CHANNELLCOMMERCIAL CORPORATION as DomesticBorrower CHANNELLCOMMERCIAL CANADA INC. as CanadianBorrower AMENDED ANDRESTATED LOAN AND SECURITY AGREEMENT Dated: July 30, 2007 $20,000,000 BANK OF AMERICA,N.A. Individually andas Administrative Agent BANK OF AMERICA,N.A., CANADA BRANCH Individually andas Canadian Agent THE LENDERS NAMED HEREIN

Exhibit 10.1

CHANNELL COMMERCIAL CORPORATION

as Domestic Borrower

CHANNELL COMMERCIAL CANADA INC.

as Canadian Borrower

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Dated:  July 30, 2007

$20,000,000

BANK OF AMERICA, N.A.

Individually and as Administrative Agent

BANK OF AMERICA, N.A., CANADA BRANCH

Individually and as Canadian Agent

THE LENDERS NAMED HEREIN

TABLE OF CONTENTS

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of July 30, 2007, by and among BANK OF AMERICA, N.A. (“Bank of America”), with an office at 55 South Lake Avenue, Suite 900, Pasadena, California  91101, individually as a Lender and as administrative agent (“Administrative Agent”) for itself and any other financial institution which is or becomes a party hereto (each such financial institution, including Bank of America, Bank of America Canada (as defined below) as Canadian Lender, and each Canadian Participating Lender (as defined in Appendix A attached hereto)), is referred to hereinafter individually as a “Lender” and collectively as the “Lenders”), BANK OF AMERICA, N.A., CANADA BRANCH (“Bank of America Canada”), a Canadian corporation with an office at 200 Front Street West, Toronto, Ontario M5V 3L2 Canada, individually as the Canadian Lender and as Canadian agent (“Canadian Agent”) for itself, the Canadian Lender and any other financial entity which is or becomes a Canadian Participating Lender (as defined in Appendix A attached hereto), the Lenders, CHANNELL COMMERCIAL CORPORATION, a Delaware corporation, with its chief executive office and principal place of business at 26040 Ynez Road, Temecula, California ###-###-#### (“Domestic Borrower”), and CHANNELL COMMERCIAL CANADA INC., an Ontario corporation, with its chief executive office and principal place of business at 6185 Tomken Road, Units 3-5, Mississauga, Ontario  L5T 1X3  Canada (“Canadian Borrower”).  Domestic Borrower and Canadian Borrower are referred to collectively in this Agreement as  “Borrowers”.

A.            Capitalized terms used in this Agreement have the meanings assigned to them in Appendix A, General Definitions.  Accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied.

B.            This Agreement amends and restates in its entirety that certain Loan and Security Agreement dated as of September 25, 2002, among Borrowers, the other borrowers named therein, the lenders named therein, Bank of America, N.A. (as assignee of Banc of America Leasing and Capital, LLC, as successor-in-interest to Fleet Capital Corporation), as administrative agent, Bank of America, N.A., Canada Branch (as successor-in-interest to BABC Global Finance Inc., as assignee of Fleet Capital Global Finance, Inc., as assignee of Fleet Capital Canada Corporation), as Canadian agent, and Bank of America, N.A. (as assignee to BABC Global Finance Inc., as successor-in-interest to Fleet National Bank, London U.K. branch, trading as FleetBoston Financial), as UK agent (as heretofore amended, restated, extended, supplemented or otherwise modified, the “Prior Loan Agreement”). On the Closing Date, (i) all outstanding Revolving Credit Loans (as defined in the Prior Loan Agreement) under the Prior Loan Agreement shall be deemed outstanding Revolving Credit Loans hereunder, and (ii) all letters of credit issued and outstanding under the Prior Loan Agreement shall be deemed to be issued and outstanding hereunder.

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SECTION 1. CREDIT FACILITY

Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders agree to make a total credit facility of up to $20,000,000 available upon Borrower Representative’s request therefor, as follows:

1.1           Revolving Credit Facility.

1.1.1        Domestic Revolving Credit Loans.  Each Lender having a Domestic Revolving Credit Commitment (each, a “Domestic Lender”) agrees, severally and not jointly, for so long as no Default or Event of Default exists, to make loans denominated in U.S. Dollars (such loans relative to such Lender, its “Domestic Revolving Credit Loans”) to Domestic Borrower from time to time during the period from the date hereof to but not including the last day of the Term, as requested by Borrower Representative in the manner set forth in Section 3.1.1(a) hereof, provided, that no Domestic Revolving Credit Loan shall be made if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof:

(a)           the principal amount of the Domestic Revolving Credit Exposure of such Lender (which, for purposes of clarification, includes the Domestic LC Amount and outstanding Domestic LC Obligations, as further set forth in the definition of “Domestic Revolving Credit Exposure”) would exceed such Lender’s Domestic Revolving Credit Commitment minus such Lender’s Domestic Revolving Loan Percentage of Reserves, if any;

(b)           the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders would exceed the Aggregate Borrowing Base then in effect (minus Reserves, if any); or

(c)           the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders would exceed the Revolving Credit Maximum Amount minus the Canadian Revolving Credit Exposure.

Domestic Revolving Credit Loans may be borrowed as Domestic Base Rate Loans or Domestic LIBOR Loans.  Amounts borrowed under this Section 1.1.1 may be repaid in whole or in part and, up to but excluding the last day of the Term, reborrowed, all in accordance with the terms and conditions hereof.  The Domestic Revolving Credit Loans shall be further evidenced by, and repayable in accordance with the terms of, the applicable Revolving Notes and shall be secured by all of the Domestic Collateral.

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1.1.2        Canadian Revolving Credit Loans.

(a)           Subject to the terms and conditions hereof, the Canadian Lender agrees, for so long as no Default or Event of Default exists, to make loans to Canadian Borrower denominated in Canadian Dollars (each such loan or extension of credit, a “Canadian Revolving Credit Loan”) from time to time during the period from the date hereof to but not including the last day of the Term, as requested by the Borrower Representative in the manner set forth in Section 3.1.1(b) hereof; provided that no Canadian Revolving Credit Loan shall be made if, after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof:

(i)            the aggregate amount of the Canadian Revolving Credit Exposure of the Canadian Lender would exceed the Canadian Borrowing Base then in effect minus Reserves applicable to Canadian Revolving Credit Loans, if any, or

(ii)           the aggregate amount of the Domestic Revolving Credit Exposure of all the Lenders would exceed the Revolving Credit Maximum Amount minus the Canadian Revolving Credit Exposure.

The Canadian Revolving Credit Loans shall be further evidenced by, and repayable in accordance with the terms of, the applicable Revolving Note and shall be secured by all of the Canadian Collateral.  Amounts borrowed under this Section 1.1.2 may be repaid in whole or in part and, up to but excluding the last day of the Term, reborrowed, all in accordance with the terms and conditions hereof.  Upon the making of each such Canadian Revolving Credit Loan and subject to Section 3.2.6, each Canadian Participating Lender shall be deemed to have irrevocably and unconditionally purchased from the Canadian Lender, without recourse or warranty, an undivided interest and participation in each Canadian Revolving Credit Loan to the extent of such Canadian Participating Lender’s Canadian Percentage thereof.

(b)           Administrative Agent will determine the Dollar Equivalent amount with respect to any (i) Canadian Revolving Credit Loans as of the requested borrowing date, and (ii) outstanding Canadian Revolving Credit Loans as of the last Business Day of each month, or on such earlier date during such month as Administrative Agent reasonably believes necessary, for all other purposes under this Agreement where the determination of a Dollar Equivalent is required to be made.

1.1.3        Use of Proceeds.  The Revolving Credit Loans shall be used by Borrowers solely for (a) the satisfaction of certain existing Indebtedness of Borrowers identified on Schedule 1.1.3 hereto, (b) for the general operating capital needs of Borrowers in a manner consistent with the provisions of this Agreement and all applicable laws, and (c) for other purposes permitted under this Agreement.

1.1.4        Reserves.  Administrative Agent shall have the right to establish reserves (collectively, “Reserves”) in such amounts, and with respect to such matters, as Administrative Agent shall reasonably deem necessary or appropriate, against the amount of Revolving Credit Loans which Borrowers may otherwise request under this Section 1.1 with respect to (a) price adjustments, damages, unearned discounts, returned products or other matters for which credit memoranda are issued in the ordinary course of Borrowers’ and UK Guarantors’ businesses; (b) potential dilution related to Accounts of Borrowers and UK Guarantors, (c) shrinkage, spoilage and obsolescence of Domestic Borrower’s Inventory, (d) slow-moving Inventory of Domestic Borrower, (e) other sums chargeable against Borrowers’ Loan Accounts as Revolving Credit Loans under any section of this Agreement; (f) amounts owing by any Borrower or any UK Guarantor to any Person to the extent secured by a Lien

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on, or trust over, any Property of a Borrower, including Prior Claims, landlord, bailee and customs claims which are not subordinated to the satisfaction of Administrative Agent, (g) with respect to UK Guarantors, claims of Preferential Creditors of the UK Guarantors in their capacity as such, (h) with respect to Canadian Borrower, claims of Preferential Creditors of the Canadian Borrower in their capacity as such, (i) a permanent availability reserve, which Reserve shall be in the amount of $300,000 on the Closing Date and shall be subject to change after the Closing Date in the reasonable credit judgment of Administrative Agent, (j) the Bank Product Reserve, and (k) such other specific events, conditions or contingencies as to which Administrative Agent, in its reasonable credit judgment, determines Reserves should be established from time to time hereunder.  Notwithstanding the foregoing, Administrative Agent shall not establish any Reserves in respect of any matters relating to any items of Collateral that have been taken into account in determining Eligible Accounts and Eligible Inventory.

1.2           Domestic Letters of Credit; Domestic LC Guaranties.

(a)           Administrative Agent agrees, for so long as no Default or Event of Default exists and if requested by Borrower Representative on behalf of Domestic Borrower, to (i) issue Domestic Letters of Credit of Administrative Agent or an Affiliate of Administrative Agent for the account of Domestic Borrower on the date requested by Borrower Representative or (ii) execute Domestic LC Guaranties, by which Bank of America, or an Affiliate of Administrative Agent, on the date requested by Borrower Representative, shall guaranty the payment or performance by Domestic Borrower of its reimbursement obligations with respect to Domestic Letters of Credit, provided that (i) the Domestic LC Amount shall not exceed $2,000,000 at any time, (ii) the principal amount of the Domestic Revolving Credit Exposure of such Lender (which, for purposes of clarification, includes the Domestic LC Amount and outstanding Domestic LC Obligations, as further set forth in the definition of “Domestic Revolving Credit Exposure”) shall not exceed such Lender’s Domestic Revolving Credit Commitment minus such Lender’s Domestic Revolving Loan Percentage of Reserves, if any, (iii) the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders would exceed the Aggregate Borrowing Base then in effect (minus Reserves, if any), and (iv) the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders would exceed the Revolving Credit Maximum Amount minus the Canadian Revolving Credit Exposure.  No Domestic Letter of Credit which is a trade Domestic Letter of Credit or Domestic LC Guaranty of a trade letter of credit may have an expiration date that is more than 180 days after the date of issuance thereof; and no Domestic Letter of Credit which is a standby Domestic Letter of Credit or Domestic LC Guaranty of a standby letter of credit may have an expiration date that is more than one year from the date of issuance thereof, which expiration date may be extended for additional periods of up to one year, subject to the immediately following sentence.  No Domestic Letter of Credit or Domestic LC Guaranty may have an expiration date that is after 30 days prior to the last day of the Term.  Each Domestic Letter of Credit shall be denominated in U.S. Dollars.  Notwithstanding anything to the contrary

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contained herein, Domestic Borrower, Administrative Agent and Domestic Lenders hereby agree that all Domestic LC Obligations and all obligations of Domestic Borrower relating thereto shall be satisfied by the prompt issuance of one or more Domestic Revolving Credit Loans that are Domestic Base Rate Loans, which Domestic Borrower hereby acknowledges are requested and Domestic Lenders hereby agree to fund.  In the event that Domestic Revolving Credit Loans are not, for any reason, promptly made to satisfy all then existing Domestic LC Obligations, each Domestic Lender hereby agrees to pay to Administrative Agent, on demand, an amount equal to such Domestic LC Obligations multiplied by such Domestic Lender’s Domestic Revolving Loan Percentage, and until so paid, such amount shall be secured by the Domestic Collateral and shall bear interest and be payable at the same rate and in the same manner as Domestic Base Rate Loans.  Immediately upon the issuance of a Domestic Letter of Credit or a Domestic LC Guaranty under this Agreement, each Domestic Lender shall be deemed to have irrevocably and unconditionally purchased and received from Administrative Agent, without recourse or warranty, an undivided interest and participation therein equal to such Domestic LC Amount or Domestic LC Obligations multiplied by such Domestic Lender’s Domestic Revolving Loan Percentage.

1.3           Domestic Term Loan and Domestic Cap Ex Facilities.

1.3.1        Domestic Term Loan.  Each Domestic Lender, severally and not jointly, agrees to make a term loan (collectively, the “Domestic Term Loan”) to Domestic Borrower on the Closing Date, in the aggregate principal amount of such Domestic Lender’s Domestic Term Loan Commitment.  The Domestic Term Loan shall be repayable in accordance with the terms of the applicable Domestic Term Note and shall be secured by all of the Domestic Collateral, and shall be initially funded as a Domestic Base Rate Loan.  The proceeds of the Domestic Term Loan shall be used solely for the purposes that the Domestic Revolving Credit Loans are authorized to be used.

1.3.2        Domestic Cap Ex Loans.  Each Domestic Lender agrees, severally and not jointly, for so long as no Default or Event of Default exists, to make loans denominated in U.S. Dollars (such loans relative to such Lender, its “Domestic Cap Ex Loans”), from time to time during the period from the date hereof to but not including the last day of the Term, as requested by Borrower Representative in the manner set forth in Section 3.1.1(d) hereof, provided, that no Domestic Cap Ex Loan shall be made unless each of the following conditions has been satisfied, in form and substance satisfactory to Administrative Agent in its sole discretion:

(a)           after giving effect to the making of such Loan and the simultaneous application of the proceeds thereof, the aggregate principal amount of the outstanding Domestic Cap Ex Loans of such Lender would not exceed such Lender’s Domestic Cap Ex Loan Commitment;

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(b)           Borrower Representative shall have provided evidence to Administrative Agent, in form and substance satisfactory to Administrative Agent in its reasonable discretion, that Domestic Borrower will use the proceeds of each requested Domestic Cap Ex Loan for Equipment (i) to be used in Domestic Borrower’s business operations, (ii) to be located at a location in compliance with this Agreement, and (iii) subject to no Liens other than Permitted Liens;

(c)           Administrative Agent shall have received the invoice from the seller of the Equipment evidencing the cost of the Equipment Domestic Borrower proposes to purchase with the proceeds of each Domestic Cap Ex Loan, and such invoice discloses that the original principal amount of such requested Equipment Loan does not exceed (i) in the case of new Equipment, eighty percent (80%) of the cost thereof or (ii) in the case of used Equipment, fifty percent (50%) of the cost thereof, in each case, exclusive of transportation, installation, taxes, perishable tooling and other soft costs (as determined by Administrative Agent in its sole discretion) pertaining thereto;

(d)           Administrative Agent shall have received, in form and substance satisfactory to Administrative Agent in its reasonable discretion, evidence of insurance covering the Equipment Domestic Borrower proposes to purchase with the proceeds of each Domestic Cap Ex Loan;

(e)           the requested Domestic Cap Ex Loan is in a minimum original principal amount of $250,000;

(f)            the aggregate original principal amount of the requested Domestic Cap Ex Loan together with the original principal amount of all other Domestic Cap Ex Loans funded by Lenders during such fiscal year shall not exceed $3,000,000;

(g)           Borrower Representative shall have delivered or caused to be delivered to Administrative Agent and each Domestic Lender any and all documents, agreements and instruments deemed reasonably necessary by Administrative Agent or any Domestic Lender in connection with the making of such Domestic Cap Ex Loan including, without limitation, certificates of title, if any, for such Equipment and, subject to clause (h) below, a Domestic Cap Ex Note duly executed by Borrower;

(h)           Borrower Representative shall have delivered or caused to be delivered to each Domestic Lender a Domestic Cap Ex Note evidencing such Domestic Lender’s Domestic Cap Ex Loans upon the earlier of (i) the date which is 12 months following the initial Domestic Cap Ex Loan, (ii) the date which is 12 months following the most recent delivery of a Domestic Cap Ex Note, and (iii) the date upon which the aggregate principal amount of all Domestic Cap Ex Loans made since the most recent delivery of a Domestic Cap Ex Note exceeds $1,000,000; and

(i)            the proceeds of the Domestic Cap Ex Loans shall be used solely for the purpose of purchasing Equipment in accordance with the provisions of this Section 1.3.2.

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Domestic Cap Ex Loans may be borrowed as Domestic Base Rate Loans or Domestic LIBOR Loans.  Amounts borrowed under this Section 1.3.2 may not be reborrowed.  The Domestic Cap Ex Loans shall be further evidenced by, and repayable in accordance with the terms of, the applicable Domestic Cap Ex Notes and shall be secured by all of the Domestic Collateral.

1.4           Optional Reductions of Domestic Revolving Credit Commitments.  Domestic Borrower may, at its option from time to time upon not less than three Business Days’ prior written notice to Administrative Agent, permanently reduce ratably in part, the unused portion of the Domestic Revolving Credit Commitments, provided, however, that (i) each such partial reduction shall be in an amount of $1,000,000 or integral multiples of $250,000 in excess thereof and (ii) the Domestic Revolving Credit Commitments shall not be reduced to an aggregate amount of less than $10,000,000.  Except for charges under subsection 3.2.5 applicable to prepayments of LIBOR Advances, such reductions shall be without premium or penalty.

SECTION 2. INTEREST, FEES AND CHARGES

2.1           Interest.

2.1.1        Rates of Interest.

(a)           Interest shall accrue on the principal amount of the Domestic Base Rate Loans outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin then in effect plus the Domestic Base Rate.  Such rate of interest shall increase or decrease by an amount equal to any increase or decrease in the Domestic Base Rate, effective as of the opening of business on the day that any such change in the Domestic Base Rate occurs.

(b)           Interest shall accrue on the principal amount of Canadian Revolving Credit Loans outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin then in effect plus the Canadian Base Rate.  Such rate of interest shall increase or decrease by an amount equal to any increase or decrease in the Canadian Base Rate, effective as of the opening of business on the day that any such change in the Canadian Base Rate occurs.

(c)           Interest shall accrue on the principal amount of Domestic LIBOR Loans outstanding at the end of each day at a fixed rate per annum equal to the Applicable Margin then in effect plus the LIBOR for the applicable Interest Period for such Domestic LIBOR Loan.

(d)           Interest shall be paid solely in the same currency as the underlying Loan is made.

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2.1.2        Default Rate of Interest.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, the principal amount of all Loans shall bear interest at a rate per annum equal to 2.0% plus the interest rate otherwise applicable thereto (the “Default Rate”).

2.1.3        Maximum Interest.

(a)           In no event whatsoever shall the aggregate of all amounts deemed interest hereunder or under the Notes and charged or collected pursuant to the terms of this Agreement or pursuant to the Notes exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto (the “Maximum Rate”).  If any provisions of this Agreement or the Notes are in contravention of any such law, such provisions shall be deemed amended to conform thereto.  If at any time, the amount of interest paid hereunder is limited by the Maximum Rate, and the amount at which interest accrues hereunder is subsequently below the Maximum Rate, the rate at which interest accrues hereunder shall remain at the Maximum Rate, until such time as the aggregate interest paid hereunder equals the amount of interest that would have been paid had the Maximum Rate not applied.

(b)           Without limiting the provisions of Section 2.1.3(a), if any provision of this Agreement or any of the other Loan Documents would obligate Canadian Borrower to make any payment of interest under the Canadian Obligations or other amount in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by the applicable recipient of interest under the Canadian Obligations at a criminal rate (as such terms are construed under the Criminal Code (Canada)) then, notwithstanding such provision, such amount or rates shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such recipient of interest under the Canadian Obligations at a criminal rate, such adjustment to be effected, to the extent necessary, as follows:  (1) firstly, by reducing the amount or rates of interest required to be paid to the recipient under this Section 2.1.3(b); and (2) thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid by the Canadian Borrower which would constitute interest under the Canadian Obligations for purposes of Section 347 of the Criminal Code (Canada).  Notwithstanding the foregoing, and after giving effect to all adjustments contemplated thereby, if the recipient of payments by the Canadian Borrower shall have received an amount in excess of the maximum permitted by that section of the Criminal Code (Canada), then Canadian Borrower shall be entitled, by notice in writing to Canadian Agent for the benefit of such recipient, to obtain reimbursement from such recipient in an amount equal to such excess, and pending such reimbursement, such amount shall be deemed to be an amount payable by such recipient to Canadian Borrower.  Any amount or rate of interest under the Canadian Obligations referred to in this Section 2.1.3 shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term that any Loan to Canadian Borrower remains outstanding on the assumption that any charges,

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fees or expenses that fall within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be pro-rated over that period of time and otherwise be pro-rated over the period from the Closing Date to the date all Obligations have been indefeasibly paid in full and all commitments to make Canadian Revolving Credit Loans have been terminated and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by Canadian Agent shall be conclusive for the purposes of such determination.

2.2           Computation of Interest and Fees.

Interest, Domestic Letter of Credit and Domestic LC Guaranty fees and unused line fees hereunder shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days.  For the purpose of computing interest hereunder, (a) all items of payment received by Administrative Agent shall be applied by Administrative Agent on account of the Domestic Obligations (subject to final payment of such items) one (1) Business Day after receipt by Administrative Agent of such items in Administrative Agent’s account located in Hartford, Connecticut and (b) all items of payment received by Canadian Agent shall be applied by Canadian Agent on account of the Canadian Obligations (subject to final payment of such items) one (1) Business Day after receipt by Canadian Agent of such items in Canadian Agent’s account located in Toronto, Ontario, Canada.  Unless otherwise set forth herein, all fees shall be paid in the same currency as the underlying Loan is made or Domestic Letter of Credit or Domestic LC Guaranty is issued for which such fee is associated.

2.3           Fee Letter.

Borrowers shall pay to Administrative Agent certain fees and other amounts in accordance with the terms of the fee letter between Borrowers and Administrative Agent dated as of the date hereof (the “Fee Letter”).

2.4           Domestic Letter of Credit and Domestic LC Guaranty Fees.  

Each applicable Borrower shall pay to Administrative Agent (a) for Administrative Agent’s own account, a fronting fee equal to 0.25% multiplied by the available amount of each Domestic Letter of Credit (and, without duplication, Domestic LC Guaranty) at the time of issuance of such Domestic Letter of Credit (or, without duplication, Domestic LC Guaranty) and at the time of any amendment to increase the amount of each such Domestic Letter of Credit (or, without duplication, Domestic LC Guaranty)(on the amount of any such increase), (b) for the ratable benefit of the applicable Lenders, a fee equal to the Domestic LC Margin (provided that upon and after the occurrence of an Event of Default, and during the continuation thereof, the Domestic LC Margin shall be increased by 2.0% per annum) multiplied by the aggregate available amount of all Domestic Letters of Credit and Domestic LC Guaranties, as applicable, outstanding from time to time during the term of this Agreement (calculated for each such Domestic Letter of Credit or Domestic LC Guaranty from the date of issuance), which fees shall be payable monthly in arrears on the first day of each month hereafter, and (c) for the benefit of Bank of America as applicable, all normal and

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customary charges associated with the issuance, amendment, administration, processing, transfer or negotiation of such Domestic Letters of Credit and Domestic LC Guaranties, which fees and charges shall be deemed fully earned and shall be due and payable upon issuance, amendment, transfer or negotiation of each such Domestic Letter of Credit or Domestic LC Guaranty or such other times as notified by Administrative Agent, as applicable, and shall not be subject to rebate or proration upon the termination of this Agreement for any reason.

2.5           Unused Line Fee. 

Domestic Borrower shall pay to Administrative Agent, for the ratable benefit of the Domestic Lenders, a fee (the “Unused Line Fee”) equal to the Applicable Margin multiplied by the average daily amount by which the Revolving Credit Maximum Amount exceeds the sum of the outstanding principal balance of the Dollar Equivalent of the Revolving Credit Loans plus the Domestic LC Amount plus the outstanding principal balance of the Domestic Cap Ex Loans.  The Unused Line Fee shall be payable in Dollars monthly in arrears on the first day of each month hereafter.

2.6           Fronting Fees and Participation Fees.  The provisions of this Section 2.6 shall only be effective upon the initial assignment of any of the Loans hereunder by Bank of America or Canadian Lender to another lender in accordance with the provisions of this Agreement.  When and as interest is collected on Canadian Revolving Credit Loans, and until the Canadian Revolving Credit Loans are refunded in accordance with Section 3.2.6, Canadian Borrower shall distribute to the Canadian Lender a fee (the “Canadian Fronting Fee”) equal to 1/8 of one percent (0.125%) per annum of the outstanding principal balance of the Canadian Revolving Credit Loans, and Canadian Agent shall distribute to the Canadian Participating Lenders, ratably, a per annum fee (the “Canadian Participation Fee”) equal to the product of such Canadian Participating Lender’s Canadian Percentage times the Applicable Margin then in effect for Canadian Revolving Credit Loans with respect to the aggregate principal amount of Canadian Revolving Credit Loans outstanding from time to time during the term of this Agreement plus any Default Rate then in effect.  The Canadian Participation Fee shall be distributed by the Canadian Agent promptly upon receipt of the relevant Applicable Margin by the Canadian Agent pursuant to Section 2.1.1(b).  If Canadian Borrower pays less than all of the interest then due and owing by it for any period, that portion of the interest corresponding to the Canadian Participation Fee shall be deemed to be the last portion of interest paid or to be paid.  For purposes of Section 2.13, any interest distributed by Canadian Lender to a Canadian Participating Lender shall be deemed to have been paid by Canadian Borrower.

2.7           Prepayment Fee.

Subject to the next sentence, Domestic Borrower shall pay to Administrative Agent, for the ratable benefit of the Lenders, a fee in the event that Borrowers elect to repay the Loans in full and terminate all credit facilities provided pursuant to this Agreement.  Such fee shall be payable upon repayment of the Loans and shall be in an amount equal to one percent (1%) of the Total Credit Facility as of such date.

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2.8           Audit Fees.

Borrowers shall pay to Administrative Agent and Canadian Agent, as the case may be, an audit fee of $850 per day per auditor which is an employee of Administrative Agent or Canadian Agent (which daily audit fee shall be subject to change from time to time without prior notice), and, with respect to audits conducted by auditors which are not employees of Administrative Agent or Canadian Agent, such audit fees as shall be charged by such auditors, together with all reasonable out-of-pocket expenses incurred by Administrative Agent or Canadian Agent, as the case may be, in connection with audits of the books and records and Properties of Borrowers and their Subsidiaries and such other matters as Administrative Agent or Canadian Agent, as the case may be, shall deem appropriate in its sole judgment, whether such audits are conducted by employees of Administrative Agent or Canadian Agent, as the case may be, or by third parties hired by Administrative Agent or Canadian Agent, as the case may be; provided that Canadian Borrower shall not be responsible for such fees and expenses incurred with respect to Domestic Borrower.  Such fees and out-of-pocket expenses shall be payable within 10 days following the date of issuance by Administrative Agent or Canadian Agent, as the case may be, of a request for payment thereof to Borrower Representative.

2.9           Reimbursement of Expenses.

If, at any time or times regardless of whether or not an Event of Default then exists, (a) Administrative Agent and/or Canadian Agent incurs legal or accounting expenses or any other costs or out-of-pocket expenses (including, without limitation, costs or expenses of any third party consultants, and costs or expenses relating to due diligence, transportation, computer, duplication, appraisal, audit, insurance, searches, filing and recording of documents) in connection with (i) the negotiation and preparation of this Agreement or any of the other Loan Documents and the closing of the transactions contemplated hereby, Administrative Agent’s and Canadian Agent’s due diligence in connection therewith, any amendment of or modification of this Agreement or any of the other Loan Documents, or any sale or attempted sale of any interest herein to any assignee (including, without limitation, printing and distribution of materials to prospective Lenders and all costs associated with bank meetings, but excluding any closing fees paid to Lenders in connection therewith) or (ii) the administration of this Agreement or any of the other Loan Documents and the transactions contemplated hereby and thereby; or (b) Administrative Agent, Canadian Agent, or any Lender incurs legal or accounting expenses or any other costs or out-of-pocket expenses (including, without limitation, costs or expenses of any third-party consultants) in connection with (i) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Administrative Agent, Canadian Agent, any Lender, any Borrower or any other Person) relating to the Collateral, this Agreement or any of the other Loan Documents or any affairs of Borrower, any of its Subsidiaries, or any Guarantor; (ii) any attempt to enforce any rights of Administrative Agent, Canadian Agent, or any Lender against any Borrower or any other Person which may be obligated to Administrative Agent, Canadian Agent, or any Lender by virtue of this Agreement or any of the other Loan Documents, including, without limitation, the Account Debtors; or (iii) any attempt to inspect, verify, protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then all

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such reasonable legal and accounting expenses, other costs and out of pocket expenses of Administrative Agent, Canadian Agent, or any Lender, as applicable, shall be charged to Borrowers; provided, that Borrowers shall not be responsible for such costs and out-of-pocket expenses to the extent incurred because of the gross negligence or willful misconduct of Administrative Agent, Canadian Agent, or any Lender; and provided, further, that Canadian Borrower shall not be responsible for such fees and expenses incurred with respect to Domestic Borrower.  Borrowers shall also reimburse Administrative Agent and Canadian Agent for expenses incurred by Administrative Agent and Canadian Agent in their administration of the Collateral to the extent and in the manner provided in Section 2.11 hereof.

2.10         Bank Charges.

Borrowers shall pay to Administrative Agent and Canadian Agent any and all fees, costs or expenses which Administrative Agent or Canadian Agent pays to a bank or other similar institution arising out of or in connection with (a) the forwarding to Borrowers or any other Person on behalf of any Borrower, by Administrative Agent or Canadian Agent, of proceeds of Loans made to any Borrower pursuant to this Agreement and (b) the depositing for collection by Administrative Agent or Canadian Agent of any check or item of payment received or delivered to Administrative Agent or Canadian Agent on account of the Obligations; provided that Canadian Borrower shall not be responsible for such fees, costs or expenses incurred with respect to Domestic Borrower.

2.11         Collateral Protection Expenses; Appraisals.

All out-of-pocket expenses incurred in protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral, any and all excise, property, sales, and use taxes imposed by any state, federal, provincial or local authority on any of the Collateral or in respect of the sale thereof shall be borne and paid by Borrowers; provided that Canadian Borrower shall not be liable for any such expenses incurred with respect to Domestic Borrower.  If Borrowers fail to promptly pay any portion thereof when due, Administrative Agent or Canadian Agent, as the case may be, may, at its option, but shall not be required to, pay the same and charge Borrowers therefor.  Additionally, from time to time, if Administrative Agent or Canadian Agent or any Lender determines that obtaining appraisals is necessary in order for it to comply with applicable laws or regulations, or is otherwise necessary in the reasonable credit judgment of Administrative Agent or Canadian Agent, as the case may be, and at any time if a Default or an Event of Default shall have occurred and be continuing, Administrative Agent or Canadian Agent, as the case may be, may, at Borrowers’ expense, obtain appraisals from appraisers (who may be personnel of Administrative Agent or Canadian Agent, as the case may be), stating the then current fair market value or liquidation value of all or any portion of the real (or immovable) Property or personal (or movable) Property of Borrowers or any of their Subsidiaries.  Administrative Agent also shall have the right to obtain such appraisals periodically, at Borrowers’ expense, with respect to the real estate or equipment of Borrowers to confirm the continuing adequacy of the value of such Collateral as the basis for the Domestic Term Loan and Domestic Cap Ex Loans.  In the event that personnel of Administrative Agent or Canadian Agent conduct any such appraisal, Administrative Agent’s or Canadian Agent’s, as applicable, then-prevailing internal cost of such appraisal shall be payable by Borrowers (which cost per appraisal shall be subject to change from time to time with respect to future appraisals without prior notice).

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2.12         Payment of Charges.

All amounts chargeable to Domestic Borrower under this Agreement shall be Obligations secured by all of the Domestic Collateral, all amounts chargeable to Canadian Borrower under this Agreement shall be Obligations secured by all of the Canadian Collateral, and in each case shall be, unless specifically otherwise provided, payable on demand and shall bear interest from the date demand was made or such amount is due, as applicable, until paid in full at the rate applicable to that portion of the outstanding principal amount of the Domestic Term Loan bearing interest with reference to the Domestic Base Rate from time to time, with respect to amounts chargeable to Domestic Borrower, and at the rate applicable to Canadian Revolving Credit Loans, with respect to amounts chargeable to Canadian Borrower.

2.13         Taxes.

2.13.1      Subject to Section 2.13.5, all payments made by Domestic Borrower to any Lender under this Agreement or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, assessments, imposts, duties, fees, deductions or withholdings or similar charges, and all liabilities with respect thereto, now or hereafter imposed, levied, collected, withheld or assessed by any governmental authority, excluding, in the case of Administrative Agent and each Lender, any tax based upon or measured by net income (or taxes that are expressly in substitution for, or relieve the indemnitee from, any tax based on or measured by net income) imposed on Administrative Agent or such Lender (including, without limitation, any transferee or assignee (including a participation holder) (any such entity, a “Transferee”)), as the case may be, as a result of a present or former connection between the jurisdiction of the governmental authority imposing such tax and Administrative Agent or such Lender (excluding a connection arising solely from Administrative Agent or such Lender or Transferee having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document) (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called “Domestic Non-Excluded Taxes”).

2.13.2      Subject to Section 2.13.5, if Domestic Borrower shall be required by law to deduct or withhold any Domestic Non-Excluded Taxes or Further Taxes from or in respect of any sum payable hereunder to any Lender or Administrative Agent, then:

(a)           the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Lender or Administrative Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;

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(b)           Domestic Borrower shall make such deductions and withholdings;

(c)           Domestic Borrower shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and

(d)           Domestic Borrower shall also pay to each Lender or Administrative Agent for the account of such Lender, at the time interest is paid, Further Taxes in the amount that the respective Lender reasonably specifies is necessary to preserve the after-tax yield such Lender would have received if such Domestic Non-Excluded Taxes or Further Taxes had not been imposed.

2.13.3      Subject to Section 2.13.5, Domestic Borrower agrees to indemnify and hold harmless each Lender and Administrative Agent for the full amount of Domestic Non-Excluded Taxes and Further Taxes in the amount that the respective Lender or Administrative Agent reasonably specifies as necessary to preserve the after-tax yield such Lender or Administrative Agent would have received if such Domestic Non-Excluded Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Domestic Non-Excluded Taxes or Further Taxes were correctly or legally asserted.  Payment under this indemnification shall be made within 30 days after the date the applicable Lender or Administrative Agent makes written demand therefor specifying the amount and basis for such determination.

2.13.4      Within 30 days after the date of any payment by Domestic Borrower of Domestic Non-Excluded Taxes or Further Taxes, Domestic Borrower shall furnish to each Lender or Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Lender or Administrative Agent.

2.13.5      (a)  Each Lender or Transferee that is not a “United States Person” within the meaning of Section 7701(a)(30) of the Code, agrees that it will deliver to the Borrower Representative and Administrative Agent on or before the date it becomes a Lender or Transferee two duly completed and signed copies of Form W-8BEN, Form W-8ECI or Form W-8IMY or successor applicable form (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by the Domestic Borrower pursuant to this Agreement or the other Loan Documents) certifying that such Person is entitled to receive all payments under this Agreement and the other Loan Documents without deduction or withholding of any United States federal income taxes (or, in the case of a Transferee, that any such deduction or withholding is no greater than it would have been for the Lender (or the Transferee) that transferred or assigned its interest to such Transferee).  A Form W-8BEN completed and delivered by (i) certain foreign trusts, or (ii) persons claiming an exemption or reduced rate of withholding at source under an

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income tax treaty will not be considered duly completed unless the Form W-8BEN contains such person’s U.S. taxpayer identification number.  Each such Lender or Transferee also agrees (x) to deliver to the Borrower Representative and Administrative Agent two further completed and signed copies of one of such forms (or successor applicable forms) on or before the date that any such statement or form expires or becomes obsolete or after the occurrence of any event (including, without limitation, a change in such Lender’s or Transferee’s lending office) requiring a change in the most recent statement or form previously delivered by it to the Borrower Representative and Administrative Agent, and (y) to obtain such extensions of the time for filing and to renew such statements or forms and certifications thereof as may reasonably be requested by the Borrower Representative or Administrative Agent, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such statements or forms inapplicable or which would prevent such Lender or Transferee from duly completing and delivering any such statement or form with respect to it and such Lender or Transferee so advises the Borrower Representative and Administrative Agent.  If such Person fails to deliver the above forms or other documentation, then Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction, provided that the Domestic Borrower shall not be required to increase any such amounts payable to any Lender pursuant to Section 2.13.1, unless the obligation to pay such increased amounts would not have arisen but for a change in law.  Each Lender or Transferee that is a “United States person”, as defined under Section 7701(a)(30) of the Code, and that is not a corporation agrees that it will deliver to the Borrower Representative and Administrative Agent a Form W-9 stating that it is entitled to an exemption from United States backup withholding tax.

(b)           Domestic Borrower shall not be required to pay any additional amounts to any Lender or Transferee pursuant to this Section 2.13 if the obligation to pay such additional amounts arose solely from a failure by such Lender or Transferee to comply with the provisions of Section 2.13.5(a) above.

2.13.6      If any Lender or Transferee claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from withholding tax by providing an IRS Form W-8ECI (or any successor form) and such Lender or Transferee sells, assigns or (other than pursuant to Section 2.13.8 below) otherwise transfers all or part of the Obligations of Domestic Borrower to a transferee Lender or Transferee, such Lender or Transferee agrees to notify Administrative Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Domestic Borrower to such Lender or Transferee.  To the extent of such percentage amount, Administrative Agent will treat such Lender or Transferee’s IRS Form W-8BEN or W-8IMY (or any successor form) as no longer valid.

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2.13.7      If any Lender or Transferee claims an exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from withholding tax by providing Form W-8ECI (or successor form) and such Lender or Transferee grants a participation in the Obligations of Domestic Borrower to a transferee Lender or Transferee, such Lender or Transferee agrees to notify Administrative Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Domestic Borrower, and such Lender or Transferee agrees to undertake responsibility to provide to Administrative Agent such forms and documentation (including IRS Form W-8IMY and forms and documentation provided by each participant to the extent required by the IRS) to enable the Domestic Borrower to comply with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

2.13.8      (a)  If the IRS or any other governmental authority of the United States or other jurisdiction asserts a claim that Administrative Agent or Domestic Borrower did not properly withhold tax or any other amount from amounts paid to or for the account of any Lender or Transferee (because the appropriate form was not delivered or was not properly executed, or because such Lender or Transferee failed to notify Administrative Agent or Domestic Borrower of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender or Transferee shall indemnify Administrative Agent or Domestic Borrower fully for all amounts paid, directly or indirectly, by Administrative Agent or Domestic Borrower as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Administrative Agent or Domestic Borrower under this Section 2.13, together with all costs and expenses (including reasonable fees and expenses of legal counsel).  The obligation of the Lenders or Transferees under this Section 2.13.8 shall survive the payment of all Obligations and the resignation or replacement of Administrative Agent.

(b)           If  Administrative Agent or any Lender (or Transferee), as applicable, receives a refund of a tax for which a payment has been made by Domestic Borrower pursuant to this Section 2.13, which refund in the good faith judgment of Administrative Agent or such Lender (or Transferee), as the case may be, is attributable to such payment made by Domestic Borrower, then Administrative Agent or such Lender (or Transferee), as the case may be, shall reimburse Domestic Borrower for such amount as Administrative Agent or such Lender (or Transferee), as the case may be, determines will leave it, after such reimbursement, in the same position it would have been in if the payment of such tax and any payment by Domestic Borrower under this Section 2.13 had not been made.  Administrative Agent and each Lender (or Transferee), as the case may be, shall exercise good faith in determining whether to make a claim for any refund.  Subject to this Section 2.13.8(b), upon the request of Domestic Borrower, Administrative Agent or such Lender (or Transferee), as applicable, shall use reasonable efforts to cooperate with Domestic Borrower with a view to obtaining a refund of any Domestic Non-Excluded Taxes with respect to which Domestic Borrower has paid any amounts pursuant to this Section 2.13 and which Domestic Borrower reasonably believes were not correctly or legally asserted.

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2.13.9      Any and all payments or reimbursements made by the Canadian Borrower hereunder and under the other Loan Documents to Canadian Agent, Canadian Lender or any Canadian Participating Lender shall be made in  Canadian Dollars, as applicable, free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto; excluding, however, the following: franchise taxes and taxes imposed on the net income of  Canadian Agent or Canadian Lender by the jurisdiction under the laws of which  Canadian Agent or Canadian Lender is organized or doing business or any political subdivision thereof and franchise taxes and taxes imposed on its net income by the jurisdiction of Canadian Agent’s or Canadian Lender’s applicable lending office or any political subdivision thereof (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto, excluding such franchise taxes and taxes imposed on net income, herein “Canadian Non-Excluded Taxes”).  If Canadian Borrower (or Canadian Agent) shall be required by law or the administration thereof to deduct any such Canadian Non-Excluded Taxes from or in respect of any sum payable hereunder to Canadian Agent, Canadian Lender or any Canadian Participating Lender, then the sum payable hereunder shall be increased as may be necessary so that, after all required deductions are made, Canadian Agent, Canadian Lender and any such Canadian Participating Lender receives an amount equal to the sum it would have received had no such deductions been made.  Whenever any Canadian Non-Excluded Taxes are deducted by Canadian Borrower, as soon as practicable thereafter, the Borrower Representative shall send to Canadian Agent for its own account or for the account of the Canadian Lender or Canadian Participating Lenders, as the case may be, a certified copy of an original official receipt received by Canadian Borrower showing payment thereof or other evidence of such payment reasonably satisfactory to the Canadian Agent.  If Canadian Borrower fails to pay any Canadian Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to Canadian Agent the required receipts or other required documentary evidence, Canadian Borrower shall indemnify Canadian Agent, Canadian Lender and Canadian Participating Lenders for any incremental taxes, interest or penalties that may become payable by Canadian Agent, Canadian Lender or Canadian Participating Lenders as a result of any such failure.  Without in any way limiting the foregoing, Canadian Borrower shall indemnify and hold harmless Canadian Agent, Canadian Lender and Canadian Participating Lenders for any Canadian Non-Excluded Taxes (including related interest and penalties, if any) that may be incurred by Canadian Agent, Canadian Lender and/or Canadian Participating Lender in respect of arrangements pertaining to the refunding, pursuant to Section 3.2.6, of the Canadian Revolving Credit Loans and the Canadian Participation Fees provided for pursuant to Section 2.6.

2.13.10    The agreements in this Section 2.13 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

SECTION 3. LOAN ADMINISTRATION

3.1           Manner of Borrowing Loans.  Borrowings under the credit facility established pursuant to Section 1 hereof shall be as follows:

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3.1.1        Loan Requests.

(a)           Domestic Revolving Credit Loan Requests.  A request for a Domestic Revolving Credit Loan shall be made, or shall be deemed to be made, in the following manner:  (i) Borrower Representative may give Administrative Agent notice of its intention to borrow, in which notice Borrower Representative shall specify the amount of the proposed borrowing and the proposed borrowing date, no later than 10:00 a.m. Los Angeles time on the proposed borrowing date (or in accordance with Section 3.1.7 in the case of a request for a Domestic LIBOR Loan), provided, however, that no such request may be made at a time when there exists a Default or an Event of Default; and (ii) the becoming due of any amount required to be paid under this Agreement, or the Notes, by Domestic Borrower, whether as interest or for any other Domestic Obligation, shall be deemed irrevocably to be a request for a Domestic Revolving Credit Loan bearing interest in relation to the Domestic Base Rate on the due date in the amount required to pay such interest or other Domestic Obligation.

(b)           Canadian Revolving Credit Loan Requests.  A request for a Canadian Revolving Credit Loan shall be made, or shall be deemed to be made, in the following manner: (i) Borrower Representative may give Administrative Agent and Canadian Agent notice of its intention to borrow, in a form specified by Administrative Agent and the Canadian Agent, which notice must be received by each of Administrative Agent and the Canadian Agent prior to 10:00 a.m. (Los Angeles time) one (1) Business Day prior to the requested borrowing date (provided, however, that no such request may be made at a time when there exists a Default or an Event of Default) specifying: (A) the amount of the proposed borrowing (which shall be no less than cdn$100,000) and (B) the requested borrowing date, which shall be a Business Day; and (ii) the becoming due of any amount required to be paid under this Agreement, or the Notes, by Canadian Borrower, whether as interest or for any other Canadian Obligation, shall be deemed irrevocably to be a request for a Canadian Revolving Credit Loan on the due date in the amount required to pay such interest or other Canadian Obligation.

(c)           Domestic Cap Ex Loan Requests.  A request for a Domestic Cap Ex Loan shall be made, or shall be deemed to be made,  in the following manner:  Borrower Representative may give Administrative Agent notice of its intention to borrow, in which notice Borrower Representative shall specify the amount of the proposed borrowing and the proposed borrowing date, no later than 10:00 a.m. Los Angeles time on the proposed borrowing date (or in accordance with Section 3.1.7 in the case of a request for a Domestic LIBOR Loan), provided, however, that no such request may be made at a time when there exists a Default or an Event of Default.  In addition, Borrower shall also comply with the requirements of Section 1.3.2 with respect to such Domestic Cap Ex Loan.

3.1.2        Disbursement.  Each Borrower hereby irrevocably authorizes Administrative Agent and Canadian Agent, as the case may be, to disburse the proceeds of each Revolving Credit Loan and each Domestic Cap Ex Loan requested, or deemed to be requested, pursuant to Section 3.1.1 as follows:  (a) the proceeds of each Revolving Credit

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Loan requested under Sections 3.1.1(a)(i) or 3.1.1(b)(i) shall be disbursed by Administrative Agent or Canadian Agent, as the case may be, in Dollars or Canadian Dollars, as the case may be, in immediately available funds, in the case of the initial borrowing, in accordance with the terms of the written disbursement letter from Borrower Representative, and in the case of each subsequent borrowing, by wire transfer to such bank account as may be agreed upon by Borrower Representative and Administrative Agent from time to time; (b) the proceeds of each Revolving Credit Loan deemed requested under Section 3.1.1(a)(ii) or 3.1.1(b)(ii)  shall be disbursed, as the case may be, by Administrative Agent by way of direct payment of the relevant interest or other Domestic Obligation or by Canadian Agent by way of direct payment of the relevant interest or other Canadian Obligation; and (c) the proceeds of each Domestic Cap Ex Loan requested under Section 3.1.1(c) shall be disbursed by Administrative Agent in Dollars in immediately available funds, as directed by Borrower Representative in writing with respect to such Domestic Cap Ex Loan.

3.1.3        Payment by Lenders.  Administrative Agent shall give to each Domestic Lender prompt written notice (which notice shall specify the requested date and amount of the applicable Domestic Revolving Credit Loan or Domestic Cap Ex Loan, whether such Domestic Revolving Credit Loan or Domestic Cap Ex Loan shall be a Domestic LIBOR Loan, and the amount of each Domestic Lender’s advance thereunder (in accordance with its applicable Domestic Revolving Loan Percentage or Domestic Cap Ex Loan Percentage, as applicable)) by facsimile, telex or cable of the receipt by Administrative Agent from Borrower Representative of any request for a Domestic Revolving Credit Loan or a Domestic Cap Ex Loan, and Administrative Agent shall give to each Canadian Participating Lender prompt written notice by facsimile, telex or cable of the receipt by Administrative Agent from Canadian Lender of any Notice of Canadian Revolving Loan Refunding (as defined in Section 3.2.6 below).  Each Domestic Lender shall, and each Canadian Participating Lender shall, not later than 12:00 noon (Los Angeles time) or 12:00 noon (Toronto time), respectively, on the applicable requested date of funding, wire to a bank designated by Administrative Agent the amount of that Domestic Lender’s Domestic Revolving Loan Percentage of the requested Domestic Revolving Credit Loan, Domestic Lender’s Domestic Cap Ex Loan Percentage of the requested Domestic Cap Ex Loan, or that Canadian Participating Lender’s Canadian Percentage of the outstanding principal amount of Canadian Revolving Credit Loans.  The failure of any Domestic Lender or Canadian Participating Lender to make the Domestic Revolving Credit Loans, Domestic Cap Ex Loans, or Canadian Revolving Credit Loans refunding, as the case may be, to be made by it shall not release any other Domestic Lender or Canadian Participating Lender, as the case may be, of its obligations hereunder to make its Domestic Revolving Credit Loan, Domestic Cap Ex Loans, or Canadian Revolving Credit Loan refunding, as the case may be.  Neither Administrative Agent, or Canadian Agent, nor any other Domestic Lender or Canadian Participating Lender shall be responsible for the failure of any other Domestic Lender or Canadian Participating Lender, as the case may be, to make the Domestic Revolving Credit Loan, the Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the case may be, to be made by such other Domestic Lender or Canadian Participating Lender, as the case may be.  The foregoing notwithstanding, Administrative Agent or Canadian Agent, as applicable, in its sole discretion, may from its own funds make a Domestic Revolving Credit

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Loan on behalf of any Domestic Lender, or a Domestic Cap Ex Loan, or a Canadian Revolving Credit Loan refunding on behalf of any Canadian Participating Lender.  In such event, the Domestic Lender or Canadian Participating Lender on behalf of whom Administrative Agent or Canadian Agent made the Domestic Revolving Credit Loan, Domestic Cap Ex Loan or Canadian Revolving Credit Loan refunding, as the case may be, shall reimburse Administrative Agent or Canadian Agent, as applicable, for the amount of such Domestic Revolving Credit Loan, Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the case may be, made on its behalf, on a weekly (or more frequent, as determined by Administrative Agent or Canadian Agent, as applicable, in its sole discretion) basis.  The entire amount of interest attributable to such Domestic Revolving Credit Loan, Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the case may be, for the period from the date on which such Domestic Revolving Credit Loan, Domestic Cap Ex Loan, or Canadian Revolving Credit Loan refunding, as the case may be, was made by Administrative Agent or Canadian Agent on such Domestic Lender’s or Canadian Participating Lender’s, as the case may be, behalf until Administrative Agent or Canadian Agent, as applicable, is reimbursed by such Domestic Lender or Canadian Participating Lender, as the case may be, shall be paid to Administrative Agent or Canadian Agent, as applicable, for its own account.

3.1.4        Authorization.

(a)           Domestic Borrower hereby irrevocably authorizes Administrative Agent to advance on behalf of Domestic Borrower, and to charge to Domestic Borrower’s Domestic Loan Account hereunder as a Domestic Revolving Credit Loan (which shall be a Domestic Base Rate Loan), a sum sufficient to pay all interest accrued on the Domestic Obligations during the immediately preceding month and to pay all fees, costs and expenses and other Domestic Obligations at any time owed by Domestic Borrower to Administrative Agent or any Lender hereunder.

(b)           Canadian Borrower hereby irrevocably authorizes Canadian Agent to advance on behalf of Canadian Borrower, and to charge to Canadian Borrower’s Canadian Loan Account hereunder as a Canadian Revolving Credit Loan, a sum sufficient to pay interest accrued on the Canadian Obligations during the immediately preceding month and to pay all fees, costs and expenses and other Canadian Obligations at any time owed by Canadian Borrower to Canadian Agent, Canadian Lender, or Canadian Participating Lenders hereunder.

3.1.5        Domestic Letter of Credit and Domestic LC Guaranty Requests.  A request for a Domestic Letter of Credit or Domestic LC Guaranty shall be made in the following manner:  Borrower Representative may give Administrative Agent a written notice of its request for the issuance of a Domestic Letter of Credit or Domestic LC Guaranty, not later than 10:00 a.m. Los Angeles time, three (3) Business Days before the proposed issuance date thereof, in which notice Borrower Representative shall specify the proposed beneficiary, issuance date, expiration date and format and wording for the Domestic Letter of Credit or Domestic LC Guaranty being requested (which shall be satisfactory to Administrative Agent, or any other Person asked to issue such Domestic Letter of Credit or Domestic LC Guaranty); provided, that no such request may be made at a time when there exists a Default or Event of Default.  Such request shall be accompanied by an executed application and reimbursement agreement in form and substance satisfactory to Administrative Agent and the Person being asked to issue the Domestic Letter of Credit or Domestic LC Guaranty, as well as any required resolutions.

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3.1.6        Method of Making Requests.  As an accommodation to Borrowers, unless a Default or an Event of Default is then in existence, (a) Administrative Agent shall permit telephonic requests for Domestic Revolving Credit Loans or Domestic Cap Ex Loans to Administrative Agent; provided that in the case of requests for Domestic Cap Ex Loans, Borrower has previously delivered to Administrative Agent the written materials required by Section 1.3.2, (b) Administrative Agent may, in its discretion, permit electronic transmittal of requests for Domestic Letters of Credit and Domestic LC Guaranties to Administrative Agent, and (c) Administrative Agent may, in Administrative Agent’s discretion, permit electronic transmittal of instructions, authorizations, agreements or reports to Administrative Agent.  All other instructions, authorizations, agreements or reports must be in written hard copy form (including by facsimile).  Unless Borrower Representative specifically directs Administrative Agent in writing not to accept or act upon telephonic or electronic communications from Borrower Representative, Administrative Agent shall not have any liability to Borrowers for any loss or damage suffered by Borrowers as a result of Administrative Agent’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically or electronically and purporting to have been sent to Administrative Agent by an authorized officer of Borrower Representative, and Administrative Agent shall not have any duty to verify the origin of any such communication or the authority of the Person sending it.  Each telephonic request for a Revolving Credit Loan, Domestic Cap Ex Loan, Domestic Letter of Credit or Domestic LC Guaranty accepted by Administrative Agent, hereunder shall be promptly followed by a written confirmation of such request from Borrower Representative to Administrative Agent.

3.1.7        Domestic LIBOR Loans.  Notwithstanding the provisions of Section 3.1.1(a), in the event Borrower Representative desires to obtain a Domestic LIBOR Loan, Borrower Representative shall give Administrative Agent prior, written, irrevocable notice no later than 10:00 a.m. Los Angeles time on the second (2nd) Business Day prior to the requested borrowing date specifying (i) Borrower Representative’s election to obtain a Domestic LIBOR Loan, (ii) the date of the proposed borrowing (which shall be a Business Day), (iii) the length of the Interest Period, and (iv) the amount to be borrowed, which amount shall be in a minimum principal amount of $1,000,000 and may increase in integral multiples of $500,000.  In no event shall Domestic Borrower be permitted to have outstanding at any one time in the aggregate more than five (5) different Domestic LIBOR Loans.

3.1.8        Conversion of Domestic Base Rate Loans.  Provided that no Default or Event of Default has occurred which is then continuing, Borrower Representative may, on any Business Day, convert any Domestic Base Rate Loan into a Domestic LIBOR Loan.  If Borrower Representative desires to convert a Domestic Base Rate Loan, Borrower Representative shall give Administrative Agent not less than two (2) Business Days’ prior

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written notice (prior to 10:00 a.m. Los Angeles time on such Business Day), specifying the date of such conversion, the amount to be converted, and the length of the Interest Period.  Each conversion into or conversion of a Domestic LIBOR Loan shall be in a minimum principal amount of $1,000,000 and may increase in integral multiples of $500,000 in excess thereof.  After giving effect to any conversion of Domestic Base Rate Loans to Domestic LIBOR Loans, the number of Domestic LIBOR Loans outstanding shall not exceed five (5).

3.1.9        Continuation of Domestic LIBOR Loans.  Borrower Representative shall have the right on two (2) Business Days’ prior irrevocable written notice given to Administrative Agent by Borrower Representative (prior to 10:00 a.m. Los Angeles time on such Business Day), subject to the provisions hereof, to continue any Domestic LIBOR Loan into a subsequent Interest Period of the same or a different permitted duration, in each case subject to the satisfaction of the following conditions:

(a)           in the case of a continuation of less than all Domestic LIBOR Loans, the Domestic LIBOR Loans continued shall each be in a minimum principal amount of $1,000,000 and may increase in integral multiples of $500,000; and

(b)           no Domestic LIBOR Loan (or portion thereof) may be continued as a Domestic LIBOR Loan if a Default or Event of Default has occurred which is then continuing or if, after giving effect to such continuation, Domestic Borrower shall have outstanding in the aggregate more than five (5) separate Domestic LIBOR Loans.

If Borrower Representative shall fail to give timely notice of its election to continue any Domestic LIBOR Loan or portion thereof as provided above, or if such continuation shall not be permitted, such Domestic LIBOR Loan or portion thereof, unless such Domestic LIBOR Loan shall be repaid, shall automatically be converted into a Domestic Base Rate Loan at the end of the Interest Period then in effect with respect to such Domestic LIBOR Loan.

3.1.10      Inability to Make Domestic LIBOR Loans.  Notwithstanding any other provision hereof, if any applicable law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this Section 3.1.10, the term “Lender” shall include the office or branch where a Lender or any corporation or bank then controlling such Lender makes or maintains any Domestic LIBOR Loan) to make or maintain its Domestic LIBOR Loans or if with respect to any Interest Period, Administrative Agent is unable to determine the LIBOR relating thereto, or adverse or unusual conditions in, or changes in applicable law relating to, the London interbank market make it, in the reasonable judgment of Administrative Agent impracticable to fund therein any of the Domestic LIBOR Loans or make the projected LIBOR unreflective of the actual costs of funds therefor to any Lender, the obligation of Administrative Agent and Lenders to make or continue Domestic LIBOR Loans or convert Domestic Base Rate Loans to Domestic LIBOR Loans, as the case may be, hereunder shall forthwith be suspended during the pendency of such circumstances and Borrowers shall, if any affected Domestic LIBOR Loans are then outstanding, promptly upon request from Administrative Agent convert such affected Domestic LIBOR Loans into Domestic Base Rate Loans.

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3.1.11      Borrower Representative.  Each Borrower hereby designates Domestic Borrower as its representative and agent on its behalf for the purposes of requests for Loans, giving instructions with respect to the disbursement of the proceeds of the Loans, selecting interest rate options, requesting Domestic Letters of Credit, giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect of compliance with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.  Domestic Borrower hereby accepts such appointment as Borrower Representative.  Administrative Agent, Canadian Agent, and each Lender may regard any notice or other communication pursuant to any Loan Document from Borrower Representative as a notice or communication from all Borrowers, any group of Borrowers or any Borrower, as the case may be, and may give any notice or communication required or permitted to be given to any Borrower or Borrowers hereunder to Borrower Representative on behalf of such Borrower or Borrowers.  Each Borrower agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by Borrower Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.

3.2           Payments.

Except where evidenced by notes or other instruments issued or made by Borrowers to any Lender and accepted by such Lender specifically containing payment instructions that are in conflict with this Section 3.2 (in which case the conflicting provisions of said notes or other instruments shall govern and control), the Obligations shall be payable as follows:

3.2.1        Principal.

(a)           Domestic Revolving Credit Loans.  Principal payable on account of Domestic Revolving Credit Loans shall be payable by Domestic Borrower to Administrative Agent for the ratable benefit of Domestic Lenders, in addition to the circumstances described in Section 3.3.3, immediately upon the earliest of (i) the receipt by Administrative Agent or Domestic Borrower of any proceeds of any of the Domestic Collateral (except as otherwise provided herein), including without limitation pursuant to Sections 3.3.1, 3.3.2(a) and 6.2.4, to the extent of such proceeds, subject to Domestic Borrower’s rights to reborrow such amounts in compliance with Section 1.1.1 hereof; (ii) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations, or (iii) termination of this Agreement pursuant to Section 4 hereof.  Each payment (including principal prepayments) by Domestic Borrower on account of principal of the Domestic Revolving Credit Loans shall be applied first to Domestic Base Rate Loans, then to Domestic LIBOR Loans.

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(b)           Domestic Term Loan.  The principal amount of the Domestic Term Loan shall be payable in equal monthly installments of $41,666.67 commencing with September 1, 2007 and on the first day of each succeeding calendar month during the Term, and Domestic Borrower shall in any event repay the then outstanding principal balance of the Domestic Term Loan on the last day of the Term.  Any prepayments of the Domestic Term Loan shall be applied to these installments in the inverse order of their maturity.  Principal payable on account of Domestic Terms Loans shall also be payable by Domestic Borrower to Administrative Agent for the ratable benefit of Domestic Lenders, in addition to the circumstances described in Section 3.3.3, immediately upon the earliest of (i) the receipt by Administrative Agent or Domestic Borrower of any proceeds of any of the Domestic Collateral (except as otherwise provided herein), including without limitation pursuant to Sections 3.3.1 and 6.2.4, to the extent of such proceeds; (ii) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations, or (iii) termination of this Agreement pursuant to Section 4 hereof.  Each payment (including principal prepayments) by Domestic Borrower on account of principal of the Domestic Term Loan shall be applied first to Domestic Base Rate Loans, then to Domestic LIBOR Loans.

(c)           Domestic Cap Ex Loans.  The principal amount of the Domestic Cap Ex Loans shall be payable in monthly installments in the amounts set forth in each Domestic Cap Ex Note, which amounts shall be equal to the original principal of such Domestic Cap Ex Note divided by 60.  Such principal payments shall be payable commencing with the first full calendar month following the delivery of the initial Domestic Cap Ex Note and on the first day of each succeeding calendar month during the Term, and Domestic Borrower shall in any event repay the then outstanding principal balance of the Domestic Cap Ex Loans on the last day of the Term.  Any prepayments of the Domestic Cap Ex Loans shall be applied to these installments in the inverse order of their maturity.  Principal payable on account of Domestic Cap Ex Loans shall also be payable by Domestic Borrower to Administrative Agent for the ratable benefit of Domestic Lenders, in addition to the circumstances described in Section 3.3.3, immediately upon the earliest of (i) the receipt by Administrative Agent or Domestic Borrower of any proceeds of any of the Domestic Collateral (except as otherwise provided herein), including without limitation pursuant to Sections 3.3.1 and 6.2.4, to the extent of such proceeds; (ii) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations, or (iii) termination of this Agreement pursuant to Section 4 hereof.  Each payment (including principal prepayments) by Domestic Borrower on account of principal of the Domestic Cap Ex Loans shall be applied first to Domestic Base Rate Loans, then to Domestic LIBOR Loans.

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(d)           Canadian Revolving Credit Loans.  Principal on account of Canadian Revolving Credit Loans shall be payable by Canadian Borrower to Canadian Agent for the ratable benefit of the Canadian Lender and the Canadian Participating Lenders, in addition to the circumstances described in Section 3.3.3, immediately upon the earliest of (i) the receipt by Canadian Borrower of any proceeds of any of the Collateral (except as otherwise provided herein), including without limitation pursuant to Sections 3.3.1, 3.3.2(b) and 6.2.4, to the extent of such proceeds, subject to Canadian Borrower’s right to reborrow such amounts in compliance with Section 1.1.2 hereof, (ii) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations, or (iii) termination of this Agreement pursuant to Section 4 hereof.

3.2.2        Interest.  Interest accrued on all Loans shall be due and payable on each applicable Interest Payment Date and on the earliest of (a) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations or (b) termination of this Agreement pursuant to Section 4 hereof.

3.2.3        Costs, Fees and Charges.  Costs, fees and charges payable pursuant to this Agreement shall be payable by Borrowers to Administrative Agent and Canadian Agent, as and when provided in Section 2 or Section 3 hereof or to any other Person designated by Administrative Agent or Canadian Agent in writing.

3.2.4        Other Obligations.  The balance of the Domestic Obligations requiring the payment of money, if any, shall be payable by Domestic Borrower to Administrative Agent for distribution to Domestic Lenders or any other Lender, as appropriate, the balance of the Canadian Obligations requiring the payment of money, if any, shall be payable by Canadian Borrower to Canadian Agent for distribution to Canadian Agent, Canadian Lender, and the Canadian Participating Lenders, as appropriate, in each case as and when provided in this Agreement, the Other Agreements or the Security Documents, or on demand, whichever is later.

3.2.5        Prepayment of or Failure to Borrow Domestic LIBOR Loans.  Except as otherwise provided in this Section 3.2.5, repayment of a Domestic LIBOR Loan shall occur only on the last day of the Interest Period for such Domestic LIBOR Loan.  Borrowers may prepay a Domestic LIBOR Loan only upon at least two (2) Business Days prior written notice (which notice shall be irrevocable), and subject to the provisions of this Section 3.2.5.  Domestic Borrower shall pay to Administrative Agent, upon request of Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of Administrative Agent) to compensate Domestic Lenders for any loss, cost, or expense incurred as a result of:  (a) any payment of a Domestic LIBOR Loan on a date other than the last day of the Interest Period for such Loan; (b) any failure by Domestic Borrower to borrow a Domestic LIBOR Loan on the date specified by Borrower Representative’s applicable written notice; or (c) any failure by Domestic Borrower to pay a Domestic LIBOR Loan on the date for payment specified in Borrower Representative’s written notice. Without limiting the foregoing, in connection with any prepayment of a Domestic LIBOR Loan, Borrowers shall pay, as applicable, to Administrative Agent, for the ratable benefit of

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Domestic Lenders, a “yield maintenance fee” in an amount computed as follows:  the greater of (i) $150.00 (which amount shall be subject to change from time to time without prior notice), and (ii) the amount obtained when the current rate for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent) with a maturity date closest to the Interest Period chosen pursuant to the Domestic LIBOR Loan as to which the prepayment is made, is subtracted from the LIBOR in effect at the time of prepayment.  If the result in clause (ii) above is zero or a negative number, the yield maintenance fee shall be $150.00.  If the result in clause (ii) above is a positive number, then the resulting percentage shall be multiplied by the amount of the principal balance being prepaid.  The resulting amount shall be divided by 360 and multiplied by the number of days remaining in the Interest Period chosen pursuant to the Domestic LIBOR Loan as to which the prepayment is made.  Such amount shall be reduced to present value calculated by using the above referenced United States Treasury securities rate  and the number of days remaining in the term chosen pursuant to the Domestic LIBOR Loan as to which prepayment is made.  The resulting amount shall be, if greater than $150.00, as applicable, the yield maintenance fee due to Administrative Agent, for the ratable benefit of Domestic Lenders, upon the prepayment of a Domestic LIBOR Loan.  If by reason of an Event of Default, Administrative Agent or Majority Lenders elect to declare the Obligations to be immediately due and payable, then any yield maintenance fee with respect to a Domestic LIBOR Loan, as the case may be, shall become due and payable in the same manner as though Borrowers had exercised such right of prepayment.

3.2.6        Canadian Revolving Credit Loans Refunding.

(a)           If any Default or Event of Default shall occur and be continuing, the Canadian Lender may, in its sole and absolute discretion, direct that the Canadian Revolving Credit Loans owing to it be refunded by delivering a notice (with such detail as Administrative Agent shall request, a “Notice of Canadian Revolving Loan Refunding”) to Administrative Agent.  Upon receipt of any such notice, Administrative Agent shall (i) promptly give notice of the contents thereof to the Canadian Participating Lenders and, unless an Event of Default described in Sections 10.1.8 or 10.1.9 shall have occurred, to the Borrower Representative and (ii) calculate the aggregate principal amount of Canadian Revolving Credit Loans (the “Canadian Dollar Refunding Amount”).  Each such Notice of Canadian Revolving Loan Refunding shall be deemed to constitute delivery of a notice to Administrative Agent requesting each Canadian Participating Lender to immediately transfer to the Canadian Lender, in immediately available funds, the amount of such Canadian Participating Lender’s participation with reference to the Canadian Dollar Refunding Amount, as the case may be.

(b)           Whenever, at any time after a Canadian Participating Lender has funded a participating interest in a Canadian Revolving Credit Loan, the Canadian Lender receives any payment on account thereof, the Canadian Lender will distribute to Administrative Agent for delivery to such Canadian Participating Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Canadian Participating

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Lender’s participating interest was outstanding and funded); provided, however, that in the event that such payment received by the Canadian Lender is required to be returned, such Canadian Participating Lender will return to Administrative Agent for delivery to the Canadian Lender any portion thereof previously distributed by Administrative Agent or the Canadian Lender to it.

(c)           Each Canadian Participating Lender’s obligation to fund the participating interests referred to in this Section 3.2.6 shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Canadian Participating Lender or any Borrower may have against the Canadian Lender, any Canadian Participating Lender, any Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default, (iii) any adverse change in the condition (financial or otherwise) of any Borrower, (iv) any breach of this Agreement or any other Loan Document by any Borrower, any Guarantor, any Subsidiary of any Borrower or any other Lender, or (v) any other circumstances, happening or event whatsoever, whether or not similar to any of the foregoing.

3.2.7        Satisfaction of Corresponding Obligations.  Any payment of principal or interest under this Agreement in respect of a Domestic Term Loan, Domestic Cap Ex Loan or a Revolving Credit Loan will be taken to be a payment under the relevant Domestic Term Note, Domestic Cap Ex Note or Revolving Note, as applicable (and all payments of principal or interest made under a Domestic Term Note, Domestic Cap Ex Note, or a Revolving Note will also be taken to discharge the equivalent liability under this Agreement).

3.3           Mandatory and Optional Prepayments.

3.3.1        Proceeds of Sale, Loss, Destruction or Condemnation of Collateral.

(a)           Except as provided in Sections 6.4.2 and 8.2.10, if any Borrower or any of its Subsidiaries sells any of the Equipment or real (or immovable) Property, or if any of the Collateral owned by such Borrower or such Subsidiary is lost or destroyed or taken by condemnation, (i) Domestic Borrower shall pay, in the case of Domestic Borrower and all other Subsidiaries other than Canadian Borrower, unless otherwise agreed by Majority Lenders, to Administrative Agent for the benefit of Administrative Agent and the Lenders for application towards the Obligations, and (ii) Canadian Borrower shall pay in the case of Canadian Borrower, to Canadian Agent for the benefit of Canadian Agent, Canadian Lender, and the Canadian Participating Lenders for application towards the Canadian Obligations, as and when received by such Borrower or such Subsidiary and as a mandatory prepayment of the Loans, as herein provided, a sum equal to the proceeds (including insurance payments but net of costs and taxes incurred in connection with such sale or event) received by such Borrower or such Subsidiary from such sale, loss, destruction or

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condemnation, provided that (i) with respect to the sale, loss, destruction or taking of the assets of the Channell Australia Entities, the proceeds of such sale, loss, destruction or taking shall be, to the extent permitted under the Channell Bushman Credit Facility, applied to the outstanding obligations under any intercompany loans owed to Borrowers by the Channell Australia Entities, but only to the extent any such intercompany loans exist at such time, and (ii) Canadian Borrower shall only be required to pay from the proceeds of any of sale, loss, destruction or taken of the assets of the Canadian Borrower an amount equal to the then outstanding Canadian Obligations, and Domestic Borrower shall make a payment in respect of the Domestic Obligations in an amount equal to the remaining amount of such proceeds.

(b)           To the extent that the Domestic Collateral sold, lost, destroyed or condemned consists of Equipment other than Equipment that was purchased with the proceeds of Domestic Cap Ex Loans, real Property, or other Property other than Accounts or Inventory, the applicable prepayment under this Section 3.3.1 shall be applied (i) FIRST to the installments of principal due under the Domestic Term Notes evidencing the Domestic Term Loan ratably, to be applied to future installment payments in inverse order of maturity until paid in full, (ii) SECOND to the installments of principal due under the Domestic Cap Ex Notes evidencing the Domestic Cap Ex Loans  ratably, to be applied to future installment payments in inverse order of maturity until paid in full, (iii) THIRD to repay ratably outstanding principal of Domestic Revolving Credit Loans (but shall not permanently reduce the Domestic Revolving Credit Commitments), (iv) FOURTH to pay any other Domestic Obligations owing by Domestic Borrower, and (v) FIFTH, at Administrative Agent’s option, to be held by Administrative Agent as security for repayment of any remaining Domestic Obligations (or to be released to Domestic Borrower, if there are no remaining Obligations and the Commitment Termination has occurred).

(c)           To the extent that the Domestic Collateral sold, lost, destroyed or condemned consists of Equipment purchased with the proceeds of Domestic Cap Ex Loans, the applicable prepayment under this Section 3.3.1 shall be applied (i) FIRST to the installments of principal due under the Domestic Cap Ex Notes evidencing the Domestic Cap Ex Loans  ratably, to be applied to future installment payments in inverse order of maturity until paid in full, (ii) SECOND to the installments of principal due under the Domestic Term Notes evidencing the Domestic Term Loan ratably, to be applied to future installment payments in inverse order of maturity until paid in full, (iii) THIRD to repay ratably outstanding principal of Domestic Revolving Credit Loans (but shall not permanently reduce the Domestic Revolving Credit Commitments), (iv) FOURTH to pay any other Domestic Obligations owing by Domestic Borrower, and (v) FIFTH at Administrative Agent’s option, to be held by Administrative Agent as security for repayment of any remaining Domestic Obligations (or to be released to Domestic Borrower, if there are no remaining Obligations and the Commitment Termination has occurred).

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(d)           any prepayment under this Section 3.3.1 with respect to Canadian Collateral shall be applied (i) FIRST to repay ratably outstanding principal of Canadian Revolving Credit Loans (but shall not permanently reduce the Canadian Revolving Credit Sub-Limit), (ii) SECOND to pay any other Canadian Obligations owing by Canadian Borrower, and (iii) THIRD, at Canadian Agent’s option, to be held by Canadian Agent as security for repayment of any remaining Canadian Obligations (or to be released to Canadian Borrower, if there are no remaining Canadian Obligations and the Commitment Termination has occurred).

(e)           Notwithstanding the foregoing, if the proceeds of insurance (net of costs and taxes incurred) with respect to any loss or destruction of Equipment, Inventory or real (or immovable) Property (i) are less than $250,000, unless an Event of Default is then in existence, Administrative Agent shall remit such proceeds to the applicable Borrower for use in replacing or repairing the damaged Collateral or (ii) are equal to or greater than $250,000 and the applicable Borrower has requested that Administrative Agent agree to permit such Borrower or the applicable Subsidiary to repair or replace the damaged Collateral, such amounts shall be provisionally applied to reduce the outstanding principal balance of the applicable Revolving Credit Loans until the earlier of Administrative Agent’s decision with respect thereto or the expiration of 120 days from such request.  If Administrative Agent agrees, in its reasonable judgment, to permit such repair or replacement under such clause (ii), such amount shall, unless an Event of Default is in existence, be remitted to the applicable Borrower for use in replacing or repairing the damaged Collateral; if Administrative Agent declines to permit such repair or replacement or does not respond to the applicable Borrower within such 120 day period, such amount shall be applied to the Loans in the manner specified in clauses (b) through (d) of this Section 3.3.1 until payment thereof in full.

3.3.2        Prepayment Upon Exceeding Commitments and Borrowing Base.

(a)           Domestic Revolving Credit Loans.  Domestic Borrower shall prepay the outstanding principal amount of the Domestic Revolving Credit Loans on any date on which (i) the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders exceeds the Aggregate Borrowing Base then in effect (minus Reserves, if any) or (ii) the aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders and the Canadian Revolving Credit Exposure of the Canadian Lender exceeds the Revolving Credit Maximum Amount (minus the Dollar Equivalent of the aggregate principal amount of the outstanding Canadian Revolving Credit Loans minus Reserves, if any), in the amount of such excess.

(b)           Canadian Revolving Credit Loans.  Canadian Borrower shall prepay the outstanding principal amount of Canadian Revolving Credit Loans on any date on which the aggregate amount of the Canadian Revolving Credit Exposure of the Canadian Lender would exceed (including, without limitation, solely as a result of fluctuation in exchange rates) the Canadian Borrowing Base then in effect (minus

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Reserves applicable to Canadian Revolving Credit Loans, if any), in the amount of such excess and in the applicable currency; provided, however, that if such excess is solely as a result of fluctuation in exchange rates, such repayment shall not be required to be made until two Business Days after notice from the Canadian Agent, and Canadian Borrower shall not be obligated to pay such amount unless such excess is greater than the Dollar Equivalent of an amount equal to 1% of the Canadian Revolving Credit Sub-Limit then in effect.  Any such prepayment shall be applied to repay ratably outstanding principal of Canadian Revolving Credit Loans (but shall not permanently reduce the Canadian Revolving Credit Sub-Limit).

3.3.3        Proceeds from Issuance of Additional Indebtedness or Equity.  If any Borrower or any Subsidiary issues any additional Indebtedness for Money Borrowed or issues any additional equity in a manner permitted under this Agreement, other than (provided no Default or Event of Default has occurred and is continuing) (A) for the purpose of financing an asset or stock acquisition or merger approved by the Majority Lenders, (B) Permitted Intercompany Loans, and (C) stock options in Domestic Borrower granted to executives and other employees of Domestic Borrower, then (i) Domestic Borrower shall pay, in the case of Domestic Borrower or any Subsidiary other than the Canadian Borrower, to Administrative Agent for the benefit of Administrative Agent, Canadian Agent, and the Lenders, and (ii) Canadian Borrower shall pay, in the case of Canadian Borrower, to Canadian Agent for the benefit of Canadian Agent, Canadian Lender, and the Canadian Participating Lenders, when and as received by such Borrower or Subsidiary and as a mandatory prepayment of the Domestic Obligations or the Canadian Obligations, respectively, a sum equal to 100% of the net proceeds to such Borrower or Subsidiary of the issuance of such Indebtedness or equity, provided that (i), for so long as the Channell Bushman Credit Facility has not been terminated, the Domestic Borrower shall only be required to make such prepayments in connection with such issuance by any of the Channell Australia Entities to the extent such prepayment is not required by, and does not violate, the documents governing the Channell Bushman Credit Facility, and (ii) Canadian Borrower shall only be required to pay from the net proceeds of the issuance of such Indebtedness or equity by Canadian Borrower an amount equal to the then outstanding Canadian Obligations, and Domestic Borrower shall make a payment in respect of the Domestic Obligations in an amount equal to the remaining amount of such proceeds, if any.  Any prepayment under this Section 3.3.3 with respect to the issuance of such Indebtedness for Money Borrowed or equity by Domestic Borrower or any of its Subsidiaries (other than Canadian Borrower) shall be applied (i) FIRST to the installments of principal due under the Domestic Term Notes evidencing the Domestic Term Loan ratably, to be applied to future installment payments in inverse order of maturity until paid in full, (ii) SECOND to the installments of principal due under the Domestic Cap Ex Notes evidencing the Domestic Cap Ex Loan ratably, to be applied to future installment payments in inverse order of maturity until paid in full, and (iii) THIRD to repay ratably the outstanding principal of Domestic Revolving Credit Loans (but shall not permanently reduce the Domestic Revolving Credit Commitments), and any prepayment under this Section 3.3.3 with respect to the issuance of such Indebtedness for Money Borrowed or equity by Canadian Borrower shall be applied to repay ratably outstanding principal of Canadian Revolving Credit Loans (but shall not permanently reduce the Canadian Revolving Credit Sub-Limit).

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3.3.4        Domestic LIBOR Loans.  If the application of any payment made in accordance with the provisions of this Section 3.3 at a time when no Event of Default has occurred and is continuing would result in termination of a Domestic LIBOR Loan prior to the last day of the Interest Period for such Domestic LIBOR Loan, the amount of such prepayment shall not be applied to such Domestic LIBOR Loan, but will, at Borrower Representative’s option, be held by Administrative Agent in a non-interest bearing account or deposited by the applicable Borrower in an interest-bearing account at a Lender or another bank satisfactory to Administrative Agent, in its discretion, which account is in the name of Administrative Agent, and from which account only Administrative Agent can make any withdrawal, in each case to be applied as such amount would otherwise have been applied under this Section 3.3 at the earlier to occur of (a) the last day of the relevant Interest Period or (b) the occurrence of a Default or an Event of Default.

3.3.5        Optional Prepayments.  Domestic Borrower may, at its option from time to time upon not less than 3 Business Days’ prior written notice to Administrative Agent, prepay installments of the Domestic Term Notes or the Domestic Cap Ex Notes, provided that the amount of any such prepayment is at least $500,000 and in integral multiples of $100,000 above $500,000, and that such prepayments are made ratably with respect to all such Domestic Term Notes or Domestic Cap Ex Notes, as applicable.  Except for charges under Section 3.2.5 applicable to prepayments of Domestic LIBOR Loans, subject to Section 2.7, such prepayments shall be without premium or penalty.

3.4           Application of Payments and Collections.

3.4.1        Collections.  All items of payment received by Administrative Agent by 12:00 noon, Los Angeles time, or by Canadian Agent by 12:00 noon, Toronto time, on any Business Day shall be deemed received on that Business Day for purposes other than computation of interest.  All items of payment received after 12:00 noon, Los Angeles time, or 12:00 noon, Toronto time, on any Business Day shall be deemed received on the following Business Day for purposes other than computation of interest.  Domestic Borrower irrevocably waives the right to direct the application of any and all payments and collections at any time or times hereafter received by Administrative Agent from or on behalf of Domestic Borrower or any of its Subsidiaries (other than Canadian Borrower), and Domestic Borrower does hereby irrevocably agree that Administrative Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Administrative Agent or its agent against the Domestic Obligations, in such manner as Administrative Agent may deem advisable, notwithstanding any entry by Administrative Agent or any Lender upon any of its books and records.  Canadian Borrower irrevocably waives the right to direct the application of any and all payments and collections at any time or times hereafter received by Canadian Agent from or on behalf of Canadian Borrower, and Canadian Borrower does hereby irrevocably agree that Canadian Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Canadian Agent or its agent against the Canadian Obligations, in such manner as Canadian Agent may deem advisable, notwithstanding any entry by Canadian Agent or Canadian Lender or any Canadian Participating Lender upon any of its books and records.  If as the result of collections of

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Accounts as authorized by Section 6.2.4 hereof or otherwise, a credit balance exists in the Domestic Loan Account, such credit balance shall not accrue interest in favor of Domestic Borrower, but shall be disbursed to Domestic Borrower or otherwise at  Borrower Representative’s direction in the manner set forth in Section 3.1.2, upon  Borrower Representative’s request at any time, so long as no Default or Event of Default then exists.  If as the result of collections of Accounts authorized by Section 6.2.4 hereof or otherwise, a credit balance exists in the Canadian Loan Account, such credit balance shall not accrue interest in favor of Canadian Borrower, but shall be disbursed to Canadian Borrower or otherwise at Borrower Representative’s direction in the manner set forth in Section 3.1.2, upon Borrower Representative’s request at any time, so long as no Default or Event of Default then exists.  Administrative Agent may at its option, offset such credit balance with respect to the Domestic Loan Account against any of the Domestic Obligations upon and during the continuance of an Event of Default.  Canadian Agent may at its option, offset such credit balance with respect to the Canadian Loan Account against any of the Canadian Obligations upon and during the continuance of an Event of Default.

3.4.2        Apportionment; Application and Reversal of Payments.  Principal and interest payments (i) by Domestic Borrower shall be apportioned ratably among all Domestic Lenders (according to the unpaid principal balance of the Loans to which such payments related held by each Domestic Lender), and (ii) by Canadian Borrower shall be distributed to Canadian Lender subject to Section 2.6 or, following a refunding in accordance with Section 3.2.6, apportioned among Canadian Lender and all Canadian Participating Lenders (according to the unpaid principal balance of the Loans to which such payments related held by Canadian Lender and each Canadian Participating Lender).  All payments by Domestic Borrower shall be remitted to Administrative Agent and by Canadian Borrower shall be remitted to Canadian Agent, and all such payments not relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of Collateral, except as otherwise provided in this Agreement received by Administrative Agent or Canadian Agent, as applicable, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities, or expense reimbursements then due to Administrative Agent, Canadian Agent, or Lenders  from the applicable Borrower; second, to pay interest due from the applicable Borrower in respect of all Loans made to such Borrower, third, to pay or prepay principal of the Domestic Term Loan made to such Borrower; fourth, to pay or prepay principal of the Domestic Cap Ex Loans made to such Borrower; fifth, to pay or prepay principal of the Revolving Credit Loans made to such Borrower and unpaid reimbursement obligations in respect of Domestic Letters of Credit owed by such Borrower; sixth, with respect to payments by Domestic Borrower, to pay an amount to Administrative Agent equal to the available amount of all outstanding Domestic Letters of Credit to be held as cash Collateral for reimbursement and fee obligations in respect of such Domestic Letters of Credit; seventh, to the payment of any Derivative Obligations due to Administrative Agent, Canadian Agent, any Lender or any other Bank Product Provider by such Borrower, and eighth, to the payment of any other Obligations due to Administrative Agent, Canadian Agent, or any Lender by such Borrower.  Except as expressly set forth to the contrary, payments received (i) from Domestic Borrower shall be applied only to the Domestic Obligations, and (ii) from Canadian Borrower shall be applied only to the Canadian

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Obligations.  Subject to the provisions of this Section 3.4.2, after the occurrence and during the continuance of an Event of Default, Administrative Agent and Canadian Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Administrative Agent or Canadian Agent or their agents against the Obligations, in such manner as Administrative Agent or Canadian Agent may deem advisable, notwithstanding any entry by Administrative Agent, Canadian Agent, or any Lender upon any of its books and records.

3.5           All Loans to Constitute One Obligation.

The Domestic Revolving Credit Loans, the Domestic Term Loan, the Domestic Cap Ex Loans shall constitute one general Obligation of Domestic Borrower, and shall be secured by Administrative Agent’s (for the benefit of itself, and each Lender) Lien upon all of the Domestic Collateral.  The Canadian Revolving Credit Loans shall constitute one general Obligation of Canadian Borrower, and shall be secured by Canadian Agent’s (on behalf of itself, Canadian Lender, and the Canadian Participating Lenders) Lien upon all of the Canadian Collateral.

3.6           Loan Accounts.

Administrative Agent shall enter all Domestic Revolving Credit Loans and the Domestic Term Loan as debits to a loan account (the “Domestic Loan Account”), and Canadian Agent shall enter all Canadian Revolving Credit Loans as debits to a loan account (the “Canadian Loan Account”, and together with the Domestic Loan Account, each a “Loan Account”), and shall also record in the relevant Loan Account all payments made by the relevant Borrowers on any Obligations and all proceeds of the relevant Collateral which are finally paid to Administrative Agent or Canadian Agent, as the case may be, and may record therein, in accordance with customary accounting practice, other debits and credits, including interest and all charges and expenses properly chargeable to Borrowers pursuant to this Agreement or any other Loan Document.

3.7           Statements of Account.

Administrative Agent will account to Borrower Representative monthly with a statement of Loans, charges and payments made pursuant to this Agreement during the immediately preceding month, and such account rendered by Administrative Agent shall be deemed final, binding and conclusive upon Borrowers absent demonstrable error unless Administrative Agent is notified by Borrower Representative in writing to the contrary within 30 days of the date each accounting is received by Borrower Representative.  Such notice shall only be deemed an objection to those items specifically objected to therein.

3.8           Sharing of Payments, Etc.

3.8.1        If any Domestic Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Domestic Revolving Credit Loan or any portion of the Domestic Term Loan made by

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it in excess of its ratable share of payments on account of such Loans made by all Domestic Lenders, such Domestic Lender shall forthwith purchase from each other Domestic Lender such participation in such Loans as shall be necessary to cause such purchasing Domestic Lender to share the excess payment ratably with each other Domestic Lender; provided, that if all or any portion of such excess payment is thereafter recovered from such purchasing Domestic Lender, such purchase from each Domestic Lender shall be rescinded and such Domestic Lenders shall repay to the purchasing Domestic Lender the purchase price to the extent of such recovery, together with an amount equal to such Domestic Lender’s ratable share (according to the proportion of (i) the amount of such Domestic Lender’s required repayment to (ii) the total amount so recovered from the purchasing Domestic Lender) of any interest or other amount paid or payable by the purchasing Domestic Lender in respect of the total amount so recovered.  Each Borrower agrees that any Domestic Lender so purchasing a participation from another Domestic Lender pursuant to this Section 3.8.1 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Domestic Lender were the direct creditor of Borrowers in the amount of such participation.  Notwithstanding anything to the contrary contained herein, all purchases and repayments to be made under this Section 3.8.1 shall be made through Administrative Agent.

3.8.2        If Canadian Lender or any Canadian Participating Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Canadian Revolving Credit Loan  made or refunded by it in excess of its ratable share of payments on account of such Loans made or refunded by Canadian Agent and Canadian Participating Lenders in the aggregate, such Lender shall forthwith purchase from Canadian Lender and each other Canadian Participating Lender such participation in such Loans as shall be necessary to cause such purchasing Lender to share the excess payment ratably with Canadian Lender and each other Canadian Participating Lender; provided, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from Canadian Lender and each Canadian Participating Lender shall be rescinded and Canadian Lender and such Canadian Participating Lenders shall repay to the purchasing Lender the purchase price to the extent of such recovery, together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such  Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  Each Borrower agrees that Canadian Lender and any Canadian Participating Lender so purchasing a participation from Canadian Lender or a Canadian Participating Lender pursuant to this Section 3.8.2 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of Borrowers in the amount of such participation.  Notwithstanding anything to the contrary contained herein, all purchases and repayments to be made under this Section 3.8.2 shall be made through Canadian Agent.

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3.9           Increased Costs.

If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) adopted or implemented after the date of this Agreement and having general applicability to all banks or finance companies within the jurisdiction in which any Lender operates (excluding, for the avoidance of doubt, the effect of and phasing in of capital requirements or other regulations or guidelines passed prior to the date of this Agreement), or any interpretation or application thereof by any governmental authority charged with the interpretation or application thereof, or the compliance of such Lender therewith, shall:

(a)           (i) subject such Lender to any tax with respect to this Agreement (other than (A) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (B) subject to the provisions of Section 2.13, any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee) or (ii) change the basis of taxation of payments to such Lender of principal, fees, interest or any other amount payable hereunder or under any Loan Documents (other than in respect of (A) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (B) subject to the provisions of Section 2.13, any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee);

(b)           impose, modify or hold applicable any reserve (except any reserve taken into account in the determination of the applicable LIBOR), special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by, any office of such Lender, including (without limitation) pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or

(c)           impose on such Lender or the London interbank market any other condition with respect to any Loan Document and the result of any of the foregoing is to increase the cost to such Lender of making, renewing or maintaining its Loans hereunder by an amount that such Lender deems to be material or the result of any of the foregoing is to reduce the rate of return on such Lender’s capital as a consequence of its obligations hereunder, or the result of any of the foregoing is to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of such Loans by an amount that such Lender deems to be material, then, in any such case, the applicable Borrower(s) shall pay such Lender, upon demand and certification not later than sixty (60) days following Borrower Representative’s receipt of notice of the imposition of such increased costs, such additional amount as will compensate such Lender for such additional cost or such reduction, as the case may be, to the extent such Lender has not otherwise been compensated, with respect to a particular Loan, for such increased cost as a result of

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an increase in the Domestic Base Rate, Canadian Base Rate or LIBOR.  An officer of such Lender shall determine the amount of such additional cost or reduced amount using reasonable averaging and attribution methods and shall certify the amount of such additional cost or reduced amount to Borrower Representative, which certification shall include a written explanation of such additional cost or reduction to Borrower Representative.  Such certification shall be conclusive absent manifest error.  If a Lender claims any additional cost or reduced amount pursuant to this Section 3.9, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different lending office or to file any certificate or document reasonably requested by Borrower Representative if the making of such designation or filing would avoid the need for, or reduce the amount of, any such additional cost or reduced amount and would not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender.

3.10         Basis for Determining Interest Rate Inadequate or Unfair

In the event that Administrative Agent or any Lender shall have determined that:

(a)           reasonable means do not exist for ascertaining the LIBOR for any Interest Period; or

(b)           Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank market with respect to a proposed Domestic LIBOR Loan, or a proposed conversion of a Domestic Base Rate Loan into a Domestic LIBOR Loan; then

Administrative Agent or such Lender, as applicable, shall give Borrower Representative prompt written, telephonic or electronic notice of the determination of such event.  If such notice is given, (i) any such requested Domestic LIBOR Loan shall be made as a Domestic Base Rate Loan, unless Borrower Representative shall notify Administrative Agent, with respect to Domestic LIBOR Loans, no later than 10:00 a.m. (Los Angeles time) two (2) Banking Days prior to the date of such proposed borrowing that the request for such borrowing shall be canceled, and (ii) any Domestic Base Rate Loan which was to have been converted to an affected type of Domestic LIBOR Loan shall be continued as or converted into a Domestic Base Rate Loan.

3.11         Location of Payments.

Notwithstanding anything else herein to the contrary, all payments made by Borrowers or Borrower Representative on behalf of Borrowers under this Agreement, whether principal or interest payments, fees, expenses or other charges hereunder, shall be made to the applicable Administrative Agent at its address for notices set forth in Section 12.8 of this Agreement.

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SECTION 4. TERM AND TERMINATION

4.1           Term of Agreement.

Subject to the right of Lenders to cease making Loans to Borrowers during the continuance of any Default or Event of Default, this Agreement shall be in effect from the Closing Date through and including June 30, 2010 (the “Term”), unless terminated as provided in Section 4.2 hereof.

4.2           Termination.

4.2.1        Termination by Lenders.  Administrative Agent may, and at the direction of Majority Lenders shall, terminate this Agreement without notice upon or after the occurrence and during the continuance of an Event of Default.

4.2.2        Termination by Borrower Representative.  Upon at least 60 days prior written notice to Administrative Agent and Lenders, Borrower Representative may, at its option, terminate this Agreement; provided, however, no such termination shall be effective until Borrowers have paid or collateralized to Administrative Agent’s reasonable satisfaction all of the Obligations in immediately available funds, all Domestic Letters of Credit and Domestic LC Guaranties have expired, terminated or have been cash collateralized to Administrative Agent’s reasonable satisfaction and Borrowers have complied with Sections 2.7, 3.2.5 and 4.2.3(b) (if applicable).  Any notice of termination given by Borrower Representative shall be irrevocable unless all Lenders otherwise agree in writing, and no Lender shall have any obligation to make any Loans or issue or procure any Domestic Letters of Credit or Domestic LC Guaranties on or after the termination date stated in such notice.  Borrower Representative may elect to terminate this Agreement in its entirety only.  No section of this Agreement or type of Loan available hereunder may be terminated singly.

4.2.3        Effect of Termination.

(a)           All of the Obligations shall be immediately due and payable upon the termination date stated in any notice of termination of this Agreement.  All undertakings, agreements, covenants, warranties and representations of Borrowers and their Subsidiaries contained in the Loan Documents shall survive any such termination and Administrative Agent and Canadian Agent shall retain their Liens in the Collateral and Administrative Agent, Canadian Agent, and each Lender shall retain all of its rights and remedies under the Loan Documents notwithstanding such termination until all Obligations have been discharged or paid, in full, in immediately available funds, including, without limitation, all applicable Obligations under Sections 2.7, 3.2.5 and 4.2.3(b) resulting from such termination.  Notwithstanding the foregoing or the payment in full of the Obligations, none of Administrative Agent and Canadian Agent shall be required to terminate its Liens in the Collateral unless, with respect to any loss or damage Administrative Agent or Canadian Agent may incur as a result of dishonored checks or other items of payment received by Administrative Agent or Canadian Agent from Borrowers or any of their Subsidiaries

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or any Account Debtor and applied to the Obligations, Administrative Agent shall, at its option, (i) have received a written agreement satisfactory to Administrative Agent, executed by Borrowers and/or their Subsidiaries and by any Person whose loans or other advances to Borrowers and/or their Subsidiaries are used in whole or in part to satisfy the Obligations, indemnifying Administrative Agent, Canadian Agent, and each Lender from any such loss or damage or (ii) have retained cash Collateral for such period of time as Administrative Agent, in its reasonable discretion, may deem necessary to protect Administrative Agent, Canadian Agent, and each Lender from any such loss or damage.

(b)           In the event that Borrower Representative provides less than 60 days prior written notice of termination of this Agreement as required by Section 4.2.2, in addition to any other amounts which are required to be paid to Administrative Agent, Canadian Agent, or any Lender under the Loan Documents, (i) Domestic Borrower agrees to pay to Administrative Agent (for the ratable benefit of the Domestic Lenders), an amount equal to the product of (A)(I) the product of (X) the aggregate payoff amount of the Domestic Obligations times (Y) the interest rates applicable to such Domestic Obligations, divided by (II) 360 times (B) the difference between 60 and the number of days prior written notice of termination of this Agreement given by Borrower Representative to Administrative Agent and Lenders (the “Notice Days”) and (ii) Canadian Borrower agrees to pay to Canadian Agent (for the benefit of Canadian Lender and, subsequent to any Canadian Revolving Credit Loan refunding pursuant to Section 3.2.6, for the ratable benefit of Canadian Lender and Canadian Participating Lenders) an amount equal to the product of (A)(I) the product of (X) the aggregate payoff amount of the Canadian Obligations times (Y) the interest rates applicable to such Canadian Obligations, divided by (II) 360 times (B) the Notice Days.

(c)           Upon termination of this Agreement and repayment in full of the Obligations, each Administrative Agent shall promptly execute and deliver to Borrowers such documents as reasonably requested by Borrower Representative to evidence the release of Agents’ Liens in the Collateral.

SECTION 5. SECURITY INTERESTS

5.1           Security Interest in Collateral.

5.1.1        To secure the prompt payment and performance of the Domestic Obligations (including, without limitation, the obligations of Domestic Borrower under the Domestic Borrower Guaranty), Domestic Borrower hereby grants to Administrative Agent for the benefit of itself, Canadian Agent, each Lender and each Bank Product Provider, a continuing Lien upon all of Domestic Borrower’s assets, including all of the following Property and interests in Property of Domestic Borrower, whether now owned or existing or hereafter created, acquired or arising and wheresoever located:

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(a)           Accounts;

(b)           Certificated Securities;

(c)           Chattel Paper;

(d)           Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing;

(e)           Contract Rights;

(f)            Deposit Accounts;

(g)           Documents;

(h)           Equipment;

(i)            Financial Assets;

(j)            Fixtures;

(k)           General Intangibles, including Payment Intangibles and Software;

(l)            Goods (including all of its Equipment, Fixtures and Inventory), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor;

(m)          Instruments;

(n)           Intellectual Property;

(o)           Inventory;

(p)           Investment Property;

(q)           money (of every jurisdiction whatsoever);

(r)            Letter-of-Credit Rights;

(s)           Payment Intangibles;

(t)            Security Entitlements;

(u)           Software;

(v)           Supporting Obligations;

(w)          Uncertificated Securities; and

(x)            to the extent not included in the foregoing, all other personal property of any kind or description;

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together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided that (i) to the extent that the provisions of any lease or license of Computer Hardware and Software or Intellectual Property expressly prohibit (which prohibition is enforceable under applicable law) any assignment thereof, and the grant of a security interest therein, Administrative Agent will not enforce its security interest in Domestic Borrower’s rights under such lease or license (other than in respect of the Proceeds thereof) for so long as such prohibition continues, it being understood that upon request of Administrative Agent, Domestic Borrower will in good faith use reasonable efforts (other than the payment of money) to obtain consent for the creation of a security interest in favor of Administrative Agent (and to Administrative Agent’s enforcement of such security interest) in Domestic Borrower’s rights under such lease or license, (ii) with respect to other contracts or agreements, Contract Rights of Domestic Borrower will be excluded from Domestic Collateral  to the extent assignment is expressly prohibited by the underlying contract or agreement (which prohibition is enforceable under applicable law), it being understood that upon request of Administrative Agent, Domestic Borrower will in good faith use reasonable efforts (other than the payment of money) to obtain consent for the creation of a security interest in favor of Administrative Agent (and to Administrative Agent’s enforcement of such security interest) in Domestic Borrower’s rights under such contract or agreement, (iii) that the Domestic Collateral described above (A) shall not include any of Domestic Borrower’s equity interests in Channel de Mexico S.A. de C.V., CC Holdings, Inc., or Channell Bushman, and (B) shall, with respect to each of Channell Commercial Canada, Inc. and Channell Commercial Hong Kong Limited, be limited to 65% of the issued and outstanding Securities of each such entity.

5.1.2        To secure the prompt payment and performance of the Canadian Obligations, Canadian Borrower hereby grants to Canadian Agent for the benefit of itself, Canadian Lender, and each Canadian Participating Lender, a continuing security interest upon all of Canadian Borrower’s assets, including all of the following Property and interests in Property of Canadian Borrower, whether now owned or existing or hereafter created, acquired or arising and wheresoever located:

(a)             Accounts;

(b)             Certificated Securities;

(c)             Chattel Paper;

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(d)             Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing;

(e)             Contract Rights;

(f)              Deposit Accounts;

(g)             Documents;

(h)             Equipment;

(i)              Financial Assets;

(j)              Fixtures;

(k)             General Intangibles, including Payment Intangibles and Software;

(l)              Goods (including all of its Equipment, Fixtures and Inventory), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor;

(m)            Instruments;

(n)             Intellectual Property;

(o)             Inventory;

(p)             Investment Property;

(q)             money (of every jurisdiction whatsoever);

(r)              Letter-of-Credit Rights;

(s)             Payment Intangibles;

(t)              Security Entitlements;

(u)             Software;

(v)             Supporting Obligations;

(w)            Uncertificated Securities; and

(x)              to the extent not included in the foregoing, all other personal property of any kind or description;

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together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided, however, that notwithstanding the foregoing this Section 5.1.2 shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is prohibited by any applicable law, requires a consent not obtained of any governmental authority pursuant to such applicable law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under any contract, license, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any Investment Property, any applicable shareholder or similar agreement, except to the extent that such applicable law or the term in such contract, license, agreement, instrument or other document or shareholder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law, it being understood that upon request of Canadian Agent, Canadian Borrower will in good faith use reasonable efforts (other than the payment of money) to obtain any such required consent. In addition to the foregoing grant of a security interest, Canadian Borrower shall execute and deliver such debentures, hypothecs, pledges and other security agreements as Canadian Agent may reasonably request to provide Canadian Agent with a first-priority perfected Lien on all assets of Canadian Borrower.  In the event of a conflict between this Section 5.1.2 and the Security Documents executed by Canadian Borrower, the latter shall govern.

5.2           Other Collateral.

5.2.1        Commercial Tort Claims.  Domestic Borrower shall promptly notify Administrative Agent in writing upon incurring or otherwise obtaining a Commercial Tort Claim after the Closing Date against any third party and, upon request of Administrative Agent, promptly enter into an amendment to this Agreement and do such other acts or things deemed appropriate by Administrative Agent to give Administrative Agent a security interest in any such Commercial Tort Claim.

5.2.2        Other Collateral.  Each Borrower shall promptly notify Administrative Agent or Canadian Agent, as the case may be, in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic Chattel Paper and, upon the request of Administrative Agent or Canadian Agent, as the case may be, promptly execute such other documents, and do such other acts or things deemed appropriate by Administrative Agent or Canadian Agent, as the case may be, to deliver to Administrative Agent or Canadian Agent, as the case may be, control with respect to such Collateral; promptly notify Administrative Agent or Canadian Agent, as the case may be, in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Documents (and Documents of Title, as defined in the PPSA) or Instruments and, upon the request of Administrative Agent or Canadian Agent, as the case may be, will promptly execute such other documents, and do such other acts or things deemed appropriate by Administrative Agent or Canadian Agent, as the case may be, to deliver to Administrative Agent or Canadian Agent, as the case may be, possession of such Documents (and Documents of Title, as defined in the PPSA) which are

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negotiable and Instruments, and, with respect to nonnegotiable Documents (and Documents of Title, as defined in the PPSA), to have such nonnegotiable Documents (and Documents of Title, as defined in the PPSA) issued in the name of Administrative Agent or Canadian Agent, as the case may be; and with respect to Collateral in the possession of a third party, other than Certificated Securities and Goods covered by a Document, obtain an acknowledgement from the third party that it is holding the Collateral for the benefit of Administrative Agent or Canadian Agent, as the case may be.

5.3           Lien Perfection; Further Assurances.

Each Borrower hereby authorizes Administrative Agent to file such UCC-1 and PPSA financing statements as are required by the UCC or the PPSA, and any other applicable statutory scheme, and each Borrower shall execute such other instruments, assignments or documents as are necessary to perfect Administrative Agent’s Lien upon any of the Domestic Collateral and Canadian Agent’s Lien upon any of the Canadian Collateral, and each Borrower shall take such other action as may be required to perfect or to continue the perfection of Administrative Agent’s Lien upon the Domestic Collateral and Canadian Agent’s Lien upon the Canadian Collateral.  Without limiting the generality of the preceding sentence, each Borrower hereby irrevocably authorizes Administrative Agent and Canadian Agent, as applicable, to file any such financing statements, including, without limitation, financing statements that indicate the portion of the Collateral owned by such Borrower (a) as all assets of such Borrower or words of similar effect, or (b) as being of an equal or lesser scope, or with greater or lesser detail, than as set forth in Section 5.1.  Each Borrower also hereby ratifies its authorization for Administrative Agent and Canadian Agent, as the case may be, to have filed in any jurisdiction any like financing statements or amendments thereto if filed prior to the date hereof.  The parties agree that a carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for the purposes of the UCC and may be filed in any appropriate office in lieu thereof.  At Administrative Agent’s or Canadian Agent’s request, each Borrower shall also promptly execute or cause to be executed and shall deliver to Administrative Agent or Canadian Agent, as the case may be, any and all documents, instruments and agreements deemed necessary by Administrative Agent or Canadian Agent, as the case may be, to give effect to or carry out the terms or intent of the Loan Documents.

5.4           Lien on Realty.

The due and punctual payment and performance of the Domestic Obligations shall also be secured by the Lien created by Mortgages upon all real (or immovable) Property of Domestic Borrower now or hereafter owned.  The due and punctual payment and performance of the Canadian Obligations shall also be secured by the Lien created by Mortgages upon all real (or immovable) Property of Canadian Borrower now or hereafter owned.  Each Mortgage shall be executed by the applicable Borrower in favor of Administrative Agent or Canadian Agent,

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as the case may be.  Each Mortgage shall be duly recorded, at the applicable Borrower’s expense, in each office where such recording is required to constitute a fully perfected first Lien on the real (or immovable) Property covered thereby.  Each applicable Borrower shall deliver to Administrative Agent or Canadian Agent, as the case may be, at such Borrower’s expense, mortgagee title insurance policies (or a Canadian equivalent acceptable to the applicable Administrative Agent) issued by a title insurance company satisfactory to Administrative Agent or Canadian Agent, as the case may be, which policies shall be in form and substance satisfactory to Administrative Agent or Canadian Agent, as the case may be, and shall insure a valid first Lien in favor of Administrative Agent (for the benefit of itself, Canadian Agent, and the Lenders), or in favor of Canadian Agent (for the benefit of itself, Canadian Lender, and the Canadian Participating Lenders), as the case may be, on the Property covered by each Mortgage, subject only to those exceptions reasonably acceptable to Administrative Agent or Canadian Agent, as the case may be, and its counsel.  Each applicable Borrower shall deliver to Administrative Agent or Canadian Agent, as the case may be, such other documents, including, without limitation, as-built survey prints of the real (or immovable) Property (to the extent such as-built survey prints are already in existence or, at the applicable Borrower’s sole option, prepared), as Administrative Agent or Canadian Agent, as the case may be, and its counsel may reasonably request relating to the real (or immovable) Property subject to the Mortgages.

SECTION 6. COLLATERAL ADMINISTRATION

6.1           General.

6.1.1        Location of Collateral.  All tangible Collateral, other than Inventory in transit and motor vehicles, will at all times be kept by the applicable Borrowers and their Subsidiaries at one or more of the business locations identified in Schedule 6.1.1 hereto as a business location for such Borrower or Subsidiary.

6.1.2        Insurance of Collateral.  Each Borrower shall maintain and pay for insurance upon all Collateral owned by such Borrower wherever located and with respect to the business of such Borrower and each of its Subsidiaries, covering casualty, hazard, public liability, workers’ compensation and such other risks in such amounts and with such insurance companies as are reasonably satisfactory to Administrative Agent.  Each Borrower shall deliver certified copies of such policies to Administrative Agent and Canadian Agent as promptly as practicable, with satisfactory lender’s loss payable endorsements, naming Administrative Agent, with respect to Domestic Collateral, and Canadian Agent, with respect to Canadian Collateral, as a loss payee, assignee or additional insured, as appropriate, as its interest may appear, and showing only such other loss payees, assignees and additional insureds as are satisfactory to Administrative Agent and Canadian Agent, as the case may be.  Each policy of insurance or endorsement shall contain a clause  requiring the insurer to give not less than 10 days’ prior written notice to Administrative Agent or Canadian Agent, as the case may be, in the event of cancellation of the policy for nonpayment of premium and not less than 30 days’ prior written notice to Administrative Agent or Canadian Agent, as the case may be, in the event of cancellation of the policy for any other reason whatsoever and shall provide in substance that the interest of Administrative Agent or Canadian Agent, as the case may be, shall not be impaired or invalidated by any act or neglect of the applicable Borrower, any of its Subsidiaries or the owner of the Property or by the occupation of the premises for purposes more hazardous than are permitted by said policy. Borrower Representative agrees to deliver to Administrative Agent and Canadian Agent, as the case may be, promptly as

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rendered, true copies of all reports made in any reporting forms to insurance companies.  If any proceeds of business interruption insurance are received by any Borrowers or any of their Subsidiaries, then (i) Domestic Borrower shall remit to Administrative Agent (A) the proceeds of such insurance received by Domestic Borrower and (B) an amount equal to the proceeds received by any such Subsidiary (other than the Channell Australia Entities and the Canadian Borrower), in each case, for application to the outstanding balance of the Revolving Credit Loans, (ii) Canadian Borrower shall remit to Canadian Agent the proceeds of such insurance received by Canadian Borrower for application to the then outstanding Canadian Obligations; and (iii) to the extent that the payment thereof does not violate the documents governing the Channell Bushman Credit Facility, the Channell Australia Entities shall apply the proceeds of any business interruption insurance received by them to the repayment of outstanding obligations under any intercompany loans owed by such entity to Borrowers (provided that, for the avoidance of doubt, such repayment shall only be required to the extent any such intercompany loans exist at the time of receipt of such insurance proceeds); provided that the maximum amount Canadian Borrower shall be required to make under this Section 6.1.2 shall be equal to the then outstanding Canadian Obligations, and Domestic Borrower shall make a payment in respect of the Domestic Obligations in an amount equal to the remaining amount, if any, of the proceeds from such business interruption insurance received by Canadian Borrower.

Unless Borrower Representative provides Administrative Agent and Canadian Agent, as the case may be, with evidence of the insurance coverage required by this Agreement, Administrative Agent or Canadian Agent, as the case may be, may purchase insurance at the applicable Borrowers’ expense to protect Administrative Agent’s and Canadian Agent’s, as the case may be, interests in the Properties of Borrowers and their Subsidiaries.  This insurance may, but need not, protect the interests of Borrowers and their Subsidiaries.  The coverage that Administrative Agent or Canadian Agent, as the case may be, purchases may not pay any claim that Borrowers or any Subsidiary makes or any claim that is made against Borrowers or any such Subsidiary in connection with said Property.  Borrower Representative may later cancel any insurance purchased by Administrative Agent or Canadian Agent, but only after (a) providing Administrative Agent or Canadian Agent, as the case may be, with evidence that Borrowers and their Subsidiaries have obtained insurance as required by this Agreement, and (b) Administrative Agent or Canadian Agent, as the case may be, shall have approved such insurance.  If Administrative Agent or Canadian Agent purchases insurance in accordance with this Section 6.1.2, Borrowers will be responsible for the costs of that insurance, including interest and any other charges Administrative Agent or Canadian Agent, as the case may be, may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to the Obligations.  The costs of the insurance may be more than the cost of insurance that Borrowers and their Subsidiaries may be able to obtain on their own.

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6.1.3         Protection of Collateral.  Neither Administrative Agent, Canadian Agent, nor Lenders shall  be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in Administrative Agent’s, Canadian Agent’s, or any Lender’s actual possession) or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other person whomsoever, but the same shall be at the applicable Borrower’s or Subsidiary’s sole risk.

6.2            Administration of Accounts.

6.2.1        Records, Schedules and Assignments of Accounts.  Each Borrower shall keep (and shall cause each of its Subsidiaries to keep) accurate and complete records of its Accounts and all payments and collections thereon and Borrowers shall submit to Administrative Agent and Canadian Agent on such periodic basis as Administrative Agent or Canadian Agent shall request a sales and collections report for the preceding period, in form consistent with the reports currently prepared by Borrowers and their Subsidiaries with respect to such information.  Concurrently with the delivery of each Borrowing Base Certificate required by Section 8.1.4, or more frequently as reasonably requested by Administrative Agent or Canadian Agent, from and after the date hereof, Borrower Representative shall deliver to Administrative Agent and Canadian Agent a detailed aged trial balance of all Accounts of Borrowers and their Subsidiaries (other than the Channell Australia Entities), and upon Administrative Agent’s or Canadian Agent’s request therefor, copies of proof of delivery and the original copy of all documents, including, without limitation, repayment histories and present status reports relating to the Accounts so scheduled and such other matters and information relating to the status of then existing Accounts as Administrative Agent or Canadian Agent shall reasonably request.

6.2.2        If an Account of a Borrower (or any of its Subsidiaries (other than the Channell Australia Entities)) includes a charge for any tax payable to any governmental taxing authority, Administrative Agent and/or Canadian Agent, as the case may be, is authorized, in its sole discretion, to pay the amount thereof to the proper taxing authority for the account of the applicable Borrower or Subsidiary and to charge the applicable Borrowers therefor, except for taxes that (i) are being actively contested in good faith and by appropriate proceedings and with respect to which the applicable Borrower or Subsidiary maintains reasonable reserves on its books therefor and (ii) would not reasonably be expected to result in any Lien on any material Property of Borrowers other than a Permitted Lien.  In no event shall Administrative Agent, Canadian Agent, or any Lender be liable for any taxes to any governmental taxing authority that may be due by any Borrower or any Subsidiary of a Borrower.

6.2.3        Account Verification.  Any of Administrative Agent’s or Canadian Agent’s officers, employees or agents shall have the right, at any time or times hereafter, in the name of Administrative Agent or Canadian Agent, any designee of Administrative Agent, Canadian Agent, or any Borrower or any of its Subsidiaries, to verify the validity, amount or any other matter relating to any Accounts owned by any such Person by mail, telephone, telegraph or otherwise; provided, that unless a Default or an Event of Default is then in existence, prior to conducting each set of verifications, Administrative Agent and Canadian Agent shall generally consult with the applicable Borrower or Subsidiary about the verification process.  Each Borrower shall (and shall cause each of its Subsidiaries to) cooperate fully with Administrative Agent and Canadian Agent in an effort to facilitate and promptly conclude any such verification process.

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6.2.4        Maintenance of Dominion Accounts.

(a)           Domestic Borrower shall maintain, and, if requested by Administrative Agent, shall cause each Subsidiary of such Borrower (other than other Canadian Borrower and Restricted Subsidiaries) to maintain, at Domestic Borrower’s expense, a Dominion Account or Accounts pursuant to lockbox and blocked account arrangements acceptable to Administrative Agent, with such banks as may be selected by Domestic  Borrower and be acceptable to Administrative Agent for direct deposit of payments and other remittances.  Domestic Borrower shall issue, and shall cause each of its Subsidiaries required to maintain such account arrangements hereunder to issue, to any such banks an irrevocable letter of instruction directing such banks to deposit all payments or other remittances received in the lockbox and blocked accounts to Domestic Borrower’s Dominion Account for application on account of the Domestic Obligations (with all such payments and remittances to be applied, prior to the occurrence of an Event of Default, first to outstanding Domestic Revolving Credit Loans with any remaining amounts remitted to Domestic Borrower).

(b)           Canadian Borrower shall maintain, at Canadian Borrower’s expense, the RBC Account (which is a Dominion Account for purposes of this Agreement) pursuant to blocked account arrangements acceptable to Administrative Agent (or other Dominion Account or Accounts pursuant to blocked account arrangements acceptable to Administrative Agent, with such banks as may be selected by Canadian Borrower and be acceptable to Administrative Agent) for direct deposit of payments and other remittances.  Amounts deposited in Canadian Borrower’s Dominion Account shall be applied on account of the Canadian Obligations in the event of the occurrence of an Event of Default.

(c)           UK Guarantors shall maintain, at UK Guarantors’ expense, (i) a Dominion Account or Accounts pursuant to collection account letters acceptable to Administrative Agent with Bank of America for direct deposit of payments and other remittances and (ii) their primary disbursement accounts and other cash management accounts with Bank of America and shall close all of their other deposit and cash management accounts in the United Kingdom, unless otherwise consented to by Administrative Agent.  Amounts deposited in the UK Guarantors’ Dominion Account shall be applied on account of the Domestic Obligations (with all such payments and remittances to be applied, prior to the occurrence of an Event of Default, first to outstanding Domestic Revolving Credit Loans with any remaining amounts remitted to UK Guarantors).

(d)           All funds deposited in any Dominion Account shall, to the extent of the applicable Obligations, immediately become the property of, in the case of Domestic Borrower and its Subsidiaries (other than Canadian Borrower and

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Restricted Subsidiaries), Administrative Agent, for the benefit of itself, Canadian Agent, and the Lenders, and, in the case of Canadian Borrower, Canadian Agent, for the benefit of Canadian Lender and the Canadian Participating Lenders, and the applicable Borrowers shall obtain (and shall cause their applicable Subsidiaries to obtain) the agreement by such banks in favor of Administrative Agent and Canadian Agent, as applicable, to waive any recoupment, compensation rights, offset rights and any security interest or hypothec in, or against, the funds so deposited.  Neither Administrative Agent, nor Canadian Agent assumes any responsibility for such lockbox and blocked account arrangements, including, without limitation, any claim of accord and satisfaction or release with respect to deposits accepted by any bank thereunder.

6.2.5        Collection of Accounts, Proceeds of Collateral.  To expedite collection, each Borrower shall endeavor in the first instance, and shall cause its Subsidiaries (other than Restricted Subsidiaries) to endeavor in the first instance, to collect its Accounts for Administrative Agent or Canadian Agent, as applicable.  All remittances received by each applicable Borrower or Subsidiary on account of Accounts, together with the proceeds of any other Collateral, shall be held as Administrative Agent’s or Canadian Agent’s, as the case may be, property, for its benefit and the benefit of the applicable Lenders, and other Agents, by such Borrower or Subsidiary as trustee of an express trust for Administrative Agent’s or Canadian Agent’s, as the case may be, benefit and such Borrower shall, and shall cause its applicable Subsidiaries to, immediately deposit same in kind in the lockboxes or a Dominion Account.  Administrative Agent and Canadian Agent each retains the right at all times after the occurrence and during the continuance of a Default or an Event of Default to notify Account Debtors that Borrowers’ and their applicable Subsidiaries’ Accounts have been assigned to Administrative Agent or Canadian Agent, as the case may be, and to collect such Borrowers’ and their applicable Subsidiaries’ Accounts directly in its own name and to charge the collection costs and expenses, including legal fees, to Borrowers.

6.3                Records and Reports of Inventory.

Each Borrower shall keep records of its Inventory which records shall be complete and accurate in all material respects.  Domestic Borrower will furnish to Administrative Agent Inventory reports concurrently with the delivery of each Borrowing Base Certificate described in Section 8.1.4 or more frequently as requested by Administrative Agent, which reports will be in such other format and detail as Administrative Agent shall request and shall include a current list of all locations of Domestic Borrower’s Inventory.  Domestic Borrower shall conduct a physical inventory no less frequently than annually and shall provide to Administrative Agent a report based on each such physical inventory promptly thereafter, together with such supporting information as Administrative Agent shall reasonably request.  Upon Administrative Agent’s request, Canadian Borrower and UK Guarantors shall furnish to Administrative Agent perpetual listings of Inventory of such Person.

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6.4           Administration of Equipment.

6.4.1        Records and Schedules of Equipment.  Each Borrower shall (and shall cause each of its Subsidiaries to) keep records of its Equipment which shall be complete and accurate in all material respects itemizing and describing the kind, type, quantity and book value of its Equipment and all dispositions made in accordance with Section 6.4.2 hereof, and Borrowers shall promptly after the reasonable request therefor by Administrative Agent or Canadian Agent, and shall cause each of their Subsidiaries to, furnish Agents with a current schedule containing the foregoing information on at least an annual basis and more often if reasonably requested by Agents, which schedule shall contain a certification that, except as otherwise indicated  in such schedule, all such Equipment is working in a satisfactory manner.  Promptly after the reasonable request therefor by Administrative Agent or Canadian Agent, each applicable Borrower shall (and shall cause each of its Subsidiaries to) deliver to Administrative Agent or Canadian Agent, as applicable, any and all evidence of ownership, if any, of any of its Equipment.

6.4.2        Dispositions of Equipment.  No Borrower shall, nor shall it permit any of its Subsidiaries to, sell, lease or otherwise dispose of or transfer any of its respective Equipment or other fixed assets or any part thereof without the prior written consent of Administrative Agent, in the case of Domestic Borrower, and Canadian Agent, in the case of Canadian Borrower; provided, however, that the foregoing restriction shall not apply, for so long as no Default or Event of Default exists and is continuing, to (a) dispositions of Equipment and other fixed assets which, in the aggregate during any consecutive twelve-month period, have a book value of $250,000 or less, provided that all proceeds thereof are remitted to Administrative Agent or Canadian Agent, as applicable, for application to the Loans as provided in Section 3.3.1, (b) replacements of Equipment or other fixed assets that are substantially worn, damaged or obsolete with Equipment or other fixed assets which are useful in the business of the applicable Borrower or one of its Subsidiaries, provided that the replacement Equipment or other fixed assets shall be acquired within 180 days before or after any disposition of the Equipment or other fixed assets that are to be replaced and the replacement Equipment or other fixed assets shall be free and clear of Liens other than Permitted Liens that are Purchase Money Liens, and (c) the sale, lease or other disposition of or transfer of Equipment or other fixed assets of the Channell Australia Entities, so long as the proceeds of such sale, lease, disposition, or transfer shall be, to the extent permitted under the Channell Bushman Credit Facility, applied to the outstanding obligations under any intercompany loans owed to Borrowers, but only to the extent any such intercompany loans exist at such time.  For the avoidance of doubt, if there are no outstanding intercompany loans owed to Borrowers by the Channell Australia Entities, then the sale, lease or other disposition of or transfer of Equipment or other fixed assets of the Channell Australia Entities shall be permitted under this Section 6.4.2.

SECTION 7. REPRESENTATIONS  AND  WARRANTIES

7.1          General Representations and Warranties.

To induce Administrative Agent, Canadian Agent, and each Lender to enter into this Agreement and to make advances hereunder, each Borrower warrants, represents and covenants to Administrative Agent, Canadian Agent, and each Lender that:

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7.1.1        Organization and Qualification.  Domestic Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Canadian Borrower is a corporation duly organized and validly existing under the laws of Ontario.  CCEL is a private limited liability company  duly incorporated and validly existing under the laws of England and Wales. CLU is a private limited liability company duly incorporated and validly existing under the laws of England and Wales.  Each of Borrowers’ Subsidiaries not referenced in the preceding sentences is a corporation, limited partnership or limited liability company duly organized, validly existing and, with respect to those Subsidiaries organized in the United States, in good standing under the laws of the jurisdiction of its incorporation or organization.  Each Borrower and each of its Subsidiaries is duly qualified and is authorized to do business and, with respect to Domestic Borrower and those Subsidiaries organized in the United States, is in good standing as a foreign limited liability company, limited partnership or corporation, as applicable, in each state or jurisdiction listed on Schedule 7.1.1 hereto and in all other states and jurisdictions in which the failure of such Borrower or any of its Subsidiaries to be so qualified would reasonably be expected to have a Material Adverse Effect.

7.1.2        Power and Authority.  Each Borrower and each of its Subsidiaries is duly authorized and empowered to enter into, execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party.  The execution, delivery and performance of this Agreement by each Borrower, and the execution, delivery and performance of each of the other Loan Documents by each Borrower and each of its Subsidiaries party thereto, have been duly authorized by all necessary corporate or other relevant action and do not and will not (a) require any consent or approval of the shareholders or other equity holders of any Borrower or any of the shareholders, partners or members, as the case may be, of any Subsidiary of any Borrower (other than UK Guarantors); (b) contravene any Borrower’s or any of its Subsidiaries’ charter, articles or certificate of incorporation, partnership agreement, certificate of formation, by-laws, limited liability agreement, operating agreement, unanimous shareholders agreement or other organizational documents (as the case may be); (c) violate, or cause any Borrower or any of its Subsidiaries to be in default under, any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award in effect having applicability to such Borrower or any of its Subsidiaries, the violation of which would reasonably be expected to have a Material Adverse Effect; (d) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Borrower or any of its Subsidiaries is a party or by which it or its Properties may be bound or affected, the breach of or default under which would reasonably be expected to have a Material Adverse Effect; or (e) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Properties now owned or hereafter acquired by any Borrower or any of its Subsidiaries.

7.1.3        Legally Enforceable Agreement.  This Agreement is, and each of the other Loan Documents when delivered under this Agreement will be, a legal, valid and binding obligation of each Borrower party thereto and each of its Subsidiaries party thereto, enforceable against it in accordance with its respective terms, except as enforcement may be limited by applicable bankruptcy or insolvency laws, and by general principles of equity.

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7.1.4        Capital Structure.  Schedule 7.1.4 hereto states, as of the date hereof, (a) the correct name of each of the Subsidiaries of each Borrower, its jurisdiction of incorporation or organization and the percentage of its Voting Stock owned by Borrowers, (b) the name of each Borrower’s and each of its Subsidiaries’ corporate or joint venture relationships and the nature of the relationship, (c) the number, class and holder of all outstanding Securities of Borrowers (other than Domestic Borrower) and the holder of Securities of each Subsidiary of each Borrower and (d) the number of issued and authorized, but unissued, Securities of each Borrower (with respect to Domestic Borrower, as of the date set forth in such schedule).  Attached as Schedule 7.1.4A hereto is the corporate organization chart of the Domestic Borrower and its Subsidiaries as of the Closing Date.  Each Borrower has good title to all of the Securities it purports to own of each of such Subsidiaries, free and clear in each case of any Lien other than Permitted Liens.  All such Securities have been duly issued and are fully paid and non-assessable.  Except as set forth on Schedule 7.1.4, as of the date hereof, there are no outstanding options to purchase, or any rights or warrants to subscribe for, or any commitments or agreements to issue or sell any Securities or obligations convertible into, or any powers of attorney relating to, any Securities of any Borrower or any of its Subsidiaries.  Except as set forth on Schedule 7.1.4, as of the date hereof, there are no outstanding agreements or instruments binding upon any of any Borrower’s or any of its Subsidiaries’ partners, members or shareholders, as the case may be, relating to the ownership of its Securities.

7.1.5        Names.  No Borrower nor any of its Subsidiaries has been known as or has used any legal, fictitious or trade names except those listed on Schedule 7.1.5 hereto.  Except as set forth on Schedule 7.1.5, no Borrower nor any of its Subsidiaries has been the surviving entity of a merger or consolidation, or the entity resulting from an amalgamation, or has acquired all or substantially all of the assets of any Person.  Each Borrower’s and each of its Subsidiaries’ respective jurisdictions of incorporation or organization, Type of Organization and Organizational I.D. Number, and any United Kingdom and Canadian equivalent thereof, are set forth on Schedules 7.1.4 and 7.1.5.  The respective exact legal names of each Borrower and each of its Subsidiaries are set forth on Schedule 7.1.5.

7.1.6        Business Locations.  Each Borrower’s and each of its Subsidiaries’ chief executive office and other places of business as of the date hereof are as listed on Schedule 6.1.1 hereto as updated from time to time by Borrower Representative.  During the preceding one-year period, no Borrower nor any of its Subsidiaries has had an office or place of business other than as listed on Schedule 6.1.1.  All tangible Collateral is and will at all times be kept by each Borrower and its Subsidiaries in accordance with Section 6.1.1.  Except as shown on Schedule 6.1.1, as  of the date hereof, no Inventory is stored with a bailee, distributor, warehouseman or similar party, nor is any Inventory consigned to any Person.

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7.1.7        Title to Properties; Priority of Liens.  Each Borrower and each of its Subsidiaries has good and indefeasible title to and fee simple ownership of, or valid and subsisting leasehold interests in, all of its real (or immovable) Property, and good title to all of the Collateral owned by such Borrower or Subsidiary and all of its other Property, in each case, free and clear of all Liens except Permitted Liens.  Each Borrower and each of its Subsidiaries has paid or discharged all lawful claims which, if unpaid, might become a Lien against any Borrower’s or such Subsidiary’s Properties that is not a Permitted Lien.  The Liens granted to Administrative Agent and Canadian Agent under Section 5 hereof are first priority Liens, subject only to Permitted Liens.

7.1.8        Accounts.  Administrative Agent and Canadian Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers and their Subsidiaries with respect to any Account or Accounts.  With respect to each Account of a Borrower and each Account of each Subsidiary of a Borrower, whether or not such Account of such Borrower or such Subsidiary is an Eligible Account, unless otherwise disclosed to Administrative Agent or Canadian Agent in writing:

(a)           It is genuine and in all respects what it purports to be, and it is not evidenced by a judgment;

(b)           It arises out of a completed, bona fide sale and delivery of goods or rendition of services by such Borrower or such Subsidiary, in the ordinary course of its business and in accordance with the terms and conditions of all purchase orders, contracts or other documents relating thereto to be complied with by any Borrower or any of its Subsidiaries and forming a part of the contract between such Borrower or such Subsidiary and the Account Debtor and the Account Debtor is not an Affiliate of such Borrower or such Subsidiary, except to the extent such Accounts with Affiliates exist in the ordinary course of business and consistent with past practices;

(c)           It is for a liquidated amount maturing as stated in the duplicate invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Administrative Agent or Canadian Agent, as applicable;

(d)           There are no facts, events or occurrences known to Borrowers which in any way impair the validity or enforceability of any Accounts or tend to reduce the amount payable thereunder from the face amount of the invoice and statements delivered or made available to Administrative Agent or Canadian Agent, as applicable, with respect thereto;

(e)           To the best of such Borrower’s knowledge (with “knowledge” in this clause (e) referring to the actual knowledge of those officers of such Borrower which are directly involved in the administration of the credit facilities provided pursuant to this Agreement), the Account Debtor thereunder (i) had the capacity to contract at the time any contract or other document giving rise to the Account was executed and (ii) is not involved in any bankruptcy or insolvency proceeding; and

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(f)            To the best of such Borrower’s knowledge (with “knowledge” in this clause (f) referring to the actual knowledge of those officers of such Borrower which are directly involved in the administration of the credit facilities provided pursuant to this Agreement), there are no proceedings or actions which are pending against the Account Debtor thereunder which are reasonably likely to result in any material adverse change in such Account Debtor’s financial condition or the collectability of such Account.

7.1.9        Equipment.  The Equipment of each Borrower and its Subsidiaries is in good operating condition and repair as of the date hereof, and all necessary replacements of and repairs thereto shall be made so that the operating efficiency thereof shall be maintained and preserved, reasonable wear and tear excepted, except where the failure to so maintain the same would not reasonably be expected to have a Material Adverse Effect.  No Borrower will permit (nor will it allow any of its Subsidiaries (other than Restricted Subsidiaries) to permit) any Equipment owned by such Borrower or Subsidiary to become affixed to any real (or immovable) Property leased to such Borrower or such Subsidiary so that an interest arises therein under the real estate laws of the applicable jurisdiction unless the landlord of such real (or immovable) Property has executed a landlord waiver or leasehold mortgage in favor of and in form reasonably acceptable to Administrative Agent or Canadian Agent, as applicable, and no Borrower will permit (nor will it allow any of its Subsidiaries (other than Restricted Subsidiaries) to permit) any of the Equipment of such Borrower or such Subsidiary to become an accession to any personal (or movable) Property other than Equipment that is subject to first priority (except for Permitted Liens) Liens in favor of Administrative Agent or Canadian Agent, as applicable.

7.1.10      Financial Statements; Fiscal Year.  The Consolidated balance sheets of Domestic Borrower and its Subsidiaries (including the accounts of all Subsidiaries of Domestic Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of April 30, 2007, and the related statements of income for the periods ended on such date, except for the absence of footnote disclosures and normal year-end adjustments, have been prepared in accordance with GAAP, and present fairly in all material respects the financial positions of Domestic Borrower and such Persons, taken as a whole, at such dates and the results of Domestic Borrower’s and such Persons’ operations, taken as a whole, for such periods.  As of the date hereof, since December 31, 2006, there has been no material adverse change in the financial position of Domestic Borrower and such other Persons, taken as a whole, as reflected in the Consolidated balance sheet as of such date.  As of the date hereof, the fiscal year of each Borrower and each of its Subsidiaries ends on December 31 of each year.

7.1.11      Full Disclosure.  The financial statements referred to in Section 7.1.10 hereof do not, nor does this Agreement or any other written statement of any Borrower or any of its Subsidiaries to Administrative Agent, Canadian Agent, or any Lender contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading. To the best of Borrowers’ knowledge, there is no fact pertaining directly to the business of Borrowers and their Subsidiaries or their customers which any Borrower or any of its Subsidiaries has failed to disclose to Administrative Agent, Canadian Agent, or any Lender in writing which would reasonably be expected to have a Material Adverse Effect.

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7.1.12      Solvent Financial Condition.  Except as set forth on Schedule 7.1.12, each Borrower and each of its Subsidiaries, is now and, after giving effect to the initial Loans to be made and the initial Domestic Letters of Credit and Domestic LC Guaranties to be issued hereunder and all related transactions, will be, as of the Closing Date, Solvent.

7.1.13      Surety Obligations.  Except as set forth on Schedule 7.1.13, as of the date hereof, no Borrower nor any of its Subsidiaries is obligated as surety or indemnitor under any surety or similar bond or other contract issued or entered into to assure payment, performance or completion of performance of any undertaking or obligation of any Person.

7.1.14      Taxes.  Domestic Borrower’s federal tax identification number is ###-###-####.  Canadian Borrower’s original corporation number is Ontario Corporation Number 1244636.  The federal tax identification number of each Domestic Subsidiary of each Borrower is shown on Schedule 7.1.14 hereto.  Except as set forth on Schedule 7.1.14 hereto, each Borrower and each of its Subsidiaries has filed all federal, national, state, provincial and local tax returns (including, without limitation, any returns required under its jurisdiction of organization or incorporation) and other reports relating to taxes it is required by law to file, except where the failure to so file would not reasonably be expected to have a Material Adverse Effect, and has paid, or made provision for the payment of, all material taxes, assessments, fees, levies and other governmental charges known by it to be due upon it, its income and Properties as and when such taxes, assessments, fees, levies and charges are due and payable, unless and to the extent any thereof are being actively contested in good faith and by appropriate proceedings and each Borrower and each of its Subsidiaries maintains reasonable reserves on its books therefor.  Except as set forth on Schedule 7.1.14 hereto, no tax Lien has been filed with respect to any such tax, fee or other charge.  To the knowledge of each Borrower, no claim is being asserted with respect to any such tax, fee or other charge, except (a) as set forth on Schedule 7.1.14 hereto, and (b) where any such claim would not reasonably be expected to result in a Material Adverse Effect.  The provision for taxes on the books of each Borrower and its Subsidiaries is adequate for all years not closed by applicable statutes, and for the current fiscal year.  No Borrower, nor any of its Subsidiaries, has entered into any “listed transactions” within the meaning of Treasury Regulation 1.6011-4T(b)(2).

7.1.15      Brokers.  Except as shown on Schedule 7.1.15 hereto, there are no claims for brokerage commissions, finder’s fees or investment banking fees in connection with the transactions contemplated by this Agreement arising from any actions taken by any Borrower or any of its Subsidiaries.

7.1.16      Patents, Trademarks, Copyrights and Licenses.  Each Borrower and each of its Subsidiaries owns, possesses or licenses or has the right to use all the patents, trademarks, service marks, trade names, copyrights, licenses and other Intellectual Property necessary for the present conduct of its business without any known conflict with the rights of others, except for such conflicts as would not reasonably be expected to have a Material Adverse Effect.  All such patents, registered trademarks, trademark applications, registered service marks, registered tradenames, registered copyrights, copyright applications, and

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licenses of Intellectual Property are listed on Schedule 7.1.16 hereto.  No claim has been asserted against any Borrower or any of its Subsidiaries which is currently pending that its use of its Intellectual Property or the conduct of its business does or may infringe upon the Intellectual Property rights of any third party, except for such claims as would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of Borrowers and except as set forth on Schedule 7.1.16 hereto, as of the date hereof, no Person is engaging in any activity that infringes in any material respect upon Borrowers’ or any of their Subsidiaries’ material Intellectual Property.  Except as set forth on Schedule 7.1.16, each Borrower’s and each of its Subsidiaries’ material license agreements and similar arrangements relating to its Inventory (a) permits, and does not restrict, the assignment by such Borrower or any of its Subsidiaries to Administrative Agent or Canadian Agent, as the case may be, or any other Person designated by Administrative Agent or Canadian Agent, as the case may be, of all of such Borrower’s or such Subsidiary’s, as applicable, rights, title and interest pertaining to such license agreement or such similar arrangement and (b) would permit the continued use by such Borrower or such Subsidiary, or Administrative Agent or Canadian Agent, as the case may be, or its assignee, of such license agreement or such similar arrangement and the right to sell Inventory subject to such license agreement for a period of no less than 6 months after a default or breach of such agreement or arrangement.  The consummation and performance of the transactions and actions contemplated by this Agreement and the other Loan Documents, including without limitation, the exercise by Administrative Agent or Canadian Agent, as the case may be, of any of its rights or remedies under Section 10, will not result in the termination or impairment of any of any Borrower’s or any of its Subsidiaries’ ownership or rights relating to its Intellectual Property, except for such Intellectual Property rights the loss or impairment of which would not reasonably be expected to have a Material Adverse Effect.  Except as listed on Schedule 7.1.16 and except as would not reasonably be expected to have a Material Adverse Effect, (A) no Borrower nor any of its Subsidiaries is in breach of, or default under, any term of any license or sublicense with respect to any of its Intellectual Property and (B) to the knowledge of Borrowers, no other party to such license or sublicense is in breach thereof or default thereunder, and such license is valid and enforceable.

7.1.17      Governmental Consents.  Each Borrower and each of its Subsidiaries has, and is in good standing with respect to, all governmental consents, approvals, licenses, authorizations, permits, certificates, inspections and franchises necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now owned or leased by it, except where the failure to possess or so maintain such rights would not reasonably be expected to have a Material Adverse Effect.  No action, consent or approval of, registration or filing with or any other action by any governmental authority is or will be required in connection with the borrowings hereunder, the creation of the security interests contemplated hereby and the other transactions contemplated to occur under the Loan Documents, except for (a) the filing of UCC and PPSA financing statements and filings with the United States Patent and Trademark Office, the United States Copyright Office and foreign equivalent, as applicable, and such other comparable documents as may be necessary to perfect the security interest of the Lenders hereunder in any jurisdiction, (b) such filings as are required by Section 395 of the Companies Act of England and Wales (as amended) or any applicable act of Parliament or rule or regulations of England and Wales relating to creation of security interests over land, and (c) such others as have been made or obtained and are in full force and effect.

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7.1.18      Compliance with Laws.  Except as set forth on Schedule 7.1.18, each Borrower and each of its Subsidiaries has duly complied in all material respects with (except for such noncompliance with respect to which no action may be taken by the applicable governmental authorities against any Borrower or any of its Subsidiaries), and its Properties, business operations and leaseholds are in compliance in all material respects with, the provisions of all United States of America, Canadian and United Kingdom federal, state, provincial and local laws, rules and regulations applicable to such Borrower or such Subsidiary, as applicable, its Properties or the conduct of its business, except for such non-compliance as would not reasonably be expected to have a Material Adverse Effect, and there have been no citations, notices or orders of noncompliance issued to any Borrower or any of its Subsidiaries under any such law, rule or regulation, except where (i) such noncompliance would not reasonably be expected to have a Material Adverse Effect or (ii) no action may be taken by the applicable governmental authorities against any Borrower or any of its Subsidiaries with respect to such noncompliance.  Each Borrower and each of its Subsidiaries has established and maintains an adequate monitoring system to insure that it remains in compliance in all material respects with all federal, state, provincial and local rules, laws and regulations applicable to it.  No Inventory has been produced in violation of the Fair Labor Standards Act (29 U.S.C. §201 et seq.), as amended.

7.1.19      Restrictions.  Except pursuant to the documents governing the Channell Bushman Credit Facility, no Borrower nor any of its Subsidiaries is a party or subject to any contract or agreement which restricts its right or ability to incur Indebtedness.

7.1.20      Litigation.  Except as set forth on Schedule 7.1.20 hereto, there are no actions, suits, proceedings or investigations pending, or to the knowledge of Borrowers, threatened, against or involving any Borrower or any of its Subsidiaries, or the business, operations, Properties, prospects, profits or condition of any Borrower or any of its Subsidiaries which, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect.  No Borrower nor any of its Subsidiaries is in default with respect to any order, writ, injunction, judgment, decree or rule of any court, governmental authority or arbitration board or tribunal, which, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

7.1.21      No Defaults.  No event has occurred and no condition exists which would, upon or after the execution and delivery of this Agreement or Borrowers’ performance hereunder, constitute a Default or an Event of Default.  No Borrower nor any of its Subsidiaries is in default in (and no event has occurred and no condition exists which constitutes, or which with the passage of time or the giving of notice or both would constitute, a default in) the payment of any Indebtedness to any Person for Money Borrowed in excess of $250,000.

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7.1.22      Leases.  Schedule 7.1.22 hereto is a complete listing of all capitalized and operating personal (or movable) Property leases of Borrowers and their Subsidiaries and all real (or immovable) Property leases of Borrowers and their Subsidiaries.  Each Borrower and each of its Subsidiaries is in full compliance with all of the terms of each of its respective capitalized and operating leases, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect.

7.1.23      Pension Plans.

(a)           Except as disclosed on Schedule 7.1.23 hereto, no Borrower nor any of its Subsidiaries has any Plan, Canadian Pension Plan or pension scheme.  Each Borrower and each of its Subsidiaries is in compliance with the requirements of ERISA and the regulations promulgated thereunder with respect to each Plan, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect.  No fact or situation that would reasonably be expected to have a Material Adverse Effect exists in connection with any Plan.  Neither Domestic Borrower nor any of its Subsidiaries has any material withdrawal liability in connection with a Multiemployer Plan.

(b)           The Canadian Pension Plans are duly registered under and have been administered in compliance with the Income Tax Act (Canada) and all other applicable laws which require registration (except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect) and no event has occurred which is reasonably likely to cause the loss of such registered status.  All material obligations of Canadian Borrower or any of its Subsidiaries (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and the funding agreements therefor have been performed in a timely fashion.  There have been no improper withdrawals or applications of the assets of the Canadian Pension Plans or the Canadian Benefit Plans.  There are no outstanding disputes, actions, suits or claims concerning the assets of the Canadian Pension Plans or the Canadian Benefit Plans.  Each of the Canadian Pension Plans is fully funded on a solvency basis (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable governmental authorities and which are consistent with generally accepted actuarial principles).  Canadian Borrower and its Subsidiaries have withheld all employee withholdings and have made all employer contributions to be withheld and made by it pursuant to Canadian and any provincial applicable law on account of Canadian Pension Plans, Canadian Benefit Plans, Canadian employment insurance and employee income taxes.  No condition exists or transaction has occurred in connection with any Canadian Pension Plan or Canadian Benefit Plan which could result in the incurrence by Canadian Borrower or its Subsidiaries of any liability, fine or penalty, except any liability, fine or penalty the imposition of which would not reasonably be expected to have a Material Adverse Effect.

(c)           All pension schemes of UK Guarantors and any other Subsidiaries of Domestic Borrower that are organized under the laws of England and Wales are operated and fully funded to the extent required by law based on reasonable actuarial assumptions applicable in the United Kingdom.

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7.1.24      Trade Relations.  There exists no actual or, to any Borrower’s knowledge, threatened termination, cancellation or limitation of, or any modification or change in, the business relationship between any Borrower or any of its Subsidiaries and any customer or any group of customers whose purchases individually or in the aggregate are material to the business of any Borrower and its Subsidiaries, or with any material supplier, except in each case, where the same would not reasonably be expected to have a Material Adverse Effect, and there exists no present condition or state of facts or circumstances which would prevent any Borrower or any of its Subsidiaries from conducting such business after the consummation of the transaction contemplated by this Agreement in substantially the same manner in which it has heretofore been conducted.

7.1.25      Labor Relations.  Except as described on Schedule 7.1.25 hereto, as of the date hereof, no Borrower nor any of its Subsidiaries is a party to any collective bargaining agreement.  There are no material grievances, disputes or controversies with any union or any other organization of any Borrower’s or any of its Subsidiaries’ employees, or threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization, except those that would not reasonably be expected to have a Material Adverse Effect.

7.1.26      Environmental Matters.

(a)           The properties now or formerly owned or operated by each Borrower and its Subsidiaries (as referred to in this Section 7.1.26, the “Owned Properties”) do not contain any Hazardous Materials in amounts or concentrations which (i) constitute, or constituted a violation of, or (ii) could give rise to liability under, Environmental Laws resulting from any Release of Hazardous Materials during such  Borrower’s or its Subsidiaries’ ownership or operation of the Owned Properties or, to the knowledge of such Borrower, at any other time, which violations and liabilities, in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(b)           The Owned Properties currently owned or occupied by such Borrower or any of its Subsidiaries and all operations of such Borrower and its Subsidiaries are in compliance, and, to the extent that such Borrower or any of its Subsidiaries owned or operated any Owned Properties in the past three years, in the last three years have been in compliance, with all Environmental Laws and all Environmental Permits and all necessary Environmental Permits have been obtained and are in effect, except to the extent that such non-compliance or failure to obtain any necessary permits, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)           During the time of such Borrower’s or its Subsidiaries’ ownership or operation of the Owned Properties and, to the knowledge of such Borrower, at any other time, there have been no Releases at, from, under or proximate to the Owned Properties or otherwise in connection with the operations of such Borrower or its Subsidiaries, which Releases, in the aggregate, could reasonably

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be expected to result in a Material Adverse Effect, and none of the Owned Properties currently owned or operated by such Borrower and its Subsidiaries are listed on the Federal National Priorities List (under CERCLA and as defined pursuant to Environmental Law), or any similar listing in any other relevant jurisdiction.

(d)           No Borrower nor any of its Subsidiaries has received any Environmental Claim in connection with any of the Owned Properties or the operations of such Borrower or any of its Subsidiaries or with regard to any Person whose liabilities for environmental matters such Borrower or any of its Subsidiaries  has retained or assumed, in whole or in part, contractually, by operation of law or otherwise, which Environmental Claim, in the aggregate, could reasonably be expected to result in a Material Adverse Effect, nor do such Borrower or any of its Subsidiaries have reason to believe that notice of any such Environmental Claim will be received or is being threatened.

Hazardous Materials have not been transported from any of the Owned Properties by any Borrower or any of its Subsidiaries or, to the knowledge of Borrowers, any other party, nor have Hazardous Materials been generated, treated, stored or disposed of at, on or under any of the Owned Properties by any Borrower or any of its Subsidiaries in a manner that could reasonably be expected to give rise to liability under any  Environmental Law that would constitute a Material Adverse Effect, nor have any Borrower or any of its Subsidiaries retained or assumed any liability, contractually, by operation of law or otherwise, with respect to the generation, treatment, storage or disposal of Hazardous Materials, which transportation, generation, treatment, storage or disposal, or retained or assumed liabilities, in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

7.2           Continuous Nature of Representations and Warranties.

Each representation and warranty contained in this Agreement and the other Loan Documents shall be continuous in nature and shall remain accurate, complete and not misleading at all times during the term of this Agreement, except for changes in the nature of a Borrower’s or one of a Borrower’s Subsidiary’s business or operations that would render the information in any schedule attached hereto or to any other Loan Document either inaccurate, incomplete or misleading, so long as Majority Lenders have consented to such changes or such changes are expressly permitted by this Agreement (provided that the consent of Majority Lenders shall not be required (so long as Borrowers have notified Administrative Agent of such changes) with respect to the following, to the extent otherwise expressly permitted by this Agreement: (a) the entry into any capitalized or operating personal (or movable) Property leases by any Borrowers or any of their Subsidiaries, or any real (or immovable) Property leases by any Borrower or any of their Subsidiaries not identified on Schedule 7.1.22 as of the Closing Date, (b) the establishment by any Borrower or any of their Subsidiaries of any Plan, Canadian Pension Plan or pension scheme not identified on Schedule 7.1.23 as of the Closing Date, (c) the filing of any tax Lien permitted by Section 8.2.5(b), or (d) the issuance of additional equity by Domestic Borrower).

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7.3           Survival of Representations and Warranties.

All representations and warranties of Borrowers contained in this Agreement or any of the other Loan Documents shall survive the execution, delivery and acceptance thereof by Administrative Agent, Canadian Agent, and each Lender and the parties thereto and the closing of the transactions described therein or related thereto.

SECTION 8. COVENANTS  AND  CONTINUING  AGREEMENTS

8.1           Affirmative Covenants.

During the term of this Agreement, and thereafter for so long as there are any Obligations outstanding, each Borrower covenants that, unless otherwise consented to by Majority Lenders, in writing, it shall (and it shall cause each of its Subsidiaries to):

8.1.1        Visits and Inspections; Lender Meeting.  Permit representatives of Administrative Agent and Canadian Agent, and during the continuation of any Default or Event of Default any Lender, from time to time, as often as may be reasonably requested, but only during normal business hours, to visit and inspect the Properties of such Borrower and such Subsidiaries, inspect, audit and make extracts from their books and records, and discuss with their officers, their employees, their consultants and their independent accountants, such Borrower’s and such Subsidiaries’ business, assets, liabilities, financial condition, business prospects and results of operations.  Administrative Agent or Canadian Agent, as applicable, if no Default or Event of Default then exists, shall give each Borrower or Subsidiary reasonable prior notice of any such inspection or audit.  Without limiting the foregoing, each Borrower will participate and will cause its Subsidiaries and key management personnel to participate in a meeting with Administrative Agent, Canadian Agent, and Lenders periodically during each year, which meetings shall be held at such times and such places as may be reasonably requested by Administrative Agent and Canadian Agent.

8.1.2        Notices.  Promptly notify Administrative Agent in writing of the occurrence of (a) any Default or Event of Default and (b) any event or the existence of any fact which renders any representation or warranty in this Agreement or any of the other Loan Documents inaccurate, incomplete or misleading in any material respect as of the date made or remade.  In addition, each Borrower agrees to provide Administrative Agent with (i) 10 Business Days’ prior written notice of (A) any change in the legal name of such Borrower or any of its Subsidiaries, (B) the adoption by such Borrower or any of its Subsidiaries of any new fictitious name or tradename and (C) any change in the principal place of business of such Borrower or any of its Subsidiaries, and (ii) prompt written notice of any change in the information disclosed in any exhibit or schedule hereto, in each case after giving effect to the materiality limits and Material Adverse Effect qualifications contained therein.

8.1.3        Financial Statements.  Keep, and cause each of its Subsidiaries to keep, adequate records and books of account with respect to its business activities in which proper entries are made in accordance with customary accounting practices reflecting all its financial transactions; and cause to be prepared and furnished to Administrative Agent,

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Canadian Agent, and each Lender, the following, all to be prepared in accordance with GAAP applied on a consistent basis, unless Borrowers’ certified public accountants concur in any change therein and such change is disclosed to Administrative Agent and is consistent with GAAP:

(a)           not later than 90 days after the close of each fiscal year of Domestic Borrower, unqualified (except for a qualification for a change in accounting principles with which the accountant concurs) audited financial statements of Domestic Borrower and its Subsidiaries as of the end of such year (including without limitation, a balance sheet, statement of income and statement of cash flow), on a Consolidated basis, certified by a firm of independent certified public accountants of recognized standing selected by Borrowers but reasonably acceptable to Administrative Agent and, within a reasonable time thereafter a copy of any management letter issued in connection therewith;

(b)           not later than 30 days after the end of each month hereafter, including the last month of Domestic Borrower’s fiscal year, unaudited financial statements of Domestic Borrower and its Subsidiaries as of the end of such month and of the portion of the fiscal year then elapsed (including without limitation, a balance sheet, statement of income and statement of cash flow), on a Consolidated and consolidating basis, certified by the principal financial officer of Domestic Borrower as prepared in accordance with GAAP and fairly presenting in all material respects the financial position and results of operations of Domestic Borrower and its Subsidiaries for such month and period subject only to changes from audit and year-end adjustments and except that such statements need not contain notes;

(c)           together with each delivery of financial statements pursuant to clauses (a) and (b) of this Section 8.1.3, a management report (i) setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year and the corresponding figures from the most recent Projections for the current fiscal year delivered pursuant to Section 8.1.7 and (ii) upon Administrative Agent’s request, identifying the reasons for any significant variations from such Projections.  The information above shall be presented in reasonable detail and shall be certified by the chief financial officer of Domestic Borrower to the effect that such information fairly presents in all material respects the results of operations and financial condition of Domestic Borrower and its Subsidiaries as at the dates and for the periods indicated;

(d)           upon Administrative Agent’s request, promptly after the sending or filing thereof, as the case may be, copies of any proxy statements or financial statements which any Borrower has made available to its Securities holders and copies of any regular, periodic and special reports or registration statements which any Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or any national securities exchange;

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(e)           upon request of Administrative Agent, copies of any annual report to be filed with the United States Department of Labor in connection with each Plan;

(f)            concurrently with the delivery of the financial statements described in paragraph (a) and (b) of this Section 8.1.3 and as more frequently as Administrative Agent or Canadian Agent may request, a statutory payables certificate with respect to Canadian Borrower and UK Guarantors in the form of Exhibit 8.1.3(g) hereto; and

(g)           such other data and information (financial and otherwise) as Administrative Agent, Canadian Agent, or any Lender, from time to time, may reasonably request, bearing upon or related to the Collateral or Borrowers’ or any of their Subsidiaries’ financial condition or results of operations.

Concurrently with the delivery of the financial statements described in paragraph (a) of this Section 8.1.3, Borrowers shall forward to Administrative Agent a copy of the accountants’ letter to Domestic Borrower’s management that is prepared in connection with such financial statements and at Administrative Agent’s request shall furnish to Administrative Agent a certificate of the aforesaid certified public accountants certifying to Administrative Agent that, based upon their examination of the financial statements of Domestic Borrower and its Subsidiaries, they are not aware of any Default or Event of Default, or, if they are aware of such Default or Event of Default, specifying the nature thereof.  Concurrently with the delivery of the financial statements described in paragraphs (a) and (b) of this Section 8.1.3, or more frequently if reasonably requested by Administrative Agent or Canadian Agent, Borrowers shall cause to be prepared and furnished to Administrative Agent and Canadian Agent a Compliance Certificate in the form of Exhibit 8.1.3 hereto executed by the Chief Financial Officer of Domestic Borrower.

8.1.4        Borrowing Base Certificates.  On or before the 15th day of each month from and after the date hereof, Borrowers shall deliver to Administrative Agent a Borrowing Base Certificate as of the last day of the immediately preceding month, with such supporting materials as Administrative Agent shall reasonably request, which Borrowing Base Certificate shall provide eligibility information with respect to Accounts of the Account Creditors and Inventory of Domestic Borrower on a consolidated and consolidating basis. If Administrative Agent deems it advisable in its sole discretion, Borrowers shall execute and deliver to Administrative Agent Borrowing Base Certificates more frequently than as provided above.

8.1.5        [Reserved].

8.1.6        Landlord, Processor and Storage Agreements.  Provide Administrative Agent and Canadian Agent with copies of all agreements between each Borrower or any of its Subsidiaries and any landlord, processor, distributor, warehouseman or consignee which owns any premises at which any Collateral may, from time to time, be kept.

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8.1.7        Projections.  No later than thirty (30) days prior to the end of each fiscal year of Domestic Borrower, deliver to Administrative Agent Consolidated and consolidating Projections of Domestic Borrower and its Subsidiaries for the forthcoming fiscal year of Domestic Borrower, month by month.

8.1.8        Subsidiaries.  Cause each Domestic Subsidiary of Domestic Borrower (other than Restricted Subsidiaries) and upon Administrative Agent’s request each Foreign Subsidiary of Domestic Borrower (other than Restricted Subsidiaries and Canadian Borrower), in each case whether now or hereafter in existence, to execute and deliver to Administrative Agent a Guaranty Agreement and a Guaranty Security Agreement pursuant to which such Subsidiary guaranties the payment of all Obligations and grants to Administrative Agent (for the benefit of itself, Canadian Agent, and Lenders) a first priority Lien (subject only to Permitted Liens) on all of its Properties of the types described in Section 5.  Additionally, each Borrower and each Subsidiary of a Borrower (other than Restricted Subsidiaries) shall execute and deliver to Administrative Agent a pledge agreement pursuant to which such Borrower or such Subsidiary grants to Administrative Agent (for the benefit of itself, Canadian Agent, and Lenders) a first priority Lien (subject only to Permitted Liens) with respect to (a) all of the issued and outstanding Securities of each Subsidiary of Domestic Borrower which is not a Restricted Subsidiary (other than Canadian Borrower (with respect to which 65% of the issued and outstanding Securities shall be pledged to Administrative Agent on the Closing Date), and (b) 65% of the issued and outstanding Securities, in the aggregate, of each Restricted Subsidiary (other than Channell Bushman and the Channell Australia Entities) described in clause (b) of the definition of “Restricted Subsidiary” if such Subsidiary possesses 2.5% or greater of Consolidated assets of Domestic Borrower, determined in accordance with GAAP, or owns any material Intellectual Property.  In addition, Borrowers shall cause each Restricted Subsidiary of Domestic Borrower which ceases to be a Restricted Subsidiary to comply with this Section 8.1.8, and Borrowers shall, and shall cause each Subsidiary of Borrower (other than Restricted Subsidiaries) which owns equity of such Restricted Subsidiary to, comply with this Section 8.1.8 with respect to each Restricted Subsidiary of Domestic Borrower which ceases to be a Restricted Subsidiary.

8.1.9        Deposit and Brokerage Accounts.  For each deposit account or brokerage account that any Borrower or any of its Subsidiaries (other than Restricted Subsidiaries) at any time opens or maintains, such Borrower shall (or shall cause such Subsidiary to), at Administrative Agent’s or Canadian Agent’s, as the case may be, request and option, pursuant to an agreement in form and substance satisfactory to Administrative Agent or Canadian Agent, as the case may be, cause the depository bank or securities intermediary, as applicable, to agree to comply at any time with instructions from Administrative Agent or Canadian Agent, as the case may be, to such depository bank or securities intermediary, as applicable, directing the disposition of funds from time to time credited to such deposit or brokerage account, without further consent of such Borrower or such Subsidiary.

8.1.10      ERISA.  Each Borrower will, and will cause each of its Subsidiaries to, (a) comply with the applicable provisions of ERISA and the Code (or their Canadian or United Kingdom equivalent) and of the regulations and published interpretations thereunder, except where the failure to comply therewith could not reasonably be expected to

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have a Material Adverse Effect, and (b) furnish to Administrative Agent (i) promptly, and in any event within 30 days after any responsible officer of such Borrower either knows or has a reasonable basis to know that any Reportable Event has occurred, that alone or together with any other Reportable Event could reasonably be expected to result in material liability, of such Borrower, any Subsidiary or any ERISA Affiliate to the PBGC, a statement of a responsible officer of such Borrower (in his or her capacity as such) setting forth details as to such Reportable Event and the action proposed to be taken with respect thereto, together with a copy of the notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice such Borrower, any Subsidiary or any ERISA Affiliate receives from the PBGC relating to the intention of the PBGC to terminate any Plan or Plans or to appoint a trustee to administer any Plan or Plans, (iii) within 30 days after the due date for filing with the PBGC pursuant to Section 412(n) of the Code a notice of failure to make a required installment or other payment with respect to a Plan, a statement of a responsible officer of such Borrower setting forth details as to such failure and the action proposed to be taken with respect thereto, together with a copy of such notice given to the PBGC and (iv) promptly and in any event within 30 days after receipt thereof by such Borrower, any Subsidiary or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice received by such Borrower, any Subsidiary or any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a determination that a Multiemployer Plan is, or is expected to be, terminated or in Reorganization, in each case within the meaning of Title IV of ERISA; provided, however, that no such notice or statement will be required under this Section 8.1.10 unless the event, when aggregated with all other events described in this Section 8.1.10 occurring at the same time, could be reasonably expected to result in liability to such Borrower, any Subsidiary or any ERISA Affiliate in an amount that would exceed $250,000 in the aggregate for such Borrower, its Subsidiaries and all ERISA Affiliates.

8.1.11      Compliance with Environmental Laws.  Except as any of the following, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Borrower will, and will cause each of its Subsidiaries to, comply, and use its reasonable best efforts to cause all lessees and other Persons occupying its Properties to comply, in all material respects with all Environmental Laws and Environmental Permits applicable to its operations and Properties; obtain and renew all material Environmental Permits necessary for its operations and Properties; and conduct any remedial action required by any governmental authority in accordance with Environmental Laws; provided, however, that no Borrower nor any of its Subsidiaries shall be required to undertake any remedial action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances.

8.1.12      Patents, Trademarks and Copyrights.  Each Borrower will, and will cause each of its Subsidiaries (other than Restricted Subsidiaries) to (a) as it deems appropriate in its business judgment, use commercially reasonable efforts to register with the United States Patent and Trademark Office, the United States Copyright Office or foreign equivalent, as the case may be, all of its or their right, title and interest in each material patent, trademark and copyright used in its or their business which is so registrable under applicable

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law, (b) report each such filing and registration to Administrative Agent, with respect to Domestic Collateral, and Canadian Agent, with respect to Canadian Collateral, within fifteen (15) Business Days after the last day of the fiscal quarter in which such filing occurs and (c) promptly upon request by Administrative Agent, with respect to Domestic Collateral, and Canadian Agent, with respect to Canadian Collateral, execute and deliver any and all agreements, instruments, documents, and papers (each of which shall be in form and substance reasonably satisfactory to Administrative Agent or Canadian Agent, as applicable) as may be necessary or as Administrative Agent or Canadian Agent, as applicable, may reasonably request to grant (to the extent possible) to Administrative Agent, for the benefit of itself, Canadian Agent, and the Lenders, and to Canadian Agent, for the benefit of itself, Canadian Lender and the Canadian Participating Lenders, a perfected, first priority security interest therein and in any goodwill and general intangibles relating thereto or represented thereby.

8.1.13      Canadian Pension and Benefit Plans.

(a)           For each existing Canadian Pension Plan of Canadian Borrower or any of its Subsidiaries, Canadian Borrower or such Subsidiary, as applicable, shall ensure that such plan retains its registered status under and is administered in a timely manner in all material respects in accordance with the applicable pension plan text, funding agreement, the Income Tax Act (Canada) and all other applicable laws.

(b)           For each Canadian Pension Plan hereafter adopted by Canadian Borrower or any of its Subsidiaries which is required to be registered under the Income Tax Act (Canada) or any other applicable laws, the Canadian Borrower or such Subsidiary, as applicable, shall use its best efforts to seek and receive confirmation in writing from the applicable governmental authorities to the effect that such plan is unconditionally registered under the Income Tax Act (Canada) and such other applicable laws.

(c)           For each existing and hereafter adopted Canadian Pension Plan and Canadian Benefit Plan of Canadian Borrower or any of its Subsidiaries, Canadian Borrower or such Subsidiary, as applicable, shall in a timely fashion perform in all material respects all obligations (including fiduciary, funding, investment and administration obligations) required to be performed in connection with such plan and the funding media therefor.

(d)           Canadian Borrower and each Subsidiary of Canadian Borrower shall deliver to Administrative Agent and Canadian Agent, if requested by Administrative Agent or Canadian Agent, promptly after the filing thereof by Canadian Borrower or such Subsidiary, as applicable, with any applicable governmental authority, (i) copies of each annual and other return, report or valuation with respect to each Canadian Pension Plan of Canadian Borrower or such Subsidiary, as applicable; (ii) promptly after receipt thereof, a copy of any direction, order, notice, ruling or opinion that Canadian Borrower or such Subsidiary, as

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applicable, may receive from any applicable governmental authority with respect to any Canadian Pension Plan of Canadian Borrower or such Subsidiary, as applicable; and (iii) notification within 30 days of any increases having a cost to Canadian Borrower or such Subsidiary, as applicable, in excess of $250,000 per annum, in the benefits of any existing Canadian Pension Plan or Canadian Benefit Plan, or the establishment of any new Canadian Pension Plan or Canadian Benefit Plan, or the commencement of contributions to any such plan to which Canadian Borrower or such Subsidiary, as applicable, was not previously contributing.

8.2          Negative Covenants.

During the Term, and thereafter for so long as there are any Obligations outstanding, each Borrower covenants that, unless otherwise consented to by Majority Lenders, in writing, it shall not (and it shall not permit its Subsidiaries to):

8.2.1        Mergers; Consolidations; Acquisitions; Structural Changes.  Merge, amalgamate or consolidate with any Person; or acquire all or substantially all of the Properties of any Person; or change its state or other jurisdiction of incorporation or organization or Type of Organization; or change its legal name, except for:

(a)           mergers of any Subsidiary of a Borrower into a Borrower or another Subsidiary (other than Canadian Borrower or a Restricted Subsidiary) of a Borrower;

(b)           acquisitions of assets consisting of fixed assets or real (or immovable) Property that constitute Capital Expenditures permitted under Section 8.2.8; and

(c)           mergers of any Channell Australia Entity into another Channell Australia Entity.

8.2.2        Loans and Advances.  Make any loans or other advances of money to any Person, other than (a) for salary, travel advances, advances against commissions and other similar advances to employees and extensions of trade credit in the ordinary course of business, (b) deposits with financial institutions permitted under this Agreement, (c) prepaid expenses, and (d) Permitted Intercompany Loans.

8.2.3        Total Indebtedness.  Create, incur, assume, or suffer to exist, any Indebtedness, except:

(a)           Obligations owing to Administrative Agent, Canadian Agent, or any Lender under this Agreement or the other Loan Documents;

(b)           Indebtedness existing on the date of this Agreement and listed on Schedule 8.2.3(b) and any refinancing thereof which does not increase the amount thereof;

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(c)           Contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;

(d)           Guaranties of any Indebtedness permitted hereunder;

(e)           To the extent not mentioned above, trade payables, accruals and accounts payable in the ordinary course of business (in each case to the extent not overdue) not for Money Borrowed;

(f)            Subordinated Debt in such amounts as may be approved in writing by Administrative Agent and the Majority Lenders;

(g)           Purchase Money Indebtedness secured by a Purchase Money Lien and Capitalized Lease Obligations (and any refinancing thereof), provided that the aggregate unpaid principal amount for Borrowers and their Subsidiaries of the foregoing (excluding any interest component thereof) does not exceed $2,000,000;

(h)           Permitted Intercompany Loans;

(i)            Guaranties in the ordinary course of business by any Borrower of any obligation owed by any Subsidiary to an unrelated third party, and guaranties by Subsidiaries of Domestic Borrower of any obligation owed by a Borrower to an unrelated third party, provided that the guarantied obligations are otherwise permitted by this Agreement and do not exceed at any time the sum of the amount set forth on Schedule 8.2.3(i) hereto as of the Closing Date plus $75,000;

(j)            Indebtedness not included in paragraphs (a) through (j) above which, when added to outstanding Indebtedness permitted under paragraph (g) above, does not exceed at any time, in the aggregate, the sum of $1,000,000; and

(k)           Indebtedness under the Channell Bushman Credit Facility which does not exceed an aggregate principal amount of AUD15,000,000.

8.2.4        Affiliate Transactions.  Enter into, or be a party to, any transaction with any Affiliate of a Borrower, including without limitation any management, consulting or similar fees, except, without duplication, (a) in the ordinary course of and pursuant to the reasonable requirements of such Borrower’s or such Subsidiary’s business and upon fair and reasonable terms which are fully disclosed to Administrative Agent and are no less favorable to such Borrower or such Subsidiary than would be obtained in a comparable arms-length transaction with a Person not an Affiliate of such Borrower or such Subsidiary, (b) those transactions identified on Schedule 8.2.4 hereto, (c) Permitted Intercompany Loans, and (d) the employment of an Affiliate who is a natural person by any Borrower or any Subsidiary as an officer, director or employee of such Borrower or Subsidiary, and (e) as otherwise permitted under this Agreement.

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8.2.5        Limitation on Liens.  Create or suffer to exist any Lien upon any of its Property, income or profits, whether now owned or hereafter acquired, except:

(a)           Liens at any time granted in favor of Administrative Agent or Canadian Agent pursuant to the Loan Documents;

(b)           Liens for taxes, assessments or governmental charges (excluding any Lien imposed pursuant to any of the provisions of ERISA) not yet due, or being contested in the manner described in Section 7.1.14 hereto, but only if such Lien would not reasonably be expected to have a Material Adverse Effect;

(c)           Liens arising in the ordinary course of the business of such Borrower or any of its Subsidiaries by operation of law or regulation, but only if payment in respect of any such Lien is not at the time required and such Liens do not, in the aggregate, materially detract from the value of the Property of such Borrower or any of its Subsidiaries or materially impair the use thereof in the operation of the business of such Borrower or any of its Subsidiaries;

(d)           Purchase Money Liens securing Permitted Purchase Money Indebtedness and any renewals or extensions thereof so long as the obligations secured or benefited thereby are not increased and such Liens comply with the limitations set forth in the definition of “Purchase Money Lien”;

(e)           Such other Liens as appear on Schedule 8.2.5 hereto and any renewals or extensions thereof so long as the obligations secured or benefited thereby are not increased and such Liens are not extended beyond their scope from that existing on the Closing Date;

(f)            Liens incurred or deposits made in the ordinary course of business in connection with (i) worker’s compensation, social security, unemployment insurance and other like laws or (ii) sales contracts, leases, statutory obligations, work in progress advances and other similar obligations not incurred in connection with the borrowing of money or the payment of the deferred purchase price of property;

(g)           Reservations, covenants, zoning and other land use regulations, title exceptions or encumbrances granted in the ordinary course of business, affecting real (or immovable) Property owned or leased by such Borrower or one of its Subsidiaries; provided that such exceptions do not in the aggregate materially interfere with the use of such Property in the ordinary course of such Borrower’s or such Subsidiary’s business;

(h)           Judgment Liens that do not give rise to an Event of Default under Section 10.1.15;

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(i)            Liens securing Capitalized Lease Obligations permitted by Section 8.2.3(g) on and limited to the capital assets acquired, constructed or financed with the proceeds of such Capitalized Lease Obligations;

(j)            Liens securing the Channell Bushman Credit Facility; and

(k)           Such other Liens as Majority Lenders may hereafter approve in writing.

Notwithstanding any provision contained herein or in any of the Loan Documents to the contrary, Borrower shall not, nor shall it permit any of its Subsidiaries, to create or suffer to exist any Liens on the equity interests in Channell Bushman.

8.2.6        Payments and Amendments of Certain Debt.

(a)           Make any payment of any part or all of any Subordinated Debt or take any other action or omit to take any other action in respect of any Subordinated Debt, except in accordance with the subordination agreement relative thereto or the subordination provisions thereof; or

(b)           Amend or modify any agreement, instrument or document evidencing or relating to any Subordinated Debt.

8.2.7        Distributions.  Declare or make any Distributions, except for:

(a)           Distributions by any Subsidiary of Borrowers to a Borrower; and

(b)           Distributions paid solely in Securities of such Borrower or any of its Subsidiaries;

(c)           Distributions by Domestic Borrower consisting of the repurchase of the common stock of Domestic Borrower in the open market in an amount not to exceed $200,000 in the aggregate during each fiscal year of Domestic Borrower, subject in the case of each such Distribution to the following: (i) Aggregate Availability as at such date shall not be less than $2,000,000, after giving effect to such repurchase, (ii) no Default or Event of Default shall then exist or would result therefrom, and (iii) Borrowers and their Subsidiaries shall not be in violation of Section 8.2.19 as of such date; and

(d)           Distributions by any Channell Australia Entity to another Channell Australia Entity.

8.2.8        Capital Expenditures.  Make Capital Expenditures (including, without limitation, by way of capitalized leases (but counting in any fiscal year the full amount of the obligations under each capitalized lease entered into during such fiscal year and counting no amount in respect of capitalized leases entered into during any other fiscal year)) which, in the aggregate, (a) as to Borrowers and the UK Guarantors, exceed $3,500,000 for any fiscal year of Domestic Borrower and (b) as to Borrowers and all of their Subsidiaries, exceed $6,000,000 for any fiscal year of Domestic Borrower.

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8.2.9        Operating Leases.  Incur any obligation to pay rent under an operating lease in any fiscal year of Domestic Borrower if to do so would result in the aggregate obligation of Borrowers and their Subsidiaries to make cash payments under all operating leases in that fiscal year to exceed the sum of the amount set forth in Schedule 8.2.9 as of the Closing Date plus $500,000.

8.2.10      Disposition of Assets.  Sell, lease or otherwise dispose of any of its Properties, including any disposition of Property as part of a sale and leaseback transaction, to or in favor of any Person, except for:

(a)           unless a Default or Event of Default has occurred and Agents or Lenders are exercising any default remedies pertaining to mashalling, sale, liquidation or other control of such Inventory, sales of Inventory in the ordinary course of business;

(b)           transfers of Property to such Borrower by a Subsidiary of such Borrower or by any Subsidiary to a Borrower where the Liens created by the Security Documents over such Property are not adversely affected in any material respect;

(c)           dispositions of Property that is substantially worn, damaged, uneconomic or obsolete (subject to Section 6.4.2 hereof);

(d)           dispositions of investments described in clauses (d), (e), (f) and (g) of the definition of the term “Restricted Investments”; and

(e)           other dispositions expressly authorized by this Agreement, including without limitation dispositions of Equipment and other fixed assets permitted by Section 6.4.2 hereof; and

(f)            the subletting by either UK Guarantor of its leasehold interest in the applicable Subject UK Leaseholds.

8.2.11      Securities of Subsidiaries.  Permit any Subsidiaries of Domestic Borrower to issue any additional Securities except to a Borrower and except for (i) director’s qualifying Securities and to any other Subsidiary of Domestic Borrower provided such Subsidiary pledges such Securities to the Agents in accordance with this Agreement and the other Loan Documents and (ii) Securities issued by any Channell Australia Entity to any other Channell Australia Entity.

8.2.12      Bill-and-Hold Sales, Etc.  Make a sale to any customer on a bill-and-hold or consignment basis.

8.2.13      Restricted Investment.  Make or have any Restricted Investment.

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8.2.14      Subsidiaries and Joint Ventures.  Create, acquire or otherwise suffer to exist any Subsidiary or joint venture arrangement not in existence as of the date hereof except for the Subsidiary described on Schedule 8.2.13.

8.2.15      Tax Consolidation.  File or consent to the filing of any consolidated income tax return with any Person other than Domestic Borrower and its Subsidiaries.

8.2.16      Organizational Documents.  Agree to, or suffer to occur, any amendment, supplement or addition to its or any of its Subsidiaries’ charter, articles or certificate of incorporation, certificate of formation, limited partnership agreement, bylaws, limited liability agreement, operating agreement or other organizational documents (as the case may be), that would reasonably be expected to have a Material Adverse Effect.

8.2.17      Fiscal Year End.  Change its fiscal year end.

8.2.18      Aggregate Availability.  Permit Aggregate Availability to be less than $1,500,000 at any time.

8.2.19      UK Losses.  Permit UK Loss, (i) as of the last day of each calendar month for the calendar month then ended, to exceed negative $500,000 and (ii) as of the last day of each calendar month for the twelve month period then ended, to exceed negative $900,000; provided that, notwithstanding anything to the contrary contained in this Agreement, a violation of this covenant shall not constitute a Default or an Event of Default under this Agreement nor otherwise impose upon Borrowers or their Subsidiaries any additional Obligations nor any acceleration of the payment of any outstanding Obligations, but rather in the event of a violation of this Section 8.2.19, the sole and exclusive right and remedy shall consist of the right of Administrative Agent, in its sole discretion, to deem the UK Borrowing Base equal to $0 (unless and until such breach shall be cured by Borrowers and their Subsidiaries delivering appropriate information to Administrative Agent indicating, and Administrative Agent’s determination, that Borrowers and their Subsidiaries have complied with this Section 8.2.19 for three consecutive months subsequent to such breach (it being acknowledged that only a breach of clause (b) of this Section 8.2.19 is capable of such cure)).

8.2.20      Post-Closing Deliveries.  Within 30 days of the Closing Date, fail to cause UK Guarantors to deliver fully executed collection account agreements and/or amendments to the existing collection account agreements in respect of (i) UK Guarantors’ accounts with Bank of America, N.A., London U.K. Branch and (ii) such other accounts of UK Guarantors, as may be requested by Administrative Agent, in its sole discretion, in each case in form and substance reasonably acceptable to Administrative Agent.

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SECTION 9. CONDITIONS PRECEDENT

Notwithstanding any other provision of this Agreement or any of the other Loan Documents, and without affecting in any manner the rights of Administrative Agent, Canadian Agent, or any Lender under the other sections of this Agreement, no Lender shall be required to make any Loan, nor shall Administrative Agent be required to or issue or procure any Domestic Letter of Credit or Domestic LC Guaranty unless and until each of the following conditions has been and continues to be satisfied:

9.1           Documentation.

Administrative Agent shall have received, in form and substance reasonably satisfactory to Administrative Agent, Canadian Agent, and their counsel, a duly executed copy of this Agreement and the other Loan Documents, together with such additional documents, instruments and certificates as Administrative Agent and Canadian Agent and their counsel shall require in connection therewith from time to time, all in form and substance reasonably satisfactory to Administrative Agent, Canadian Agent, and their counsel, including, without limitation, the pledge by Domestic Borrower to Administrative Agent of 65% of the outstanding equity of Canadian Borrower and 100% of the outstanding equity of Egerton, CLU and CCEL.

9.2           No Default.

No Default or Event of Default shall exist.

9.3           Other Conditions.

Each of the conditions precedent set forth in the other Loan Documents shall have been satisfied.

9.4           No Litigation.

No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of this Agreement or the consummation of the transactions contemplated hereby.

9.5           Material Adverse Effect.

Since December 31, 2006, there has not been any material adverse change in Borrowers’ business, assets, condition (financial or otherwise), operations, income or prospects and no event or condition exists which would be reasonably likely to result in any Material Adverse Effect.

9.6           Fees.

The fees payable on the Closing Date pursuant to the Fee Letter shall have been paid.

9.7           Collateral.

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Administrative Agent shall be reasonably satisfied that, upon the filing of appropriate financing statements showing Administrative Agent (for the benefit of itself, Canadian Agent, and each Lender) as secured party with the appropriate governmental authorities, Administrative Agent (for the benefit of itself, Canadian Agent, and each Lender) will hold a first priority perfected Lien in the collateral described therein subject only to Permitted Liens.  Canadian Agent shall be reasonably satisfied that, upon the filing of appropriate financing statements showing Canadian Agent (for the benefit of itself, Canadian Lender and Canadian Participating Lenders) as secured party with the appropriate governmental authorities,  Canadian Agent (for the benefit of itself, Canadian Lender, and Canadian Participating Lenders) will hold a first priority perfected Lien in the collateral described therein subject only to Permitted Liens.

9.8           Diligence.

Administrative Agent and Canadian Agent shall have completed and received all audits, inspections, legal due diligence and research (including, without limitation, with respect to state sales tax issues), appraisals and examinations as deemed necessary in Administrative Agent’s and Canadian Agent’s reasonable opinion with respect to the Collateral (including inventory, fixed assets and real (or immovable) Property), the books and records of Borrowers and their Subsidiaries, the financial and business condition and operations of Borrowers and their Subsidiaries, environmental assessment studies and remediation plans, and the transactions contemplated hereby.

9.9           Corporate Matters.

Administrative Agent shall be satisfied with the corporate and legal structure and capitalization of Borrowers and each of their Subsidiaries, including the charter and bylaws of Borrowers and each such Subsidiary and each agreement or instrument relating thereto.

9.10         Environmental Matters.

Administrative Agent shall be satisfied as to the existing and potential liability of Borrowers and their Subsidiaries with respect to any environmental matters, and as to the compliance by Borrowers and their Subsidiaries with all Environmental Laws.

9.11         Insurance.

Administrative Agent and Canadian Agent shall be satisfied that Borrowers have obtained the insurance policies and the loss payable and additional insured endorsements relating thereto required by Section 6.1.2.

9.12         Legal Opinions.

Administrative Agent and Canadian Agent shall have received satisfactory written opinions of counsel for Borrowers and their Subsidiaries as to the transactions contemplated hereby (including, without limitation, the tax aspects thereof and compliance with all applicable securities laws), the status of Borrowers and their Subsidiaries, and the legal, binding and enforceable effect of the Loan Documents.

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9.13         Reference Checks.

Administrative Agent shall have completed satisfactory reference checks of the customers and vendors of Borrowers and their Subsidiaries.

9.14         Financial Statements.

Administrative Agent shall have been satisfied with its review of Borrowers’ financial statements for the fiscal year ending December 31, 2006, and all interim financial statements of Borrowers delivered to Administrative Agent (including, without limitation, as of April 30, 2007) prior to the Closing Date.

9.15         Updated Audit.

Administrative Agent and Canadian Agent shall have completed a satisfactory pre-closing updated audit of the books and records of Borrowers and their Subsidiaries.

9.16         Costs and Expenses.

The reasonable costs and expenses of Administrative Agent and Canadian Agent in connection with the preparation of the Loan Documents payable pursuant to Section 2.9 and invoiced to Borrowers prior to the Closing Date, shall have been paid.

9.17         Representations and Warranties.

The representations and warranties of Borrowers contained in Section 7 shall be true and correct in all material respects.

9.18         Availability.

Administrative Agent shall have determined that immediately after Lenders have made the initial Loans and after Administrative Agent have procured the initial Domestic Letters of Credit and Domestic LC Guaranties contemplated hereby, and Borrowers have paid (or, if accrued, treated as paid) all closing costs incurred in connection with the transactions contemplated hereby and have reserved an amount sufficient to pay all trade payables greater than 60 days past due, Aggregate Availability shall not be less than $1,500,000.

SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

10.1         Events of Default.

The occurrence of one or more of the following events shall constitute an “Event of Default”:

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10.1.1      Payment of Obligations.  Borrowers shall fail to pay any of the Obligations hereunder or under any Note on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise), or, in the case of any payment required because of an Overadvance (as defined below), within three Business Days of the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise).  As used in this Section 10.1.1, the term “Overadvance” means the occurrence of any of the following: (a) the Domestic Revolving Credit Exposure of all the Domestic Lenders exceeds (i) the Aggregate Borrowing Base then in effect (minus Reserves, if any) or (ii) the Revolving Credit Maximum Amount (minus the Dollar Equivalent of the aggregate principal amount of the outstanding Canadian Revolving Credit Loans, if any) or (b) the aggregate amount of the Canadian Revolving Credit Exposure of the Canadian Lender exceeds (including, without limitation, as a result of fluctuation in exchange rates) the Canadian Borrowing Base then in effect (minus Reserves applicable to Canadian Revolving Credit Loans, if any).

10.1.2      Misrepresentations.  Any representation, warranty or other statement made or furnished to Administrative Agent, Canadian Agent, or any Lender by or on behalf of any Borrower, any Subsidiary of any Borrower or any Guarantor in this Agreement, any of the other Loan Documents or any instrument, certificate or financial statement furnished in compliance with or in reference thereto proves to have been false or misleading in any material respect when made, furnished or remade pursuant to Section 7.2 hereof, unless (a) any breach described in this Section 10.1.2 was not intentional on the part of Borrowers and their Subsidiaries, (b) such breach is capable of being cured as reasonably determined by Administrative Agent, and (c) such breach is in fact so cured to Administrative Agent’s satisfaction within fifteen days after the sooner to occur of Borrower Representative’s receipt of notice of such breach from Administrative Agent or the date on which such breach first becomes known to any officer of any Borrower.

10.1.3      Breach of Specific Covenants.  Any Borrower shall breach any covenant contained in Sections 6.1.2, 8.1.1 (other than, if no Event of Default shall have occurred and be continuing, the last sentence thereof), 8.1.2, 8.1.4 or 8.2 (provided that if at such time there are no outstanding Loans, a breach of the covenants contained in Sections 8.2.3(g) and 8.2.8 shall not constitute a Default or an Event of Default hereunder but Lenders may cease funding hereunder) hereof on the date that Borrowers are required to perform, keep or observe such covenant or shall fail to perform, keep or observe any covenant contained in Section 8.1.3 or in the last sentence of Section 8.1.1 hereof within 5 days following the date on which Borrowers are required to perform, keep or observe such covenant.

10.1.4      Breach of Other Covenants.  Any Borrower shall fail or neglect to perform, keep or observe any covenant contained in this Agreement (other than a covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and the breach of such other covenant is not cured to Administrative Agent’s satisfaction within 30 days after the sooner to occur of Borrower Representative’s receipt of notice of such breach from Administrative Agent or the date on which such failure or neglect first becomes known to any officer of any Borrower.

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10.1.5      Default Under Security Documents or Other Agreements.  Any event of default shall occur under, or any Borrower, any of its Subsidiaries or any  Guarantor shall default in the performance or observance of any term, covenant, condition or agreement contained in, any of the Security Documents or the Other Agreements and such default shall continue beyond any applicable grace or cure period.

10.1.6      Other Defaults.  There shall occur any default or event of default on the part of any Borrower, any Subsidiary of any Borrower or any Guarantor under any agreement, document or instrument to which such Borrower, such Subsidiary of any Borrower or such Guarantor is a party or by which such Borrower, such Subsidiary of any Borrower or such Guarantor or any of its Property is bound, evidencing or relating to any Indebtedness for Money Borrowed (other than the Obligations) with an outstanding principal balance in excess of $250,000, if the payment or maturity of such Indebtedness is accelerated in consequence of such event of default or demand for payment of such Indebtedness is made or could be made in accordance with the terms thereof.

10.1.7      Uninsured Losses.  There shall occur any material loss, theft, damage or destruction of any portion of the Collateral and the portion of such Collateral that is not fully covered by insurance exceeds $200,000, in the aggregate (subject to such deductibles and self-insurance retentions as Administrative Agent or Canadian Agent, as the case may be, shall have permitted).

10.1.8      Insolvency and Related Proceedings.  Any Borrower, any Subsidiary of any Borrower which is a Loan Party or any Guarantor (that is not a Subsidiary of Domestic Borrower) shall cease to be Solvent or shall suffer the appointment of a receiver, administrator, administrative receiver, trustee, interim receiver, sheriff, monitor, sequestrator, custodian or similar fiduciary, or shall pass or convene any meeting for the purpose of considering any resolution for winding up or administration, or shall make an assignment, composition or arrangement for the benefit of creditors, or any petition for an order for relief (or similar proceedings, including, without limitation, an application for a stay order or filing of a proposal or notice of intention to make a proposal) shall be filed by or against any Borrower, any Subsidiary of any Borrower (which is a Loan Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) under the United States federal bankruptcy laws, the Insolvency Laws of Canada, England’s Insolvency Act of 1986 or any other insolvency laws in the United Kingdom (if against any Borrower, any Subsidiary of any Borrower (which is a Loan Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) the continuation of such proceeding for more than 30 days or, with respect to any proceeding in the United Kingdom, 14 days), or any Borrower, any Subsidiary of any Borrower (which is a Loan Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) shall make any offer of settlement, extension or composition to their respective unsecured creditors generally.  With respect to UK Guarantors or any other Subsidiary of Domestic Borrower (which is a Loan Party) organized under the laws of the United Kingdom, a petition has been presented or a meeting convened or application made for the purpose of appointing an administrator or receiver or other similar officer of, or for the making of an administration order in respect of, UK Guarantors or any such Subsidiary and (other than in the case of a petition to appoint an administrator or receiver to which a grace period shall not apply), such petition or application is not stayed or discharged within 14 days or in any event before it is heard.  Notwithstanding the foregoing provisions of this Section 10.1.8, no Event of Default shall have occurred as a result of UK Guarantors ceasing to be Solvent, so long as UK Guarantors are in compliance with Section 8.2.19.

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10.1.9      Business Disruption; Condemnation.  There shall occur a cessation of a substantial part of the business of any Borrower or any Subsidiary of any Borrower for a period which materially adversely affects Borrowers’ and their Subsidiaries’, taken as a whole, capacity to continue their business on a profitable basis; or any Borrower or any Subsidiary of any Borrower shall suffer the loss or revocation of any material license or permit now held or hereafter acquired by such Borrower or such Subsidiary which is necessary to the continued or lawful operation of its business and any such loss or revocation would reasonably be expected to have a Material Adverse Effect; or any Borrower or any Subsidiary of any Borrower shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of its business affairs and any such action would reasonably be expected to have a Material Adverse Effect; or any material lease or agreement pursuant to which any Borrower or any Subsidiary of any Borrower leases, uses or occupies any Property shall be canceled or terminated prior to the expiration of its stated term, except any such lease or agreement the cancellation or termination of which would not reasonably be expected to have a Material Adverse Effect; or any material portion of the Collateral shall be taken through condemnation or the value of such Property shall be impaired through condemnation.

10.1.10        Change of Ownership.  Any Borrower shall cease to own and control, beneficially and of record (directly or indirectly), 100% (except for directors’ qualifying Securities) of the issued and outstanding Securities and Voting Stock of each of its Subsidiaries which are Loan Parties.

10.1.11        Reportable Event.  A Reportable Event shall occur which, in Administrative Agent’s determination, constitutes grounds for the termination by the PBGC of any Plan or for the appointment by the appropriate United States district court of a trustee for any Plan, or if any Plan shall be terminated or any such trustee shall be requested or appointed, or if any Borrower, any Subsidiary of any Borrower or any Guarantor is in “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from such Borrower’s, such Subsidiary’s or such Guarantor’s complete or partial withdrawal from such Plan and any such event specified in this Section 10.1.11 would reasonably be expected to have a Material Adverse Effect.

10.1.12        Challenge to Agreement.  Any Borrower, any Subsidiary of any Borrower or any Guarantor, or any Designated Affiliate of any of them, shall challenge or contest in any action, suit or proceeding the validity or enforceability of this Agreement or any of the other Loan Documents, the legality or enforceability of any of the Obligations or the perfection or priority of any Lien granted to Administrative Agent or Canadian Agent.  Any holder of Subordinated Debt asserts in writing that such Subordinated Debt is not subordinated to the Obligations in accordance with its terms and Borrowers do not promptly deny in writing such assertion and contest any attempt by such holder to take action based on such assertion.

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10.1.13        Repudiation of or Default Under Guaranty Agreement.  Any Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by such Guarantor, or shall repudiate such Guarantor’s liability thereunder or shall be in default under the terms thereof (including any grace or cure period).

10.1.14        Criminal Forfeiture.  Any Borrower, any Subsidiary of any Borrower or any Guarantor shall be criminally indicted or convicted under any law that could lead to a forfeiture of any material Property of any Borrower, any Subsidiary of any Borrower or any Guarantor.

10.1.15        Judgments.  Any money judgments, writ of attachment or similar processes (collectively, “Judgments”) are issued or rendered against any Borrower, any Subsidiary of any Borrower or any Guarantor, or any of their respective Property (i) in the case of money judgments, in an amount of $150,000 or more for any single judgment, attachment or process or $300,000 or more for all such judgments, attachments or processes in the aggregate, in each case in excess of any applicable insurance with respect to which the insurer has admitted liability, and (ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the aggregate) would reasonably be expected to have a Material Adverse Effect, in each case which Judgment is not stayed, appealed, released or discharged within 30 days.

10.1.16        Canadian Pension Plans.  Any of the following events or conditions has occurred which could reasonably be expected to have a Material Adverse Effect: (a) the withdrawal of Canadian Borrower or any of its Subsidiaries from a Canadian Pension Plan; (b) the obligation to provide affected parties with written notice of the intention to terminate or wind-up a Canadian Pension Plan in whole or in part, whether voluntarily or by order of any applicable pension regulatory authority; (c) the institution by any applicable pension regulatory authority of any action to terminate, in whole or in part, any Canadian Pension Plan; (d) any event or condition which would require the appointment of a trustee or similar Person to administer a Canadian Pension Plan; or (e) any event that would give rise to any liability or offense under Canadian pension laws or that could jeopardize the registration of any Canadian Pension Plan.

10.2         Acceleration of the Obligations.

Upon or at any time after the occurrence and during the continuance of an Event of Default, (a) the Domestic Revolving Credit Commitments and the Canadian Revolving Credit Sub-Limit shall, at the option of Administrative Agent or Majority Lenders be terminated and/or (b) Administrative Agent or Majority Lenders may declare all or any portion of the Obligations at once due and payable without presentment, demand, protest or further notice by Administrative Agent, Canadian Agent, or any Lender, and Domestic Borrower shall forthwith pay to Administrative Agent, and Canadian Borrower shall forthwith pay to Canadian Agent, the full amount of such Obligations, provided, that upon the occurrence of an Event of Default specified in Section 10.1.8 hereof, the Domestic Revolving

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Credit Commitments (together with the Canadian Revolving Credit Sub-Limit) and the Domestic Cap Ex Commitments shall automatically be terminated and all of the Obligations shall become automatically due and payable without declaration, notice or demand by Administrative Agent, Canadian Agent, or any Lender.

10.3         Other Remedies.

Upon the occurrence and during the continuance of an Event of Default, Administrative Agent and Canadian Agent shall have and may exercise from time to time the following rights and remedies:

10.3.1      All of the rights and remedies of a secured party under the UCC or the PPSA or under other applicable law, such additional rights as may be afforded under the Loan Documents, and all other legal and equitable rights to which Administrative Agent, Canadian Agent, or Lenders may be entitled, all of which rights and remedies shall be cumulative and shall be in addition to any other rights or remedies contained in this Agreement or any of the other Loan Documents, and none of which shall be exclusive.

10.3.2      The right to take immediate possession of the Collateral, and to (a) require Borrowers and each of their Subsidiaries to assemble the Collateral, at Borrowers’ expense, and make it available to Administrative Agent and/or Canadian Agent at a place designated by Administrative Agent and/or Canadian Agent which is reasonably convenient to both parties, and (b) enter any premises where any of the Collateral shall be located and to keep and store the Collateral on said premises until sold (and if said premises be the Property of any Borrower or any Subsidiary of any Borrower, such Borrower agrees not to charge, or permit any of its Subsidiaries to charge, Administrative Agent or Canadian Agent for storage thereof).

10.3.3      The right to sell or otherwise dispose of all or any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale or sales, with such notice as may be required by law, in lots or in bulk, for cash or on credit, all as Administrative Agent or Canadian Agent, as applicable, in its sole discretion, may deem advisable.  Administrative Agent and/or Canadian Agent, as applicable, may, at Administrative Agent’s and/or Canadian Agent’s, as applicable, option, disclaim any and all warranties regarding the Collateral in connection with any such sale.  Each Borrower agrees that 10 days’ written notice to Borrower Representative of any public or private sale or other disposition of Collateral shall be reasonable notice thereof, and such sale shall be at such locations as Administrative Agent and/or Canadian Agent may designate in said notice.  Administrative Agent and/or Canadian Agent, as applicable, shall have the right to conduct such sales on Borrowers’ or any of their Subsidiaries’ premises, without charge therefor, and such sales may be adjourned from time to time in accordance with applicable law.  Administrative Agent and/or Canadian Agent shall have the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for cash, credit or any combination thereof, and Administrative Agent, on behalf of itself, Canadian Agent, and Lenders, and Canadian Agent, on behalf of itself, Canadian Lender, and Canadian Participating Lenders, may purchase all or any part of the Collateral at public or, if permitted by law, private sale and, in lieu of actual

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payment of such purchase price, may set off the amount of such price against the Obligations.  The proceeds realized from the sale of any Collateral may be applied, after allowing one (1) Business Day for collection, first to the costs, expenses and legal fees incurred by Administrative Agent and/or Canadian Agent, as applicable, in collecting the Obligations, in enforcing the rights of Administrative Agent, Canadian Agent, and Lenders under the Loan Documents and in collecting, retaking, completing, protecting, removing, storing, advertising for sale, selling and delivering any Collateral, second to the interest due upon any of the Obligations; and third, to the principal of the Obligations.  If any deficiency shall arise with respect to the Domestic Obligations, Domestic Borrower and each Guarantor of the Domestic Obligations shall remain jointly and severally liable to Agents and Lenders therefor.  If any deficiency shall arise with respect to the Canadian Obligations each Guarantor of the Canadian Obligations shall remain jointly and severally liable, and Canadian Borrower shall remain liable, to Canadian Agent, Canadian Lender, and Canadian Participating Lenders therefor.

10.3.4      Administrative Agent, with respect to the Domestic Collateral,  and Canadian Agent, with respect to the Canadian Collateral, is hereby granted a license or other right to use, without charge, Borrowers’ and each of their Subsidiary’s labels, patents, copyrights, licenses, rights of use of any name, trade secrets, tradenames, trademarks and advertising matter, or any Property of a similar nature, as it pertains to the applicable Collateral, in completing, advertising for sale and selling any applicable Collateral and Borrowers’ and each of their Subsidiary’s rights under all licenses and all franchise agreements shall inure to Administrative Agent’s and Canadian Agent’s, as applicable, benefit.

10.3.5      Administrative Agent may, at its option, require Domestic Borrower to deposit with Administrative Agent funds equal to one hundred and five percent (105%) of the Domestic LC Amount and, if Domestic Borrower fails to promptly make such deposit, Administrative Agent may advance such amount as a Domestic Revolving Credit Loan (provided that such Domestic Revolving Credit Loan and the Domestic LC Amount shall only be counted once in determining Domestic Availability).  Each such Domestic Revolving Credit Loan shall be secured by all of the Domestic Collateral and shall bear interest and be payable at the same rate and in the same manner as the Domestic Base Rate Loans.  Any such deposit or advance shall be held by Administrative Agent as a reserve to fund future payments on such Domestic LC Guaranties and future drawings against such Domestic Letters of Credit and fees payable in connection with such Domestic Letters of Credit.  At such time as all Domestic LC Guaranties have been paid or terminated and all Domestic Letters of Credit have been drawn upon or expired, any amounts remaining in such reserve shall be applied against any outstanding Domestic Obligations, or, if all Domestic Obligations have been indefeasibly paid in full, returned to Domestic Borrower.

10.4         Set Off and Sharing of Payments.

10.4.1      In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default, each Domestic Lender is hereby authorized by Domestic Borrower at any time or from time to time, with prior written consent of Administrative Agent and with

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reasonably prompt subsequent notice to Borrower Representative (any prior or contemporaneous notice to Borrowers being hereby expressly waived) to set off and to appropriate and to apply any and all (a) balances held by such Domestic Lender at any of its offices for the account of Domestic Borrower or any of its Subsidiaries (other than Canadian Borrower)(regardless of whether such balances are then due to such Borrower or its Subsidiaries), and (b) other property at any time held or owing by such Domestic Lender to or for the credit or for the account of Domestic Borrower or any of its Subsidiaries (other than Canadian Borrower), against and on account of any of the Domestic Obligations.  Any Domestic Lender exercising a right to set off shall, to the extent the amount of any such set off exceeds its pro rata share of the amount set off, purchase for cash (and the other Domestic Lenders shall sell) interests in each such other Domestic Lender’s pro rata share of the Domestic Obligations as would be necessary to cause such Domestic Lender to share such excess with each other Domestic Lender in accordance with their respective pro rata shares.  Domestic Borrower agrees, to the fullest extent permitted by law, that any Domestic Lender may exercise its right to set off with respect to amounts in excess of its pro rata share of the Domestic Obligations and upon doing so shall deliver such excess to Administrative Agent for the benefit of all Domestic Lenders, in accordance with the Domestic Revolving Loan Percentages and the outstanding principal amount of the Domestic Term Loan, as applicable, to be applied to the Domestic Obligations in the manner set forth in subsections (b)-(d) of Section 3.3.1 with respect to the application of proceeds of Domestic Collateral.

10.4.2      In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default, Canadian Lender and each Canadian Participating Lender is hereby authorized by Canadian Borrower at any time or from time to time, with prior written consent of Canadian Agent and with reasonably prompt subsequent notice to Borrower Representative (any prior or contemporaneous notice to Borrowers being hereby expressly waived) to set off and to appropriate and to apply any and all (a) balances held by Canadian Lender or such Canadian Participating Lender at any of its offices for the account of Canadian Borrower (regardless of whether such balances are then due to Canadian Borrower), and (b) other property at any time held or owing by Canadian Lender or such Canadian Participating Lender to or for the credit or for the account of Canadian Borrower, against and on account of any of the Canadian Obligations.  Canadian Lender, or any Canadian Participating Lender, exercising a right to set off shall, to the extent the amount of any such set off exceeds its Canadian Percentage of the amount set off, purchase for cash (and Canadian Lender and the Canadian Participating Lenders shall sell) interests in each such Lender’s Canadian Percentage of the Canadian Obligations as would be necessary to cause Canadian Lender or such Canadian Participating Lender, as applicable, to share such excess with Canadian Lender and each Canadian Participating Lender in accordance with their respective Canadian Percentages of the Canadian Obligations.  Canadian Borrower agrees, to the fullest extent permitted by law, that Canadian Lender and any Canadian Participating Lender may exercise its right to set off with respect to amounts in excess of its Canadian Percentage of the Canadian Obligations and upon doing so shall deliver such excess to Canadian Agent for the benefit of Canadian Lender and all Canadian Participating Lenders, in accordance with the Canadian Percentages, to be applied to the Canadian Obligations in the manner set forth in subsections (b)-(d) of Section 3.3.1 with respect to the application of proceeds of Canadian Collateral.

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10.5         Remedies Cumulative; No Waiver.

All covenants, conditions, provisions, warranties, guaranties, indemnities, and other undertakings of Borrowers contained in this Agreement and the other Loan Documents, or in any document referred to herein or contained in any agreement supplementary hereto or in any schedule or in any Guaranty Agreement given to Administrative Agent, Canadian Agent, or any Lender or contained in any other agreement between any Lender and any Borrower or between Administrative Agent, Canadian Agent, and any Borrower heretofore, concurrently, or hereafter entered into, shall be deemed cumulative to and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of Borrowers herein contained.  The failure or delay of Administrative Agent, Canadian Agent, or any Lender to require strict performance by Borrowers of any provision of this Agreement or to exercise or enforce any rights, Liens, powers, or remedies hereunder or under any of the aforesaid agreements or other documents or security or Collateral shall not operate as a waiver of such performance, Liens, rights, powers and remedies, but all such requirements, Liens, rights, powers, and remedies shall continue in full force and effect until all Loans and other Obligations owing or to become owing from Borrowers to Administrative Agent, Canadian Agent, and each Lender have been fully satisfied.  None of the undertakings, agreements, warranties, covenants and representations of Borrowers and their Subsidiaries contained in this Agreement or any of the other Loan Documents and no Default or Event of Default by Borrowers or any of their Subsidiaries under this Agreement or any other Loan Document shall be deemed to have been suspended or waived by Lenders or Administrative Agent, unless such suspension or waiver is by an instrument in writing specifying such suspension or waiver and is signed by a duly authorized representative of Administrative Agent or Canadian Agent, as applicable, and directed to Borrowers.

SECTION 11. ADMINISTRATIVE AGENT
AND CANADIAN AGENT

11.1         Authorization and Action.

11.1.1      Each Lender hereby appoints and authorizes Administrative Agent and Canadian Agent to take such action on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Administrative Agent and Canadian Agent, as applicable, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto.  Each Lender hereby acknowledges that neither Administrative Agent nor Canadian Agent has by reason of this Agreement assumed a fiduciary relationship in respect of any Lender.  In performing its functions and duties under this Agreement, Administrative Agent and Canadian Agent shall act solely as agent of Lenders and shall not assume, or be deemed to have assumed, any obligation toward, or relationship of agency or trust with or for, any Borrower or any of its Subsidiaries.  As to any matters not expressly provided for by this Agreement and the other Loan Documents (including without limitation enforcement and collection of the Notes), Administrative Agent

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and Canadian Agent may, but 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 the Majority Lenders, whenever such instruction shall be requested by Administrative Agent or Canadian Agent or required hereunder, or a greater or lesser number of Lenders if so required hereunder, and such instructions shall be binding upon all Lenders; provided, that Administrative Agent and Canadian Agent shall be fully justified in failing or refusing to take any action which exposes Administrative Agent and/or Canadian Agent to any liability or which is contrary to this Agreement, the other Loan Documents or applicable law, unless Administrative Agent and/or Canadian Agent is indemnified to its satisfaction by the other Lenders against any and all liability and expense which it may incur by reason of taking or continuing to take any such action.  If Administrative Agent and/or Canadian Agent seeks the consent or approval of the Majority Lenders (or a greater or lesser number of Lenders as required in this Agreement), with respect to any action hereunder, Administrative Agent and/or Canadian Agent shall send notice thereof to each Lender and shall notify each Lender at any time that the Majority Lenders (or such greater or lesser number of Lenders) have instructed Administrative Agent and/or Canadian Agent to act or refrain from acting pursuant hereto.

11.1.2      Each Lender hereby authorizes Administrative Agent to delegate to Canadian Agent any and all of its obligations under this Agreement and the other Loan Documents with respect to all actions required to be taken in Canada of any kind whatsoever.  Canadian Agent, when acting pursuant to the authority granted hereunder, shall have all the protections, indemnities, rights and powers granted to Administrative Agent under this Agreement and any other Loan Document.

11.2         Administrative Agent’s and Canadian Agent’s Reliance, Etc.

Neither Administrative Agent nor Canadian Agent, any Affiliate of Administrative Agent or Canadian Agent, nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the other Loan Documents, except for its or their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, Administrative Agent and Canadian Agent:  (a) may treat each Lender party hereto as the holder of Obligations until Administrative Agent receives written notice of the assignment or transfer of such Lender’s portion of the Obligations signed by such Lender and in form reasonably satisfactory to Administrative Agent; (b) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (c) makes no warranties or representations to any Lender and shall not be responsible to any Lender for any recitals, statements, warranties or representations made in or in connection with this Agreement or any other Loan Documents; (d) shall not have any duty beyond Administrative Agent’s or Canadian Agent’s customary practices in respect of loans in which Administrative Agent or Canadian Agent is the only lender, to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Borrower or any of their Subsidiaries, to inspect the property (including the books and

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records) of any Borrower or any of their Subsidiaries, to monitor the financial condition of any Borrower or any of their Subsidiaries or to ascertain the existence or possible existence or continuation of any Default or Event of Default; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (f) shall not be liable to any Lender for any action taken, or inaction, by Administrative Agent or Canadian Agent upon the instructions of Majority Lenders pursuant to Section 11.1 hereof or refraining to take any action pending such instructions; (g) shall not be liable for any apportionment or distributions of payments made by it in good faith pursuant to Section 3 hereof; (h) shall incur no liability under or in respect of this Agreement or the other Loan Documents by acting upon any notice, consent, certificate, message or other instrument or writing (which may be by telephone, facsimile, telegram, cable or telex) believed in good faith by it to be genuine and signed or sent by the proper party or parties; and (i) may assume that no Event of Default has occurred and is continuing, unless Administrative Agent or Canadian Agent, as applicable, has actual knowledge of the Event of Default, has received notice from Borrowers or Borrowers’ independent certified public accountants stating the nature of the Event of Default, or has received notice from a Lender stating the nature of the Event of Default and that such Lender considers the Event of Default to have occurred and to be continuing.  In the event any apportionment or distribution described in clause (g) above is determined to have been made in error, the sole recourse of any Person to whom payment was due but not made shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled.

11.3         Bank of America, Bank of America Canada, and Affiliates.

With respect to its commitment hereunder to make Loans, Bank of America, and Bank of America Canada shall have the same rights and powers under this Agreement and the other Loan Documents as any other Lender and may exercise the same as though it were not Administrative Agent and Canadian Agent, respectively; and the terms “Lender,” “Lenders” or “Majority Lenders” shall, unless otherwise expressly indicated, include Bank of America and Bank of America Canada in its individual capacity as a Lender. Bank of America and Bank of America Canada and its Affiliates may lend money to, and generally engage in any kind of business with, Borrowers, Borrowers’ Subsidiaries, and any Person who may do business with or own Securities of Borrowers all as if Bank of America and Bank of America Canada were not Administrative Agent and Canadian Agent, respectively, and without any duty to account therefor to any other Lender.

11.4         Lender Credit Decision.

Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or Canadian Agent or any other Lender and based on the financial statements referred to herein and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or Canadian Agent or any other Lender and based on such documents

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and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.  Neither Administrative Agent nor Canadian Agent shall have any duty or responsibility, either initially or on an ongoing basis, to provide any Lender with any credit or other similar information regarding Borrowers or any of their Subsidiaries.

11.5         Indemnification.

Lenders agree to indemnify Administrative Agent and Canadian Agent (to the extent not reimbursed by Borrowers), in accordance with their respective Aggregate Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Administrative Agent and/or Canadian Agent in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by Administrative Agent and/or Canadian Agent under this Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Administrative Agent’s or Canadian Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse Administrative Agent and Canadian Agent promptly upon demand for its ratable share, as set forth above, of any out-of-pocket expenses (including legal fees) and allocated costs of audits and appraisals incurred by Administrative Agent and/or Canadian Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and each other Loan Document, to the extent that Administrative Agent and/or Canadian Agent is not reimbursed for such expenses by Borrowers.  The obligations of Lenders under this Section 11.5 shall survive the payment in full of all Obligations and the termination of this Agreement.  If after payment and distribution of any amount by Administrative Agent and/or Canadian Agent to Lenders, any Lender or any other Person, including any Borrower, any Subsidiary of any Borrower, any creditor of any Borrower or any of its Subsidiaries, a liquidator, administrator or trustee in bankruptcy, recovers from Administrative Agent and/or Canadian Agent any amount found to have been wrongfully paid to Administrative Agent and/or Canadian Agent or disbursed by Administrative Agent and/or Canadian Agent to Lenders, then Lenders, in accordance with their respective Aggregate Percentages, shall reimburse Administrative Agent and/or Canadian Agent for all such amounts.

11.6         Rights and Remedies to be Exercised by Administrative Agent and Canadian Agent Only.

Each Lender agrees that, except as set forth in Section 10.4, no Lender shall have any right individually (a) to realize upon the security created by this Agreement or any other Loan Document, (b) to enforce any provision of this Agreement or any other Loan Document, or (c) to make demand under this Agreement or any other Loan Document.

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11.7         Agency Provisions Relating to Collateral.

Each Lender authorizes and ratifies Administrative Agent’s and Canadian Agent’s entry into this Agreement and the Security Documents for the benefit of Lenders.  Each Lender agrees that any action taken by Administrative Agent and/or Canadian Agent with respect to the Collateral in accordance with the provisions of this Agreement or the Security Documents, and the exercise by Administrative Agent and/or Canadian Agent of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders.  Administrative Agent and/or Canadian Agent, as the case may be, are hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected Administrative Agent’s Liens upon the Domestic Collateral, for its and Canadian Agent’s and the Lenders’ benefit, and Canadian Agent’s Liens upon the Canadian Collateral, for its, Canadian Lender’s, and Canadian Participating Lenders’ benefit.  Lenders hereby irrevocably authorize Administrative Agent and Canadian Agent, as the case may be, at its option and in its discretion, to release any Lien granted to or held by Administrative Agent or Canadian Agent upon any Collateral (a) upon termination of this Agreement and payment and satisfaction of all Obligations; or (b) constituting property being sold or disposed of if the Borrower Representative certifies to Administrative Agent and Canadian Agent, as the case may be, that the sale or disposition is made in compliance with Section 8.2.10 hereof (and Administrative Agent and Canadian Agent may rely conclusively on any such certificate, without further inquiry); or (c) constituting property in which the applicable Borrower or Subsidiary of a Borrower owned no interest at the time the Lien was granted or at any time thereafter; or (d) in connection with any foreclosure sale or other disposition of Collateral after the occurrence and during the continuation of an Event of Default or (e) if approved, authorized or ratified in writing by Administrative Agent at the direction of all Lenders in the case of Domestic Collateral and by Canadian Agent at the direction of Canadian Lender and Canadian Participating Lenders in the case of Canadian Collateral.  Upon request by Administrative Agent or Canadian Agent, as the case may be, at any time, Lenders will confirm in writing Administrative Agent’s or Canadian Agent’s, as the case may be, authority to release particular types or items of Collateral pursuant hereto. Neither Administrative Agent nor Canadian Agent shall have any obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by the applicable Borrowers or Subsidiaries of Borrowers or is cared for, protected or insured or has been encumbered or that the Liens granted to Administrative Agent or Canadian Agent, as the case may be, herein or pursuant to the Security Documents have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of its rights, authorities and powers granted or available to Administrative Agent or Canadian Agent, as the case may be, in this Section 11.7 or in any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, Administrative Agent or Canadian Agent, as the case may be, may act in any manner it may deem appropriate, in its sole discretion, but consistent with the provisions of this Agreement, including given Administrative Agent’s or Canadian Agent’s own interest in the Collateral as a Lender and that neither Administrative Agent nor Canadian Agent shall have any duty or liability whatsoever to any Lender.

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11.8         Administrative Agent’s and Canadian Agent’s Right to Purchase Commitments.

Administrative Agent and Canadian Agent shall have the right, but shall not be obligated, at any time upon written notice to any Lender and with the consent of such Lender, which may be granted or withheld in such Lender’s sole discretion, to purchase for Administrative Agent’s or Canadian Agent’s, as the case may be, own account all of such Lender’s interests in this Agreement, the other Loan Documents and the Obligations, for the face amount of the outstanding Obligations owed to such Lender, including without limitation all accrued and unpaid interest and fees.

11.9         Right of Sale, Assignment, Participations.

Each Borrower hereby consents to any Lender’s participation, sale, assignment, transfer or other disposition, at any time or times hereafter, of this Agreement and any of the other Loan Documents, or of any portion hereof or thereof, including, without limitation, such Lender’s rights, title, interests, remedies, powers, and duties hereunder or thereunder subject to the terms and conditions set forth below:

11.9.1      Sales, Assignments.  Each Lender hereby agrees that, with respect to any sale or assignment (other than pursuant to Section 3.2.6) (a) no such sale or assignment shall be for an amount of less than $5,000,000 (or the aggregate principal amount of Loans owing to such Lender, if less), (b) each such sale or assignment shall be made on terms and conditions which are customary in the industry at the time of the transaction, (c) Administrative Agent and, in the absence of a Default or Event of Default, Borrowers, must consent, such consent not to be unreasonably withheld, to each such assignment to a Person that is not an original signatory to this Agreement, and (d) the assignee Lender shall pay to Administrative Agent a processing and recordation fee of $3,500 and any out-of-pocket legal fees and expenses incurred by Administrative Agent in connection with any such sale or assignment.  After such sale or assignment has been consummated (i) the assignee Lender thereupon shall become a “Lender” for all purposes of this Agreement and (ii) the assigning Lender shall have no further liability for funding Loans under this Agreement to the extent such liability was assumed by such other Lender.

11.9.2      Participations.  Any Lender may grant participations in its extensions of credit hereunder to any other Lender or other lending institution (a “Participant”), provided that (a) no such participation shall be for an amount of less than $5,000,000 (or the aggregate principal amount of Loans owing to such Lender, if less), (b) no Participant shall thereby acquire any direct rights under this Agreement, (c) no Participant shall be granted any right to consent to any amendment, except to the extent any of the same pertain to (i) reducing the aggregate principal amount of, or interest rate on, or fees applicable to, any Loan in which such Participant has an interest, or (ii) extending the final stated maturity of any Loan in which such Participant has an interest or the stated maturity of any portion of any payment of principal of, or interest or fees applicable to, any of the Loans;

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provided, that the rights described in this subclause (ii) shall not be deemed to include the right to consent to any amendment with respect to or which has the effect of requiring any mandatory prepayment of any portion of any Loan or any amendment or waiver of any Default or Event of Default, (d) no sale of a participation in extensions of credit shall in any manner relieve the originating Lender of its obligations hereunder, (e) the originating Lender shall remain solely responsible for the performance of such obligations, (f) Borrowers and Administrative Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (g) in no event shall any financial institution purchasing the participation grant a participation in its participation interest in the Loans without the prior written consent of Administrative Agent, and, in the absence of a Default or an Event of Default, Borrowers, which consents shall not unreasonably be withheld and (h) all amounts payable by Borrowers hereunder shall be determined as if the originating Lender had not sold any such participation.  For greater certainty, the provisions of this Section 11.9.2 do not apply to the Canadian Participating Lenders in their capacities as such.

11.9.3      Certain Agreements of Borrowers.  Each Borrower agrees that (a) it will use its reasonable efforts to assist and cooperate with each Lender in any manner reasonably requested by such Lender to effect the sale of participations in or assignments of any of the Loan Documents or any portion thereof or interest therein, including, without limitation, assisting in the preparation of appropriate disclosure documents and making members of management available at reasonable times to meet with and answer questions of potential assignees and Participants; and (b) subject to the provisions of Section 12.14 hereof, such Lender may disclose credit information regarding such Borrower and its Subsidiaries to any potential Participant or assignee.

11.10       Amendment.

No amendment or waiver of any provision of this Agreement or any other Loan Document (including without limitation any Note), nor consent to any departure by Borrowers or any of their Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and Borrower Representative and/or such Subsidiaries of Borrowers, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment, waiver or consent shall be effective, unless (a) in writing and signed by each Lender, to do any of the following:  (i) increase or decrease the aggregate Domestic Revolving Credit Commitments, the Canadian Revolving Credit Sub-Limit, the Domestic Cap Ex Commitments, or any Lender’s Domestic Revolving Credit Commitment, or its Domestic Cap Ex Commitment, or its Canadian Percentage, (ii) reduce the principal of, or interest on, any amount payable hereunder or under any Note, other than those payable only to Bank of America in its capacity as Administrative Agent, which may be reduced by Bank of America unilaterally,

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and other than those payable only to Bank of America Canada in its capacity as Canadian Agent, which may be reduced by Bank of America Canada unilaterally, (iii) postpone any date fixed for any payment of principal of, or interest on, any amounts payable hereunder or under any Note, other than those payable only to Bank of America in its capacity as Administrative Agent, which may be postponed by Bank of America unilaterally and other than those payable only to Bank of America Canada in its capacity as Canadian Agent, which may be postponed by Bank of America Canada unilaterally, (iv) reduce the number of Lenders that shall be required for Lenders or any of them to take any action hereunder, (v) release or discharge any Person liable for the performance of any obligations of Borrowers hereunder or under any of the Loan Documents, (vi) amend any provision of this Agreement that requires the consent of all Lenders or consent to or waive any breach thereof, (vii) amend the definition of the term “Majority Lenders”, (viii) amend this Section 11.10 or (ix) release any substantial portion of the Collateral, unless otherwise permitted pursuant to Section 11.7 hereof or the other terms of this Agreement; or (b) in writing and signed by Administrative Agent or Canadian Agent, as the case may be, in addition to the Lenders required above to take such action, to affect the rights or duties of Administrative Agent or Canadian Agent, as the case may be, under this Agreement, any Note or any other Loan Document.

11.11       Resignation of Administrative Agent or Canadian Agent; Appointment of Successor.

Administrative Agent or Canadian Agent may resign as Administrative Agent or Canadian Agent, as the case may be, by giving not less than thirty (30) days’ prior written notice to the Lenders and Borrower Representative.  If Administrative Agent or Canadian Agent shall resign under this Agreement, then, (a) subject to the consent of Borrower Representative (which consent shall not be unreasonably withheld and which consent shall not be required during any period in which a Default or an Event of Default exists), the Majority Lenders shall appoint from among the Lenders a successor Administrative Agent or Canadian Agent for the Lenders or (b) if a successor Administrative Agent or Canadian Agent shall not be so appointed and approved within the thirty (30) day period following Administrative Agent’s or Canadian Agent’s notice to the Lenders and Borrower Representative of its resignation, then Administrative Agent or Canadian Agent, as the case may be, shall appoint a successor Administrative Agent or Canadian Agent, as the case may be, who shall serve as Administrative Agent or Canadian Agent, as the case may be, until such time as the Majority Lenders appoint a successor Administrative Agent or Canadian Agent, as the case may be, subject to Borrower Representative’s consent as set forth above.  Upon its appointment, such successor Administrative Agent or Canadian Agent, as the case may be, shall succeed to the rights, powers and duties of Administrative Agent or Canadian Agent, as the case may be, and the term “Administrative Agent” or “Canadian Agent”, as the case may be, shall mean such successor effective upon its appointment, and the former Administrative Agent’s or Canadian Agent’s rights, powers and duties as Administrative Agent or Canadian Agent, as the case may be, shall be terminated without any other or further act or deed on the part of such former Administrative Agent or Canadian Agent, as the case may be, or any of the parties to this Agreement.  After the resignation of any Administrative Agent or Canadian Agent hereunder, the provisions of this Section 11 shall inure to the benefit of such former Administrative Agent or Canadian Agent, as the case may be, and such former Administrative Agent or Canadian Agent, as the case may be, shall not by reason of such resignation be deemed to be released from liability for any actions taken or not taken by it while it was an Administrative Agent or Canadian Agent, as the case may be, under this

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Agreement.  Notwithstanding the foregoing, without the consent of Lenders or the Borrowers, an Affiliate of Bank of America Canada or Bank of America may be appointed by Bank of America Canada to replace Bank of America Canada as Canadian Agent hereunder; provided, that, such replacement Canadian Agent shall provide prior notice to Borrowers of such replacement.

SECTION 12. MISCELLANEOUS

12.1         Power of Attorney.

Domestic Borrower hereby irrevocably designates, makes, constitutes and appoints Administrative Agent (and all Persons designated by Administrative Agent) as Domestic Borrower’s true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this Section 12.1, and Administrative Agent, or Administrative Agent’s agent, may, without notice to Domestic Borrower and in Domestic Borrower’s or Administrative Agent’s name, but at the cost and expense of Domestic Borrower, do the following, and Canadian Borrower hereby irrevocably designates, makes, constitutes and appoints Canadian Agent (and all Persons designated by Canadian Agent) as Canadian Borrower’s true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this Section 12.1, and Canadian Agent, or Canadian Agent’s agent, may, without notice to Canadian Borrower and in Canadian Borrower’s or Canadian Agent’s name, but at the cost and expense of Canadian Borrower, do the following:

12.1.1      At such time or times as Administrative Agent or Canadian Agent, as the case may be, or said agent, in its sole discretion, may determine, endorse such Borrower’s name on any checks, notes, acceptances, drafts, money orders or any other evidence of payment or proceeds of the Collateral which come into the possession of Administrative Agent or Canadian Agent, as the case may be, or under Administrative Agent’s or Canadian Agent’s, as the case may be, control.

12.1.2      At such time or times upon or after the occurrence and during the continuance of an Event of Default (provided that the occurrence of an Event of Default shall not be required with respect to clauses (d) and (f) below), as Administrative Agent or Canadian Agent, as the case may be, or its agent in its sole discretion may determine: (a) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of such Borrower’s rights and remedies with respect to the collection of the Accounts; (b) settle, adjust, compromise, discharge or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral; (c) sell or assign any of the Accounts and other Collateral upon such terms, for such amounts and at such time or times as Administrative Agent or Canadian Agent, as the case may be, deems advisable; (d) take control, in any manner, of any item of payment or proceeds relating to any Collateral; (e) prepare, file and sign such Borrower’s name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in connection with any of the Collateral; (f) receive, open and dispose of all mail addressed to such Borrower; (g) notify postal authorities to change the

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address for delivery thereof to such address as Administrative Agent or Canadian Agent, as applicable, may designate; (h) endorse the name of such Borrower upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of Administrative Agent or Canadian Agent, as the case may be, on account of the Obligations; (i) endorse the name of such Borrower upon any chattel paper, document, instrument, invoice, freight bill, bill of lading or similar document or agreement relating to the Accounts, Inventory and any other Collateral; (j) use such Borrower’s stationery and sign the name of such Borrower to verifications of the Accounts and notices thereof to Account Debtors; (k) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to the Accounts, Inventory, Equipment and any other Collateral; (l) make and adjust claims under policies of insurance; and (m) do all other acts and things necessary, in Administrative Agent’s or Canadian Agent’s, as the case may be, determination, to fulfill such Borrower’s obligations under this Agreement.

The power of attorney granted hereby shall constitute a power coupled with an interest and shall be irrevocable.

12.2         Indemnity.

Each Borrower hereby agrees to indemnify Administrative Agent, Canadian Agent, and each Lender (and each of their Affiliates, officers, directors, employees, agents and advisors (each an “Indemnitee”)) and hold each Indemnitee harmless from and against any liability, expense, loss, damage, suit, action or proceeding ever suffered or incurred by any Indemnitee (including reasonable legal fees and expenses) as the result of (a) Borrowers’ or their Subsidiaries’ failure to observe, perform or discharge Borrowers’ or their Subsidiaries’ duties hereunder or under the other Loan Documents, or (b) any suit, action, proceeding or investigation arising out of or related to the Loan Documents and the transactions contemplated thereby (except any liabilities, expenses, losses, damages, suits, actions or proceedings identified above which (i) are determined by a final, nonappealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or intentional misconduct of any such Indemnitee or (ii) relate to a dispute between any Borrower or its Subsidiaries and any Indemnitee with respect to the Loan Documents and which dispute is determined adversely to such Indemnitee (and is not the subject of any settlement (unless the settlement provides for a similar exclusion from Borrowers’ indemnification obligations hereunder)) by a final, nonappealable judgment by a court of competent jurisdiction).  In addition, each Borrower shall defend the Indemnitees against and save them harmless from all claims of any Person with respect to the Collateral (except those determined by a final, nonappealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or intentional misconduct of any such Indemnitee).  Without limiting the generality of the foregoing, these indemnities shall extend to any claims asserted against any Indemnitee by any Person under any Environmental Laws with respect to the Owned Properties by reason of any Borrower’s or any other Person’s failure to comply with laws applicable to solid or hazardous waste materials or other toxic substances.  Notwithstanding any contrary provision in this Agreement, the obligations of Borrowers under this Section 12.2 shall survive the payment in full of the Obligations and the termination of this Agreement.

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12.3         Sale of Interest.

No Borrower may sell, assign or transfer any interest in this Agreement, any of the other Loan Documents, or any of the Obligations, or any portion thereof, including, without limitation, such Borrower’s rights, title, interests, remedies, powers, and duties hereunder or thereunder.

12.4         Severability.

Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

12.5         Successors and Assigns.

This Agreement, the Other Agreements and the Security Documents shall be binding upon and inure to the benefit of the successors and assigns of each Borrower, Administrative Agent, Canadian Agent, and each Lender permitted under Section 11.9 or Section 11.11 hereof.

12.6         Cumulative Effect; Conflict of Terms.

The provisions of the Other Agreements and the Security Documents are hereby made cumulative with the provisions of this Agreement.  Except as otherwise provided in any of the other Loan Documents by specific reference to the applicable provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or inconsistent with, any provision in any of the other Loan Documents, the provision contained in this Agreement shall govern and control.

12.7         Execution in Counterparts.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument.

12.8         Notices.

Except as otherwise provided herein, all notices, requests and demands to or upon a party hereto, to be effective, shall be in writing and shall be sent by certified or registered mail, return receipt requested, by personal delivery against receipt, by overnight courier or by facsimile and, unless otherwise expressly provided herein, shall be deemed to have been validly served, given, delivered or received immediately when delivered against receipt, one Business Day after deposit with an overnight courier or, in the case of facsimile notice, when sent, addressed in the case of each Lender to such Lender at such Lender’s

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address set forth on the signature page to this Agreement (or set forth in the applicable assignment agreement by which such Lender became a Lender under this Agreement), and with respect to the following Persons, as follows:

or to such other address as each party may designate for itself by notice given in accordance with this Section 12.8; provided, however, that any notice, request or demand to or upon Administrative Agent, Canadian Agent, or a Lender pursuant to Section 3.1.1 or 4.2.2 hereof shall not be effective until received by Administrative Agent, Canadian Agent, or such Lender.

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12.9         Consent.

Whenever Administrative Agent’s, Canadian Agent’s, or Majority Lenders’ consent is required to be obtained under this Agreement, any of the Other Agreements or any of the Security Documents as a condition to any action, inaction, condition or event, except as otherwise specifically provided herein, Administrative Agent, Canadian Agent, or Majority Lenders, as applicable, shall be authorized to give or withhold such consent in their sole and absolute discretion.

12.10       Credit Inquiries.

Subject to the confidentiality provisions of Section 12.14 hereof, each Borrower hereby authorizes and permits Administrative Agent, Canadian Agent, and each Lender to respond to usual and customary credit inquiries from third parties concerning such Borrower or any of its Subsidiaries.

12.11       Time of Essence.

Time is of the essence of this Agreement, the Other Agreements and the Security Documents.

12.12       Entire Agreement.

This Agreement and the other Loan Documents, together with all other instruments, agreements and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written.

12.13       Interpretation.

No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision.

12.14       Confidentiality.

Administrative Agent, Canadian Agent, and each Lender (and each of their officers, directors and employees) shall hold all nonpublic information obtained pursuant to the requirements of this Agreement and the other Loan Documents in confidence in accordance with Administrative Agent’s, Canadian Agent’s, and such Lender’s customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices, shall use such information solely for the purposes contemplated by this Agreement and in any event may make disclosure reasonably required by a

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prospective participant or assignee in connection with the contemplated participation or assignment or as required by any governmental authority or representative thereof (provided that, if possible, Administrative Agent shall provide reasonable prior notice of any such disclosure) or as compelled by legal process (provided that, if possible, Administrative Agent shall provide reasonable prior notice of any such disclosure) and shall require any such participant or assignee to agree to comply with this Section 12.14.

12.15       Judgment.

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

12.16       GOVERNING LAW; CONSENT TO FORUM.

THIS AGREEMENT HAS BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN LOS ANGELES, CALIFORNIA.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN CALIFORNIA,  THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF, OR REALIZATION UNDER, ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF

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CALIFORNIA.  AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY BORROWER, ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S OPTION, THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY BORROWER ON THE ONE HAND AND ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT; PROVIDED THAT ADMINISTRATIVE AGENT, CANADIAN AGENT, AND/OR ANY LENDER MAY INITIATE LEGAL OR EQUITABLE PROCEEDINGS IN ANY OTHER COURT WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWER REPRESENTATIVE AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE BORROWER REPRESENTATIVE’S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.  NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

12.17       WAIVERS BY BORROWERS.

EACH BORROWER WAIVES (a) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE AGENT, CANADIAN AGENT, AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;

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(b) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT, CANADIAN AGENT, OR ANY LENDER MAY DO IN THIS REGARD; (c) NOTICE PRIOR TO ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT OR CANADIAN AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT’S OR CANADIAN AGENT’S REMEDIES; (d) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (e) NOTICE OF ACCEPTANCE HEREOF.  EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S, CANADIAN AGENT’S, AND EACH LENDER’S ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE AGENT, CANADIAN AGENT, AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS.  EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

12.18       Further Assurances.

Without limiting in any manner any other obligation, requirement or agreement hereunder or under any of the other Loan Documents or otherwise, Borrowers shall, at their expense and without expense to the Lenders, Administrative Agent or Canadian Agent, do, execute and deliver such further acts and documents as the Majority Lenders, Administrative Agent or the Canadian Agent from time to time require for the assuring and confirming unto the Lenders, Administrative Agent or the Canadian Agent of the rights hereby created or intended now or hereafter so to be, or for carrying out the intention or facilitating the performance of the terms of any Loan Document.

12.19       Interest Act (Canada).

For the purpose of complying with the Interest Act (Canada), it is expressly stated that:

12.19.1      where interest is calculated pursuant hereto at a rate based upon a 360-day period (for the purposes of this Section 12.19.1, the “first rate”), the yearly rate or percentage of interest to which the first rate is equivalent is the first rate multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360; and

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12.19.2      the parties hereto acknowledge that there is a material distinction between the nominal and effective rates of interest and that they are capable of making the calculations necessary to compare such rates and that the calculations herein are to be made using the nominal rate method and not on any basis that gives effect to the principle of deemed reinvestment of interest.

12.20       Arbitration.  Notwithstanding any other provision of this Agreement to the contrary, any controversy or claim among the parties relating in any way to any Obligations or Loan Documents, including any alleged tort, shall at the request of any party hereto be determined by binding arbitration conducted in accordance with the United States Arbitration Act (Title 9 U.S. Code). Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association (“AAA”), and the terms of this Section.  In the event of any inconsistency, the terms of this Section shall control.  If AAA is unwilling or unable to serve as the provider of arbitration or to enforce any provision of this Section, Administrative Agent or Canadian Agent may designate another arbitration organization with similar procedures to serve as the provider of arbitration.  The arbitration proceedings shall be conducted in Los Angeles or Pasadena, California.  The arbitration hearing shall commence within 90 days of the arbitration demand and close within 90 days thereafter.  The arbitration award must be issued within 30 days after close of the hearing (subject to extension by the arbitrator for up to 60 days upon a showing of good cause), and shall include a concise written statement of reasons for the award.  The arbitrator shall give effect to applicable statutes of limitation in determining any controversy or claim, and for these purposes, service on AAA under applicable AAA rules of a notice of claim is the equivalent of the filing of a lawsuit.  Any dispute concerning this Section or whether a controversy or claim is arbitrable shall be determined by the arbitrator.  The arbitrator shall have the power to award legal fees to the extent provided by this Agreement.  Judgment upon an arbitration award may be entered in any court having jurisdiction.  The institution and maintenance of an action for judicial relief or pursuant to a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.  No controversy or claim shall be submitted to arbitration without the consent of all parties if, at the time of the proposed submission, such controversy or claim relates to an obligation secured by real property, but if all parties do not consent to submission of such a controversy or claim to arbitration, it shall be determined as provided in the next sentence.  At the request of any party, a controversy or claim that is not submitted to arbitration as provided above shall be determined by judicial reference; and if such an election is made, the parties shall designate to the court a referee or referees selected under the auspices of the AAA in the same manner as arbitrators are selected in AAA sponsored proceedings and the presiding referee of the panel (or the referee if there is a single referee) shall be an active attorney or retired judge; and judgment upon the award rendered by such referee or referees shall be entered in the court in which proceeding was commenced.  None of the foregoing provisions of this Section shall limit the right of Administrative Agent, Canadian Agent, or Lenders to exercise self-help remedies, such as setoff, foreclosure or sale

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of any Collateral or to obtain provisional or ancillary remedies from a court of competent jurisdiction before, after or during any arbitration proceeding.  The exercise of a remedy does not waive the right of any party to resort to arbitration or reference.  At Administrative Agent’s or Canadian Agent’s option, foreclosure under a Mortgage may be accomplished either by exercise of power of sale thereunder or by judicial foreclosure.

12.21       Patriot Act Notice.  Administrative Agent and Lenders hereby notify Borrowers that pursuant to the requirements of the Patriot Act, Administrative Agent and Lenders are required to obtain, verify and record information that identifies each Borrower, including its legal name, address, tax ID number and other information that will allow Administrative Agent and Lenders to identify it in accordance with the Patriot Act.  Administrative Agent and Lenders will also require information regarding each personal guarantor, if any, and may require information regarding Borrowers’ management and owners, such as legal name, address, social security number and date of birth.

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IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified at the beginning of this Agreement.

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APPENDIX A

GENERAL DEFINITIONS

When used in the Amended and Restated Loan and Security Agreement dated as of July 30, 2007, by and among Bank of America, N.A., individually and as Administrative Agent, the other financial institutions which are or become parties thereto, Bank of America, N.A., Canada Branch, individually and as Canadian Agent,  Channell Commercial Corporation, a Delaware corporation, and Channell Commercial Canada Inc., an Ontario corporation, (a) the terms Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Security, Payment Intangibles,  Proceeds, Security Entitlement, Software, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security, have the respective meanings assigned thereto under the UCC (as defined below) or the PPSA (as defined below), as applicable; (b) all terms indicating Collateral having the meanings assigned thereto under the UCC or the PPSA, as applicable shall be deemed to mean such Property, whether now owned or hereafter created or acquired by Borrowers and their applicable Subsidiaries or in which Borrowers and their applicable Subsidiaries now have or hereafter acquire any interest; (c) to the extent that any term reflecting Collateral has different meanings under the PPSA and the UCC, such term shall be defined in the alternative so as to include both meanings; (d) capitalized terms which are not otherwise defined have the respective meanings assigned thereto in said Amended and Restated Loan and Security Agreement; and (e) the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa):

“AAA” – as defined in Section 12.20 of the Agreement.

“Account” – has the meaning assigned thereto under the UCC and, in addition thereto, shall include all “accounts receivable” and “accounts,” as such terms are defined in the PPSA and shall include as to UK Guarantors the amounts now or subsequently standing to the credit of any account which each UK Guarantor has, or has an interest in, with any person and the debts represented thereby and all book and other debts and monetary claims now or subsequently due or owing to each UK Guarantor, the proceeds of the same and the benefit of all securities or investments, Liens and guarantees or other rights of any nature now or subsequently enjoyed or held by it in relation thereto (other than Accounts).

“Account Creditor” – collectively, Domestic Borrower, Canadian Borrower, UK Guarantors and any other Subsidiary of Domestic Borrower, if any, approved by Administrative Agent and Majority Lenders in writing from time to time for inclusion as an “Account Creditor” for purposes of the Loan Documents.

“Account Debtor” – any Person who is or may become obligated on or under or on account of any Account, Contract Right, Chattel Paper or General Intangible.

“Adjustment Date” – as defined in the definition of “Applicable Margin”.

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“Administrative Agent” – Bank of America in its capacity as administrative agent for the Lenders under the Agreement and any successor in that capacity appointed pursuant to Section 11.11 of the Agreement.

“Affiliate” - a Person: (a) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, a Person; (b) which beneficially owns or holds 5% or more of any class of the Voting Stock of a Person; or (c) 5% or more of the Voting Stock (or in the case of a Person which is not a corporation, 5% or more of the equity interest) of which is beneficially owned or held by a Person or a Subsidiary of a Person.

“Agents” – collectively, Administrative Agent and Canadian Agent.

“Aggregate Availability” – the sum of the Domestic Availability and the Canadian Availability.

“Aggregate Borrowing Base” means, as of each date of determination, the sum of the Domestic Borrowing Base and the UK Borrowing Base.

“Aggregate Percentage” - with respect to each Lender, the percentage equal to the quotient of (a) such Lender’s Domestic Revolving Credit Commitment  divided by (b) the aggregate of all Domestic Revolving Credit Commitments.

“Agreement” - the Loan and Security Agreement referred to in the first sentence of this Appendix A, all Exhibits and Schedules thereto and this Appendix A, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted.

“Agreement Currency” – as defined in Section 12.15 of the Agreement.

“Applicable Margin” - from the Closing Date to, but not including, the first Adjustment Date (as hereinafter defined) the per annum rates set forth below with respect to Domestic Base Rate Loans, Domestic LIBOR Loans, and Canadian Revolving Credit Loans:

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The per annum rates set forth above will be adjusted quarterly on the first day of each month after Administrative Agent’s receipt of the monthly financial statements delivered by Borrowers to Administrative Agent pursuant to Section 8.1.3(b) of the Agreement with respect to each month (beginning with September 2007) which is a final month in a fiscal quarter of Domestic Borrower (each such date an “Adjustment Date”), effective prospectively, by reference to the Leverage Ratio as of the last day of each such month, determined on the basis of such monthly financial statements, in accordance with the following:

provided that, (a) if Domestic Borrower’s audited financial statements for any fiscal year delivered pursuant to Section 8.1.3(a) of the Agreement reflect a Leverage Ratio that yields a different Applicable Margin than that yielded by the monthly financial statements previously delivered pursuant to Section 8.1.3(b) of the Agreement for the last month of such fiscal year, the Applicable Margin shall be readjusted retroactive to the preceding Adjustment Date and (b) if Borrowers fail to deliver the financial statements required to be delivered pursuant to Section 8.1.3(a) or Section 8.1.3(b) of the Agreement on or before the due date thereof, the interest rate shall automatically adjust to the highest interest rate set forth above, effective prospectively from such due date until the next Adjustment Date.

“Bank of America Canada” — as defined in the preamble to the Agreement, or its successor.

“Bank Product” - any of the following products, services or facilities extended to any Borrower or any of its Subsidiaries by any Lender or any of its Affiliates (each a “Bank Product Provider”) : (a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; and (d) leases and other banking products or services as may be requested by any Borrower or any of its Subsidiaries, other than Domestic Letters of Credit.

“Bank Product Debt” - Indebtedness and other obligations of any Borrower or any of its Subsidiaries relating to Bank Products.

“Bank Product Provider” – as defined in the definition of Bank Product.

“Bank Product Reserve” - the aggregate amount of reserves established by Administrative Agent from time to time in its reasonable discretion in respect of Bank Product Debt.

“Bankruptcy Event” – with respect to any Person, such Person shall suffer the appointment of a receiver, trustee, administrator, administrative receiver, interim receiver, sheriff, monitor, sequestrator, custodian or similar fiduciary, or shall pass or convene any

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meeting for the purpose of considering any resolution for winding up or administration, or shall make an assignment, composition or arrangement for the benefit of creditors, or any petition for an order for relief (or similar proceedings, including, without limitation, an application for a stay order or filing of a proposal or notice of intention to make a proposal) shall be filed by or against such Person under the United States federal bankruptcy laws, the Insolvency Laws of Canada, England’s Insolvency Act of 1986 or any other insolvency laws in the United Kingdom (and the continuation of such proceeding for more than 30 days or, with respect to any proceeding in the United Kingdom, 14 days), or such Person shall make any offer of settlement, extension or composition to their respective unsecured creditors generally.  With respect to any Person organized under the laws of the United Kingdom, a petition has been presented or a meeting convened or application made for the purpose of appointing an administrator or receiver or other similar officer of, or for the making of an administration order in respect of such Person and (other than in the case of a petition to appoint an administrator or receiver to which a grace period shall not apply), such petition or application is not stayed or discharged within 14 days or in any event before it is heard.

“Borrowers” – as defined in the preamble to the Agreement.

“Borrower Representative” – Domestic Borrower.

“Borrowing Base Certificate” – a certificate by a responsible officer of Borrower Representative, substantially in the form of Exhibit 8.1.4 (or another form acceptable to Administrative Agent) setting forth the calculation of the Domestic Borrowing Base, the Canadian Borrowing Base and the UK Borrowing Base, including a calculation of each component thereof, all in such detail as shall be satisfactory to Administrative Agent.  All calculations of the Domestic Borrowing Base, Canadian Borrowing Base and UK Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by Borrower Representative and certified to Administrative Agent; provided, that each of Administrative Agent and Canadian Agent, as applicable, shall have the right to review and adjust, in the exercise of its reasonable credit judgment, any such calculation after giving notice thereof to Borrower Representative, (a) to reflect its reasonable estimate of declines in value of any of the Collateral described therein, and (b) to the extent that such calculation is not in accordance with this Agreement.

“Business Day” - (a) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or is a day on which banking institutions located in the State of California are closed, (b) with respect to any disbursements and payments in and calculations pertaining to any Canadian Revolving Credit Loan, any day which is a Business Day in clause (a) above and which is also not a day on which commercial banks in Toronto, Canada, Atlanta, Georgia and New York, New York are authorized or required by law to close, and (c) with respect to the making, continuing, prepaying or repaying of any Domestic LIBOR Loan, any day which is a Business Day described in clauses (a), (b) and (c) above and which is also a day on which dealings in U.S. Dollars are carried on in the London interbank eurodollar market.

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“Canadian Agent” – Bank of America Canada in its capacity as Canadian Agent for the Canadian Lender and the Canadian Participating Lenders under the Agreement and any successor in that capacity appointed pursuant to Section 11.11 of the Agreement.

“Canadian Availability” – the amount of additional money which Canadian Borrower is entitled to borrow from time to time as Canadian Revolving Credit Loans, such amount being the lesser of (i) the Revolving Credit Maximum Amount minus the aggregat amount of the Domestic Revolving Credit Exposure of all the Domestic Lenders (which, for purposes of clarification, includes the Domestic LC Amount and outstanding Domestic LC Obligations, as further set forth in the definition of “Domestic Revolving Credit Exposure”) minus the aggregate Canadian Revolving Credit Exposure, and (ii) the difference derived when the sum of the Dollar Equivalent of the principal amount of Canadian Revolving Credit Loans to Canadian Borrower then outstanding (including any amounts which Administrative Agent, Canadian Agent or Canadian Lender may have paid for the account of Canadian Borrower pursuant to any of the Loan Documents and which have not been reimbursed by Canadian Borrower), and the Dollar Equivalent of any Reserves is subtracted from the Dollar Equivalent of the Canadian Borrowing Base, subject in each case to the other limitations in Section 1.1.2 of the Agreement.  If the aggregate amount outstanding under the Canadian Revolving Credit Loans is equal to or greater than the Canadian Revolving Credit Sub-Limit or the Canadian Borrowing Base, Canadian Availability is $0.

“Canadian Base Rate” – the Canadian Prime.

“Canadian Benefit Plans” – all material employee benefit plans, programs or arrangements of any nature or kind whatsoever that are not Canadian Pension Plans and are maintained or contributed to by, or to which there is or may be an obligation to contribute by, Canadian Borrower or its Subsidiaries in respect to their employees or former employees in Canada.

“Canadian Borrower” – as defined in the preamble to the Agreement.

“Canadian Borrower Guaranty” - the continuing guaranty agreement executed by the Canadian Borrower, in form and substance satisfactory to Administrative Agent.

“Canadian Borrowing Base” – as at any date of determination thereof, the Dollar Equivalent of an amount equal to the lesser of the following:

(a)         the Canadian Revolving Credit Sub-Limit; and

(b)         an amount equal to 85% of the net amount of Eligible Accounts of Canadian Borrower outstanding at such date.

The advance rate set forth above may be adjusted downward by Canadian Agent as Canadian Agent shall deem necessary or appropriate in its reasonable credit judgment, including, without limitation, adjustments with respect to Prior Claims or inventory subject to rights of suppliers under Section 81.1 of Bankruptcy and Insolvency Act (Canada).  For purposes hereof, the net amount of Eligible Accounts at any time shall be the face amount

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of such Eligible Accounts less any and all returns, rebates, discounts (which may, at Canadian Agent’s option, be calculated on shortest terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Accounts at such time.

“Canadian Collateral” – all of the Property and interests in Property of Canadian Borrower described in Section 5 of the Agreement, and all other Property and interests in Property of Canadian Borrower that now or hereafter secures the payment and performance of any of the Canadian Obligations, and all other Property and interest in Property of any Person that is identified in a Loan Document as “Canadian Collateral”.

“Canadian Dollar Equivalent” – at any time, as to any amount denominated in U.S. Dollars, the equivalent amount in Canadian Dollars determined by Administrative Agent at such time on the basis of the spot rate for the purchase by Canadian Agent of such U.S. Dollars with Canadian Dollars through a foreign exchange trading office selected by Canadian Agent or such other rate which Administrative Agent may select based on reasonable commercial practices.

“Canadian Dollar Refunding Amount” – as defined in Section 3.2.6 of the Agreement.

“Canadian Dollars and cdn$” – each, lawful currency of Canada.

“Canadian Fronting Fee” – as defined in Section 2.6(a) of the Agreement.

“Canadian Lender” – Bank of America Canada, in its capacity as provider of Canadian Revolving Credit Loans.

“Canadian Loan Account” – as defined in Section 3.6 of the Agreement.

“Canadian Non-Excluded Taxes” – as defined in Section 2.13.9 of the Agreement.

“Canadian Obligations” – all Loans made by the Canadian Lender and all other advances, debts, liabilities, obligations, covenants and duties, together with all interest (including, without limitation, whether accruing prior to or subsequent to the commencement of a bankruptcy or similar proceeding with Canadian Borrower as a debtor thereof and whether or not such interest is an allowed claim in any such proceeding), fees and other charges thereon, owing, arising, due or payable from Canadian Borrower to Canadian Agent, for its own benefit, or from Canadian Borrower to Canadian Agent for the benefit of Canadian Lender or Canadian Participating Lenders, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether arising under the Agreement or any of the other Loan Documents or otherwise, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising and however acquired, including without limitation any Derivative Obligations owing by Canadian Borrower to Canadian Agent, Canadian Lender or any Canadian Participating Lender.

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“Canadian Participating Lender” – each Lender (other than Canadian Lender) that has a Canadian Percentage as identified on Schedule 1.1; it being understood and agreed that each Canadian Affiliate of a Domestic Lender (other than Bank of America) which is not a non-resident of Canada for purposes of Part XIII of the Income Tax Act (Canada) or any successor provision thereto shall be a Canadian Participating Lender.

“Canadian Participation Fee” – as defined in Section 2.6 of the Agreement.

“Canadian Pension Plan” – each plan, program or arrangement which is considered to be a pension plan under any applicable pension benefits standard or tax statute and/or regulation in Canada established, maintained or contributed to by, or to which there is or may be an obligation to contribute by, Canadian Borrower or its Subsidiaries in respect of its employees or former employees.

“Canadian Percentage” – relative to the Canadian Lender and any Canadian Participating Lender, the applicable percentage relating to such Person’s obligation to fund Canadian Revolving Credit Loans pursuant to Section 3.2.6 of the Agreement as set forth opposite its name on Schedule 1.1 to the Agreement, as such percentage may be adjusted from time to time pursuant to assignment agreements executed by such Lender and delivered pursuant to Section 11.9 of the Agreement.  A Lender shall not have any Canadian Percentage if its percentage under the Canadian Percentage column is zero or is blank.

“Canadian Prime” – the annual rate of interest announced by the Canadian Agent as its “reference rate” for commercial loans made by it in Canada in Canadian Dollars.  The “reference rate” is a rate set by the Canadian Agent based upon various factors including its cost and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in the reference rate announced by the Canadian Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

“Canadian Revolving Credit Exposure” – at any date, the amount equal to the Dollar Equivalent of the aggregate principal amount of all Canadian Revolving Credit Loans.

“Canadian Revolving Credit Loan” – as defined in Section 1.1.2 of the Agreement.

“Canadian Revolving Credit Sub-Limit” – $1,000,000, as such amount may be reduced from time to time in accordance with the provisions of the Agreement.

“Capital Expenditures” - expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations; provided that “Capital Expenditures” shall exclude (i) an

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amount up to $250,000 during each consecutive twelve-month period corresponding to the net proceeds of dispositions of Equipment and Fixed Assets made in accordance with Section 6.4.2(a), and (ii) replacements of Equipment or fixed assets made in accordance with Section 6.4.2(b).

“Capitalized Lease Obligation” - any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“Cash Management Services” - any services provided from time to time by any Lender or any of its Affiliates to any Borrower or any of their Subsidiaries in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automatic clearinghouse, controlled disbursement, depository, electronic funds transfer, information reporting, lockbox, stop payment, overdraft and/or wire transfer services.