual customary practices of such
Reseller, as in existence on the Effective Date.

14.13.3. Tracing of Proceeds. Reseller shall maintain reasonably detailed and
accurate accounting and records of proceeds of the Loans and transfers of proceeds
of the Loans (a) received by it from Lenders or Administrative Agents, (b)
transferred from it to any other Covered Person, and (c) received by it from another
Reseller. Reseller agrees that (i) the business operations of Reseller and each
other Covered Person are interrelated and complement one another, and such entities
have a common business purpose and common management, and (ii) the proceeds of
Advances hereunder will benefit Reseller and each Covered Person, severally and
jointly. Not in any way in limitation of any other provisions set forth herein,
such books and records may be reviewed and copied by Administrative Agents at
Reseller’s expense at reasonable intervals and upon reasonable notice given by
Administrative Agents to Reseller.

	 	14.14.	 	Financial Statements; Annual Projections; Tax Returns. Deliver to Administrative
Agent and each Lender:

14.14.1. Annual Financial Statements. Within 120 days after the close of each
fiscal year of Reseller, year-end audited consolidated and consolidating financial
statements of Reseller and its Subsidiaries, containing a balance sheet, statement
of operations, statement of cash flows and a unqualified report without any
explanatory paragraphs by an independent registered public accounting firm selected
by Reseller and satisfactory to Administrative Agents together with all related tax
returns and filings (except for tax returns for which the required filing date has
been extended, in which case Reseller shall deliver to Administrative Agents a copy
of each request for extension when made and deliver a copy of such tax returns
simultaneously with the filing of each thereof) and accompanied by (a) a Compliance
Certificate of Reseller, (b) the management letter and report on internal controls,
if any, delivered by such independent registered public accounting firm in
connection with their audit, and (c) if requested by Administrative Agents, any
summary prepared by such independent registered public accounting firm of the
adjustments proposed by the members of its audit team.

 

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14.14.2. Annual Projections. No fewer than 10 days prior to the first day of
each fiscal year of Reseller, projected balance sheets and statements of income and
expense for such fiscal year and the fiscal year immediately thereafter, on a
consolidated basis, and with such other detail as Administrative Agents may
reasonably require.

14.14.3. Monthly Financial Statements. As soon as available and in any event
no later than 30 days after the last day of each month, management-prepared
unaudited consolidated and consolidating financial statements of Reseller and its
Subsidiaries for such fiscal month, in each case consisting of a balance sheet,
statement of operations and statement of cash flows, in each case accompanied by a
Compliance Certificate of Reseller.

Each Compliance Certificate shall be in the form of Exhibit 14.14, shall contain
detailed calculations of the financial measurements referred to in Section 16 for
the relevant periods, and shall contain statements by the signing authorized officer (either
the president, any vice president or the chief financial officer) to the effect that, except
as explained in reasonable detail in such Compliance Certificate, (a) the attached Financial
Statements are complete and correct in all material respects (subject, in the case of
Financial Statements other than annual, to normal year-end audit adjustments and with
respect to Financial Statements other than annual, without footnote disclosures) and have
been prepared in accordance with GAAP applied consistently throughout the periods covered
thereby and with prior periods (except as disclosed therein), (b) all of the Representations
and Warranties are true and correct as of the date such certification is given as if made on
such date, and (c) there is no Existing Default. If any Compliance Certificate delivered to
Lenders discloses that a representation or warranty is not true and correct, or that there
is an Existing Default that has not been waived in writing by Lender, such Compliance
Certificate shall state what action Reseller has taken or proposes to take with respect
thereto.

	 	14.15.	 	Other Financial Information. Deliver the following to Administrative Agents each
satisfactory to Administrative Agents:

14.15.1. Weekly Items.

14.15.1.1. Borrowing Base Certificate. Within two (2) Business Days
following the end of each week, a Borrowing Base Certificate as of the
Business Day immediately preceding the last Business Day of such week in
substantially the form of Exhibit 14.15.1, as prepared by
Administrative Agents based upon information provided to Administrative
Agents by Reseller, duly certified as accurate and signed by the Chief
Financial Officer or other Authorized Employee of Reseller. If there is an
Existing Default, Reseller shall provide a Borrowing Base Certificate more
often if so requested by Administrative Agents in their sole and absolute
discretion. Each Borrowing Base Certificate shall be in the form of
Exhibit 14.15.1.

14.15.1.2. Schedule of Accounts and Schedule of Inventory 14.15.1.3. 
Prior to 7:00 a.m. (Local Time) each Thursday, a Schedule of Accounts
(including a month-to-month roll-forward reconciliation of Accounts aging),
a Schedule of Consolidated Accounts, and as of 5:00 p.m. (Local Time) each
Wednesday, a Schedule of Inventory, and accounts payable aging as of such
week.

14.15.1.4. Sales Report. Upon the request of Administrative Agents or
within two Business Days after the end of each week after the occurrence and
continuation of an Event of Default, a report showing each item of Inventory
sold or leased and each payment received by Reseller for such week.

 

53

 

14.15.1.5. Cash Receipts Journal and Credit Memo Entries. Upon the request
of Administrative Agents or within two Business Days after the end of each
week after the occurrence and continuation of an Event of Default, a report
showing cash receipts on Accounts, cash receipts not on Accounts and summary
of credit memo entries.

14.15.1.6. No later than the Friday of each week, Reseller shall
deliver to Administrative Agents a rolling 13-week cash flow forecast, such
forecast in form and substance acceptable to the Administrative Agents,
together with an actual results comparison to each forecast.

14.15.2. Monthly Items.

14.15.2.1. Report of Indebtedness. Within ten (10) days following the end
of each fiscal month, a report summarizing all Indebtedness, including,
accounts payable, and Permitted Indebtedness and with respect thereto, the
amounts outstanding thereon, including interest and fees.

14.15.2.2. Summary Accounts Aging and Inventory Reports. Within 10
days after the end of each fiscal month, a Schedule of Accounts (including a
month-to-month roll-forward reconciliation of Accounts aging), a Schedule of
Consolidated Accounts, a Schedule of Inventory including a listing, by
street address of the locations of Inventory, and accounts payable aging as
of month end.

14.15.2.3. Bank Statements. Within two (2) Business Days following
Reseller’s receipt of its monthly bank statement, copies of the bank
statements for each of Reseller’s bank accounts.

14.15.2.4. Inventory in Transit. Within 10 Business Days following the end
of each month, to the extent not listed on any other report required hereby,
a schedule of each item of Inventory purchased by Reseller but not yet
invoiced which is in transit or for which Reseller otherwise has received an
electronic confirmation of shipment.

14.15.3. Other Reports or Information Concerning Accounts or Inventory.
Deliver such other reports and information, in form and detail satisfactory to
Administrative Agents, and documents as Administrative Agents may reasonably request
from time to time concerning Accounts or Inventory including, to the extent
requested by Administrative Agents, copies of all invoices, leases, bills of lading,
shipping receipts, purchase orders, and warehouse receipts.

14.15.4. Stockholder and SEC Reports. Contemporaneously with their filing by
or on behalf of Reseller or any other Covered Person, copies, whether by delivery or
such documents being available on Reseller’s website, of any (a) proxy statements,
financial statements and reports which such Person makes available to its
stockholders in their capacity as stockholders, and (b) reports, registration
statements and prospectuses with any securities exchange or the Securities and
Exchange Commission or any Governmental Authority succeeding to any of its
functions.

14.15.5. Pension Benefit Plan Reports. Promptly upon the reasonable request of
Administrative Agents at any time or from time to time, a copy of each annual report
or other filing or notice filed with respect to each Pension Benefit Plan of a
Covered Person or an ERISA Affiliate of a Covered Person.

 

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14.15.6. Tax Returns. To the extent not duplicative of Section
14.14.1, promptly upon the reasonable request of Administrative Agents at any
time or from time to time, a copy of each federal, state, or local tax return or
report by any Covered Person.

	 	14.16.	 	Other Information. From time to time upon the reasonable request of Administrative
Agents or Required Lenders, Reseller shall promptly deliver to Administrative Agents such
other information about the business, operations, revenues, financial condition, property,
or business prospects of Reseller and every other Covered Person.

	 
	 	14.17.	 	Examinations and Site Visits by Administrative Agents. Permit Administrative Agents
or Persons authorized by and acting on behalf of Administrative Agents at any time (upon
reasonable prior notice, except if there is an Existing Default, no prior notice shall be
required) during normal business hours to examine the books, records, and assets of, and
inspect any of the property, locations or operations of, each Covered Person from time to
time, and in the course thereof may make copies or abstracts of such books and records and
discuss the affairs, finances and books and records of such Covered Person with its
accountants, officers and employees, and make such inspections as it reasonably deems
necessary. Each Covered Person shall cooperate with Administrative Agents and such Persons
in the conduct of such exams, site visits and inspections and shall deliver to
Administrative Agents any instrument necessary for Administrative Agents to obtain records
from any service bureau maintaining records for such Covered Person. When there is no
Existing Default, Administrative Agents shall conduct at least four (4) examinations per
fiscal year. Reseller shall reimburse Administrative Agents their actual cost per auditor
per day (at an amount not to exceed $8,000 per examination) per examination plus
Administrative Agents’ other actual reasonable out-of-pocket costs and expenses for each
examination after the date hereof. Administrative Agents together with such Lenders that
choose to participate, may, while there is an Existing Default, perform as many as
examinations as the Administrative Agents may choose, and Reseller is required to reimburse
Administrative Agents for all fees, costs and expenses of the Administrative Agents incurred
in connection therewith.

	 
	 	14.18.	 	Verification of Accounts and Notices to Account Debtors. Permit Administrative
Agents at any time and from time to time, to verify the validity and amount of any Account
and any other matter relating to an Account, by communicating in writing or orally directly
with the Account Debtor or any Person who represents or Administrative Agents believe
represents the Account Debtor.

	 
	 	14.19.	 	Appraisals of Collateral. While there is an Existing Default, at Reseller’s sole
cost and expense, at any time, Administrative Agents or Persons authorized by and acting on
behalf of Administrative Agents may perform or have performed on their behalf such
appraisals of Reseller’s Inventory, equipment, and other assets by an appraiser satisfactory
to Administrative Agents and prepared on a frequency satisfactory to Administrative Agents.
While there is no Existing Default, at Reseller’s sole cost and expense, Administrative
Agents or Persons authorized by and acting on behalf of Administrative Agents may perform or
have performed on their behalf no more than one time per calendar year (and any such
appraisals performed while there is an Existing Default shall not count towards the once per
calendar limit described in this sentence) an appraisal of Reseller’s Inventory, equipment,
and other assets by an appraiser satisfactory to Administrative Agents and prepared on a
basis satisfactory to Administrative Agents. The cost for each appraisal shall not exceed
the actual out-of-pocket expenditures of Administrative Agents. Each Covered Person shall
cooperate with Administrative Agents and such Persons in the conduct of such appraisals and
shall deliver to Administrative Agents or such Persons any documents or instruments
necessary for Administrative Agents or such Person’s to perform such appraisals. Reseller
shall reimburse Administrative Agents for all reasonable costs
and reasonable expenses actually incurred by them in conducting or having conducted each
such appraisal.

 

55

 

	 	14.20.	 	Access to Officers and Auditors. Permit Administrative Agents, any Lender and
Persons authorized by Administrative Agents or any Lender to discuss the business,
operations, revenues, financial condition, property, or business prospects of such Covered
Person with its officers, employees, accountants and independent auditors as often as
Administrative Agents or any Lender may request in its Permitted Discretion, and such
Covered Person shall direct such officers, employees, accountants and independent auditors
to cooperate with Administrative Agents.

	 
	 	14.21.	 	Movement of Inventory. Notify Administrative Agents in writing if Reseller has
knowledge that any of Reseller’s or any other Covered Person’s Inventory with a value in
excess of $500,000 will be located for more than 30 consecutive days outside any of the
locations listed in Disclosure Schedule Section 12.31.2.

	 
	 	14.22.	 	Titled Assets. If requested by Administrative Agents after an Event of Default,
Reseller shall cause the respective titles of all Collateral which are titled in the name of
any Covered Person to reflect thereon that Administrative Agents, as agent for themselves
and the other Lenders, as the first and only lienholder thereon, and shall deliver, at
Administrative Agents’ request, originals of all such titles to Administrative Agents.

	 
	 	14.23.	 	Post-Closing Requirements. Reseller will deliver, or cause to be delivered, as
applicable, to Collateral Agent on or before the 15th day after the Effective Date, the
payment of all reasonable attorneys’ fees and actual, out-of-pocket expenses incurred by
Administrative Agents in the negotiation, preparation and execution of this Agreement.

	 
	 	14.24.	 	Further Assurances. Execute and deliver, or cause to be executed and delivered, to
Administrative Agents such documents and agreements, and shall take or cause to be taken
such actions, as either Administrative Agent may from time to time reasonably request to
carry out the terms and conditions of this Agreement and the other Loan Documents.

15. Negative Covenants. Reseller covenants and agrees that until all of the Loan Obligations
are fully and indefeasibly paid in cash, no Letters of Credit are outstanding and the Letter of
Credit Exposure is zero and the Facilities are terminated, Reseller shall not, directly or
indirectly, do any of the following, or permit any other Covered Person to do any of the following,
without the prior written consent of Required Lenders:

	 	15.1.	 	Investments. Make any Investments in any other Person except the following:

15.1.1. Investments in (a) interest-bearing United States government obligations;
(b) certificates of deposit issued by any Lender; (c) prime commercial paper rated
A1 or better by Standard and Poor’s Corporation or Prime P1 or better by Moody’s
Investor Service, Inc.; (d) agreements involving the sale to Reseller of United
States government securities and their guarantied repurchase the next Business Day
by a commercial bank chartered under the Laws of the United States or any State
thereof which has capital and surplus of not less than $500,000,000, (e)
certificates of deposit issued by and time deposits with any Lender, (f) municipal
bonds rated Al or better by Standard and Poor’s Corporation or Prime P1 or better by
Moody’s Investor Service, Inc., (g) deposit accounts opened at Wells Fargo Bank,
N.A., subject to a deposit account control agreement in favor of Collateral Agent
for the ratable benefit of the Lenders, in form and substance acceptable to
Collateral Agent, or (h) the participation by Reseller in any Floorplan Loan
Advances.

 

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15.1.2. Accounts arising in the ordinary course of business and payable in
accordance with Reseller’s customary trade terms.

15.1.3. Investments existing on the Execution Date and disclosed in Disclosure
Schedule Section 12.19.

15.1.4. Notes or securities received by a Covered Person in settlement of
Indebtedness of other Persons to such Covered Person that was incurred in the
ordinary course of such Covered Person’s business.

15.1.5. Investments by any Covered Person in any other Covered Person in the form of
equity or Indebtedness permitted by this Agreement.

	 	15.2.	 	Indebtedness. Create, incur, assume, or allow to exist any Indebtedness of any kind
or description, except the following:

15.2.1. Indebtedness to trade and similar creditors incurred in the ordinary course
of business, with the exception of the Other Creditor Indebtedness.

15.2.2. The Loan Obligations.

15.2.3. The Other Creditor Indebtedness if a subordination agreement satisfactory to
Administrative Agents is in effect with respect thereto, unless Required Lenders
waive the requirement for a subordination agreement.

15.2.4. Indebtedness secured by Permitted Security Interests as described in
Section 15.6.7.

15.2.5. Indebtedness constituting Liabilities (as defined by GAAP) under any Capital
Lease under which a Covered Person is a lessee existing on the Execution Date and
disclosed in Disclosure Schedule Section 12.23 which is acceptable to
Administrative Agents and is subject to a subordination agreement satisfactory to
Administrative Agents unless Administrative Agents, in their sole and absolute
discretion, waive the requirement for a subordination agreement with respect to any
particular Other Creditor Indebtedness, and any Capital Leases under which a Covered
Person is a lessee entered into by any Covered Person after the Execution Date for
capital assets which are subject to subordination agreements unless Administrative
Agents, in their sole and absolute discretion, waives the requirement for a
subordination agreement satisfactory to Administrative Agents with respect to any
particular Other Creditor Indebtedness.

15.2.6. Unsecured Indebtedness owed by one Covered Person to another Covered Person;
provided however, if such Indebtedness is ever evidenced by a promissory note or
other instrument, such note or instrument shall be delivered to Administrative
Agents and Reseller shall execute any security documents in connection therewith as
Administrative Agents may reasonably request.

15.2.7. Unsecured subordinated indebtedness if a subordination agreement
satisfactory to Administrative Agents remains in effect with respect thereto and the
subordinated indebtedness contains terms and provisions acceptable to Administrative
Agents.

15.2.8. Indebtedness that is unsecured or secured by Permitted Security Interests,
collectively not exceeding $2,000,000 at any time.

 

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	 	15.3.	 	Payments on Other Creditor Indebtedness and Subordinated Indebtedness. Make any
nonscheduled prepayment of principal or interest on any Other Creditor Indebtedness unless
both
immediately before and after giving effect to any such prepayment, there shall be no Default
or Event of Default and no Default or Event of Default is reasonably likely to have occurred
as a result of making such payment. Make any payment on any subordinated indebtedness
unless permitted by a subordination agreement satisfactory to Administrative Agents.

	 
	 	15.4.	 	Prepayments. Voluntarily prepay any Indebtedness other than (a) the Loan Obligations
in accordance with the terms of the Loan Documents, (b) trade payables in the ordinary
course of business consistent with past practices, and (c) as permitted by Section
15.3.

	 
	 	15.5.	 	Indirect Obligations. Create, incur, assume or allow to exist any Indirect
Obligations except (a) Indirect Obligations existing on the Execution Date and disclosed on
Disclosure Schedule 12.21, (b) Indirect Obligations with respect to Indebtedness
permitted by Section 15.2 and otherwise permitted under this Agreement and (c)
Indirect Obligations with respect to (i) Indebtedness of one or more other Covered Persons
that is permitted by Section 15.2 and otherwise permitted under this Agreement or
(ii) any Obligations of one or more other Covered Persons that are permitted under this
Agreement.

	 
	 	15.6.	 	Security Interests. Create, incur, assume or allow to exist any Security Interest
upon all or any part of its property, real or personal (including intangible property), now
owned, leased or hereafter acquired or leased, except the following:

15.6.1. Security Interests for taxes, assessments or governmental charges not
delinquent or being diligently contested in good faith and by appropriate
proceedings and for which, if applicable, adequate book reserves in accordance with
GAAP are maintained.

15.6.2. Security Interests arising out of deposits in connection with workers’
compensation insurance, unemployment insurance, old age pensions, or other social
security or retirement benefits legislation.

15.6.3. Deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal bonds,
and other obligations of like nature arising in the ordinary course of business.

15.6.4. Security Interests imposed by any Law, such as mechanics’, workmen’s,
materialmen’s, landlords’, carriers’, or other like Security Interests arising in
the ordinary course of business which secure payment of obligations which are not
past due or which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP are maintained
on such Covered Person’s books.

15.6.5. Security Interests on Inventory in favor of the holders of any of the Other
Creditor Indebtedness which are subject to subordination agreements satisfactory to
Administrative Agents unless Required Lenders waive the requirement for a
subordination agreement with respect to any particular Other Creditor Indebtedness.

15.6.6. Security Interests resulting from a judgment or order entered against a
Covered Person which does not constitute an Event of Default under Section
17.1.2 hereof and is not final and non-appealable, provided the loss of the
property subject to such Security Interest would not reasonably be expected to have
a Material Adverse Effect.

15.6.7. Purchase money Security Interests securing payment of the purchase price of
capital assets (other than Inventory which is subject to an intercreditor agreement)
acquired by a Covered Person after the Execution Date in an aggregate principal
amount outstanding at any time that does not exceed $1,000,000 for all Covered
Persons.

 

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15.6.8. Security Interests securing the Loan Obligations in favor of Collateral
Agent for the benefit of Lenders.

15.6.9. Security Interests of lessors of operating equipment in such equipment
provided that the aggregate annual rental expense associated with such operating
leases of equipment shall not exceed $1,000,000 for all Covered Persons.

15.6.10. Security Interests existing on the Execution Date that are disclosed in
Disclosure Schedule Section 12.31.3.

	 	15.7.	 	Acquisitions. Without the prior written consent of Administrative Agents, acquire stock,
membership interests, partnership interests or any other equity interest in a Person, or
acquire all or substantially all of the assets of a Person (including without limitation
assets comprising all or substantially all of an unincorporated business unit or division of
any Person), except for Permitted Investments.

	 	15.8.	 	Bailments; Consignments; Warehousing. Except to the extent expressly permitted in this Agreement, store any Inventory with a
bailee, warehouseman, consignee or pursuant to an express or implied agreement establishing
a bailment or consignment of Inventory or similar arrangement, unless Administrative Agents
have received a written acknowledgment reasonably satisfactory to Administrative Agents from
the third party involved which acknowledges the prior perfected Security Interest of
Collateral Agent for the benefit of Lenders in such Inventory.

	 	15.9.	 	Disposal of Property. Sell, transfer, exchange, or otherwise dispose of any of its assets, except for (a) the
sale of Inventory in the ordinary course of business at the fair market value thereof and
for cash or cash equivalents, (b) the sale of leases (and related assets) for which Reseller
is the lessor and which were entered into in the ordinary course of business, any such sale
to be at the fair market value, without recourse to Reseller and for cash or cash
equivalents, (c) physical assets used or consumed in the ordinary course of business, and
(d) the sale or other disposal of obsolete equipment with a sale value not greater than
$500,000 in the aggregate for all such assets that may be sold during any year if the
purchase price therefor is paid solely in cash.

	 
	 	15.10.	 	Restricted Payments. Directly or indirectly declare or make any Restricted Payment, or
set aside any funds for any such purpose, other than (a) dividends on common stock which
accrue (but are not paid in cash) or are paid in kind or dividends on preferred stock which
accrue (but are not paid in cash) or are paid in kind; provided, however, that Reseller’s
Subsidiaries may make Restricted Payments to Reseller or a wholly owned Subsidiary of
Reseller, (b) Restricted Payments for the sole purposes of purchasing Reseller’s stock from
employees of Reseller and its Subsidiaries upon termination of employment of any such
employee so long as (i) no Default or Event of Default shall have occurred and be
continuing or result therefrom and (ii) the aggregate amount of all such Restricted
Payments shall not exceed $500,000 during any 365-day period, (c) Restricted Payments for
the sole purpose of purchasing a sufficient number of shares of Reseller’s stock from
employees of Reseller to equal tax payments owed by such employees due on gains in value
with respect to such stock so long as (i) no Default or Event of Default shall have
occurred and be continuing or result therefrom and (ii) the aggregate amount of all such
Restricted Payments shall not exceed $500,000 during any 365-day period, (d) Restricted
Payments in respect of which Reseller shall have delivered evidence satisfactory to
Administrative Agents that the following conditions have been satisfied before and after
giving effect to any such Restricted Payment: (i) no Event of Default shall have occurred
and be continuing or result from such Restricted Payment, (ii) the aggregate amount of all
such Restricted Payments shall not exceed $500,000 during any 365-day period and (iii) when
the Restricted Payment is made Reseller has
availability under the Revolving Loan Facility of at least equal to the Restricted Payment,
and (e) as may be otherwise permitted by Section 15.11.

 

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	 	15.11.	 	Redemptions. Directly or indirectly redeem any
preferred stock or any common stock,
partnership interest (of any type or
class) or other equity interest of
Reseller or any Covered Person.

	 
	 	15.12.	 	Change of Control. Except as permitted under Section 15.7, merge or consolidate with or into another
Person; permit any Person or Group, to become the record or beneficial owner, directly or
indirectly, on a fully diluted basis, of 35% or more of the equity securities and voting
interests of Reseller; or permit any Person or Group, other than Reseller to own any of the
equity interests and voting interests of any Subsidiary of Reseller.

	 
	 	15.13.	 	Capital Structure; Equity Securities.

15.13.1. Make any change in the capital structure of Reseller from that which is
disclosed in the Disclosure Schedule as of the Effective Date, if such change would
reasonably be likely to (a) have Material Adverse Effect, (b) materially adversely
affect the likelihood of the Loan Obligations being repaid, or (c) give rise to an
Event of Default; or issue any equity or security which has any mandatory redemption
or mandatory repayment features;

15.13.2. Make any change in the capital structure of any Covered Person from that
which is disclosed in the Disclosure Schedule as of the Effective Date, including
issuing or creating any stock or other equity interest (or class or series thereof),
or non-equity interest that is convertible into stock or other equity interest (or
class or series thereof); or

15.13.3. Subject to the preceding clauses, change any Charter Documents of any
Covered Person which has or is reasonably likely to have a Material Adverse Effect
or which will or is reasonably likely to cause a Default or Event of Default.

	 	15.14.	 	Change of State of Formation; Change of Name. Make any change in the State of incorporation or formation of organization of any Covered
Person, change its type of legal entity, or change its legal name as it appears on any
certificates or articles of organization or formation. Unless a Covered Person has provided
Administrative Agents at least 10 days prior written notice (and such other information as
Administrative Agents may request from time to time), make any change in the trade names or
styles under which a Covered Person will create Accounts, or to which instruments in payment
of Accounts may be made payable.

	 
	 	15.15.	 	Change of Business. Engage in any business other than substantially as conducted by a Covered Person on the
Effective Date.

	 
	 	15.16.	 	Transactions With Affiliates. Reseller shall not, nor shall permit any Subsidiary of Reseller to enter into or be a
party to any agreement or transaction with any Affiliate except (a) as described in
Disclosure Schedule 15.16, (b) in the ordinary course and pursuant to the reasonable
requirements of Reseller’s or Subsidiary’s business and upon fair and reasonable terms that
are no less favorable to such Reseller Party or such Subsidiary than it would obtain in a
comparable arms length transaction with a Person not an Affiliate of Reseller or such
Subsidiary, and otherwise on terms consistent with the business relationship of Reseller or
such Subsidiary and such Affiliate prior to the Effective Date, if any, and fully disclosed
to Administrative Agents, or (c) as permitted by Sections 15.1, 15.2,
15.10 and 15.20.

	 
	 	15.17.	 	Conflicting Agreements. Enter into any agreement, that would, if fully complied with by it, result in a Default
or Event of Default either immediately or upon the elapsing of time.

	 
	 	15.18.	 	Investment Banking and Finder’s Fees. Pay or agree to pay, or reimburse any other party with respect to, any investment banking
or similar or related fee, underwriter’s fee, finder’s fee, or broker’s fee to any Person in
connection with this Agreement.

 

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	 	15.19.	 	Sale and Leaseback Transactions. Enter into any agreement or arrangement with any Person providing for any Covered Person
to lease or rent property that Reseller has or will sell or otherwise transfer to such
Person.

	 
	 	15.20.	 	New Subsidiaries. Organize, create or acquire any Subsidiary without the prior written consent of
Administrative Agents and Required Lenders thereto and contemporaneously with the
organization, creation or acquisition of such Subsidiary, if consented to by Administrative
Agents and Required Lenders, the applicable Covered Person and such Subsidiary executes and
delivers to Collateral Agent for the benefit of Lenders the following additional documents:
an unlimited Guaranty of the Loan Obligations by such Subsidiary, a pledge of the capital
stock, partnership interests, or membership interests of such Covered Person in such
Subsidiary, and other Security Documents requested by Administrative Agents so as to grant
Collateral Agent, for the benefit of Lenders, a perfected security interest having a first
priority position in all real and personal property of such Subsidiary.

	 
	 	15.21.	 	Fiscal Year. Change its fiscal year from December 31.

	 
	 	15.22.	 	Leases. Enter into any Capital Leases except as permitted by Section 15.2.

	 
	 	15.23.	 	S Corporation Status. Elect under Code Section 1362(a) to be treated as an S corporation.

	 
	 	15.24.	 	Depreciation Methodology. Change the depreciation schedule or depreciation methodology for any Inventory, equipment
or other assets.

	 
	 	15.25.	 	Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other
than another Covered Person.

	 
	 	15.26.	 	Transactions Having a Material Adverse Effect on Covered Person. Enter into any transaction which has or is reasonably likely to have a Material Adverse
Effect on any Covered Person; or enter into any transaction, which shall cause a Default or
Event of Default hereunder.

	 
	 	15.27.	 	Storage; Chief Executive Officer; State of Incorporation. Store any Inventory or equipment at any location other than as set forth in Disclosure
Schedule Section 12.31.2; maintain its chief executive office at any location other
than as set forth in Disclosure Schedule Section 12.32.1.

	 
	 	15.28.	 	Like-Kind Exchange. Reseller shall not complete or attempt to complete any “like-kind exchange” (as such term
is defined in the Code or applicable regulations) with respect to any Collateral on which
Administrative Agents have a first priority Security Interest.

	16.	 	Financial Covenants.

	 	16.1.	 	Special Definitions. As used in this Section 16 and elsewhere herein, each the following capitalized
terms means:

Capital Leases — any lease of property, whether real or personal, by Reseller
or its Subsidiaries as lessee which in accordance with GAAP is required to be capitalized on the
balance sheet of such person.

Capital Lease Obligations — for any period,, the amount at which the
aggregate rental obligations due and to become due under all Capital Leases under which Reseller or
any of its Subsidiaries is a lessee would be reflected as a liability on a balance sheet of
Reseller or such Subsidiary in accordance with GAAP.

Cash Taxes — with respect to any fiscal period, taxes on or measured by the
income of Reseller that are paid or currently payable in cash by Reseller any during that fiscal
period.

 

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Consolidated EBITDA — for any period, for Reseller and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Expenses for such period, (ii) the provision for Federal, state, local and foreign income
taxes payable by Reseller and its Subsidiaries for such period, (iii) depreciation and amortization
expense and (iv) other non-cash or non-recurring expenses of Reseller and its Subsidiaries as are
acceptable to Administrative Agents in their sole discretion, reducing such Consolidated Net Income
and minus (b) all non-cash items increasing Consolidated Net Income for such period.

Consolidated Interest Expense — for any period, the interest expense, both
expensed and capitalized (including the interest component in respect of Capital Lease
Obligations), of Reseller during such period, determined on a consolidated basis in accordance with
GAAP.

Consolidated Net Income — for any period, net earnings (or net loss) after
taxes of Reseller and its Subsidiaries during such period determined on a consolidated basis in
accordance with GAAP.

Current Assets —assets of Reseller that may, in the ordinary course of
business, be converted into cash within a period of one year from such date, but excluding:

(a) amounts due from employees, officers, equity holders or directors of Reseller;

(b) prepaid expenses for services or for supplies that are not purchased for resale; and

(c) amounts due from and investments in Affiliates of Reseller.

Current Liabilities — (a) all obligations of Reseller classified as current
liabilities under GAAP, plus (b) all principal amounts outstanding under revolving lines of credit,
whether classified as current or long-term, which are not already included under clause (a) above.

Debt — with respect to any Person, all indebtedness, obligations and
liabilities of such Person, including without limitation:

(a) all liabilities which would be reflected on a balance sheet of such Person prepared in
accordance with GAAP;

(b) all obligations of such Person in respect of any guaranty of any Debt of another Person;
or

(c) all obligations, indebtedness and liabilities secured by any lien on or security interest
in any property or assets of such Person.

Intangibles — and includes, at any date, general intangibles; software
developed in-house; accounts receivable and advances due from officers, directors, employees,
stockholders, members, owners and Affiliates; leasehold improvements net of depreciation; licenses;
goodwill; prepaid expenses; customer lists; escrow deposits; covenants not to compete; the excess
of cost over book value of acquired assets; franchise fees; organizational costs; finance reserves
held for recourse obligations; capitalized research and development costs; the capitalized cost of
patents, trademarks, service marks and copyrights net of amortization; and such other similar items
as Administrative Agents may from time to time determine in Administrative Agents’ sole discretion.

Interest Expense — for any period, all interest charges paid or accrued by
Reseller during such period.

Subordinated Indebtedness — Indebtedness subordinated to Reseller’s
obligations to Administrative Agents and Lenders in a manner satisfactory to Administrative Agents.

Tangible Net Worth — at any date, (a) Total Assets, minus (b) the sum
of (i) Intangibles plus (ii) Total Liabilities.

 

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Total Assets — the sum of all assets as presented in the balance sheet in
Reseller’s most recent combined Financial Statements delivered to Administrative Agents and each of
Lenders as required hereunder.

Total Debt Service Coverage Ratio — as of any date, for the twelve-month
period ending on such date, the ratio, determined on a consolidated basis, of:

(a) Consolidated EBITDA for such period; minus Cash Taxes paid during such period;

to

(b) the sum of:

(1) the Interest Expense of Reseller for such period; plus

(2) all scheduled principal payments with respect to Debt; plus

(3) all scheduled principal payments on Capital Lease Obligations for such
period.

Total Liabilities — the sum of all liabilities as presented in the balance
sheet in Reseller’s most recent combined Financial Statements delivered to Administrative Agent and
each Lender as required hereunder (including as liabilities, all reserves required under GAAP for
contingencies and other potential liabilities) plus all Indebtedness of Reseller not otherwise
reported thereon, but excluding the principal amount of the Subordinated Indebtedness.

All other capitalized terms used in this Section 16 shall have their meanings and shall be
determined under GAAP. All calculations shall be for Reseller and its Subsidiaries on a
consolidated basis. For the purposes of calculating the amount of Indebtedness in this Section
16, each scheduled payment of interest and principal on any of the Loans made on the first
Business Day of a month shall be deemed to have been made on the immediately preceding day.

	 	16.2.	 	Minimum Tangible Net Worth. Reseller covenants that as of the end of each fiscal month, Tangible Net Worth shall be
no less than an amount equal to Forty-Five Million Dollars ($45,000,000). This covenant
will be calculated at the end of each fiscal month.

	 
	 	16.3.	 	Maximum Total Liabilities to Tangible Net Worth. Reseller covenants that at the each of each fiscal month, the ratio of (a) Total
Liabilities to (b) Tangible Net Worth shall not be greater than 5.25 to 1.00. This covenant
will be calculated at the end of each fiscal month.

	 	16.4.	 	Minimum Current Ratio. Reseller covenants that the ratio of (a) Current Assets to (b) Current Liabilities shall
not be less than (i) 1.20 to 1.00 as of the last Business Day of the fiscal months of
January, February, March, April, May, June, October, November and December and (ii) 1.15 to
1.00 as of the last Business Day of the fiscal months of July, August and September.

	 
	 	16.5.	 	Minimum Debt Service Coverage. Reseller will at all times maintain a minimum Total
Debt Service Coverage Ratio of 1.25 to 1.00. This covenant will be calculated at the end
of each fiscal month.

	17.	 	Default.

	 	17.1.	 	Events of Default. Any one or more of the following shall constitute an event of default under this
Agreement (an “Event of Default”):

17.1.1. Failure to Pay Principal or Interest. Failure of Reseller to pay (a) any interest accrued on any of the Loans when due,
or (b) any principal of the Loans when
due; provided, however, it shall not be an Event of Default with respect to the
payment of any principal or interest on any Floorplan Loan or Interim Floorplan Loan
until the occurrence of a Floorplan Payment Default. “FLOORPLAN PAYMENT DEFAULT”
means any failure by Reseller to make any payment under a Transaction Statement or
an Extended Pay Notification, as the case may be. “Floorplan Payment Default” shall
not mean or include, and shall exclude, any deductions, offsets or other disputes
made or asserted by Reseller which are accepted by or under negotiation with
Administrative Agents.

 

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17.1.2. Failure to Pay Certain Other Amounts Owed to Lenders. Failure of Reseller to pay any of the Loan Obligations (other than principal of
the Loans or interest accrued thereon and other than Administrative Agents’ costs
and expenses Reseller is required to pay pursuant to Sections 14.19 and
14.21) when due and such failure shall continue for a period of three
Business Days.

17.1.3. Failure to Pay Examination and Appraisal Costs

. Failure of Reseller to pay any of Administrative Agents’ costs and expenses
required to be paid by Reseller pursuant to Section 14.19 and Section
14.21 when due and such failure shall continue for a period of five Business
Days.

17.1.4. Failure to Pay Amounts Owed to Other Persons. Failure of any Covered Person to make any payment due on Indebtedness of such
Covered Person which such Indebtedness is over $500,000 in the aggregate to Persons
(other than Indebtedness owed to Lenders under the Loan Documents and other than
Indebtedness owed to any Covered Person’s trade creditors in connection with the
purchase of such Covered Person’s Inventory from such trade creditors) and which
failure continues unwaived beyond any applicable grace period specified in the
documents evidencing such Indebtedness.

17.1.5. Representations or Warranties. Any of the Representations and Warranties is discovered to have been false in any
material respect when made.

17.1.6. Certain Covenants with Cure Periods. Failure of any Covered Person to comply with any covenant in Section 14
(other than the covenants in Section 14 referenced in Section
17.1.7) which is not cured within 30 days (or such longer period as may be
granted by Required Lenders) after the initial occurrence of such failure, provided
noncompliance with such covenant can be cured within such period and provided that
Reseller work diligently and in good faith to cure any such noncompliance during
such period.

17.1.7. Certain Covenants Without Cure Periods. Failure of any Covered Person to comply with the covenants in Sections
14.3, 14.10(b), 14.14, 14.15, 14.19,
14.21, 14.22, 15, or 16.

17.1.8. Other Covenants. Failure of any Covered Person to comply with of any other covenant or other terms
or provisions of any of the Loan Documents applicable to it (other than a failure
which constitutes an Event of Default under any of Section 17.1.1 through
17.1.7), which is not cured within 30 days (or such longer period as may be
granted by Administrative Agents in their reasonable commercial judgment) (provided
such breach can be cured within such period and that Reseller works diligently and
in good faith to cure any such breach during such period).

17.1.9. Default Under Other Agreements. The occurrence of any default or event of default under any agreement to which a
Covered Person is a party (other than the Loan
Documents), which default or event of default continues unwaived beyond any
applicable grace period provided therein and has or is reasonably likely to have a
Material Adverse Effect on a Covered Person or involves Indebtedness of more than
$500,000 in the aggregate. Administrative Agents receive notice from any landlord
under a landlord consent/waiver concerning a leased location at which $500,000 or
more of Inventory purchased by Reseller pursuant to the Aggregate Floorplan Loan
Facility or Interim Floorplan Loan Facility is located stating that Reseller is in
breach or default of its obligations under such lease and Reseller’s cure period
under such lease has expired without cure of such default; provided, however, if any
such landlord consent/waiver provides for notice from the landlord to Administrative
Agents only upon the occurrence of the breach or default and not after the
expiration of any cure period, in which case, then the Event of Default shall arise
upon Administrative Agents’ receipt of such notice.

 

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17.1.10. Other Creditor Indebtedness and Subordinated Indebtedness. The occurrence of (a) any breach, default or event of default with respect to any
of the Other Creditor Indebtedness in excess of $500,000 in the aggregate which is
not cured or waived within any applicable grace period, or (b) the termination of
any intercreditor agreement by any party thereto, other than Administrative Agent,
prior to the payment in full of all of the Other Creditor Indebtedness covered
thereby. The occurrence of (a) any breach or default with respect to any
subordinated indebtedness or (b) any breach or default of any subordination
agreement by the holder of any subordinated indebtedness, in either case which is
not cured or waived within any applicable grace period.

17.1.11. Bankruptcy; Insolvency; Etc.
A Covered Person (a) fails to pay, or admits in writing its inability to pay,
its debts generally as they become due, or otherwise becomes insolvent (however
evidenced); (b) makes an assignment for the benefit of creditors; (c) files a
petition in bankruptcy with respect to itself as a debtor, is adjudicated insolvent
or bankrupt, petitions or applies to any tribunal for any receiver or any trustee of
such Covered Person or any substantial part of its property; (d) commences any
proceeding relating to such Covered Person under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation Law of any jurisdiction, whether
now or hereafter in effect; (e) has commenced against it any such proceeding which
remains undismissed for a period of 60 days, or by any act indicates its consent to,
approval of, or acquiescence in any such proceeding or the appointment of any
receiver of or any trustee for it or of any substantial part of its property, or
allows any such receivership or trusteeship to continue undischarged for a period of
60 days (each, an “INSOLVENCY EVENT”), but, except with regards to Approvals issued
on or prior to such commencement date referred to in this clause (c), no additional
Loans shall be made, no additional Letters of Credit shall be issued, and no new
Approvals shall be given during such period without all Lenders’ and Administrative
Agents’ prior written approval and the prior written approval of any court of proper
jurisdiction deemed necessary by Administrative Agents; or (f) takes any action to
authorize any of the foregoing.

17.1.12. Judgments; Attachment; Settlement; Etc.
Any one or more judgments or orders is entered against a Covered Person or any
attachment or other levy is made against the property of a Covered Person with
respect to a claim or claims involving in the aggregate liabilities (not paid or
fully covered by insurance, less the amount of reasonable deductibles in effect on
the Execution Date) in an aggregate amount in excess of $500,000 and such judgment
becomes final and non-appealable or if timely appealed is not fully bonded and
collection thereof stayed pending the appeal; or any Covered Person agrees to a
settlement obligating any Covered Person to make a payment with respect to a
claim or claims involving in the aggregate liabilities (not paid or fully covered by
insurance, less the amount of reasonable deductibles in effect on the Execution
Date) in an aggregate amount in excess of $500,000.

 

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17.1.13. Pension Benefit Plan Termination, Etc.
Any Pension Benefit Plan termination by the PBGC or the appointment by the
appropriate United States District Court of a trustee to administer any Pension
Benefit Plan or to liquidate any Pension Benefit Plan, which has or reasonably could
be likely to have a Material Adverse Effect; or any event which constitutes grounds
either for the voluntary termination of any Pension Benefit Plan by the PBGC or for
the appointment by the appropriate United States District Court of a trustee to
administer or liquidate any Pension Benefit Plan shall have occurred and be
continuing for 30 days after Reseller has notice of any such event, which has or
reasonably could be likely to have a Material Adverse Effect; or any voluntary
termination of any Pension Benefit Plan which is a defined benefit pension plan as
defined in ERISA Section 3(35) while such defined benefit pension plan has an
accumulated funding deficiency in an amount exceeding $500,000 in the aggregate
unless Administrative Agents have been notified of such intent to voluntarily
terminate such plan and Required Lenders have given their consent and agreed that
such event shall not constitute an Event of Default; or the plan administrator of
any Pension Benefit Plan applies under Code Section 412(d) for a waiver of the
minimum funding standards of Section 412(1) of the Code and Required Lenders
determine that the substantial business hardship upon which the application for such
waiver is based could subject any Covered Person or ERISA Affiliate of any Covered
Person to a liability in excess of $500,000 in the aggregate.

17.1.14. Liquidation or Dissolution. A Covered Person files a certificate of dissolution under applicable State Law or
is liquidated or dissolved or suspends or terminates the operation of its business,
or has commenced against it any action or proceeding for its liquidation or
dissolution or the winding up of its business, or takes any action in furtherance
thereof, except in connection with the consolidation of such a Covered Person and
its assets with another Covered Person and its assets.

17.1.15. Seizure of Assets. All or any material part of the property of all Covered Persons is nationalized,
expropriated, seized or otherwise appropriated, or custody or control of such
property or of all Covered Persons is assumed by any Governmental Authority or any
court of competent jurisdiction at the instance of any Governmental Authority,
unless the same is being contested in good faith by proper proceedings diligently
pursued and a stay of enforcement is in effect.

17.1.16. Racketeering Proceeding. There is filed against any Covered Person any civil or criminal action, suit or
proceeding under any federal or State racketeering statute (including the Racketeer
Influenced and Corrupt Organization Act of 1970), which action, suit or proceeding
is not dismissed within 120 days and could result in the confiscation or forfeiture
of a material part of the Collateral.

17.1.17. Loan Documents; Security Interests. For any reason other than the failure of Administrative Agents to take any action
available to it to maintain perfection of the Security Interests created in favor of
Collateral Agent for the benefit of Lenders pursuant to the Loan Documents, any Loan
Document ceases to be in full force and effect or any Security Interest with respect
to any portion of the Collateral intended to be secured thereby ceases to be, or is
not, valid, perfected and prior to all other Security Interests (other than the
Permitted Security Interests, and other than sales of Inventory and
Equipment expressly permitted hereunder made in the ordinary course of business, to
a bona fide purchaser, for fair market value, if all of the proceeds thereof are
delivered to Administrative Agents as set forth herein) or is terminated, revoked or
declared void or invalid, or Reseller or any Covered Person contests the Security
Interests of Collateral Agent or Administrative Agents or contests or denies that it
has any liability or obligation under any agreement, term, or condition contained in
any Loan Document to which Reseller or such Covered Person is a party.

 

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17.1.18. Loss to Collateral. Any abandonment, loss, theft, damage or destruction of any item or items of
Collateral occurs which is not covered by insurance as required herein and has or is
reasonably likely to have a Material Adverse Effect.

17.1.19. Guaranty; Guarantor. Any Guaranty ceases to be in full force and effect or any action is taken to
discontinue or assert the invalidity or unenforceability of any Guaranty or any
Guarantor fails to comply with any of the terms or provisions of any Guaranty, or
any representation or warranty of Guarantor therein is false, or any Guarantor
denies that it has any further liability under any Guaranty or gives notice to
Lender to such effect, or any Guarantor fails to furnish the financial statements
required under any Guaranty or otherwise breaches or is in default of any obligation
or covenant contained in any Guaranty or any Guarantor, who is an individual dies.

	 	17.2.	 	Cross-Default. An Event of Default under this Agreement will automatically and immediately constitute a
default under every other Loan Document without regard to any requirement therein for the
giving of notice or the passing of time.

	 
	 	17.3.	 	Rights and Remedies.

17.3.1. Termination of Facilities. From and after the date on which an Event of Default under Section
17.1.11 occurs, the Facilities shall be deemed cancelled without any action or
notice by Lenders or Administrative Agents, and Lenders shall have no obligation to
make any further or subsequent Advances, except with regards to Approvals issued in
accordance with this Agreement. Upon the occurrence and during the continuance of
any other Event of Default, Administrative Agents may, or upon the written
instruction of Required Lenders shall, cancel the Facilities.

17.3.2. Acceleration; Funding. Upon an Event of Default described in Section 17.1.11, all of the
outstanding Loan Obligations shall automatically become immediately due and payable.
From and after the date on which an Event of Default under Section 17.1.1
occurs, no further Advances shall be made unless Required Lenders approve in writing
any further Advances or unless Required Lenders waive in writing such Event of
Default except each Lender shall be obligated to fund its pro rata share of all
Approvals regardless as to whether at the time of issuance there is an Existing
Default or after the date of issuance of any Approval an Event of Default occurs
unless any Approval is issued contrary to the express terms of Section
3.2.1. Upon the occurrence and during the continuance of any other Event of
Default, (a) Administrative Agents may or, at the direction of Required Lenders
shall, cease making Advances (except Advances to fund Approvals previously issued
shall be made), and (b) Required Lenders in their sole and absolute discretion may
declare all of the outstanding Loan Obligations immediately due and payable. Any
such acceleration may be, in either case, without presentment, demand or notice of
any kind, which each of Reseller expressly waives.

 

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17.3.3. Right of Set-off. During an Existing Default, each Lender is hereby authorized, without notice to
Reseller (any such notice being expressly waived by Reseller), to the
fullest extent permitted by law, to set off and apply against the Loan Obligations
any and all deposits (general or special, time or demand, provisional or final) or
any other assets at any time held by or at such Lender or under the control of or
otherwise pledged to such Lender, or any other Indebtedness at any time owing by
such Lender (or its Affiliate) to or for the credit or the account of Reseller,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or the Notes or any Guaranty and although such Loan Obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of set-off) which such Lender may
otherwise have. Any such amounts, deposits, property or assets shall be promptly
turned-over to Administrative Agents in the form received for application to the
Loan Obligations as set forth in this Agreement, and until turned over to
Administrative Agents such amounts, deposits, property and assets shall be held by
such Lender in trust for the benefit of Administrative Agents and the other Lenders.
During an Existing Default, Administrative Agents are hereby authorized, without
notice to Reseller (any such notice being expressly waived by Reseller), to set off
and apply against the Loan Obligations any and all deposits (general or special,
time or demand, provisional or final) or other assets at any time held by or at
Administrative Agents, or under the control of or otherwise pledged to
Administrative Agents, or any other Indebtedness at any time owing by Administrative
Agents or any Affiliate thereof to or for the credit or the account of Reseller,
irrespective of whether or not Administrative Agents or any Affiliate thereof shall
have made any demand under this Agreement or the Loan Obligations and although such
Loan Obligations may be unmatured.

17.3.4. Notice to Account Debtors. Upon the occurrence and during the continuance of an Event of Default,
Administrative Agents may (if Required Lenders concur or direct), without prior
notice to Reseller, notify any or all Account Debtors that the Accounts have been
assigned to Collateral Agent for the benefit of Lenders and that Collateral Agent
has a Security Interest therein for the benefit of Lenders, and Administrative
Agents may direct, or Reseller, at Administrative Agents’ request, shall direct, any
or all Account Debtors to make all payments upon the Accounts directly to Collateral
Agent for the benefit of Lenders.

17.3.5. Entry Upon Premises and Access to Information. Upon the occurrence and during the continuance of an Event of Default,
Administrative Agents may (or shall at the direction of Required Lenders) (a) enter
upon the premises leased or owned by Reseller where Collateral is located (or is
believed to be located) without any obligation to pay rent to Reseller, or any other
place or places where Collateral is believed to be located, (b) render Collateral
usable or saleable, (c) remove Collateral therefrom to the premises of an
Administrative Agent or any agent of an Administrative Agent for such time as
Administrative Agents may desire in order effectively to collect or liquidate
Collateral; (d) take possession of, and make copies and abstracts of, Reseller’s
original books and records, obtain access to Reseller’s data processing equipment,
computer hardware and software relating to any of the Collateral and use all of the
foregoing and the information contained therein in any manner Administrative Agents
deem appropriate in connection with the exercise of Administrative Agents’ rights;
and (e) notify postal authorities to change the address for delivery of Reseller’s
mail to an address designated by Administrative Agents and to receive, open and
process all mail addressed to Reseller.

17.3.6. Completion of Uncompleted Inventory Items. Upon the occurrence and during the continuance of an Event of Default,
Administrative Agents may (or shall at the direction of Required Lenders) request
that Reseller, and Reseller shall upon such
request, use Reseller’s reasonable efforts to obtain the consent of its and any
other Covered Person’s customers to the completion (before or after foreclosure by
Administrative Agent of its security interest therein) of the manufacture of all
uncompleted Inventory items that Reseller or any other Covered Person was
manufacturing for such customers pursuant to contracts or accepted purchase orders,
and the commitment by such customers to purchase such items upon their completion as
provided in the relevant contracts or accepted purchase orders.

 

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17.3.7. Reseller’s Obligations. Upon the occurrence and during the continuance of an Event of Default, Reseller
shall, if Administrative Agents so request, assemble all the movable tangible
Collateral and make it available to Administrative Agents at a place or places to be
designated by Administrative Agents in their discretion.

17.3.8. Secured Party Rights. Upon the occurrence and during the continuance of an Event of Default:

17.3.8.1. Collateral Agent may (and at the direction of Required Lenders
shall) exercise any or all of its rights under the Security Documents as a
secured party under the UCC and any other Law; and

17.3.8.2. Collateral Agent may sell or otherwise dispose of any or all of
the Collateral at public or private sale in a commercially reasonable
manner, which sale Collateral Agent may postpone from time to time by
announcement at the time and place of sale stated in the notice of sale or
by announcement at any adjourned sale without being required to give a new
notice of sale, all as Collateral Agent deems advisable, for cash or credit.
An Administrative Agent or Collateral Agent, on behalf of the Lenders, or a
Lender, may become the purchaser at any such sale if permissible under Law,
and Reseller agrees that such Agent has no obligation to preserve rights to
Collateral against prior parties or to marshal any Collateral for the
benefit of any Person. Reseller agrees that the private sale of Inventory
by CPC to a person who is liable to CPC under a Vendor Agreement shall not
be deemed to be a transfer subject to UCC §9-618(a) or any similar provision
of any other Law, and Reseller waive any provision of such laws to that
effect. Reseller agrees that the repurchase of Inventory by a Vendor
pursuant to a Vendor Agreement shall be deemed a commercially reasonable
disposition under the UCC. Alternatively, if Collateral Agent conducts a
private sale of any Collateral by requesting bids from 5 or more dealers,
distributors, or lessors in that type of Collateral, any sale by Collateral
Agent of such Collateral, in bulk or in parcels, to the bidder submitting
the highest cash bid therefor, which occurs within 120 days of the later to
occur of (a) Collateral Agent’s taking possession and control of such
Collateral, or (b) Collateral Agent’s being otherwise authorized or
permitted to sell such Collateral, is a commercially reasonable disposition
of such Collateral under the UCC. Reseller further agrees that 10 or more
days’ prior written notice will be commercially reasonable notice of any
public or private sale. Reseller agrees that the purchase of any Collateral
by a Vendor, as provided in any Vendor Agreement, is a commercially
reasonable disposition and private sale of such Collateral under the UCC,
and no request for bids shall be required. Reseller irrevocably waive any
requirement that Collateral Agent retains possession and not dispose of any
Collateral until after a trial or final judgment. If Collateral Agent
disposes of any such Collateral other than as herein contemplated, the
commercial reasonableness of such disposition will be determined in
accordance with the laws of the State governing this Agreement.

 

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17.3.9. Joint and Several. Each Obligation and liability of Reseller and each Guarantor to
Administrative Agents, Letter of Credit Issuer, and each Lender, including the Loan
Obligations, are the joint and several obligations of Reseller and each Guarantor,
and Administrative Agents, Letter of Credit Issuer, and any Lender may proceed
directly against Reseller, Guarantors, any Collateral, or all of the foregoing, or
any one of the foregoing or any combination of the foregoing, without first
proceeding against Reseller, any Guarantor or any Collateral, or without joining all
Persons liable or potentially liable for any portion of the Loan Obligations in one
action. Reseller and each Guarantor shall be jointly and severally liable as
primary obligor and not merely as surety for repayment of all Loan Obligations
arising under the Loan Documents. If Reseller or any Guarantor makes a payment in
respect of the Loan Obligations hereunder and under the other Loan Documents,
Reseller or such Guarantor shall have the rights of contribution described in this
Section below against Reseller or other Guarantors; provided that Reseller or such
Guarantor shall not exercise its right of contribution until all of the Loan
Obligations are fully and indefeasibly paid and satisfied, and the Facilities are
terminated, no Letters of Credit are outstanding and the Letter of Credit Exposure
is zero and Lenders have no further obligation to extend credit to or for the
account of any Reseller; provided, however, that Collateral Agent is hereby granted,
for the benefit of Lenders, a Security Interest in such right of contribution and
may enforce such right during an Existing Default. It is the intent of Reseller,
Guarantors, Administrative Agents, Letter of Credit Issuer and Lenders that
Reseller’s and Guarantors’ maximum obligation to repay the Loan Obligations
hereunder and under the other Loan Documents (the Loan Obligation Limit) shall not
exceed the greater of (a) the amount actually borrowed or received directly or
indirectly by Reseller with respect thereto and (b) the amount which is $1.00 less
than the amount which, if recorded by Reseller or such Guarantor as a liability,
would render Reseller or such Guarantor not Solvent. To the extent that Reseller or
any Guarantor makes a payment on any of the Loan Obligations (a “Loan Obligation
Payment”), Reseller or such Guarantor (the “Entitled Obligor”) is
entitled to contribution and indemnification from, and reimbursement by, each other
Reseller (a “Contributing Obligor”) in the amount of the Contribution
Obligation of such Contributing Obligor hereunder. The “Contribution
Obligation” of a Contributing Obligor with respect to the Loan Obligation
Payment of an Entitled Obligor is an amount equal to the greater of (a) the lesser
of (i) such Contributing Obligor’s Loan Obligation Limit at the time the Loan
Obligation Payment is made and (ii) such Contributing Obligor’s Allocable Share of
the Loan Obligation Payment, and (b) the amount of all proceeds from the Loan
Obligations actually received by such Contributing Obligor or applied by the
recipient thereof directly or indirectly for the benefit of such Contributing
Obligor, less the sum of any repayments thereof and any Loan Obligation Payments
made by such Contributing Obligor prior to the time the applicable Loan Obligation
Payment is made. The “Allocable Share” of a Contributing Obligor is a
fraction, the numerator of which is such Contributing Obligor’s Loan Obligation
Limit at the time the applicable Loan Obligation Payment is made and the denominator
of which is the sum of the Loan Obligation Limits of all of the Contributing Obligor
(plus a similarly computed amount for any Guarantor which has a similar obligation
to make a contribution) as of such time.

17.3.10. Miscellaneous. Upon the occurrence and during the continuance of an Event of Default,
Administrative Agents or Lenders may (and Administrative Agents shall at the
direction of Required Lenders) exercise any other rights and remedies available to
Administrative Agents or Lenders under the Loan Documents or otherwise
available to Administrative Agents or Lenders at law or in equity.

 

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	 	17.4.	 	Application of Funds. Any funds received by Lenders or Administrative Agents for the benefit of Lenders with
respect to any Loan Obligation after its Maturity or acceleration thereof, including
proceeds of Collateral, shall be applied as follows: (a) first, to reimburse to
Administrative Agents all unreimbursed costs and expenses paid or incurred by Administrative
Agents that are payable or reimbursable by Reseller hereunder; (b) second, to ratably
reimburse Lenders based on their respective Pro-Rata Shares for any amounts due to Lenders
under Section 19.6; (c) third, to ratably reimburse to Lenders based on their
respective Pro- Rata Shares for unreimbursed costs and expenses paid or incurred by Lenders
(including costs and expenses incurred by an Administrative Agent as a Lender that are not
reimbursable as provided in the first clause) that are payable or reimbursable by Reseller
hereunder; (d) fourth, to the payment of interest accrued on the Loans to each of Lenders
based on their respective Pro-Rata Shares; (e) fifth, ratably to (i) the payment of the
Loans of each of Lenders, in such order as each Lender determines in its absolute
discretion, and (ii) to Letter of Credit Issuer as cash collateral for the Letter of Credit
Exposure; (f) sixth, ratably to the payment of the other Loan Obligations based on each
Lender’s respective Pro-Rata Shares and (g) seventh, to the payment of Overtrade Advances
and (h) to the payment of Bank Product Obligations. Any remaining amounts shall be applied
to payment of all the Obligations to Administrative Agents. Any further remaining amounts
shall be paid to Reseller or such other Persons as shall be legally entitled thereto.
Except as expressly provided otherwise herein, Lenders may apply, and reverse and reapply,
payments and proceeds of the Collateral to the Loan Obligations in such order and manner as
Lenders determine in their absolute discretion. Reseller hereby irrevocably waives the
right to direct the application of payments and proceeds of the Collateral. Notwithstanding
the foregoing, Administrative Agents and Lenders may, with respect to the Aggregate
Floorplan Loan Facility, apply: (a) at any time, payments to reduce interest charges first
and then principal, regardless of Reseller’s instructions; and (b) principal payments to the
oldest (earliest) invoice for Collateral financed by Administrative Agents and Lenders under
the Aggregate Floorplan Loan Facility (including the Interim Floorplan Loan Facility), but,
in any event, all principal payments will first be applied to such Collateral financed by
Administrative Agents and Lenders under the Aggregate Floorplan Loan Facility (including the
Interim Floorplan Loan Facility) which is sold, lost, stolen, damaged, rented, leased, or
otherwise disposed of or unaccounted for.

	 	17.5.	 	Limitation of Liability; Waiver. Administrative Agents and Lenders shall not be liable to Reseller as a result of any
commercially reasonable possession, repossession, collection or sale by Administrative
Agents of Collateral; and Reseller hereby waive all rights of redemption from any such sale
and the benefit of all valuation, appraisal and exemption Laws. If Administrative Agents
seek to take possession of any of the Collateral by replevin or other court process,
Reseller hereby irrevocably waive (a) the posting of any bonds, surety and security relating
thereto required by any statute, court rule or otherwise as an incident to such possession,
(b) any demand for possession of the Collateral prior to the commencement of any suit or
action to recover possession thereof, (c) any requirement that Administrative Agents retain
possession and not dispose of any Collateral until after trial or final judgment, and (d) to
the extent permitted by Law, all rights to notice and hearing prior to the exercise by
Administrative Agents of Administrative Agents’ right to repossess the Collateral without
judicial process or to replevy, attach or levy upon the Collateral without notice or
hearing. Administrative Agents shall have no obligation to preserve rights to the
Collateral or to marshal any Collateral for the benefit of any Person.

	 	17.6.	 	Notice. Any notice of intended action required to be given by Administrative Agents (including
notice of a public or private sale of Collateral), if given as provided in Section
21.1 at least 10 days prior to such proposed action, shall be effective and constitute
reasonable and fair notice to Reseller.

 

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	18.	 	Administrative Agents and Lenders.

	 	18.1.	 	Appointment, Powers, and Immunities. Each of WFF and CPC is hereby appointed as Administrative Agent hereunder and under each
of the other Loan Documents. Each Lender hereby irrevocably appoints and authorizes each
Administrative Agent jointly and severally, to act as its agent under this Agreement and the
other Loan Documents with such powers and discretion as are specifically delegated to
Administrative Agents by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. Each Administrative Agent
(which term as used in this sentence and in Section 19.5 and the first sentence of
Section 19.6 shall include its Affiliates and its own and its Affiliates’ officers,
directors, employees, representatives, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and shall not be a
trustee or fiduciary for any Lender; (b) shall not be responsible to Lenders for any
recital, statement, representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by any Covered
Person or any other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any Covered Person or the satisfaction of any
condition or to inspect the property (including the books and records) of any Covered Person
or any of its Subsidiaries or Affiliates; (d) unless directed in writing by Required
Lenders, shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document (other than normal collection procedures from the
Lockboxes); and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Loan Document, except for its own gross negligence or
willful misconduct. Each Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.

	 
	 	18.2.	 	Reliance by Administrative Agents. Administrative Agents shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including any thereof by telephone or telecopy)
believed by them to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Covered Person), independent accountants, and other experts
selected by Administrative Agents. Administrative Agents may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until Administrative
Agents receive and accept an Assignment and Acceptance executed in accordance with this
Agreement. As to any matters not expressly provided for by this Agreement, Administrative
Agents shall not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of Required Lenders, and such instructions
shall be binding on all of Lenders; provided, however, that Administrative Agents shall not
be required to take any action that exposes Administrative Agents to personal liability or
that is contrary to any Loan Document or Law or unless they shall first be indemnified to
their satisfaction by Lenders against any and all liability and expense which may be
incurred by them by reason of taking any such action.

	 
	 	18.3.	 	Employment of Administrative Agents and Counsel. Administrative Agents may execute any of its duties hereunder by or through employees,
agents, and attorneys-in-fact and shall not be liable to any Lender, except with respect to
money or securities received by it or such agents or attorneys-in-fact, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.
Administrative Agents shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and their duties hereunder and shall not be liable
to any Lender for acting or failing to act as advised by such counsel, except where doing so
violates an express obligation of Administrative Agents under the Loan Documents.

 

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	 	18.4.	 	Defaults. Administrative Agents shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless Administrative Agents have received written notice
from a Lender or Reseller specifying such Default or Event of Default and stating that such
notice is a “Notice Of Default”. If Administrative Agents receive such a written
notice of the occurrence of a Default or Event of Default, Administrative Agents shall
promptly give notice thereof to Lenders. Administrative Agents shall (subject to
Section 18.2) take such action with respect to such Default or Event of Default as
shall be directed by Required Lenders, provided that, unless and until
Administrative Agents shall have received such directions, Administrative Agents may (but
shall not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as they shall deem advisable in the best
interest of Lenders.

	 
	 	18.5.	 	Rights as Lender. With respect to its Facilities and the Loans made by it, CPC (and any successor acting as
an Administrative Agent) in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it were not
acting as Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context
otherwise indicates, include CPC in its individual capacity as a Lender. CPC (and any
successor acting as Administrative Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, provide services to, and
generally engage in any kind of lending, trust, or other business with any Covered Person or
any of its Subsidiaries or Affiliates or any Guarantor as if it were not acting as an
Administrative Agent, and CPC (and any successor acting as an Administrative Agent) and its
Affiliates may accept fees and other consideration from any Covered Person or any of its
Subsidiaries or Affiliates or any Guarantor for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.

	 
	 	18.6.	 	Indemnification. Lenders agree to reimburse and indemnify Administrative Agents (to the extent not
reimbursed under the terms of Section 19.6, but without limiting the obligations of
Reseller under such Section) in accordance with their respective Pro-Rata Shares, for any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including reasonable attorneys’ fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against Administrative
Agents (including by any Lender) in any way relating to or arising out of any Loan Document
or the transactions contemplated thereby or any action taken or omitted by Administrative
Agents under any Loan Document; provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful misconduct of
the Person to be indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse Administrative Agents promptly upon demand for its Pro-Rata Share of any costs or
expenses payable by Reseller to Administrative Agents under this Agreement or the other Loan
Documents, to the extent that Administrative Agents are not promptly reimbursed for such
costs and expenses by Reseller. If Lenders reimburse Administrative Agents and
Administrative Agents subsequently receive reimbursement from Reseller, Administrative
Agents shall promptly remit to Lenders (without
interest) their Pro-Rata Share of such reimbursement received from Reseller. The agreements
contained in this Section shall survive payment in full of the Loans and all other amounts
payable under this Agreement and the termination of the Facilities. If Administrative
Agents are for any reason compelled to surrender any payment or any proceeds of the
Collateral because such payment or the application of such proceeds is for any reason
invalidated, declared fraudulent, set aside, or determined to be void or voidable as a
preference, an impermissible set-off, or a diversion of trust funds, then this Agreement and
the Loan Obligations to which such payment or proceeds was applied or intended to be applied
shall be revived as if such application was never made, and to the extent Administrative
Agents have been compelled to surrender any such payment or proceeds which have been
distributed by Administrative Agents to a Lender and Reseller has not repaid such amounts
immediately upon demand by Administrative Agents, such Lender shall be liable to pay to
Administrative Agents the amount of any such payments or proceeds so received by such Lender
and surrendered by Administrative Agents, and shall indemnify Administrative Agents for and
hold Administrative Agents harmless from any loss with respect to payments or proceeds
received by such Lender and surrendered by Administrative Agents.

 

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	 	18.7.	 	Notification of Lenders. Each Lender agrees to use commercially reasonable efforts (but no Lender shall have
liability to any other Lender or Administrative Agents for failure to use such commercially
reasonable efforts), upon becoming actually aware of anything which has or is reasonably
likely to have a Material Adverse Effect on any Covered Person, including any Guarantor, to
promptly notify Administrative Agents thereof. Administrative Agents shall promptly deliver
to each Lender copies of every written notice, demand, report (including any financial
report), or other writing which Administrative Agents give to or receive from Reseller or
any Lender, or of which CPC, in its capacity as a Lender otherwise becomes actually aware,
and which itself (a) constitutes, or which contains information about, something that has or
is reasonably likely to have a Material Adverse Effect on any Covered Person, including any
Guarantor, or (b) is otherwise delivered to Administrative Agents by Reseller pursuant to
the Loan Documents and is deemed material information by Administrative Agents in their sole
discretion. Any Lender may specifically request certain information regarding any Covered
Person which it reasonably believes is in the possession of Administrative Agents.
Administrative Agents and its directors, officers, agents, and employees shall have no
liability to any Lender for failure to deliver any such item to such Lender unless the
failure constitutes gross negligence or willful misconduct.

	 
	 	18.8.	 	Non-Reliance on Agent and Other Lenders. Each Lender agrees that it has, independently and without reliance on Administrative
Agents or any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Covered Persons and their Subsidiaries and
the Guarantors, if any, and its own decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agents or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make
its own analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly required to be
furnished to Lenders by Administrative Agents hereunder, Administrative Agents shall not
have any duty or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any Covered Person or any of its
Subsidiaries or Affiliates or any of the Guarantors that may come into the possession of
Administrative Agents or any of their Affiliates.

 

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	 	18.9.	 	Resignation. Administrative Agents may resign at any time by giving notice thereof to Lenders and
Reseller. Upon any such resignation, Required Lenders shall have the right to
appoint a successor Administrative Agent(s) with Reseller’s prior written consent which
shall not be unreasonably withheld or delayed; provided, however, that if there is an
Existing Default either at the time of resignation or appointment, then Reseller’s written
consent shall not be required. Effective with such resignation, the resigning
Administrative Agent shall assign (at Reseller’s sole cost and expense) all Security
Interests and liens in the Collateral, security documents and UCC filings, and do all other
things reasonably necessary so as to assign and transfer the Security Interests in the
Collateral (including, all documents effectuating or evidencing such Security Interests) to
any successor Administrative Agent or Administrative Agents. The successor Administrative
Agent(s) appointed by Required Lenders shall be a Lender. If no successor Administrative
Agent(s) shall have been so appointed by Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent’s giving of notice of
resignation, then the remaining Administrative Agent, if any, and if none, the retiring
Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent(s)
which shall be a commercial bank or other financial institution organized under the laws of
the United States of America or any State thereof having combined capital and surplus of at
least $300,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become vested with
all the rights, powers, discretion, privileges, and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Section shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

	 
	 	18.10.	 	Collections and Distributions to Lenders by Administrative Agent. Except as otherwise provided in this Agreement, including the other provisions of this
Agreement pertaining to interest on the Floorplan Loans and the Interim Floorplan Loans and
the provisions of Section 4.5 pertaining to the suspension or reduction of payments
of principal and interest to Lenders under certain circumstances, all payments of interest,
fees, principal and other amounts received by Administrative Agents for the account of
Lenders shall be distributed by Administrative Agents to Lenders in accordance with their
Pro-Rata Shares of the outstanding Loan Obligations at the time of such distribution by wire
transfer of same day funds to Lenders as provided in this Agreement (or entirely to
Administrative Agents in the case of payments of interest, fees or principal with respect to
the Swingline Loan) on the Settlement Date following the date when received, unless received
after 3:00 p.m. (Local Time) on a Business Day immediately preceding a Settlement Date, in
which case they shall be so distributed by 12:00 p.m. (Local Time) on the next Settlement
Date. All amounts received by any Lender on account of the Loan Obligations, including
amounts received by way of setoff, shall be paid over promptly to Administrative Agents for
distribution to Lenders as provided above in this Section. Such distributions shall be made
according to instructions that each Lender may give to Administrative Agents from time to
time.

	 
	 	18.11.	 	Provision Regarding Payments. Lenders agree that Lenders shall be obligated to make any required purchase and or sale
from another Lender on a Settlement Date or required reimbursement to Administrative Agents
following the termination of Lenders obligations to make Advances under Section
17.3.2. The Parties acknowledge and agree that the provisions of this Section
18.11 are solely for the benefit of Administrative Agents and Lenders and not for
Reseller or any other Person.

	 
	 	18.12.	 	Restrictions on Actions by Lenders; Sharing of Payments.

18.12.1 Each of Lenders agrees that it shall not, without the express written consent
of Administrative Agents, at any time when there is an Existing Default, set off against the
Loan Obligations, any amounts owing by such Lender to Reseller or any deposit accounts of
Reseller now or hereafter maintained with such Lender. Each of Lenders further agrees that
it shall not, unless specifically requested to do so in writing by Administrative Agents,
take or cause to be taken any action, including, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of
the Collateral.

 

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

18.13. Release of Collateral.

18.13.1 Each Lender and the Letter of Credit Issuer hereby directs, in accordance with
the terms of this Agreement, the Collateral Agent to release any Lien held by the Collateral
Agent for the benefit of the Collateral Agent, Administrative Agents and the Lenders:

(a) against all of the Collateral, upon final and indefeasible payment in full of the
Loan Obligations and termination of the Facilities; or

(b) against any part of the Collateral sold or disposed of by the Reseller if such
sale or disposition is permitted by Section 15.9 or is otherwise consented to by the
Required Lenders for such release as set forth in Section 21.2, as certified to the
Collateral Agent by Reseller in a certificate executed by an officer authorized by Reseller
in substantially the form of Exhibit 18.13.2.

18.13.2. Each Lender and the Letter of Credit Issuer hereby directs the Collateral
Agent to execute and deliver or file or authorize the filing of such termination or partial
release statements and do such other things as are necessary to release Liens to be released
pursuant to this Section 18.13 promptly upon the effectiveness of any such release.
Upon request by the Collateral Agent at any time, the Lenders and the Letter of Credit
Issuer will confirm in writing the Collateral Agent’s authority to release particular items
of Collateral pursuant to this Section 18.13.

19. General.

	 	19.1.	 	Lenders’ Right to Cure. Administrative Agents or any Lender may (but shall not be obligated to), from time to
time, in their absolute discretion, for Reseller’s account and at Reseller’s
expense, pay (or, with the consent of Required Lenders, make a Revolving Loan Advance, or
Floorplan Loan Advance to pay) any amount or do any act required of Reseller hereunder or
requested by Administrative Agents or Required Lenders to preserve, protect, maintain or
enforce the Loan Obligations, the Collateral or Collateral Agent’s Security Interests
therein for the benefit of Lenders, and which Reseller fails to pay or do after having been
provided five days’ written notice of such failure by Administrative Agents, including
payment of any judgment against Reseller, insurance premium, Taxes, warehouse charge,
finishing or processing charge, landlord’s claim, and any other Security Interest upon or
with respect to the Collateral. All payments that Lenders make pursuant to this Section and
all out-of-pocket costs and expenses that Lenders pay or incur in connection with any action
taken by them hereunder shall be a part of the Loan Obligations, the repayment of which
shall be secured by the Collateral. Any payment made or other action taken by Lenders
pursuant to this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to pursue Lender’s other rights and remedies with respect thereto.

 

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	 	19.2.	 	Rights Not Exclusive. Every right granted to each Administrative Agent and each Lender hereunder or under any
other Loan Document or allowed to it at law or in equity shall be deemed cumulative and may
be exercised from time to time.

	 	19.3.	 	Survival of Agreements. All covenants and agreements made herein and in the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and other Loan Documents and the
making of every Advance. All agreements, obligations and liabilities of Reseller under this
Agreement concerning the payment of money to Administrative Agents and Lenders, including
Reseller’s obligations under Sections 19.5 and 19.6, but excluding the
obligation to repay the Loans and interest accrued thereon, shall survive the repayment in
full of the Loans and interest accrued thereon, whether or not indefeasible, the return of
the Notes to Reseller and the termination of the Facilities.

	 	19.4.	 	Assignments.

19.4.1. Permitted Assignments. At any time after the Execution Date and upon the consent of Administrative
Agents, any Lender may assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of the
Notes payable to it, its Facilities and its Loans), provided that the terms of
assignment satisfy the following requirements:

19.4.1.1. Administrative Agents shall have accepted the assignment, which
acceptance shall not be unreasonably withheld; provided, however, that if
the Facilities have been terminated and the Loan Obligations accelerated by
Required Lenders, then Administrative Agents’ consent shall not be required;
and provided further, however, an assignment from a Lender to an Affiliate
of such Lender shall not require the prior written acceptance of
Administrative Agents, but such Lender shall give prior written notice of
such assignment to Administrative Agents and such assignment shall otherwise
be subject to all of the terms and provisions of this Section and this
Agreement.

19.4.1.2. If there is no Existing Default and none of the Facilities have
been terminated, unless such assignment is to a Lender, an Administrative
Agent, or any Affiliate of the foregoing, Reseller shall have consented to
the assignment, which consent shall not be unreasonably withheld or delayed.

19.4.1.3. For each assignment involving the issuance and transfer of Notes,
the assigning Lender shall execute an Assignment and Acceptance in the form
of Exhibit 19.4.1 together with any Note subject to such assignment and
a processing fee of $5,000.

19.4.1.4. The minimum aggregate Facility which shall be assigned (which
shall include the applicable portion of the assigning Lender’s Revolving
Loan Facility, Floorplan Loan Facility and Letter of Credit Facility (and in
the case of Administrative Agents, the Swingline Facility and the Interim
Floorplan Loan Facility) is Fifteen Million Dollars ($15,000,000) or such
lesser amount which constitutes such Lender’s entire Facility; provided,
however, after giving effect to such an assignment, unless the assigning
Lender has assigned all of its Facilities hereunder, the assigning Lender
shall retain no less than Twenty-Five Million Dollars ($25,000,000) in
Facilities hereunder; and provided further, however, that no such minimum
shall apply between a Lender and its Affiliates, or between one Lender and
another Lender or to an assignment of all of a Lender’s rights and
obligations under this Agreement.

 

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19.4.1.5. The assignee shall have an office located in the United States and
is otherwise an Eligible Assignee.

Upon execution, delivery, and acceptance of such Assignment and Acceptance, the assignee
thereunder shall be a Party hereto and, to the extent of such assignment, have the
obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment pursuant to this Section, the
assignor, Administrative Agents and Reseller shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a State thereof, it shall
deliver to Reseller and Administrative Agents certification as to the exemption from
deduction or withholding of Taxes in accordance with Section 4.11.

19.4.2. Register; Consequences and Effect of Assignments.

19.4.2.1. From and after the effective date specified in any Assignment and
Acceptance, the assignee shall be deemed and treated as a Party to this
Agreement and, to the extent that rights and obligations hereunder and under
the Notes held by the assignor have been assigned or negotiated to the
assignee pursuant to such Assignment and Acceptance, to have the rights and
obligations of a Lender hereunder as fully as if such assignee had been
named as a Lender in this Agreement and of a holder of such Notes, and the
assignor shall, to the extent that rights and obligations hereunder or under
such Notes have been assigned or negotiated by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
future obligations under this Agreement.

19.4.2.2. By executing and delivering an Assignment and Acceptance, the
assignor thereunder and the assignee confirm to and agree with each other
and the other Parties substantially as follows: (a) the assignment made
under such Assignment and Acceptance is made without recourse; (b) such
assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Covered Person or Guarantor
or the performance or observance by any Covered Person or Guarantor of any
of its Loan Obligations; (c) such assignee confirms that it has received a
copy of this Agreement, together with copies of the Financial Statements and
such other Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment
and Acceptance; (d) such assignee will, independently and without reliance
upon Administrative Agents, such assignor, or any other Lender, and based on
such documents and information as it deems appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement; (e) such assignee appoints and authorizes Administrative Agents
to take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to
Administrative Agents by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (f) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender and a holder of a Note.

 

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19.4.2.3. One of Administrative Agents shall maintain at its address
referred to herein a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses
of Lenders and the Facility of, and principal amount of Loans owing to, each
Lender from time to time (the “Register”). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and Reseller, Administrative Agents and Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by Reseller or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, Administrative Agents shall,
if such Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 19.4.1, (a) accept such Assignment and
Acceptance, (b) record the information contained therein in the Register and
(c) give prompt notice thereof to the parties thereto and to Reseller.

19.4.3. Administrative Agents to Retain Copies of Assignments and Acceptances. One of Administrative Agents shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by them.

19.4.4. Notice to Reseller of Assignment. Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender, if Administrative Agents accept the assignment contemplated thereby,
Administrative Agents shall give prompt notice thereof to Reseller. If Reseller has
consented to such assignment (to the extent their consent is required hereunder),
Reseller shall execute and deliver replacement Notes to the assignor and assignee as
requested by Administrative Agents and necessary to give effect to the assignment.
If Reseller fails or refuses to execute and deliver such replacement Notes, (and it
has consented to such assignment to the extent required), either Administrative
Agent may, as agent and attorney-in-fact for Reseller, execute and deliver such
replacement Notes on behalf of Reseller. Reseller hereby appoints Administrative
Agents as its agent and attorney-in-fact for such purpose and acknowledge that such
power is coupled with an interest and therefore irrevocable until the Loan
Obligations have been indefeasibly paid in full in cash and the Facilities have
terminated. Administrative Agents shall not have any liability to Reseller or
anyone else, including any Lender, as a consequence of exercising the power granted to Administrative
Agents in the foregoing sentence in any instance.

19.4.5. Assignment to Federal Reserve Bank. Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time assign and pledge all or any portion of its Loans and its Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.

 

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19.4.6. Information. Subject to Section 19.12, any Lender or Administrative Agents may
furnish any information concerning Reseller or any of its Subsidiaries in the
possession of such Lender or Administrative Agents, as the case may be, from time to
time to assignees, Affiliates or participants (including prospective assignees and
participants); provided that such assignees, affiliates and participants shall be
subject to the confidentiality obligations applicable to Lenders and Administrative
Agents hereunder.

19.4.7. Sale of Participations. Upon the consent of Administrative Agents, each Lender may sell
participations to one or more Persons in all or a portion of its rights and
obligations under this Agreement; provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other Parties for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the right of
setoff contained in this Agreement, (iv) the amount of the participation shall be in
a minimum amount of $3,000,000 or such lesser amount which constitutes such Lender’s
entire Facility, and (v) Reseller, the other Lenders and Administrative Agents shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of Reseller relating to its Loans, its
Notes and its funding of Advances and to approve any amendment, modification, or
waiver of any provision of this Agreement (other than amendments, modifications, or
waivers that forgive the amount of principal of the Loans). The sale of any such
participations which require Reseller to file a registration statement with the
Securities and Exchange Commission or under the securities Laws of any State shall
not be permitted. Notwithstanding the foregoing, any Lender may sell such
participations as it may be required to do under any Law or as otherwise instructed
to do so by any Governmental Authority.

	 	19.5.	 	Payment of Expenses. Reseller agrees to pay or reimburse to Administrative Agents all of Administrative
Agents’ reasonable out-of-pocket costs incurred in connection with the enforcement of
Administrative Agents’ rights and remedies under the Loan Documents after a Default or Event
of Default; any amendment of or supplementation to any of the Loan Documents; and any
waiver, consent or forbearance with respect to any Default or Event of Default. Reseller
also agrees to pay or reimburse each of Lenders all of their respective reasonable
attorneys’ and paralegal’s fees and expenses and litigation costs (as such terms are defined
below in this Section) incurred by each Lender in connection with this Agreement or any of
the other the Loan Documents upon the occurrence and during the continuance of an Event of
Default (including such fees, expenses and costs arising from or incurred in connection
with: the interpretation of any of the Loan Documents; any amendment, waiver or
supplementation to any of the Loan Documents; any enforcement action against Reseller, any
Covered Person, any Guarantor or the Collateral; or any consent or forbearance with respect
to any Default or Event of Default). Administrative Agents’ reasonable out-of-pocket costs
may include but are not limited to the following, to the extent they are actually paid or
incurred by Administrative Agents: title insurance fees and premiums; the cost of searches for Security Interests existing against
Covered Persons or Guarantors; recording and filing fees and taxes; appraisal fees;
examination and audit fees; environmental consultant fees; litigation costs; and all
attorneys’ and paralegals’ expenses and reasonable fees. Attorneys’ and paralegals’
expenses may include filing charges; telephone, data transmission, facsimile and other
communication costs; courier and other delivery charges; and photocopying charges.
Litigation costs may include filing fees, deposition costs, expert witness fees, expenses of
service of process, and other such costs paid or incurred in any administrative,
arbitration, or court proceedings involving Administrative Agents, a Lender and any Covered
Person, including proceedings under the Bankruptcy Code. In addition, Reseller shall pay to
Administrative Agents, upon receipt of notification from Administrative Agents,
Administrative Agents’ customary fees to send or receive electronic transfers of funds. All
costs and fees which Reseller is obligated to pay or reimburse Administrative Agents are
Loan Obligations payable to Administrative Agents and are payable on demand by
Administrative Agents.

 

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19.6. General Indemnity.

19.6.1. Reseller agrees to indemnify and hold harmless each Administrative Agent, each
Lender, Letter of Credit Issuer, and each of their Affiliates and their respective officers,
directors, employees, attorneys, representatives, agents, and advisors (each, an
“INDEMNIFIED PARTY”) from and against any and all claims, damages, losses, liabilities,
costs, and expenses (including reasonable attorneys’ fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including in connection with any investigation, litigation,
or proceeding or preparation of defense in connection therewith) the Loan Documents, any of
the transactions contemplated herein or the actual or proposed use of the proceeds of the
Loans (including any payments made by Administrative Agents to any Person (other than
Reseller) who is a party to any blocked account or lockbox agreement, including any
indemnity payments by Administrative Agents thereunder), or the manufacture, storage,
transportation, release or disposal of any Hazardous Material on, from, over or affecting
any of the Collateral or any of the assets, properties, or operations of any Covered Person
or any predecessor in interest, directly or indirectly, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by Reseller, its
directors, shareholders or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Reseller agrees not to assert and agrees that it will
not direct any other Covered Person to assert any claim against any Indemnified Party, on
any theory of liability, for special, indirect, consequential, or punitive damages arising
out of or otherwise relating to the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans. Reseller also agrees to
pay, indemnify and hold harmless the Indemnified Parties for, from and against, and shall
promptly reimburse the Indemnified Parties for, any and all claims, damages, liabilities,
losses, costs and expenses (including reasonable attorneys’ fees and expenses and amounts
paid in settlement) incurred, paid or sustained by the Indemnified Parties, or enforcement
by Administrative Agents of any of their rights with respect thereto, except to the extent
such claim, damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence or willful misconduct. Reseller shall pay, indemnify and hold harmless the
Indemnified Parties for,

 

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from and against, and shall promptly reimburse the Indemnified
Parties for, any and all claims, damages, liabilities, losses, costs and expenses (including
reasonable attorneys’ fees and expenses and amounts paid in settlement) incurred, paid or
sustained by the Indemnified Parties, arising out of or relating to the enforcement by
Administrative Agents of any of their rights with respect thereto. Reseller covenants and
agrees to assume liability for and to protect, indemnify and hold harmless Administrative
Agents, Letter of Credit Issuer and each of Lenders from any and all liabilities,
obligations, damages, penalties, claims, causes of action, costs, charges and expenses
(including attorneys’ fees), which may be incurred by, imposed or asserted against
Administrative Agent, Letter of Credit Issuer, or any Lender, howsoever arising or incurred
because of, out of or in connection with the disbursements of Revolving Loans, Swingline
Loans, Interim Floorplan Loans, or Floorplan Loans; provided, however, the liability of
Reseller pursuant to this indemnity shall not extend to any liability, obligation, damage,
penalty, claim, cause of action, cost, charge or expense caused by or arising out of the
gross negligence or willful misconduct of Administrative Agents, Letter of Credit Issuer, or
Lenders. Reseller: (a) are obligated to pay any Loan Obligation even if any Collateral is
defective or fails to conform to any warranties extended by any third party; (b) shall not
assert against Administrative Agents, Letter of Credit Issuer, any Lender or any other
Indemnified Party any claim or defense Reseller has against any third party; and (c)
indemnify and hold Administrative Agents, Letter of Credit Issuer, any Lender and any other
Indemnified Party harmless against all claims and defenses asserted by any buyer of the
Collateral relating to the condition of, or any representations regarding, any of the
Collateral. Reseller irrevocably waives all rights of offset and counterclaims it may have
against Administrative Agents, Letter of Credit Issuer, or any Lender except counterclaims
arising in the case of Administrative Agents’, Letter of Credit Issuer’s or any Lender’s
willful misconduct or gross negligence.

19.6.2. The obligations of Reseller under this Section 19.6 shall survive the
termination of the Facilities, the indefeasible full payment and satisfaction of all of the
Loan Obligations, and the release of the Collateral. All amounts, obligations and
liabilities referred to in Section 19.6.1 shall be deemed to be a part of the Loan
Obligations and shall be paid to Administrative Agents on demand.

19.6.3. To the extent that any of the indemnities required from Reseller under this Section
are unenforceable because they violate any Law or public policy, Reseller shall pay the
maximum amount which it is permitted to pay under Law.

19.6.4. The foregoing indemnification shall not apply to the extent such liabilities and
costs are determined to have resulted or been caused, in whole or in part, by the gross
negligence or willful misconduct on the part of such Indemnified Party. THE FOREGOING
INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO
ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT
AS PROVIDED BY THE IMMEDIATELY PRECEDING SENTENCE.

	 	19.7.	 	Letters of Credit. Reseller assume all risks of the acts or omissions of any beneficiary of any of the
Letters of Credit. None of Letter of Credit Issuer, Administrative Agents, any Lender nor
any of their respective directors, officers, employees, agents, or representatives shall be
liable or responsible for: (a) the use which may be made of any of the Letters of Credit or
for any acts or omissions of beneficiary in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by Letter of Credit Issuer against presentation of
documents which, on their face, appear to comply with the terms of any Letter of Credit,
even though such documents may fail to bear any reference or adequate reference to any such
Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit in connection with which Letter of Credit
Issuer would, pursuant to the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (as amended from time to
time), be absolved from liability. In furtherance and not in limitation of the foregoing,
Letter of Credit Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or information to
the contrary.

 

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	 	19.8.	 	Changes in Accounting Principles. If any Covered Person, at the end of its fiscal year and with the concurrence of its
independent certified public accountants, changes the method of valuing the Inventory of
such Covered Person, or if any other changes in accounting principles from those used in the
preparation of any of the Financial Statements are required by or result from the
promulgation of principles, rules, regulations, guidelines, pronouncements or opinions by
the Financial Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or bodies with similar functions), and any of such
changes result in a change in the method of calculation of, or affect the results of such
calculation of, any of the financial covenants, standards or terms found herein, then the
Parties agree to enter into and diligently pursue negotiations to amend such financial
covenants, standards or terms so as to equitably reflect such changes, with the desired
result that the criteria for evaluating the financial condition and results of operations of
such Covered Person shall be the same after such changes as if such changes had not been
made; provided, however, that until such amendments are made, all financial covenants herein
and all the provisions hereof which contemplate financial calculation hereunder shall remain
in full force and effect.

	 	19.9.	 	Loan Records. The date and amount of all Advances to Reseller and payments of amounts due from Reseller
under the Loan Documents will be recorded in the records that Administrative Agents normally
maintain for such types of transactions. The failure to record, or any error in recording,
any of the foregoing shall not, however, affect the obligation of Reseller to repay the
Loans and other amounts payable under the Loan Documents. Reseller shall have the burden of
proving that such records are not correct. Reseller agrees that Administrative Agents’ and
any Lender’s books and records showing the Loan Obligations and the transactions pursuant to
this Agreement shall be admissible in any action or proceeding arising therefrom, and shall
constitute prima facie proof thereof, irrespective of whether any Loan Obligation is also
evidenced by a promissory note or other instrument. Any statement sent by Administrative
Agents or a Lender to a Covered Person shall be deemed correct, accurate and binding on
Reseller and an account stated (except for reversals and reapplications of payments as
provided in Section 6.6 and corrections of errors discovered by Administrative
Agents or a Lender), unless Reseller notify Administrative Agents in writing to the contrary
within 60 days after such statement is rendered. If a timely written notice of objections
is given by Reseller, only the items to which exception is expressly made will be considered
to be disputed by Reseller.

	 	19.10.	 	Other Security and Guaranties. Administrative Agents or any Lender may, without notice or demand and without affecting
Reseller’s obligations hereunder, from time to time, for the benefit of the other Lenders
and Administrative Agents (based upon each Lender’s Pro-Rata Share): (a) take from any
Person and hold collateral (other than the Collateral) for the payment of all or any part of
the Loan Obligations and exchange, enforce and release such collateral or any part thereof;
and (b) accept and hold any endorsement or Guaranty of payment of all or any part of the
Loan Obligations and release or substitute any such endorser or Guarantor, or any Person who
has given any Security Interest in any other collateral as security for the payment of all
or any part of the Loan Obligations, or any other Person in any way obligated to pay all or
any part of the Loan Obligations.

 

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	 	19.11.	 	Loan Obligations Payable in Dollars. All Loan Obligations shall be payable only in Dollars. If, however, to obtain a judgment
in any court it is necessary to convert a Loan Obligation payable in Dollars into another
currency, the rate of exchange used shall be that at which WFF, using its customary
procedures, could purchase Dollars with such other currency in New York, New York on the
Business Day immediately preceding the day on which such judgment is rendered. If any sum
in another currency is paid to a Lender or received by a Lender and applied to a Loan
Obligation payable in Dollars, such Loan Obligation shall be deemed paid and discharged only
to the extent of the amount of Dollars that WFF, using its customary procedures, is able to
purchase in New York, New York with such sum on the Business Day immediately following
receipt thereof. Reseller agrees to indemnify each Lender against any loss in Dollars that
it may incur on such Loan Obligation as a result of such payment or receipt and application
to such Loan Obligation.

	 	19.12.	 	Confidentiality. Administrative Agents may obtain from any Vendor any credit, financial or other
information regarding Reseller that such Vendor may from time to time possess. Each
Administrative Agent and each Lender agrees that it will use its commercially reasonable
efforts not to disclose to third Persons any information that it obtains about Reseller or
their operations or finances that are designated by Reseller in writing as confidential or
that Reseller has advised Administrative Agents or Lenders in writing constitutes non-public
information. Each Administrative Agent and any Lender may, however, disclose such
information to their Affiliates, to each other, to each other’s Affiliates, and to all of
the officers, attorneys, auditors, accountants, bank examiners, agents and representatives
of the foregoing who have a need to know such information in connection with the
administration, interpretation or enforcement of the Loan Documents or the lending and
collection activity contemplated therein or to the extent required by Law or a Governmental
Authority. Such Administrative Agent or such Lender shall use their reasonable efforts to
advise such Persons that such information is to be treated as confidential, but shall have
no liability for failure to do so, unless such failure is grossly negligent or willful,
provided, however, no Lender shall be required to expressly inform or notify any
bank examiner or self-regulatory examiner in the course of such examiners examination,
inspection or audit of the confidential nature of such information. Each Administrative
Agents or any Lender may also disclose such information in any documents that it files in
any legal proceeding or otherwise to pursue, enforce or preserve its rights under the Loan
Documents. Each Administrative Agent may also disclose credit, financial, or other
information on Reseller in such Administrative Agents’ possession to Lenders, Vendors and
potential Vendors, or any Persons liable for the Loan Obligations; provided, however, each
Administrative Agent will use its commercially reasonably efforts not to provide copies of
Reseller’s Financial Statements to any such Vendors or potential Vendors without Reseller’s
prior written consent, although in the event an Administrative Agent does provide copies of
Reseller’s Financial Statements to any such Vendors or potential Vendors, it shall have no
liability for such disclosure. Administrative Agents’ and Lenders’ nondisclosure obligation
shall not apply to any information that (a) is disclosed to an Administrative Agent or any
Lender by a third Person not affiliated with or employed by Reseller who does not, to such
Administrative Agent’s or such Lender’s knowledge, have a commensurate duty of
nondisclosure, or (b) is or becomes publicly known other than as a result of disclosure by
an Administrative Agent or a Lender.

	 	19.13.	 	Reserved.

	 
	 	19.14.	 	Jury Trial Waiver; Service of Process; Forum:

19.14.1. Jury Trial Waiver. ANY LEGAL PROCEEDING WITH RESPECT TO ANY DISPUTE (A) ARISING UNDER THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, or (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM IN RESPECT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER OR NOT SOUNDING
IN CONTRACT OR TORT OR OTHERWISE, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE WITHOUT A JURY. RESELLER, EACH ADMINISTRATIVE AGENT AND EACH LENDER
WAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING. RESELLER, EACH
ADMINISTRATIVE AGENT, AND EACH LENDER FURTHER AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY AND THAT EITHER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HEREIN TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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19.14.2. Choice of Forum. Subject only to the exception in the next sentence, Reseller, Administrative
Agent, and each Lender hereby agrees to the exclusive jurisdiction of the federal
court of the federal judicial district of Colorado and the state courts of Colorado,
and waives any objection based on venue or forum non
conveniens with respect to any action instituted therein, and agrees that
any dispute concerning the relationship between Administrative Agents, Lenders, and
Reseller or the conduct of any of them in connection with this Agreement or
otherwise shall be heard only in the courts described above. Notwithstanding the
foregoing: (a) Administrative Agents or any Lender shall have the right to bring
any action or proceeding against any Reseller or their property in any courts of any
other jurisdiction Administrative Agents or any Lender deem necessary or appropriate
to realize on the Collateral, real estate or other security for the Loan
Obligations, and (b) each party hereto acknowledges that any appeals from the courts
described in the immediately preceding sentence may have to be heard by a court
located outside those jurisdictions.

19.14.3. Service of Process. Reseller, Administrative Agents and each Lender hereby waives personal service of
any and all process upon it and consents that all such service of process may be
made by registered mail (return receipt requested) directed to such party at its
address set forth on the signature pages hereof, and service so made shall be deemed
to be completed five (5) days after the same shall have been so deposited in the
U.S. mails. Nothing in this Section shall affect the right of Administrative
Agents or any Lender to serve legal process in any other manner permitted by Law.

19.15 Assignment of Claims Act. If so requested by Administrative Agents (after consultation
with Reseller) upon (a) the occurrence and during the continuance of an Event of Default or (b) the
occurrence of any event, act or condition resulting in a Material Adverse Effect, each Covered
Person shall execute and deliver to Administrative Agents, for the benefit of the Lenders, all
documents, instruments, filings, or take any other required actions, necessary to complete the
required procedures under the Federal Assignment of Claims Act of 1940 for the effective collateral
assignment (to the extent available under Applicable Law) of all Accounts which are owed by the
Federal Government.

20. Portal. CPC, as an Administrative Agent, may, from time to time at its sole option, permit Reseller
to access and use one or more internet web sites (the “PORTAL”) to: obtain items or information and
take other actions in connection with this Agreement, subject to the following:

(a) Reseller shall access and use the Portal solely through duly authorized employees of
Reseller to whom CPC has issued a user name and password (an “AUTHORIZED EMPLOYEE”);

(b) submission of a user name and password to access and use the Portal, constitutes
Reseller’s, and the applicable Authorized Employee’s, representation that the person
submitting such user name and password is the specific person identified by such user name
and password and that such person is, at the time of such access and use, Reseller’s
employee duly authorized to act for and on behalf of Reseller; and

(c) CPC, as an Administrative Agent, may, from time to time at its sole option and without
notice or liability:

(i) amend the terms for use of the Portal by posting amended terms on the Portal (and
such amended terms shall automatically be effective upon posting) and

(ii) suspend or revoke Reseller’s or an Authorized Employee’s access to, and use of the
Portal or modify, update or discontinue all or any portion of the Portal.

 

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21. Miscellaneous.

	 	21.1.	 	Notices. All notices, consents, requests and demands to or upon the respective Parties shall be in
writing, and shall be deemed to have been given or made when delivered in person to those
Persons listed on the signature pages hereof or four (4) days after the date when deposited
in the United States mail, postage prepaid, or, in the case of the overnight courier
services, one Business Day after delivery to the overnight courier service, or in the case
of notice by electronic or facsimile transmission, when sent, verification received, in each
case addressed as set forth on the signature pages hereof, or to such other address as
either party may designate by notice to the other in accordance with the terms of this
Section. No notice given to or demand made on Reseller by Administrative Agents or any
Lender in any instance shall entitle Reseller to notice or demand in any other instance.

	 	21.2.	 	Amendments and Modifications; Waivers and Consents; All Lenders. Unless otherwise provided herein, no amendment to or modification of any provision of
this Agreement, or of any of the other Loan Documents shall be effective unless it is in
writing and signed by authorized officers of Reseller and Required Lenders. Unless
otherwise provided herein, no waiver of, amendment or modification to, or consent to any
departure by Reseller from, any provision of this Agreement or any of the other Loan
Documents shall be effective unless it is in writing and signed by authorized officers or
representatives of Required Lenders. Any such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the purpose for which given.

The foregoing notwithstanding, no such amendment, waiver, modification or consent shall,
unless signed by authorized officers of Reseller and authorized officers or representatives
of all Lenders:

(a) reduce or forgive the repayment of principal of any Advance or the reimbursement of
any draw on a Letter of Credit or interest or fees on any Advance,

(b) postpone or delay the Termination Date or the regularly scheduled dates for
payments of principal, fees or interest with respect to any Advance,

(c) change the regularly scheduled dates for payments of any fee payable to all Lenders
under Section 5, reduce the fee payable to all Lenders under Section 5 other
than due to periodic changes in the calculation set forth therein,

(d) change the provisions of Section 18 to the detriment of any Lender,

(e) change the definition of Required Lenders herein,

(f) change the provisions of this Section,

(g) release any Covered Person from its obligations under the Loan Documents,

 

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(h) increase the advance rate percentages in Section 3.1.5 above the advance
rate percentages as each exists on the Effective Date,

(i) change any provisions of this Agreement requiring ratable distributions to Lenders,

(j) reduce the interest rate applicable to Revolving Loans or the interest rate payable
to Lenders (other than CPC) for Floorplan Loan Advances under Section 4.4,

(k) change the provisions of Section 6.1.2.2;

(l) exchange, waive, subordinate or release the Security Interests in any of the
Collateral (except as expressly permitted by Section 15.9);

(m) change the provisions of Section 6.1.2.1, Section 17.4 or Section
21.2; or

(n) change the definition of “Borrowing Base,” “Eligible Accounts”, or
“Eligible Government Accounts” or “Floorplanned Inventory”.

provided, however, that to the extent not permitted by Section 15.9,
Administrative Agents may, in their absolute discretion and without the consent of any
Lender or any Covered Person or Guarantor, exchange, waive, subordinate or release the
Security Interests in any of the Collateral so long as the fair market value of the
Collateral which is exchanged or for which the Security Interest is waived, subordinated or
released does not exceed $100,000 in each instance and $200,000 in the aggregate per
calendar year. In addition, the Dollar amount of the Revolving Loan Facility or Floorplan
Loan Facility of any Lender may not be increased without the consent of such Lender and
Administrative Agents, and Reseller if required by Section 19.4.1.2; and if the
aggregate amount of any Facility is increased, then only the consent of Lenders
participating in any such increase, Administrative Agents and Reseller shall be required.
No notice to or demand on Reseller in any instance shall entitle Reseller to any other or
further notice or demand in another similar or different instance. No failure by
Administrative Agents or any Lender to exercise, and no delay by Administrative Agents or
any Lender in exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Administrative Agents or any
Lender of any right, remedy, power or privilege hereunder preclude any other exercise
thereof, or the exercise of any other right, remedy, power or privilege existing under any
Law or otherwise.

21.3. Replacement of Holdout Lender.

(a) If any action to be taken by Lenders, Administrative Agents or Collateral Agent
hereunder requires the unanimous consent, authorization, or agreement of all Lenders, and a
Lender (“HOLDOUT LENDER”) disapproves of the action or fails to give its consent,
authorization, or agreement, then Administrative Agents, upon at least 5 Business Days’
prior irrevocable notice to the Holdout Lender, may either permanently replace the Holdout
Lender with one or more substitute Lenders (each, a “REPLACEMENT LENDER”) or cause the
Holdout Lender to no longer be a Lender and reduce the Aggregate Floorplan Loan Facility
Limit as provided in Section 21.3(b), below and the Holdout Lender shall have no right
to refuse to be replaced or to no longer be a Lender hereunder. Such notice shall specify
an effective date for such replacement or reduction of the Aggregate Floorplan Loan Facility
Limit, which date shall not be later than 15 Business Days after the date such notice is
given.

(b) Should Administrative Agents determine in their sole discretion to not solicit a
Replacement Lender (i) that portion, if any, of the Pro-Rata Share of such Holdout Lender
shall no longer be effective, (ii) the Holdout Lender shall no longer be a Lender under the
terms of this Agreement, subject only to the Holdout Lender being repaid its share of the
outstanding Loan Obligations without any premium or penalty of any kind whatsoever and (iii)
the Aggregate Floorplan Loan Facility Limit shall be reduced to the extent of the Pro-Rata
Share of such Holdout Lender.

 

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(c) Prior to the effective date of the replacement of the Holdout Lender pursuant to
the provisions of Section 21.3(a), above, the Holdout Lender and each Replacement
Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout
Lender being repaid its share of the outstanding Loan Obligations without any premium or
penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such replacement,
the Holdout Lender shall be deemed to have executed and delivered such Assignment and
Acceptance. The replacement of any Holdout Lender shall be made in accordance with the
terms of Section 19.4. Until such time as the Replacement Lenders shall have
acquired all of the Loan Obligations, the commitments, and the other rights and obligations
of the Holdout Lender hereunder and under the other Loan Documents or the Aggregate
Floorplan Loan Facility Limit has been reduced as provided in Section 21.3(b) above,
the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro-Rata Share of
Advances. Upon replacement of a Holdout Lender with a Replacement Lender, the Replacement
Lender shall assume and be bound by the terms and conditions of this Agreement and the other
Loan Documents.

	 	21.4.	 	Course of Dealing. Acceptance of or acquiescence in a course of performance or course of dealing rendered or
taken under or with respect to this Agreement or the other Loan Documents will not be
relevant in any respect to determine the meaning of this Agreement or the other Loan
Documents, or the obligations or liabilities of the Parties under this Agreement or the
other Loan Documents, even though the accepting or acquiescing Party had knowledge of the
nature of the performance and opportunity for objection.

	 	21.5.	 	Rights Cumulative. Each of the rights and remedies of Administrative Agents and Lenders under this Agreement
shall be in addition to all of their other rights and remedies under Law, and nothing in
this Agreement shall be construed as limiting any such rights or remedies.

	 	21.6.	 	Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and all
future holders of the Notes and their respective successors and assigns, except that
Reseller may not assign, delegate or transfer any of its rights or obligations under this
Agreement without the prior written consent of Administrative Agents and Required Lenders.
With respect to Reseller’s successors and assigns, such successors and assigns shall include
any receiver, trustee or debtor-in-possession of or for Reseller.

	 	21.7.	 	Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or lack of authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such provision in
any other jurisdiction unless the ineffectiveness of such provision would result in such a material
change as to cause completion of the transactions contemplated hereby to be unreasonable.

	 	21.8.	 	Counterparts. This Agreement may be executed by the Parties on any number of separate counterparts, and
all such counterparts taken together shall constitute one and the same instrument. It shall
not be necessary in making proof of this Agreement to produce or account for more than one
counterpart signed by the Party to be charged.

 

88

 

	 	21.9.	 	Governing Law; No Third Party Rights. This Agreement, the Notes and the other Loan Documents and the rights and obligations of
the parties hereunder and thereunder shall be governed by and construed and interpreted in
accordance with the internal Laws of the State of New York applicable to contracts made and
to be performed wholly within such state, without regard to choice or conflicts of law
principles; except that the provisions of the Loan Documents pertaining to the creation or
perfection of Security Interests or the enforcement of rights of Administrative Agents and
Lenders in Collateral located in a State other than the State of New York shall be governed
by the Laws of such State. This Agreement is solely for the benefit of the Parties and
their respective successors and assigns, and no other Person shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.

	 	21.10.	 	Counterpart Facsimile Execution. For purposes of this Agreement, a document (or signature page thereto) signed and
transmitted by facsimile machine is to be treated as an original document. The signature of
any Person thereon, for purposes hereof, is to be considered as an original signature, and
the document transmitted is to be considered to have the same binding effect as an original
signature on an original document. At the request of any Party, any facsimile document is
to be re-executed in original form by the Persons who executed the facsimile document. No
Party may raise the use of a facsimile machine or the fact that any signature was
transmitted through the use of a facsimile machine as a defense to the enforcement of this
Agreement or any amendment or other document executed in compliance with this Section.

	 	21.11.	 	No Other Agreements. There are no other agreements between Administrative Agents, Lenders, and Reseller, oral
or written, concerning the subject matter of the Loan Documents, and all prior agreements
concerning the same subject matter, including any proposal letter or term sheets, are merged
into the Loan Documents and thereby extinguished.

	 	21.12.	 	Waiver of Right to Seek Punitive and Exemplary Damages. Reseller, Administrative Agents and each Lender each hereby irrevocably waives forever
any right to obtain or claim for punitive or exemplary damages from any other party to this
Agreement.

	 	21.13.	 	Negotiated Transaction. Reseller, Administrative Agents and each Lender represent each to the others that in the
negotiation and drafting of this Agreement and the other Loan Documents they have been
represented by and have relied upon the advice of counsel of their choice. Reseller and
Administrative Agents affirm that their counsel have both had substantial roles in the
drafting and negotiation of this Agreement and each Lender affirms that its counsel has
participated in the drafting and negotiation of this Agreement; therefore, this Agreement
will be deemed drafted by all of Reseller, Administrative Agents and Lenders, and the rule
of construction to the effect that any ambiguities are to be resolved against the drafter
will not be employed in the interpretation of this Agreement.

	 	21.14.	 	Incorporation By Reference. All of the terms of the other Loan Documents are incorporated in and made a part of this
Agreement by this reference.

	 	21.15.	 	Customer Identification — USA Patriot Act Notice. Each Administrative Agent and each Lender hereby notifies Reseller and each Guarantor
that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56,
signed into law October 26, 2001 (as amended from time
to time (including any successor statute) and together with all rules promulgated
thereunder, collectively, the “Act”), it is required to obtain, verify and record
information that identifies Reseller and any Guarantor, which information includes the name
and address of Reseller and any Guarantor and other information that will allow
Administrative Agents and each Lender to identify Reseller and each Guarantor in accordance
with the Act.

{remainder of page intentionally left blank;

signature pages follow}

 

89

 

IN WITNESS WHEREOF, the undersigned (by their duly authorized officers, where appropriate)
have executed this Second Amended and Restated Credit Agreement effective as of the date and year
first above written.

	 	 	 	 	 
	CASTLE PINES CAPITAL LLC,

as Administrative Agent and a Lender

 	 	 
	By:  	 	 	 
	 	Name:  	John Schmidt 	 	 
	 	Title:  	Managing Partner 	 	 
	 
	WELLS FARGO CAPITAL FINANCE, LLC

as Administrative Agent and Collateral Agent

 	 	 
	By:  	 	 	 
	 	Name:  	John Hanley 	 	 
	 	Title:  	Executive Vice President — Division Portfolio Manager 	 	 

Notice Address — Administrative Agents:

c/o Castle Pines Capital LLC

116 Inverness Drive East, Suite 375

Englewood, CO 80112

Attn: Mr. John Schmidt

FAX # (303) 209-1906

TEL # (303) 209-1941

jschmidt@castlepinescapital.com

with a copy to

Mr. Robert A. Breindel

General Counsel and Secretary

FAX # (303) 209-1906

TEL # (303) 209-1937

rbreindel@castlepinescapital.com

with a copy to

Wells Fargo Capital Finance, LLC

14241 Dallas Parkway, Suite 1300

Dallas, TX 75254

Attn: Mr. John C. Reniger

FAX # (972) 661-0537

TEL # (972) 851-9113

john.reniger@wellsfargo.com

 

i 

 

IN WITNESS WHEREOF, the undersigned (by their duly authorized officers, where appropriate) have
executed this Second Amended and Restated Credit Agreement effective as of the date and year first
above written.

	 	 	 	 	 
	SUNTRUST BANK

as a Lender

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 

Notice Address — Lender:

Mail Code GA- Atlanta-1981

303 Peachtree Street

23rd Floor

Atlanta, GA 30308

Attn:

FAX #

TEL #

 

ii 

 

IN WITNESS WHEREOF, the undersigned (by their duly authorized officers, where appropriate) have
executed this Second Amended and Restated Credit Agreement effective as of the date and year first
above written.

	 	 	 	 	 
	GTSI CORP., as Reseller

 	 	 
	By:  	 	 	 
	 	Name:  	Peter Whitfield 	 	 
	 	Title:  	Senior Vice President and Chief Financial Officer 	 	 

Notice Address for Reseller:

GTSI Corp.

2553 Dulles View Drive, Suite 100

Herndon, Virginia 20171-5219

Attn: Legal Department

Telecopy No.: 703-222-5217

Email:Legal@gtsi.com

with a copy (which shall not constitute notice) to:

Carter Strong, Esq.

Arent Fox LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

Telecopy No. 202-857-6395

strong.carter@arentfox.com

 

iii 

 

EXHIBIT 2.1

DEFINITIONS

As used in this Agreement, each of the following capitalized terms means:

Account — as to any Person, the right of such Person to payment for goods sold or
leased or for services rendered by such Person.

Account Debtor — the obligor on any Account.

Acquisition — any transaction or series of related transactions, consummated on
or after the Execution Date, by which Reseller or any Subsidiary thereof directly or indirectly (a)
acquires all or substantially all of the assets comprising one or more business units of any other
Person, whether through purchase of assets, merger or otherwise or (b) acquires (in one transaction
or as the most recent transaction in a series of transactions) at least (i) a majority (in number
of votes) of the stock or other securities of a corporation having ordinary voting power for the
election of directors (other than stock or other securities having such power only by reason of the
happening of a contingency), (ii) a majority (by percentage of voting power) of the outstanding
partnership interests of a partnership or (iii) a majority of the ownership interests in any
organization or entity other than a corporation or partnership.

Administrative Agent — each of Wells Fargo Capital Finance, LLC, a
Delaware limited liability company, and Castle Pines Capital LLC, a Delaware limited liability
company, in its respective capacity as an Administrative Agent under this Agreement, and each of
their respective successors and assigns in such capacity.

Advance — a Revolving Loan Advance, a Swingline Advance, an Interim Floorplan
Loan Advance or a Floorplan Loan Advance.

Advance Date — the date on which an Advance is requested by Reseller to be made,
is required by a Vendor Agreement to be made, or is otherwise contemplated or intended to be made,
as provided herein.

Affiliate — with respect to any Person, (a) any other Person who is a partner,
director, officer or stockholder of such Person; and (b) any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with such Person, and any
partner, director, officer or stockholder of such other Person described. For purposes of this
Agreement, control of a Person by another Person shall be deemed to exist if such other Person has
the power, directly or indirectly, either to (i) vote 25% or more of the securities having the
power to vote in an election of directors of such Person, or (ii) direct the management of such
Person, whether by contract or otherwise and whether alone or in combination with others.
Notwithstanding anything herein to the contrary, each of Eyak Technology, LLC, a Delaware limited
liability company (“EYAK”) and Northtide LLC, a Delaware limited liability company (“NORTHTIDE”)
shall not be deemed to be an Affiliate of Reseller for purposes of Section 3.1.6(e) as long
as Reseller does not have the power, directly or indirectly, either to (i) vote more than 37% of
the securities having the power to vote in an election of the board of directors or other governing
body of Eyak or Northtide, as the case may be, or (ii) direct the management of Eyak or Northtide,
as the case may be, whether by contract or otherwise and whether alone or in combination with
others.

Aggregate Facility — either the Aggregate Revolving Loan Facility, the Aggregate
Floorplan Loan Facility or the Letter of Credit Facility; “Aggregate Facilities”
means the plural of “Aggregate Facility”.

Aggregate Floorplan Loan Facility — the aggregate line of credit of Lenders as
stated in Section 3.2.1 to fund Floorplan Loan Advances, as it may be changed as provided
herein.

Aggregate Floorplan Loan Facility Limit — One Hundred Million Dollars
($100,000,000).

 

iv 

 

Aggregate Floorplan Loans — the from time to time outstanding principal balance
of all Floorplan Loan Advances.

Aggregate Revolving Loan Facility — the aggregate of each Lender’s Revolving Loan
Facility.

Aggregate Revolving Loan Facility Limit — shall mean Forty-Five Million
Dollars ($45,000,000).

Aggregate Revolving Loans — the from time to time outstanding principal balance
of all Revolving Loan Advances.

Agreement and this Agreement— this document (including every document
that is stated herein to be an Exhibit or Schedule, whether or not physically attached to this
document).

Allocable Share— is defined in Section 17.3.9.

Annual Line Fee — is defined in Section 5.1.

Anti-kickback Statute — 42 USC 1320a-7b(b).

Applicable Lending Office — for each Administrative Agent and each Lender and for
each Loan, the “Applicable Lending Office” of such Administrative Agent or such Lender (or of an
Affiliate of such Lender) designated for such Loan on the signature pages hereof or such other
office of such Lender (or an affiliate of such Administrative Agent or such Lender) as such
Administrative Agent or such Lender may from time to time specify to Administrative Agents (in the
case of another Lender) and Reseller by written notice in accordance with the terms hereof as the
office by which its Loans are to be made and maintained.

Appraisal — means any appraisal obtained pursuant to Section 14.19.

Approval — CPC’s approval to finance particular Inventory for Reseller which is
evidenced by CPC’s issuing a financing approval number to the Vendor of such Inventory.
"Approval” also means (a) any open-to-buy authorization given by CPC to a Vendor,
pursuant to which CPC may authorize such Vendor to assume CPC’s approval to finance inventory until
CPC affirmatively withdraws such authorization, and (b) any Approval for which CPC has not made an
Interim Floorplan Loan Advance or Lenders have not made a Floorplan Loan Advance as a result of
CPC’s not receiving the invoice from the Vendor for the Inventory which is subject to the Approval.

Approved Vendor — is defined in Section 3.2.5.

Asbestos Material — either asbestos or asbestos-containing materials.

Assigned Collateral — any tangible or intangible property of Reseller or any
other Person, now owned or hereafter acquired, other than the Personal Property Collateral, in
which Administrative Agents hold or will hold a Security Interest under a Collateral Assignment to
secure payment or performance of any of the Loan Obligations, and all proceeds thereof.

Assignment and Acceptance — means an Assignment and Acceptance in the
form of Exhibit 19.4.1.

Authorized Employee — is defined in Section 20.

Average Daily Balance — is defined in Section 4.3.3.

BANK PRODUCT — means any financial accommodation extended to Reseller or its Subsidiaries
by a Bank Product Provider (other than pursuant to the Credit Agreement) including: (a) credit
cards, (b) credit card processing services, (c) debit cards, (d) purchase cards (including
so-called “procurement cards” or “P-cards”), (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) transactions under Hedge Agreements.

 

v 

 

Bank Product Agreements — means those agreements entered into from time to time by
Reseller or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any
of the Bank Products.

Bank Product Collateralization — means providing cash collateral (pursuant to
documentation reasonably satisfactory to Collateral Agent) to be held by Collateral Agent for the
benefit of the Bank Product Providers in an amount determined by Administrative Agents as
sufficient to satisfy the reasonably estimated credit exposure with respect to the then existing
Bank Product Obligations.

Bank Product Obligations — means all obligations, liabilities, reimbursement obligations,
fees, or expenses owing by Reseller or its Subsidiaries to any Bank Product Provider pursuant to or
evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising
and all amounts that Reseller or its Subsidiaries are obligated to reimburse to Administrative
Agents or any member of the Lenders as a result of Administrative Agents or such of the Lenders
purchasing participations from, or executing guarantees or indemnities or reimbursement obligations
to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product
Provider to Reseller or its Subsidiaries.

Bank Product Provider — means initially, Wells Fargo Bank N.A., any Lender or any of their
Affiliates.

Bank Product Reserve — means, as of any date of determination, the amount of reserves that
Administrative Agents have established (based upon the Bank Product Providers’ reasonable
determination of the credit exposure of Reseller and its Subsidiaries in respect of Bank Products
that qualify as Bank Product Obligations pursuant to the requirements of the proviso set forth in
the definition of Bank Product Obligations) in respect of Bank Products then provided or
outstanding that qualify as Bank Product Obligations pursuant to the requirements of the proviso
set forth in the definition of Bank Product Obligations.

Bankruptcy Code — means Title 11 of the United States Code, as amended or
replaced from time to time.

Blocked Accounts — is defined in Section 6.1.2.1.

Borrowing Base — is defined in Section 3.1.5.

Borrowing Base Certificate — the certificate required to be delivered to
Administrative Agents and each Lender from time to time as provided in Section 14.15.1.

Business Day — a day other than a Saturday, Sunday, or other day on which
commercial banks are authorized or required to close under the Laws of either the United States or
the State of Colorado.

Cash Collateral — is defined in Section 3.4.3.

Charter Documents — the articles or certificate of incorporation and bylaws of a
corporation; the certificate of limited partnership and partnership agreement of a limited
partnership; the partnership agreement of a general partnership; the articles of organization and
operating agreement of a limited liability company; or the indenture of a trust.

COBRA — the Consolidated Omnibus Budget Reconciliation Act.

Code — the Internal Revenue Code of 1986 and all regulations thereunder of the
IRS.

Collateral — all assets and property of Reseller, any other Covered Person or any
Guarantor, including all of the Personal Property Collateral, the Assigned Collateral, and any
other property or asset in which Administrative Agents or a Lender has a Security Interest to
secure payment or performance of the Loan Obligations and all proceeds thereof.

 

vi 

 

Collateral Agent — Wells Fargo Capital Finance, LLC, a Delaware limited
liability company, in its capacity as Collateral Agent under this Agreement, and each of its
successors and assigns in such capacity.

Collateral Assignment — any of the collateral assignments required or
contemplated under Section 8.5 to be executed and delivered to Collateral Agent for the
benefit of Lenders.

Commercial Account — means all Accounts that are not Government Accounts.

Commitment Letter — means that certain Commitment Letter between Reseller and CPC
dated April 23, 2009 and signed by Reseller on May 8, 2009.

Commonly Controlled Entity — a Person which is under common control with another
Person within the meaning of Code Section 414(b) or (c).

Contra Reserves — at any date, a reserve based upon the estimated amount of
Accounts wherein the Account Debtor (i) is a creditor of Reseller, (ii) has, may assert, has
asserted or is reasonably expected to asset a right of set-off against Reseller or is otherwise
entitled to a price adjustment, or (iii) has disputed or is reasonably expected to dispute the
amount of the Account (whether by charge back or otherwise) or made, may make or is reasonably
expected to make any claim with respect to the Account or any other Account of Reseller which has
not been resolved, in each case, without duplication, to the extent of the amount owed by Reseller
to the Account Debtor, the amount of such actual or asserted right of set-off, or the amount of
such dispute or claim, as the case may be.

Contract — any contract, capital lease, operating lease, note, bond, indenture,
deed, mortgage, deed of trust, security agreement, pledge, hypothecation agreement, assignment, or
other agreement or undertaking, or any security.

Contributing Obligor — is defined in Section 17.3.9.

Contribution Obligation — is defined in Section 17.3.9.

Covered Person — is defined in Section 2.3.

CPC — is defined in the Preamble.

Current Assets — is defined in Section 16.1.

Current Liabilities — is defined in Section 16.1.

Daily Charge — is defined in Section 4.3.3.

Daily Rate — is defined in Section 4.3.3.

Default — any of the events listed in Section 17.1, without giving effect
to any requirement for the giving of notice, for the lapse of time, or both, or for the happening
of any other condition, event or act.

Default Rate — the rate of interest payable on each Revolving Loan, each
Swingline Loan and the other Loan Obligations (other than the Aggregate Floorplan Loans and Interim
Floorplan Loans) after its Maturity and in certain other circumstances as provided in Section
4.10.

Defaulting Lender — is defined in Section 7.8.1.

Disclosure Schedule — the disclosure schedules of Reseller as described herein,
attached hereto in Exhibit 12.

Distribution — is defined in Section 15.10.

DOL — the United States Department of Labor.

Dollars and the sign $ — lawful money of the United States.

 

vii 

 

Effective Date — the date when this Agreement is effective as provided in
Section 1.

Eligible Accounts — is defined in Section 3.1.6.

Eligible Assignee — means (a) a Lender (including any successor by merger); (b)
an Affiliate of a Lender; and (c) subject to Section 19.4.1.1, any other Person approved by
Administrative Agents; provided, however, that neither Reseller, Guarantor nor an
Affiliate of Reseller or Guarantor shall qualify as an “Eligible Assignee.”

Eligible Government Accounts — means Reseller’s Eligible Accounts (a) in which
Collateral Agent for the benefit of Lenders has a first priority, perfected Security Interest
(subject to no other Security Interest), (b) are owed to Reseller by a Governmental Authority (c)
have been created in compliance with STARK and the Anti-Kickback Statute and (d) are satisfactory
to Collateral Agent in its Permitted Discretion.

Eligible State/Local Contract — means a Contract between Reseller and a
Governmental Authority that is a state, local or municipal government or a department, agency,
division or instrumentality of state, local or municipal government, pursuant to which Reseller
will provide products or services and Seller’s obligations thereunder are secured in whole or part,
directly or indirectly by a Letter of Credit and which Contract is satisfactory to Collateral
Agent.

Eligible State/Local Letter of Credit means a Letter of Credit issued to support
or otherwise in respect of an Eligible State/Local Contract.

Employment Law — ERISA, the Occupational Safety and Health Act, the Fair Labor
Standards Act, or any other Law pertaining to the terms or conditions of labor or safety in the
workplace or discrimination or sexual harassment in the workplace.

Encumbrance — as to any item of real or personal property, any easement,
right-of-way, license, condition, or restrictive covenant, or zoning or similar restriction, that
is not a Security Interest but is enforceable by any Person other than the record owner of such
property.

Entitled Obligor — is defined in Section 17.3.9.

Environmental Law — the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act, the Clean Air Act, or
any other Law pertaining to environmental quality or remediation of Hazardous Material.

EPA — the United States Environmental Protection Agency.

ERISA — the Employee Retirement Income Security Act of 1974.

ERISA Affiliate — as to any Person, any trade or business (irrespective of
whether incorporated) which is a member of a group of which such Person is a member and thereafter
treated as a single employer under Code Section 414(b), (c), (m) or (o) or applicable Treasury
Regulations.

Event of Default — any of the events listed in Section 17.1 as to which
any requirement for the giving of notice, for the lapse of time, or both, or for the happening of
any further condition, event or act has been satisfied.

Execution Date — the date when this Agreement has been executed.

Extended Payment Due Date — the date identified as the “Extended Payment Due
Date” on the Extended Pay Notification, not to exceed 30 days past the Payment Due Date.

Existing Default — an Event of Default which has occurred, and which has not been
waived in writing by Required Lenders.

 

viii 

 

Extended Pay Notification — a communication sent via electronic mail messaging
providing confirmation of the acceptance by Administrative Agents of an item of Floorplanned
Inventory for application of the Extended Payment Due Date.

Extended Pay Outstandings — is defined in Section 3.1.2.

Facility — the Revolving Loan Facility of a Lender, the Swingline Facility of
CPC, the Interim Floorplan Loan Facility of CPC, the Floorplan Loan Facility of a Lender or the
Letter of Credit Facility of Letter of Credit Issuer. “FACILITIES” means all of the
foregoing Facilities.

Federal Funds Rate — for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to
Wells Fargo Bank, N.A. on such day on such transactions as determined by Administrative Agent.

Financial Statements — the most recent of the Initial Financial Statements and
the financial statements of Reseller required to be furnished to Administrative Agents under this
Agreement.

Floorplan Loan — any Lender’s Pro-Rata Share of the Aggregate Floorplan Loans.

Floorplan Loan Advance — an Advance by CPC that is to be funded by Lenders under
the Aggregate Floorplan Loan Facility.

Floorplan Loan Facility — the line of credit of each Lender as stated in
Section 3.2.1 to fund Floorplan Loan Advances.

Floorplan Loan Maximum Available Amount — is defined in Section 3.2.1.

Floorplan Payment Default — is defined in Section 17.1.1.

Floorplanned Inventory — means Reseller’s Inventory which has been originally
financed under the terms of this Agreement from Approved Vendors in which Collateral Agent has a
first priority, perfected Security Interest (subject to no other Security Interest) that is unsold
and not leased by Reseller and is in Reseller’s possession and control as of the date of
determination, excluding any Inventory reported by Reseller as demonstration items or Inventory
that is obsolete or otherwise unmerchantable.

FRB — the Board of Governors of the Federal Reserve System and any successor thereto or to
the functions thereof.

GAAP — those generally accepted accounting principles set forth in Statements of the
Financial Accounting Standards Board and in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants or which have other substantial authoritative
support in the United States and are applicable in the circumstances, as applied on a consistent
basis.

Government Account — means any Account with respect to which the Account Debtor
is a Governmental Authority.

Governmental Authority — the federal government of the United States; any State
of the United States; any local government or municipality within the territory or under the
jurisdiction of any of the foregoing, including any school district or similar authority and any
hospitals and other health provider or health care facility that is owned by, a state, municipal or
local government or any department, agency, division, or instrumentality of any of the foregoing;
and any court, arbitrator, or board of arbitrators whose orders or judgments are enforceable by or
within the territory of any of the foregoing.

 

ix 

 

Group — as used in Regulation 13-D issued by the Securities and Exchange
Commission.

Guarantor — each Person who from time to time executes and delivers to Collateral
Agent for the benefit of Lenders a Guaranty of part or all of the Loan Obligations.

Guaranty — each guaranty of part or all of the Loan Obligations executed and
delivered to Collateral Agent for the benefit of Lenders by any Guarantor.

Hazardous Material — means any hazardous, radioactive, toxic, solid or special
waste, material, substance or constituent thereof, or any other such substance (as defined under
any Law or regulation), including Asbestos Material.

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

Holdout Lender — is defined in Section 21.3.

Impositions — is defined in Section 4.11.2.

Indebtedness — as to any Person at any particular date, any contractual
obligation enforceable against such Person (i) to repay borrowed money; (ii) to pay the deferred
purchase price of property or services; (iii) to make payments or reimbursements with respect to
Bank Products, bank acceptances or to a factor; (iv) to make payments or reimbursements with
respect to letters of credit whether or not there have been drawings thereunder; (v) with respect
to which there is any Security Interest in any property of such Person; (vi) to make any payment or
contribution to a Multi-Employer Plan; (vii) that is evidenced by a note, bond, debenture or
similar instrument; (viii) under any conditional sale agreement or title retention agreement; (ix)
all Liabilities (as defined by GAAP) under any Capital Lease or (x) to pay interest or fees with
respect to any of the foregoing. Indebtedness also includes any other Obligation that either (i)
is non-contingent and liquidated in amount or (ii) should under GAAP be included in liabilities and
not just as a footnote on a balance sheet.

Indemnified Party — is defined in Section 19.6.1.

Indirect Obligation — as to any Person, (a) any guaranty by such Person of any
Obligation of another Person; (b) any Security Interest in any property of such Person that secures
any Obligation of another Person; (c) any enforceable contractual requirement that such Person (i)
purchase an Obligation of another Person or any property that is security for such Obligation, (ii)
advance or contribute funds to another Person for the payment of an Obligation of such other Person
or to maintain the working capital, net worth or solvency of such other Person as required in any
documents evidencing an Obligation of such other Person, (iii) purchase property, securities or
services from another Person for the purpose of assuring the beneficiary of any Obligation of such
other Person that such other Person has the ability to timely pay or discharge such Obligation,
(iv) grant a Security Interest in any property of such Person to secure any Obligation of another
Person, (v) otherwise assure or hold harmless the beneficiary of any Obligation of another Person
against loss in respect thereof; (d) any Obligation arising from the endorsement by such Person of
an instrument (e) any Obligation of such Person as a surety; and (f) any other contractual
requirement enforceable against such Person that has the same substantive effect as any of the
foregoing. The term Indirect Obligation does not, however, include the endorsement by a Person of
instruments for deposit or collection in the ordinary course of business or the liability of a
general partner of a partnership for Obligations of such partnership. The amount of any Indirect
Obligation of a Person shall be deemed to be the stated or determinable amount of the Obligation in
respect of which such
Indirect Obligation is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.

 

x 

 

Initial Financial Statements — the financial statements of Reseller set forth in
its Quarterly Report on Form 10-Q for the three-month period ended March 31, 2009.

Insolvency Event — is defined in Section 17.1.11.

Insurance Proceeds — insurance or condemnation proceeds payable as a consequence
of damage to or destruction of any of the Collateral.

Intangibles — is defined in Section 16.1.

Intellectual Property — as to any Person, any domestic or foreign patents or
patent applications of such Person, any inventions made or owned by such Person upon which either
domestic or foreign patent applications have not yet been filed, any domestic or foreign trade
names or trademarks of such Person, any domestic or foreign trademark registrations or applications
filed by such Person, any domestic or foreign service marks of such Person, any domestic or foreign
service mark registrations and applications by such Person, any domestic or foreign copyrights of
such Person, and any domestic or foreign copyright registrations or applications by such Person.

Intellectual Property Assignment — each assignment of Intellectual Property that
Reseller or any other Person executes and delivers to Collateral Agent for the benefit of Lenders,
either on or after the Execution Date.

Interim Floorplan Loan — CPC’s aggregate Interim Floorplan Loan Advances.

Interim Floorplan Loan Advance — an Advance by CPC under the Interim Floorplan
Loan Facility.

Interim Floorplan Loan Facility — the line of credit of CPC as stated in
Section 3.2.2 to fund Interim Floorplan Loan Advances.

Inventory — goods owned, leased or held by a Person for sale, lease, sublease or
resale or furnished or to be furnished under contracts for services, and raw materials, goods/work
in process, materials, component parts and supplies used or consumed, or held for use or
consumption in such Person’s business.

Investment — (a) a loan or advance of money or property to a Person, (b) stock or
other equity interest in a Person, (c) a debt instrument issued by a Person, whether or not
convertible to stock or other equity interest in such Person and which shall include any and all
deposit accounts at any depository bank, or (d) any other interest in or rights with respect to a
Person which include, in whole or in part, a right to share, with or without conditions or
restrictions, some or all of the revenues or net income of such Person.

IRS — the Internal Revenue Service.

Issuance fee — the fee payable to Letter of Credit Issuer as required in
Section 5.3.

Law — any statute, rule, regulation, order, judgment, award or decree of any
Governmental Authority.

Lender — any one of the Persons who are signatories to this Agreement and
obligated as lenders or any Person who takes an assignment from any of such signatories of all or a
portion of its rights and obligations as a lender under this Agreement pursuant to Section
19.4.1 and an Assignment and Acceptance as provided therein.

Lenders’ Exposure — the sum of the outstanding Aggregate Revolving Loans, the
Swingline Loans, the Interim Floorplan Loans, the Aggregate Floorplan Loans, and the Letter of
Credit Exposure.

Letter of Credit — any standby or commercial (documentary) letter of credit
issued by Letter of Credit Issuer pursuant to the Letter of Credit Facility.

 

xi 

 

Letter of Credit Exposure — the undrawn amount of all outstanding letters of
credit issued under the Letter of Credit Facility plus all amounts drawn on such letters of credit
and not yet reimbursed by Reseller.

Letter of Credit Facility — the agreement of Letter of Credit Issuer to issue
Letters of Credit as provided in Section 3.4.

Letter of Credit Fee — the fee payable to Administrative Agents and Lenders as
required in Section 5.4.

Letter of Credit Issuer — Wells Fargo Bank N.A., or any other Lender succeeding
to Wells Fargo Bank N.A.’s, agreement to issue Letters of Credit pursuant to Section 3.4.

LIBOR Increment — is defined in Section 4.6.

LIBOR Rate — is defined in Section 4.5.

LIBOR Rate Loan — means a Loan accruing interest at the LIBOR Rate.

LIBOR Underlying Rate — is defined in Section 4.8.

Loan — the Revolving Loan, the Swingline Loan, the Interim Floorplan Loan or a
Floorplan Loan.

Loan Documents — this Agreement, the Notes, the Guaranties, the Security
Documents, the Commitment Letter any reimbursement agreement between Reseller and Letter of Credit
Issuer, any documents between Administrative Agents and Reseller or Administrative Agents and any
Vendor relating to the Aggregate Floorplan Loan Facility or the Interim Floorplan Loan Facility,
and all other agreements, certificates, documents, instruments and other writings executed in
connection herewith, whether prior to the date hereof, on the date hereof, or after the date
hereof, and from time to time.

Loan Obligation payment — is defined in Section 17.3.9.

Loan Obligations — all of Reseller’s Indebtedness owing to Letter of Credit
Issuer, Administrative Agents (including the Obligations to Administrative Agents) or Lenders under
any of the Loan Documents, this Agreement, whether as principal, interest, fees or otherwise
(including any amounts set forth in Section 4.12), any reimbursement agreement between
Reseller and Administrative Agents (or their Affiliates in connection with the issuance of any
letter of credit) and all reimbursement obligations of Reseller to Letter of Credit Issuer or
Lenders with respect to the Letter of Credit Exposure, and all other agreements, certificates,
documents, instruments and other writings executed in connection therewith, all other Obligations
and liabilities of Reseller to Administrative Agents or Lenders under the Loan Documents (in each
case including all extensions, renewals, modifications, rearrangements, restructures, replacements
and refinancings of the foregoing, whether or not the same involve modifications to interest rates
or other payment terms), whether now existing or hereafter created, absolute or contingent, direct
or indirect, joint or several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, including the obligation of
Reseller to repay future advances by Administrative Agents or Lenders hereunder, whether or not
made pursuant to commitment and whether or not presently contemplated by Reseller, Administrative
Agents or Lenders in the Loan Documents.

Local Time — Denver, Colorado, time (as changed from time to time in accordance
with the terms hereof), provided, however, such time shall be a time zone located in the
continental United States.

Lockboxes — the lockboxes maintained as required in Section 6.1.2.1.

Material Adverse Effect — as to Reseller, all Guarantors, and all other Covered
Persons, taken as a whole, and with respect to any event or occurrence of whatever nature
(including any adverse determination in any litigation, arbitration, investigation or proceeding),
a material adverse effect on the business, operations, revenues, financial condition, property, or
business prospects of Reseller and each
other Covered Person taken as a whole, or the ability of Reseller, or such Covered Person to timely
pay or perform Reseller’s, and each other Covered Person’s Obligations generally taken as a whole,
or in the case of Reseller, and each Covered Person specifically, the ability of Reseller to pay or
perform any of Reseller’s Obligations to Administrative Agents or to any Lender, or in the case of
a Guarantor, the ability of such Guarantor to pay or perform any of its Obligations guarantied
under the terms of its Guaranty.

 

xii 

 

Material Agreement — as to Reseller, any Guarantor or any other Covered Person,
any Contract to which Reseller, any Guarantor or any Covered Person is a party or by which
Reseller, any Guarantor or any other Covered Person is bound which, if violated or breached, has or
is reasonably likely to have a Material Adverse Effect, including all Other Creditor Indebtedness
Documents.

Material Law — any separately enforceable provision of a Law whose violation by
Reseller, any Guarantor, or any other Covered Person has or is reasonably likely to have a Material
Adverse Effect.

Material License — (i) as to any Covered Person, any license, permit or consent
from a Governmental Authority or other Person and any registration and filing with a Governmental
Authority or other Person which if not obtained, held or made by such Covered Person has or is
reasonably likely to have a Material Adverse Effect, and (ii) as to any Person who is a party to
this Agreement or any of the other Loan Documents, any license, permit or consent from a
Governmental Authority or other Person and any registration or filing with a Governmental Authority
or other Person that is necessary for the execution or performance by such party, or the validity
or enforceability against such party, of this Agreement or such other Loan Document.

Material Obligation — as to Reseller, any Guarantor or any Covered Person, an
Obligation of such Person which if not fully and timely paid or performed has or is reasonably
likely to have a Material Adverse Effect.

Material Proceeding — any litigation, investigation or other proceeding by or
before any Governmental Authority (i) which involves any of the Loan Documents or any of the
transactions contemplated thereby, or involves a Covered Person or a Guarantor as a party or any
property of a Covered Person or a Guarantor, and has or is reasonably likely to have a Material
Adverse Effect, (ii) in which there has been issued an injunction, writ, temporary restraining
order or any other order of any nature which purports to restrain or enjoin the making of any
Advance, the consummation of any other transaction contemplated by the Loan Documents, or the
enforceability of any provision of any of the Loan Documents, (iii) which involves the actual or
alleged breach or violation by a Covered Person of, or default by a Covered Person under, any
Material Agreement, or (iv) which involves the actual or alleged violation by a Covered Person or
any Guarantor of any Material Law.

Maturity — as to any Indebtedness, the time when it becomes payable in full,
whether at a regularly scheduled time, because of acceleration or otherwise.

Maximum Swingline Amount — is defined in Section 3.1.3.

Monthly Billing Statement — is defined in Section 4.3.4.

Multi-Employer Plan — a Pension Benefit Plan which is a multi-employer plan as
defined in ERISA Section 4001(a)(3).

Note — any Revolving Note or the Swingline Note.

Notice Of Default — defined in Section 18.4.

Nsf Check — is defined in Section 6.4.2.

Obligation — as to any Person, any Indebtedness of such Person, any guaranty by
such Person of any Indebtedness of another Person, and any contractual requirement enforceable
against such Person that
does not constitute Indebtedness of such Person or a guaranty by such Person but which would
involve the expenditure of money by such Person if complied with or enforced.

 

xiii 

 

Obligations to Administrative Agents — exclusive of all the Loan Obligations, all
of Reseller’s Indebtedness owing to either Administrative Agent and Administrative Agents (whether
as principal, interest, fees or otherwise), all obligations of Reseller under agreements between
Reseller and Administrative Agents under which the exposure of Reseller to fluctuations in interest
rates is effectively limited, whether in the form of interest rate cap agreements, interest rate
swaps, or the like, or options therefor, all Indirect Obligations of Reseller owing to
Administrative Agents, all reimbursement obligations of Reseller to Administrative Agents with
respect to letters of credit, and all other obligations and liabilities of Reseller to
Administrative Agents (including all extensions, renewals, modifications, rearrangements,
restructures, replacements and refinancings of the foregoing, whether or not the same involve
modifications to interest rates or other payment terms), whether now existing or hereafter created,
absolute or contingent, direct or indirect, joint or several, secured or unsecured, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, or
acquired by Administrative Agent outright, conditionally or as collateral security from another,
including the obligation of Reseller to repay future advances by Administrative Agents, whether or
not made pursuant to commitment and whether or not presently contemplated by Reseller and
Administrative Agents, including any of the foregoing arising under this Agreement and the Loan
Documents.

Operating Account — that certain deposit account maintained at Wells Fargo Bank, N.A., in
the name of Reseller bearing account number 4121915276.

Other Creditor Indebtedness — individually and collectively, except for the
Indebtedness owing to Administrative Agents and Lenders, all of the Indebtedness of Reseller which
is secured by Inventory and proceeds thereof (excluding Accounts) of a Covered Person, and includes
Indebtedness constituting Liabilities (as defined by GAAP) under any Capital Lease, and
Indebtedness secured by purchase money Security Interests.

Other Creditor Indebtedness Documents — each document, instrument and agreement
evidencing all or any portion of the Other Creditor Indebtedness.

Overtrade Advances — is defined in Section 3.2.10.

Party — each of Reseller, Administrative Agents, Lenders and Collateral Agent.

Payment Due Date — that date identified as the “Payment Due Date” on the
Transaction Statement.

PBGC — the Pension Benefit Guaranty Corporation.

Pension Benefit Plan — any pension or profit-sharing plan which is covered by
Title of ERISA and all other benefit plans, in each case in respect of which a Covered Person or a
Commonly Controlled Entity of such Covered Person is an “employer” as defined in Section 3(5) of
ERISA.

Permitted Discretion — means a determination made in good faith and in the exercise of
reasonable business judgment (from the perspective of a secured asset-based lender).

Permitted Encumbrance — any easement, license or similar encumbrance on any
Covered Person’s real property, excluding any mortgage, assignment of rents or lease, deed of
trust, or financing statement.

Permitted Indebtedness — Indebtedness that Reseller is permitted under
Section 15.2 to incur, assume, or allow to exist.

Permitted Indirect Obligations — Indirect Obligations that Reseller is permitted
under Section 15.5 to create, incur, assume, or allow to exist.

Permitted Investments — Investments that Reseller is permitted under Section
15.1 to make in other Persons.

 

xiv 

 

Permitted Security Interests — Security Interests that Reseller is permitted
under Section 15.6 to create, incur, assume, or allow to exist.

Person — any individual, partnership, corporation, trust, unincorporated
association, joint venture, limited liability company, Governmental Authority, or other
organization in any form that has the legal capacity to sue or be sued. If the context so implies
or requires, the term Person includes Reseller.

Personal Property Collateral — all of the Goods, Equipment, Accounts, Inventory,
Instruments, Documents, Chattel Paper, General Intangibles, commercial tort claims, healthcare
receivables and other personal property of any kind or nature, and all accessions and additions
thereto of Reseller, any other Covered Person, or any other Person, whether now owned or hereafter
acquired and wherever located, and all proceeds thereof, in which Collateral Agent at any time
holds or purports to hold a Security Interest for the benefit of Lenders to secure payment and
performance of any of the Loan Obligations.

Pledge Agreement — any pledge agreement required or contemplated under
Section 8.4 to be executed and delivered to Collateral Agent for the benefit of Lenders
from time to time.

Portal— is defined in Section 20.

Prime Rate — means a fluctuating interest rate per annum equal to the prime, base
or reference rates of interest announced publicly from time to time (whether or not charged in each
instance) by Wells Fargo Bank, N.A. or any successor thereof (or any other financial institution
chosen by Administrative Agents, including Administrative Agents) as such bank’s prime, base, or
reference rate, which rate may not be the lowest rate of interest charged by such institution,
Administrative Agents, or any Lender to its respective customers or a favored rate and may not
correspond with future increases or decreases in interest rates charged by other lenders or market
interest rates in general.

Prime Rate Advance — means an Advance that will become a Prime
Rate Loan.

Prime Rate Loan — means a Loan accruing interest with reference
to the Prime Rate.

Pro-Rata Share — means the pro-rata share of each Lender in each Facility as set
forth on Exhibit 3, as each pro-rata share may increase or decrease depending upon the size
of each Facility as each Facility may be changed from time to time in accordance with the
provisions of this Agreement.

Register — is defined in Section 19.4.2.3.

Regulation A, Regulation D, Regulation T, Regulation U, and Regulation X —
respectively, Regulation A issued by the FRB, Regulation D issued by the FRB, Regulation T issued
by the FRB, Regulation U issued by the FRB, and Regulation X issued by the FRB.

Renewal — is defined in Section 3.6.3.

Replacement Lender — is defined in Section 21.3.

Reportable Event — a reportable event as defined in Title IV of ERISA or the
regulations thereunder.

Representations and Warranties — The representations and warranties made by
Reseller with respect to itself and other Covered Persons in Section 12, and the
representations and warranties made in any certificate, report, opinion or other document delivered
by Reseller pursuant to the Loan Documents, as such representations and warranties are modified
from time to time as provided in Section 13.

Required Lenders — defined in Section 2.4.

Reseller — is defined in Section 2.9.

Responsible Officer — as to any Person that is not an individual, partnership or
trust, the Chairman of the Board of Directors, the President, the chief executive officer, the
chief operating officer, the chief financial officer, the Treasurer, any Assistant to the
Treasurer, or any Vice President in charge of a
principal business unit; as to any partnership, any individual who is a general partner thereof or
any individual who has general management or administrative authority over all or any principal
unit of the partnership’s business; and as to any trust, any individual who is a trustee.

 

xv 

 

Restricted Payment — means (a) any distribution, dividend or payment to any Person on
account of any equity interest of Reseller, (b) loans by Reseller to any holder of equity interests
of Reseller, (c) any payment of management, consulting or similar fees payable by Reseller or any
Subsidiary of a Reseller to any Affiliate, or (d) any redemption, purchase, retirement, defeasance,
sinking fund or similar payment or any claim of rescission with respect to any equity interest of
Reseller.

Revolving Loan — any Lender’s Pro-Rata Share of the Aggregate Revolving Loans
including any Extended Pay Outstandings.

Revolving Loan Advance — an Advance by CPC that is to be funded by Lenders under
the Aggregate Revolving Loan Facility.

Revolving Loan Facility — the facilities of Lenders as stated in Section
3.1.1 to fund Revolving Loan Advances and to designate Indebtedness with respect to designated
Floorplanned Inventory arising under the Aggregate Floorplan Loan Facility as Extended Pay
Outstandings, as it may be changed as provided herein.

Revolving Loan Maximum Available Amount — is defined in Section
3.1.3.

Revolving Note — any note delivered to a Lender as required by Section
3.1.3 to evidence Reseller’s obligation to repay such Lender’s Revolving Loans.

Schedule of Accounts — a listing of each Account, including the aging of each
Account of Reseller, in such reasonable detail as Administrative Agents may reasonably require.

Schedule of Inventory — with regards to all Inventory (whether or not financed by
Administrative Agents and Lenders), a listing of each item of existing Inventory, new Inventory
purchases and items of Inventory sold or assigned within the past ninety (90) days from the date of
the last such schedule, containing the following: initial date of purchase or lease by Reseller of
each item of Inventory, description of each item of Inventory, actual unit cost of each item of
Inventory, number of units of each type of item of Inventory, total cost by type of Inventory,
location of each item of Inventory and such other information as requested by Administrative
Agents, all in such detail as Administrative Agents may reasonably require.

Securities Account — that certain securities account maintained at Wells Fargo Securities,
LLC, in the name of Reseller bearing account number 28062388.

Security Agreement — any security agreement required or contemplated under
Section 8.3 to be executed and delivered to Collateral Agent for the benefit of Lenders.

Security Documents — all of the documents required or contemplated to be executed
and delivered to Collateral Agent for the benefit of Lenders under Section 8, all other
documents granting a Security Interest in any asset of Reseller or any other Person to secure the
payment or performance of any of the Loan Obligations from time to time, including any such
documents listed on Exhibit 10.1.1 and any similar documents at any time executed and
delivered to Collateral Agent for the benefit of Lenders from time to time, by Reseller or any
other Person to secure payment or performance of any of the Loan Obligations.

Security Interest — as to any item of tangible or intangible property, any
interest therein or right with respect thereto or assignment thereof that secures an Obligation or
Indirect Obligation, whether such interest or right is created under a Contract, or by operation of
law or statute (such as but not limited to a statutory lien for work or materials), or as a result
of a judgment, or which arises under any form of
preferential or title retention agreement or arrangement (including a conditional sale agreement or
a lease) that has substantially the same economic effect as any of the foregoing.

 

xvi 

 

Settlement Date — is defined in Section 6.1.2.1(ii).

Solvent — as to any Person, (i) such Person not being “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act
(the “UFTA”), or any other Law, (ii) such Person not having unreasonably small capital,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or any other Law,
and (iii) such Person not being unable to pay such Person’s debts as they become due within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or any other Law.

STARK — 42 USC 1395nn.

State — any state of the United States.

State/Local Contract Task/Purchase Order Obligations — as of the referenced date,
the aggregate amount of all Accounts owned under all Eligible State/Local Contracts. 

Subject Accounts — is defined in Section 3.1.6.

Subordinated Indebtedness — is defined in Section 16.1.

Subsidiary — as to any Person, another Person with respect to which 50% or more
of the outstanding stock or other equity interests (including membership interests or partnership
interests) of any class having ordinary voting power (other than stock having such power only by
reason of the happening of a contingency) is at the time owned by such Person or by one or more
Subsidiaries of such Person.

Swingline Advance — an advance by CPC to Reseller under the Swingline Facility.

Swingline Facility — the discretionary facility of Administrative Agents as
stated in Section 3.3.1 to make Swingline Advances.

Swingline Loan — the from time to time outstanding principal balance of all
Swingline Advances.

Tangible Net Worth — is defined in Section 16.1.

Tax — as to any Person, any tax, duty, impost, deduction, charges, withholdings,
assessment, fee, or other charge levied by a Governmental Authority (and all liabilities associated
therewith) on the income or property of such Person, including any interest or penalties thereon,
and which is payable by such Person.

Termination date — is defined in Section 3.5.3.

Total Assets — is defined in Section 16.1.

Total Facility Limit — One Hundred Million Dollars ($100,000,000).

Total Liabilities — is defined in Section 16.1.

Transaction statement — is defined in Section 4.3.2.

UCC — the Uniform Commercial Code as in effect from time to time in the State of New York
or such other similar statute as in effect from time to time in New York or any other appropriate
jurisdiction.

United States — when used in a geographical sense, all the states of the United
States of America and the District of Columbia; and when used in a legal jurisdictional sense, the
government of the country that is the United States of America.

Unused Line Fee —  is defined in Section 5.5.

Vendor — a Person that sells Inventory to Reseller or to an Account Debtor of
Reseller.

 

xvii 

 

Vendor Agreement — is defined in Section 3.2.8.

Vendor Termination — is defined in Section 3.2.3.

Welfare Benefit Plan — any plan described by ERISA Section 3(1).

WFF — is defined in the Preamble.

 

xviii

 

EXHIBIT 3

LENDERS’ FACILITIES AND PRO-RATA SHARES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	FLOORPLAN	 	 	REVOLVING	 	 	 	 
	 	 	 	 	 	 	LOAN	 	 	LOAN	 	 	PRO-RATA	 
	LENDER	 	TOTALS	 	 	FACILITY	 	 	FACILITY*	 	 	SHARES	 
	Castle Pines
Capital LLC
	 	$	75,000,000	 	 	$	75,000,000	 	 	$	33,750,000	 	 	 	75.00	 
	SunTrust Bank
	 	$	25,000,000	 	 	$	25,000,000	 	 	$	11,250,000	 	 	 	25.00	 
	Aggregates
	 	$	100,000,000	 	 	$	100,000,000	 	 	$	45,000,000	 	 	 	100.00	 

	 	 	 
	*	 	Revolving Loan Facility includes a sub-limit for Letter of Credit Exposure. In accordance
with the Agreement, usage of each of the Floorplan Loan Facility and the Revolving Loan
Facility is limited to the extent of usage of the other Facility.

 

iii

 

EXHIBIT 7.13

FORM OF REQUEST FOR REVOLVING LOAN ADVANCE

Wells Fargo Capital Finance, LLC, as Administrative Agent

Castle Pines Capital LLC, as Administrative Agent

c/o Castle Pines Capital LLC

116 Inverness Drive East, Suite 375

Englewood, CO 80112

Attn: John Schmitt

	 	 	 	 	 
	 

	 	Re:
	 	Second Amended and Restated Credit Agreement effective May 31, 2011 among GTSI
Corp. (“Reseller”), Wells Fargo Capital Finance, LLC, as Administrative Agent
and Castle Pines Capital LLC, for itself as a Lender and as Administrative Agent, and
the other Lenders party thereto, as it may be amended, modified, restated or replaced
from time to time (the “Credit Agreement”)

Ladies and Gentlemen:

The undersigned is an Authorized Employee of GTSI Corp. and, as such is authorized to make and
deliver this Advance Request on behalf of Reseller pursuant to Section 7.13 of the Credit
Agreement. All capitalized words used herein that are defined in the Credit Agreement have the
meanings defined in the Credit Agreement.

Reseller hereby requests that Administrative Agents make a Revolving Loan Advance of
$_____ 
to Reseller under the terms of the Credit Agreement on _____.

The undersigned hereby certifies that:

	 	(i)	 	There is no Existing Default.

	 
	 	(ii)	 	The Representations and Warranties including those of each Guarantor in its
Guaranty are true and will be true as of the time of the requested Revolving Loan
Advance.

	 
	 	(iii)	 	The amount of the requested Revolving Loan Advance will not, when added to
the current amount of the Aggregate Revolving Loan, exceed the Revolving Loan Maximum
Available Amount.

	 
	 	(iv)	 	All conditions precedent under Sections 10.1 and 10.2 of the
Credit Agreement have been satisfied.

 

 

 

Executed this
 _____ 
day of
 _____,
 _____.

	 	 	 	 	 	 	 	 	 
	 	 	GTSI Corp.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Its	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Typed Name:	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

ii

 

EXHIBIT 10.1.1 

DOCUMENTS AND REQUIREMENTS LIST

All documents delivered to Administrative Agents by Reseller which include, but are not limited to,
the following documents:

Second Amended and Restated Credit Agreement;

Blocked Account Agreements (in form and substance acceptable to Administrative Agents), if
applicable;

Lock Box Agreements (in form and substance acceptable to Administrative Agents), if applicable;

Security Agreements (in form and substance acceptable to Administrative Agents), if applicable;

Officer’s Certificates for Reseller, with organizational documents, resolutions, current
certificates of status;

Current UCC Searches;

Insurance Certificates; and

Legal Opinion for Reseller.

 

iii

 

EXHIBIT 12 

DISCLOSURE SCHEDULES OF RESELLER

 

iiiii

 

EXHIBIT 14.14

FORM OF COMPLIANCE CERTIFICATE

TO:      Wells Fargo Capital Finance, LLC and Castle Pines Capital LLC, as Administrative Agents

This Compliance Certificate is furnished pursuant to the Second Amended and Restated Credit
Agreement effective May 31, 2011, among GTSI Corp. (“Reseller”), Wells Fargo Capital
Finance, LLC, as Administrative Agent and Castle Pines Capital LLC, for itself as a Lender and as
Administrative Agent, and the other Lenders party thereto, as it may be amended, modified, restated
or replaced from time to time (the “Credit Agreement”). Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings defined in the Credit
Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

	 	1.	 	I am the ______ of GTSI Corp.

	 
	 	2.	 	I have reviewed the terms of the Credit Agreement and the Loan Documents and I
have made, or have caused to be made under my supervision, a review of the transactions
and conditions of Reseller and each other Covered Person 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 event which constitutes a Default or
Event of Default as of the date of this Compliance Certificate; and to my knowledge all
of the Representations and Warranties (including those of each Guarantor in its
Guaranty) are true.

	 
	 	4.	 	[Use for annual financial statements: Schedule I attached hereto contains the
Financial Statements for Reseller for the fiscal year ended
 _____, which are
complete and correct in all material respects and have been prepared in accordance with
GAAP applied consistently throughout the period and with prior periods (except as
disclosed therein).]

	 
	 	 	 	[Use for monthly financial statements: Schedule I attached hereto contains the
Financial Statements for Reseller for the fiscal quarter ended
 _____, which are
complete and correct in all material respects (subject to normal year-end audit
adjustments) and have been prepared in accordance with GAAP applied consistently
throughout the period and with prior periods (except as disclosed therein).]

	 
	 	5.	 	Reseller and every other Covered Person is in compliance with all of the
covenants in the Credit Agreement, including the financial covenants in Section
16, and Schedule II attached hereto contains calculations based on Reseller’s
consolidated financial statements and other financial records that show Reseller’s
compliance with such financial covenants. The calculations and the data upon which
they are based are believed by me to be complete and correct.

 

iii

 

This Compliance Certificate, together with the Schedules hereto, is executed and delivered this

 _____
day of _____. The undersigned is a duly authorized Authorized
Employee.

	 	 	 	 	 	 	 
	GTSI CORP.	 	 
	 
	 	 	 	 	 	 
	 	 	 
	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	Title:
	 	 	 	 	 	 
	 	 	  	 	 

Schedules I and II are Attached

 

ii

 

SCHEDULE I TO COMPLIANCE CERTIFICATE

See current Financial Statements attached.

 

iii

 

SCHEDULE II TO COMPLIANCE CERTIFICATE

Note: the text of Section 16 of the Loan Agreement controls over any difference between
this certificate and Section 16 of the Loan Agreement. Reference should be made to the
Loan Agreement for more specific instructions regarding the calculation periods and how the
components of the financial covenants should be calculated.

All calculations done in accordance with GAAP on a consolidated basis, in accordance with the
provisions of the Credit Agreement and are based on the period ended

	 	 	 	 	 
	I. Minimum Tangible Net Worth
	 	 	 	 
	A. Tangible Net Worth required
	 	$	45,000,000	 
	B. Actual Tangible Net Worth
	 	$	                    	 
	 
	 	 	 	 
	II. Maximum Total Liabilities to Tangible Net Worth
	 	 	 	 
	 
	 	 	 	 
	A. Total Liabilities (see definition in Section 16.1)
	 	$	                    	 
	B. Tangible Net Worth (see definition in Section 16.1)
	 	$	                    	 
	C. Ratio of Item IIA to Item IIB
	 	__.__ to 1.00	 
	D. Maximum ratio permitted by Section 16.3
	 	 	5.25 to 1.00	 
	 
	 	 	 	 
	III. Minimum Current Ratio
	 	 	 	 
	 
	 	 	 	 
	A. Current Assets (see definition in Section 16.1)
	 	$	                    	 
	B. Current Liabilities (see definition in Section 16.1)
	 	$	                    	 
	C. Ratio of Item IIIA to Item IIIB
	 	__.__ to 1.00	 
	D. Minimum Current Ratio required by Section 16.4
	 	 	1.20 to 1.00	*
	 
	 	 	 	 
	IV. Minimum Debt Service Coverage
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated EBITDA (see definition in Section 16.1) for 12-month period
	 	$	                    	 
	B. Cash Taxes (see definition in Section 16.1)
	 	$	                    	 
	C. Subtract Item IVB from Item IVA:
	 	$	                    	 

 

iii

 

	 	 	 	 	 
	D. Consolidated Interest Expense (see definition in Section 16.1)
	 	$	                    	 
	E. Scheduled principal payments with respect to Debt
	 	$	                    	 
	F. Scheduled principal payments on Capital Lease Obligations
	 	$	                    	 
	G. Sum of Item IVD + Item IVE + Item IVF:
	 	$	                    	 
	H. Ratio of Item IVC to Item IVG:
	 	__.__ to 1.00	 
	I. Minimum Debt Service Coverage Ratio required by Section 16.5:
	 	 	1.25 to 1.00	 

	 	 	 
	*	 	Except that as of the last Business Day of the fiscal months of July, August and September, the
Minimum Current Ratio required by Section 16.4 is 1.15 to
1.00. _______

 

ii

 

EXHIBIT 14.15.1 

BORROWING BASE CERTIFICATE

SEE FORM ATTACHED

Attachments:

Schedule of Accounts and Schedule of Inventory

 

iii

 

EXHIBIT 18.13.2

FORM OF RELEASE DOCUMENTS

LEASE SALE CERTIFICATE

Reference is hereby made to that certain Second Amended and Restated Credit Agreement
effective as of May 31, 2011 by and among GTSI CORP., a Delaware corporation (“Reseller”),
certain Subsidiaries of Reseller as Guarantors, the lenders party thereto from time to time (the
“Lenders”), Administrative Agents party thereto and WELLS FARGO CAPITAL FINANCE, LLC, ,in
its capacity as Collateral Agent for the Lenders (the “Collateral Agent”) (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined have the meanings assigned to such terms in
the Credit Agreement).

The undersigned, [INSERT NAME OF RESELLER OFFICER], the [TITLE OF OFFICE OF RESELLER OFFICER]
of Reseller, hereby certified to the Collateral Agent that, to the best of my knowledge and belief,
after making due inquiry, and in my representative capacity on behalf of Reseller as follows:

1. I am the [TITLE OF OFFICE OF RESELLER OFFICER] of Reseller and in such capacity I am
authorized to execute and deliver this certificate for and on behalf of Reseller.

2. Reseller anticipates selling that certain lease and the related assets (as more fully
described on Exhibit A, the “Released Assets”) to [INSERT NAME OF PURCHASER] (“[Name of
Purchaser]”) pursuant to that certain [Master Purchase Agreement between Reseller and [Name of
Purchaser] dated [_____], and the applicable Purchase Schedule issued thereunder.

3. No Default or Event of Default is currently existing or result from the consummation of the
sale of the Released Assets.

4. The (a) disposition of the Released Assets pursuant to the Master Purchase Agreement is in
the ordinary course of Reseller’s business, (b) the sale of such Released Assets (i) is at fair
market value, (ii) for cash or cash equivalents, (iii) is without recourse to Reseller and (iv) is
otherwise permitted by Section 18.13 of the Credit Agreement.

IN WITNESS WHEREOF, I have executed this certificate on the
[_____] day of [_____], 20[_____].

	 	 	 	 	 	 	 
	 	 	GTSI CORP., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title	 	 

 

iii

 

EXHIBIT A

Released Assets

 

ii

 

LIEN RELEASE

[Date]

GTSI CORP.

2553 Dulles View Dr. Suite 100

Herndon, VA 20171

Ladies and Gentlemen:

Reference is hereby made to that certain Second Amended and Restated Credit Agreement
effective as of May 31, 2011 by an among GTSI CORP., a Delaware corporation (“Reseller”),
certain Subsidiaries of Reseller as Guarantors, the lenders party thereto from time to time (the
“Lenders”), Administrative Agents party thereto and WELLS FARGO CAPITAL FINANCE, LLC, in
its capacity as Collateral Agent for the Lenders (the “Collateral Agent”) (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined have the meanings assigned to such terms in
the Credit Agreement).

Pursuant to that certain certificate from Reseller to the Collateral Agent, dates as of
[_____], Reseller has notified the Collateral Agent of its intent to sell that certain lease and the
related assets (as more fully described on Exhibit A, the “Released Assets”) to [INSERT
NAME OF PURCHASER] (“[Name of Purchaser]”) pursuant to that certain [Master Purchase
Agreement between Reseller and [Name of Purchaser] dated [_____], and the applicable Purchase
Schedule issued thereunder.

In accordance with Section 18.13 of the Credit Agreement and based on the certifications made
by Reseller to the Collateral Agent, the undersigned hereby releases its Lien on the Released
Assets, as well as all proceeds of such Released Assets from the security interest that was granted
to such items of Collateral to the Collateral Agent pursuant to the Credit Agreement and the other
Loan Documents executed in connection therewith, and that, from the date of delivery of this letter
to you in accordance with the terms of the Credit Agreement and the other Loan Documents
henceforward, such Released Assets do not and shall not constitute Collateral held under the
provisions of the Credit Agreement or the other Loan Documents.

[remainder of this page intentionally left blank]

 

iii

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO CAPITAL FINANCE, LLC, as
the Collateral Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 

 

iv

 

EXHIBIT A

Released Assets

 

v

 

EXHIBIT 19.4.1

FORM OF ASSIGNMENT AND ACCEPTANCE 

DATED __________________, ________

Reference is made to the Second Amended and Restated Credit Agreement effective May 31, 2011
among GTSI Corp. (“RESELLER”), Wells Fargo Capital Finance, LLC, as Administrative Agent and Castle
Pines Capital LLC, for itself as a Lender and as Administrative Agent, and the other Lenders party
thereto, as it may be amended, modified, restated or replaced from time to time (the “CREDIT
AGREEMENT”). Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings defined in the Credit Agreement.

The “ASSIGNOR” and the “ASSIGNEE” referred to on Schedule 1 agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, without recourse and without
representation or warranty except as expressly set forth herein, and the Assignee hereby purchases
and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under
the Credit Agreement and the other Loan Documents as of the date hereof equal to the percentage
interest specified on Schedule I of all outstanding rights and obligations under the Credit
Agreement and the other Loan Documents. After giving effect to such sale and assignment, the
Assignee’s Facility and the amount of the Loans owing to the Assignee will be as set forth on
Schedule 1.

2. The Assignor (i) represents and warrants that (a) it has received the prior written consent
of Administrative Agents and (b) 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; (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 Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any Covered Person or any
Guarantor, or the performance or observance by any Covered Person or any Guarantor of any of its
obligations under the Loan Documents or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Notes held by the Assignor and requests that Administrative Agent
exchange such Notes for new Notes payable to the order of the Assignee in an amount equal to the
Facility assumed by the Assignee pursuant hereto and to the Assignor in an amount equal to the
Facility retained by the Assignor, if any, as specified on Schedule 1.

3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements referred to in Section 14.14 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 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) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to
Administrative Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue
Service or other forms required under the Credit Agreement.

 

vi

 

4. Following the execution of this Assignment and Acceptance, it will be delivered to
Administrative Agent for acceptance and recording by Administrative Agent. The effective date for
this Assignment and Acceptance (the “EFFECTIVE DATE”) shall be the date of acceptance hereof by
Administrative Agent, unless otherwise specified on Schedule 1.

5. Upon such acceptance and recording by Administrative Agent, 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.

6. Upon such acceptance and recording by Administrative Agent, from and after the Effective
Date, Administrative Agent shall make all payments under the Credit Agreement and the Notes in
respect of the interest assigned hereby (including all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods prior to the Effective
Date directly between themselves.

7. Assignor represents and warrants that it has paid an assignment and a processing fee of
$5,000 to Administrative Agent.

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

9. This Assignment and Acceptance may be executed in any number of counterparts and by
different Parties in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall be
effective as delivery of a manually executed counterpart of this Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date
specified thereon.

 

vii

 

SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE

	 	 	 	 	 
	Percentage of Assignor’s interest assigned:
	 	 	—	%
	 
	 	 	 	 
	Assignee’s Facility:
	 	$	                    	 
	 
	 	 	 	 
	Aggregate outstanding principal
amount of Loans assigned:
	 	$	                    	 
	 
	 	 	 	 
	Principal amount of Revolving Note payable to Assignee:
	 	$	                    	 
	 
	 	 	 	 
	Principal amount of Floorplan Loans payable to Assignee:
	 	$	                    	 
	 
	 	 	 	 
	Principal amount of Revolving Note payable to Assignor:
	 	$	                    	 
	 
	 	 	 	 
	Principal amount of Floorplan Loans payable to Assignor:
	 	$	                    	 
	 
	 	 	 	 
	Effective Date (if other
than date of acceptance by
Administrative Agent):
	 	 	*_________, ____	 

	 	 	 	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR], as Assignor	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	 	 	Dated:                     , 20___	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE], as Assignee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Domestic Lending Office:	 	 

	 	 	 
	*	 	This date should be no earlier than five Business Days after the delivery of this Assignment and
Acceptance to Administrative Agent.

 

iii

 

Accepted and Approved

this
 _____
day of _____, _____

	 	 	 	 	 	 	 
	ADMINISTRATIVE AGENTS:	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

 

ii

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