CREDIT AGREEMENT

BY THIS CREDIT AGREEMENT (together with any amendments or modifications, the "Agreement"), entered into as of September 15, 2005 by and between KNIGHT TRANSPORTATION, INC., an Arizona corporation (the "Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Lender"), in consideration of the mutual promises herein contained and for other valuable consideration, the parties hereto do agree as follows:

A.   The Borrower has asked the Lender to provide a revolving credit facility (the "RLC Facility") in the maximum principal amount of $25,000,000.00 to the Borrower for working capital purposes, of which an amount up to the Letter of Credit Commitment may be applied to the issuance of one or more Letters of Credit.

B.   The Lender is willing to extend such credits to the Borrower on the terms and subject to the conditions herein set forth.

C.   Effective as of the delivery of this Agreement, the Credit Agreement dated April 6, 2001 among the Borrower, Wells Fargo Bank, National Association, as administrative agent and the banks party thereto (the "Prior Agreement") will be terminated and replaced by this Agreement.

Accordingly, the Borrower and the Lender agree as follows:

Section 1.1    Defined Terms . Although terms may be defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the meanings specified below:

"Affiliate" shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.

"Agreement" shall mean this Credit Agreement, as amended or modified from time to time.

"Applicable Interest Rate" with respect to a given Borrowing shall mean the interest rate in effect for that Borrowing as determined pursuant to Section 2.8 herein.

"Average Adjusted Daily Undrawn Balance" shall equal the average daily unused amount of the Commitment during the preceding calendar quarter. For this purpose, the Letter of Credit Balance shall be deemed to be a use of the Commitment.

"Base Rate" shall mean the Prime Rate.

"Base Rate Borrowing" shall mean a Borrowing bearing interest at a rate determined by reference to the Base Rate.

"Board" shall mean the Board of Governors of the Federal Reserve System of the United States.

"Borrower" shall mean KNIGHT TRANSPORTATION, INC., an Arizona corporation.

"Borrowing" shall mean an outstanding principal amount of the Revolving Loan as to which a single Interest Period is in effect and with respect to which a single Applicable Interest Rate applies.

"Borrowing Notice" shall mean a notice given pursuant to Section 2.3, as therein described.

"Business Day" shall mean any day (other than a day which is a Saturday, Sunday or legal holiday in the State of Arizona or in the State of California) on which commercial banks are open for business in Phoenix, Arizona; provided , however , that, when used in connection with a LIBOR Borrowing, the term "Business Day" shall exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.

"Capital Lease" shall mean any lease of any property (whether real, personal or mixed) required by GAAP to be accounted for as a capital lease on the balance sheet of the lessee.

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

A "Change in Control" shall be deemed to have occurred if, after the date hereof, (a) any person or group (within the meaning of Rule 13d-3, as in effect on the date hereof, promulgated by the SEC under the 1934 Act), shall acquire, directly or indirectly, beneficially or of record, shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower; (b) a majority of the seats (other than vacant seats) on the board of directors become occupied by persons not members of said board on the date hereof that were neither (i) nominated by the board of directors of the Borrower, nor (ii) appointed by directors so nominated; or (c) any person or group shall otherwise directly or indirectly Control the Borrower.

"Closing Date" shall mean the date of the first Credit Event hereunder.

"Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

"Commitment" shall mean the commitment of the Lender as to the Facility hereunder, as such Commitment may be permanently terminated or reduced from time to time pursuant to Section 2.10. The Commitment shall fully, automatically and permanently terminate on the RLC Maturity Date.

"Commitment Fee" shall have the meaning assigned to such term in Section 2.6(a).

"Control" shall mean the power to direct or cause the direction of the management or policies of a person, whether through rights of ownership under voting securities, under contract or otherwise, and "Controlling" and "Controlled" shall have meanings correlative thereto.

"Credit Event" shall have the meaning given such term in Article IV.

"Default Rate" shall mean a rate per annum (computed as provided in Section 2.8(b)) equal to the Base Rate plus three percent (3%) and changing in conformity with each change in the Base Rate.

"Designated Officer" shall mean any of the Chairman of the Board, President, any Vice President, the Chief Financial Officer, and the Chief Accounting Officer of the Borrower.

"Dollars" or "$" shall mean lawful money of the United States of America.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

"ERISA Affiliate" shall mean any trade or business (whether or not incorporated) that is a member of a group of which the Borrower is a member and which is treated as a single employer under Section 414 of the Code.

"ERISA Liabilities" shall mean at any time the minimum liability with respect to Plans that would be required to be reflected at such time as a liability on the consolidated balance sheet of the Borrower under GAAP.

"Event of Default" shall have the meaning assigned to such term in Article VII.

"Existing Letters of Credit" shall mean the letters of credit outstanding on the Closing Date issued under the Prior Agreement, which letters of credit are listed on Schedule 2A.5 attached hereto.

"Facility" shall mean the RLC Facility.

"Fees" shall mean the Commitment Fee and all other fees and charges, if any, (other than interest) payable hereunder or otherwise payable in connection with the Facility.

"Financial Covenants": See Section 5.11.

"Financial Officer" of any Person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such Person.

"GAAP" shall mean generally-accepted accounting principles in the United States.

"Governmental Authority" shall mean any federal, state, tribal, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

"Guarantee" of or by any Person shall mean any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the "Primary Obligor") in any manner, whether directly or indirectly, and including without limitation any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness, or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor to pay such Indebtedness; provided , however , that the term Guarantee shall not include endorsements for collection or deposit, in either case in the ordinary course of business.

"Guaranties", each a Guaranty, shall have the meaning given such term in Section 2.19.

"Guarantors," each a "Guarantor," shall mean each Subsidiary of Borrower.

"Indebtedness" of a Person shall mean each of the following (without duplication) that, individually, is in excess of $100,000.00 in outstanding amount (in Dollars or the equivalent at market exchange rates) on the date such obligation is incurred: (a) obligations of that Person to any other Person for payment of borrowed money, (b) Capital Lease Obligations, (c) notes and drafts drawn or accepted by that Person payable to any other Person, whether or not representing obligations for borrowed money (but without duplication of indebtedness for borrowed money), (d) any obligation for the purchase price of property the payment of which is deferred for more than one year or evidenced by a note or equivalent instrument, (e) Guarantees of Indebtedness of third parties, and (f) a recourse or non-recourse payment obligation of any other Person that is secured by a Lien on any property of the first Person, whether or not assumed by the first person, up to the fair market value (from time to time) of such property (absent manifest evidence to the contrary, the fair market value of such property shall be the amount determined under GAAP for financial reporting purposes).

"Information" shall have the meaning defined in Section 8.17 hereof.

"Interest Payment Date" shall mean (a) with respect to a Base Rate Borrowing, the first day of each month in arrears, and (b) with respect to any LIBOR Borrowing, the last day of the Interest Period applicable thereto and, in the case of a LIBOR Borrowing with an Interest Period of more than three months' duration (if at any time made available under this Agreement), each day that would have been an Interest Payment Date for such Borrowing had successive Interest Periods of three months' duration been applicable to such Borrowing and, in addition, (c) each of (i) the date of any conversion of a Borrowing with or to a Borrowing of a different Type, (ii) the date of prepayment of a Borrowing, and (iii) the RLC Maturity Date.

"Interest Period" shall mean (a) as to any LIBOR Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect, or, if earlier, on the RLC Maturity Date and (b) as to any Base Rate Borrowing, the period commencing on the date of such Borrowing and ending on the RLC Maturity Date, the date such Borrowing is converted to a Borrowing of a different Type in accordance with Section 2.11 or the date of repayment or prepayment of such Borrowing in accordance with Section 2.5 or 2.12; provided , however , that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of LIBOR Borrowings only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

"Lender" shall mean WELLS FARGO BANK, NATIONAL ASSOCIATION.

"Letter of Credit Balance" shall mean, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time plus (b) the aggregate amount which has been drawn under Letters of Credit but for which the Lender has not been reimbursed by the Borrower.

"Letter of Credit Commitment" shall mean $25,000,000.00.

"Letter of Credit Disbursement" shall mean any payment or disbursement made by the Lender under or pursuant to a Letter of Credit.

"Letters of Credit" shall mean letters of credit issued by the Lender for the account of the Borrower pursuant to Article IIA as well as the Existing Letters of Credit.

"Leverage" shall mean the sum of the Borrower's current liabilities and non-current liabilities less its Subordinated Debt, divided by the sum of its total stockholders' equity plus its Subordinated Debt, less its intangible assets, all as determined at fiscal quarter end.

"LIBOR Borrowing" shall mean a Borrowing bearing interest at a rate determined by reference to the LIBOR Rate.

"LIBOR Rate" shall mean, with respect to any LIBOR Borrowing for any Interest Period, the average of the interest rate per annum equal to the composite London interbank offered rate for Dollar deposits approximately equal in principal amount to such LIBOR Borrowing and for a maturity comparable to such Interest Period for delivery on the first day of the Interest Period, adjusted for reserve requirements.

"Lien" shall mean any mortgage, pledge, security interest or similar lien.

"Loans" shall mean the loan made available by the Lender to the Borrower, in the form of the Revolving Loan under the RLC Facility.

"Loan Documents" shall mean this Agreement, the Note, the Guaranties and all other documents, instruments and agreements of every kind and description at any time undertaken by any Person for the benefit of the Lenders in connection with the Loans.

"Margin Stock" shall have the meaning given such term under Regulation U.

"Maximum RLC Commitment" shall mean $25,000,000.00.

"Multiemployer Plan" shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

"1934 Act" shall mean the United States Securities Exchange Act of 1934, as amended.

"Note" shall mean a revolving credit note of the Borrower executed and delivered as provided in Section 2.7 as such Note might be amended, modified, extended and restated from time to time.

"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

"Permitted Lien" shall mean a Lien permitted under Section 6.1.

"Person" shall mean any natural person (whether or not acting in a representative capacity), corporation, limited liability company, business trust, joint venture, association, sole proprietorship, partnership or government, or any agency or political subdivision thereof.

"Plan" shall mean any pension plan (other than a Multiemployer Plan) that is (1) a qualified plan under Section 401(a) of the Code, (ii) subject to the provisions of Title IV of ERISA or Section 412 of the Code and (iii) maintained for employees of the Borrower or any ERISA Affiliate.

"Potential Default" shall mean any act, event or condition which upon notice, lapse of time or both would constitute an Event of Default.

"Prime Rate" shall mean at any time the rate of interest per annum most recently announced within the Lender at its principal office in San Francisco as its prime rate, with the understanding that the prime rate of the Lender is one of its base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as the Lender may designate; each change in the Prime Rate shall be effective on the date such change is announced within the Lender.

"Prior Agreement": See Recital C.

"Quarterly Certificate" shall mean that Quarterly Compliance Certificate in the form of Exhibit "E".

"Quick Ratio" shall mean the sum of the Borrower's unrestricted cash, unrestricted marketable securities, net accounts receivable and income tax receivable convertible into cash, divided by the sum of total current liabilities, the RLC Balance and the Letter of Credit Balance, all as determined at the end of each fiscal quarter.

"Redeployment Loss": See Section 2.15.

"Regulation D" shall mean Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

"Regulation T" shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

"Regulation U" shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

"Regulation X" shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

"Reportable Event" shall mean any reportable event as defined in Section 4043(b) of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

"Revolving Loan" shall mean the revolving line of credit loans made available by the Lender to the Borrower pursuant to Article II. The Revolving Loan shall be composed of one or more LIBOR Borrowings and/or Base Rate Borrowings.

"RLC Balance" means the outstanding aggregate principal amount of all Borrowings.

"RLC Commitment" shall mean the Maximum RLC Commitment.

"RLC Facility": See Recital A, which Facility consists of the Revolving Loan and the Letters of Credit.

"RLC Maturity Date" shall mean September 30, 2007.

"SEC" shall mean the United States Securities and Exchange Commission.

"Subsidiary" of a Person shall mean any corporation, association or other business entity of which more than 50% of the total voting power of shares of stock entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person, by one or more of the other Subsidiaries of that Person, or by any combination thereof.

"Subordinated Debt" shall mean Indebtedness of the Borrower whose payment is subordinated in writing to the payment of the Loans and the other obligations of the Borrower under this Agreement, to the satisfaction of the Lender.

"Termination" shall mean the payment in full of the principal amount of all Loans, all accrued interest thereon and all fees with respect thereto, coupled with termination of the Facility and all other obligations (if any) of the Lender to advance funds or extend credit to or for the benefit of the Borrower pursuant to this Agreement.

"Termination Date" shall mean the date of the occurrence of the last event to occur required for Termination to occur.

"Type," when used in respect of any Borrowing, shall refer to the rate by reference to which interest on such Borrowing is determined. For purposes hereof, "rate" shall mean the LIBOR Rate or the Base Rate.

"Wells Fargo" shall mean Wells Fargo Bank, National Association.

Section 1.2    Terms Generally . The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of this Agreement, and Exhibits and Schedules to this Agreement, unless the context shall otherwise require. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP as in effect in the United States of America from time to time; provided , however , that, for purposes of determining compliance with any covenant set forth in Article VI, such terms shall be construed in accordance with GAAP as in effect on the date of this Agreement.

Section 2.1    The RLC Commitment .

(a)    Subject to the terms and conditions herein set forth, the Lender agrees to make advances of its Revolving Loan to the Borrower, at any time and from time to time on and after the date hereof and until the RLC Maturity Date, in an aggregate principal amount at any time outstanding not to exceed the RLC Commitment, subject, however, to the conditions that at no time shall the outstanding aggregate principal amount of all Borrowings pursuant to the Revolving Loan, together with the Letter of Credit Balance, exceed the Maximum RLC Commitment. The RLC Commitment may be terminated or reduced from time to time pursuant to Section 2.10. Within the foregoing limits, the Borrower may borrow, pay or prepay and reborrow hereunder, on and after the date hereof and prior to the RLC Maturity Date, subject to the terms, conditions and limitations set forth herein.

(b)    Each advance of the proceeds of the Revolving Loan shall constitute a single Borrowing. Each LIBOR Borrowing shall be in a principal amount which is an integral multiple of $100,000.00 and not less than $1,000,000.00 (or, if less, a principal amount equal to the remaining balance of the available RLC Commitment).

Section 2.2    [ Intentionally left blank ].

Section 2.3    Procedures for Borrowings Under the RLC Facility .

(a)    Each advance under the Revolving Loan shall be a single LIBOR Borrowing or a single Base Rate Borrowing, as the Borrower may request. Borrowings of more than one Type may be outstanding at the same time; provided , however , that (i) the Borrower shall not be entitled to request any Borrowing which, if made, would result in an aggregate of more than five (5) separate LIBOR Borrowings being outstanding under the Revolving Loan at any one time and (ii) each LIBOR Borrowing shall be in a principal amount which is an integral multiple of $100,000.00 and not less than $1,000,000.00. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

(b)    In order to request a Borrowing, the Borrower shall give to the Lender written or telecopy notice (or telephone notice confirmed in writing on the same Business Day) in the form of Exhibit "B" (a "Borrowing Notice") not later than 9:00 a.m., California time, (a) in the case of a LIBOR Borrowing, three (3) Business days before a proposed Borrowing and (b) in the case of a Base Rate Borrowing, on the day of a proposed Borrowing. Each Borrowing Notice shall be irrevocable and shall in each case specify (i) whether the Borrowing then being requested is to be a LIBOR Borrowing or a Base Rate Borrowing; (ii) the date of such Borrowing (which shall be a Business Day) and the amount thereof; (iii) if such Borrowing is to be a LIBOR Borrowing, the Interest Period with respect thereto; and (iv) if such Borrowing is to reborrow all or any part of any outstanding Borrowing, the identity and amount of such Borrowing that the Borrower requests to be refinanced. If no election as to the Type of Borrowing is specified in any Borrowing Notice, then the requested Borrowing shall be a Base Rate Borrowing. If no Interest Period with respect to any LIBOR Borrowing is specified in any Borrowing Notice, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Subject to Section 2.11, if the Borrower shall not have given notice in accordance with this Section of its election to reborrow a LIBOR Borrowing prior to the end of the Interest Period in effect for such Borrowing, then the Borrower (unless such Borrowing is repaid at the end of such Interest Period) shall be deemed to have given notice of an election to reborrow such Borrowing with a Base Rate Borrowing.

Section 2.4    Revolving Loan . The Revolving Loan shall be made as part of a Borrowing made by the Lender.

Section 2.5    Reborrowings . Subject to Section 2.11, the Borrower may reborrow all or any part of any Borrowing with a Borrowing of the same or a different Type made pursuant to Section 2.3, subject to the conditions and limitations set forth herein and elsewhere in this Agreement. Any Borrowing or part thereof so reborrowed or combined shall be deemed to have been repaid in accordance with Section 2.7 with the proceeds of a new Borrowing hereunder, and the proceeds of the new Borrowing (except to the extent, if any, they exceed the principal amount of the Borrowing(s) being reborrowed) shall not be disbursed to the Borrower.

Section 2.6    Fees .

(a)    The Borrower agrees to pay to the Lender (i) quarterly in arrears for each calendar quarter ending each March 31, June 30, September 30 and December 31, on the last Business Day of each calendar quarter, commencing September 30, 2005 and (ii) on the date on which the RLC Commitment shall be terminated as provided herein, for the period from the end of the preceding calendar quarter to the date of such termination, a commitment fee (the "Commitment Fee") at a rate per annum equal to 6.25 basis points (.0625%) on the Average Adjusted Daily Undrawn Balance during the preceding calendar quarter (or shorter period (1) commencing with the date hereof or (2) ending with the RLC Maturity Date or any other date on which the Commitment shall be terminated). The Commitment Fee shall be computed on the basis of the actual number of days elapsed in a year of 360 days. The Commitment Fee shall commence to accrue on the date hereof and shall cease to accrue on the earlier of the RLC Maturity Date and the termination of the Commitment of Lender as provided herein.

(b)    Once paid, the Commitment Fee shall not be refundable under any circumstances.

Section 2.7    Note; Repayment of Revolving Loan . The Revolving Loan made by the Lender shall be evidenced by a Note duly completed and executed on behalf of the Borrower, dated the date of this Agreement, in the form of Exhibit "A" hereto, and payable to the order of the Lender in a principal amount equal to the Lender's Commitment. The Note shall bear interest from the date thereof on the outstanding principal balance thereof as set forth in Section 2.8. The Lender may (and is hereby authorized by the Borrower, at the Lender's discretion, to) endorse on a schedule attached to the Note (or on a continuation of such schedule attached to such Note and made a part thereof), or otherwise to record in the Lender's internal records, an appropriate notation evidencing the date and amount of each Borrowing under the Revolving Loan, each payment or prepayment of principal of any such Borrowing and the other information provided for on such schedule; provided , however , that the failure of the Lender to make such a notation or any error therein shall not in any manner affect the obligation of the Borrower to repay each Borrowing under the Revolving Loan in accordance with the terms of the Note.

Section 2.8    Interest on Revolving Loans .

(a)    Subject to the provisions of Sections 2.9 and 2.11, each LIBOR Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to, the LIBOR Rate for the Interest Period in effect for such LIBOR Borrowing plus the Applicable Margin. Interest on each LIBOR Borrowing shall be payable on each applicable Interest Payment Date. The LIBOR Rate for each Interest Period shall be determined by the Lender, and such determination shall be conclusive absent manifest error. The Lender shall promptly advise the Borrower of such determination.

(b)    Subject to the provisions of Sections 2.9 and 2.11, each Base Rate Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days, as the case may be) at a rate per annum equal to the Base Rate plus the Applicable Margin. Interest on each Base Rate Borrowing shall be payable on each applicable Interest Payment Date. The Base Rate shall be determined by the Lender and such determination shall be conclusive absent manifest error. The Lender shall promptly advise the Borrower of such determination.

Section 2.9    Default Interest . If the Borrower shall default in the payment of the principal of or interest on any Revolving Loan or any other amount becoming due hereunder, whether by scheduled maturity, notice of prepayment, acceleration or otherwise, the Borrower shall on demand from time to time pay interest, to the extent permitted by law, on such defaulted amount up to (but not including the date of actual payment (after as well as before judgment) at the Default Rate.

Section 2.10    Termination and Reduction of Commitments .

(a)    The RLC Commitment shall be automatically terminated on the RLC Maturity Date.

(b)    Upon at least three (3) Business Days' prior irrevocable written or telecopy notice to the Lender, the Borrower may at any time in whole permanently terminate, or from time to time in part permanently reduce, the RLC Commitment; provided , however , that each partial reduction of the Maximum RLC Commitment shall be in an integral multiple of $100,000.00 and in a minimum principal amount of $1,000,000.00; and provided   further , that the Borrower shall not be permitted to terminate or reduce the Maximum RLC Commitment if, as a result respectively, the aggregate principal amount of the outstanding Borrowings together with the Letter of Credit Balance outstanding hereunder would exceed such reduced amount of the Maximum RLC Commitment.

Section 2.11    Conversion and Continuation of Borrowings . The Lender agrees to communicate the proposed LIBOR Rate verbally or otherwise to the Borrower on or about 8:00 a.m., California time, on any proposed conversion or continuation date and thereupon the Borrower shall have the right at any time upon prior irrevocable notice to the Lender not later than 10:00 a.m., California time, (i) on the day of conversion, to convert any LIBOR Borrowing into a Base Rate Borrowing, (ii) on the day of conversion or continuation, to convert any Base Rate Borrowing into a LIBOR Borrowing or to continue any LIBOR Borrowing as a LIBOR Borrowing for an additional Interest Period, and (iii) on the day of conversion, to convert the Interest Period with respect to any LIBOR Borrowing to another permissible Interest Period, subject in each case to the following:

(a)    if less than all the outstanding principal amount of any Borrowing shall be converted or continued, the aggregate principal amount of such Borrowing converted or continued shall be an integral multiple of $100,000.00 and not less than $1,000,000.00;

(b)    each conversion shall be effected by the Lender by applying the proceeds of the new Borrowing resulting from such conversion to the Borrowing (or portion thereof) being converted; accrued interest on a Borrowing (or portion thereof) being converted shall be paid by the Borrower at the time of conversion;

(c)    any LIBOR Borrowing may be converted only at the end of the Interest Period applicable thereto;

(d)    any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a LIBOR Borrowing; and

(e)    any portion of a LIBOR Borrowing which cannot be continued as a LIBOR Borrowing by reason of clauses (c) and (d) above shall be automatically converted at the end of the Interest Period in effect for such Borrowing into a Base Rate Borrowing.

Each notice pursuant to this Section shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Borrowing that the Borrower requests be converted or continued, (ii) whether such Borrowing is to be converted to or continued as a LIBOR Borrowing or a Base Rate Borrowing, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day), and (iv) if such Borrowing is to be converted to or continued as a LIBOR Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a LIBOR Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month's duration. If the Borrower shall not have given notice in accordance with this Section to continue any LIBOR Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued as a Base Rate Borrowing.

Section 2.12    Prepayment .

(a)    The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon written or telecopy notice (or telephone notice promptly confirmed by written or telecopy notice) to the Lender, such notice to be three Business Days with respect to a LIBOR Borrowing and one Business Day with respect to a Base Rate Borrowing; provided, however, that each partial prepayment shall be in an amount which is an integral multiple of $100,000.00 and not less than $1,000,000.00.

(b)    On the date of any termination or reduction of the Maximum RLC Commitment pursuant to Section 2.10, the Borrower shall pay or prepay an amount of the Revolving Loan such that the sum of the aggregate principal amount of such Loan outstanding together with the Letter of Credit Balance will not exceed the Commitment after giving effect to such termination or reduction.

(c)    Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such Borrowing (or portion thereof) by the amount stated therein on the date stated therein. All prepayments under this Section shall be subject to Section 2.15 but otherwise without premium or penalty. All prepayments under this Section shall be accompanied by a payment of accrued interest on the amount being prepaid to the date of payment.

Section 2.13    Reserve Requirements; Change in Circumstances .

(a)    If the Lender shall have determined that the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, special deposit, insurance or any change after the date hereof in any of the foregoing or in the interpretation or administration of any of the foregoing by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender's holding company with any request or directive promulgated after the date hereof regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the Lender's or on the capital of the Lender's holding company, if any, as a consequence of this Agreement or the Revolving Loan made by the Lender to a level below that which the Lender's holding company could have achieved but for such adoption, change or compliance (taking into consideration the Lender's policies and the policies of the Lender's holding company with respect to capital adequacy) by an amount deemed by the Lender in good faith to be material, then from time to time the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender's holding company for any such reduction suffered.

(b)    Notwithstanding any other provision herein, if after the date of this Agreement any change in applicable law or regulation (either by way of changes in existing laws or regulations or the introductions of new laws or regulations) or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) shall change the basis of taxation of payments to the Lender of the principal of or interest on any LIBOR Borrowing made by the Lender, Fees or other amounts payable hereunder (other than changes in respect of taxes imposed on the net income of the Lender), or shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by the Lender, including without limitation any reserve requirement that may be applicable to "eurocurrency liabilities" under and as defined in Regulation D, or shall impose on the Lender or the London interbank market any other condition affecting this Agreement or any LIBOR Borrowing made by the Lender, and the result of any of the foregoing shall be to increase the cost to the Lender of making or maintaining any LIBOR Borrowing or to reduce the amount of any sum received or receivable by the Lender hereunder or under the Note (in respect of LIBOR Borrowing only), whether of principal, interest or otherwise, by an amount deemed by the Lender in good faith to be material, then, the Borrower will pay to the Lender upon demand such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.

(c)    A certificate of the Lender setting forth such amount or amounts as shall be necessary to compensate the Lender or its holding company as specified in paragraph (a) or (b) above, as the case may be, and setting forth in reasonable detail the manner in which such amount or amounts shall have been determined shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate delivered by it within ten (10) days after its receipt of the same.

(d)    Failure on the part of the Lender to demand compensation for any increased costs or reduction in amounts received or receivable with respect to any period shall not constitute a waiver of the Lender's right to demand compensation with respect to such period or any other period. The protection of this Section shall be available to the Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed, provided that if the Lender is compensated for such increased costs or reduction by any Governmental Authority or third party in the event such invalidity or inapplicability is finally determined, then the Lender shall return to the Borrower the respective compensation paid by the Borrower, up to the lesser of such amount as is received by the Lender or such amount as was paid by the Borrower.

(e)    Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive Termination, provided that the Borrower shall have no further obligation to the Lender under this Section unless a certificate setting forth the amount of such obligation shall have been delivered by the Lender pursuant to paragraph (c) above within ninety (90) calendar days after the Termination Date.

(f)    The Lender shall give notification to the Borrower of any event or prospective event which will give rise to the operation of paragraphs (a) or (b) of this Section, such notification to be sent within thirty (30) days of the date of the public promulgation of the effective date of any such law, rule, regulation, guidelines or change therein.

Section 2.14    Change in Legality .

(a)    Notwithstanding any other provision herein, if any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for the Lender to make or maintain any LIBOR Borrowing or to give effect to its obligations as contemplated hereby with respect to any LIBOR Borrowing, then by written notice to the Borrower setting forth in reasonable detail the relevant circumstances and the effect thereof, the Lender may:

(i)    declare that LIBOR Borrowings will not thereafter be made by the Lender hereunder, whereupon any request by the Borrower for a LIBOR Borrowing shall be deemed a request for a Base Rate Borrowing unless such declaration shall be subsequently withdrawn; and

(ii)    require that all outstanding LIBOR Borrowings made by it be converted to Base Rate Borrowings, in which event all such LIBOR Borrowings shall be automatically converted to Base Rate Borrowings as of the effective date of such notice as provided in paragraph (b) below.

In the event the Lender shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal which would otherwise have been applied to repay the LIBOR Borrowings that would have been made by the Lender or the converted LIBOR Borrowings of the Lender shall instead be applied to repay the Base Rate Borrowings made by the Lender in lieu of, or resulting from the conversion of, such LIBOR Borrowings.

(b)    For purposes of this Section, a notice to the Borrower by the Lender shall be effective as to each LIBOR Borrowing, if lawful, on the last day of the Interest Period currently applicable to such LIBOR Borrowing; in all other cases such notice shall be effective on the date of receipt by the Borrower.

(c)    The Lender shall use its best efforts to give prompt notification to the Borrower of any event or prospective event which will give rise to the operation of paragraph (a) of this Section.

Section 2.15    Redeployment Loss . The Borrower shall pay to the Lender on demand against any Redeployment Loss (defined below) arising as a consequence of any payment, prepayment (optional or mandatory) or conversion of a LIBOR Borrowing required by any other provision of this Agreement or otherwise made or deemed made on a date other than the last day of the Interest Period applicable thereto, or failure to borrow, convert or extend a LIBOR Borrowing after giving notice. "Redeployment Loss" shall mean, in each circumstance, a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in such Interest Period matures, calculated as follows for each such month:

(i)    Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had it remained outstanding until the last day of the Interest Period applicable thereto.

(ii)    Subtract from the amount determined in (i) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such Interest Period at the LIBOR Rate in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid.

(iii)    If the result obtained in (ii) for any month is greater than zero, discount that difference by the LIBOR Rate used in (ii) above.

The Borrower acknowledges that prepayment of such amount may result in the Lender incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. The Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of the Lender. If the Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at the Default Rate.

A certificate of the Lender setting forth in reasonable detail any amount or amounts which the Lender is entitled to receive pursuant to this Section and setting forth in reasonable detail the manner in which such amounts shall have been determined shall be delivered to the Borrower and shall be conclusive absent manifest error. Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive Termination provided that the Borrower shall have no further obligation to the Lender under this Section unless a certificate setting forth the amount of such obligation shall have been delivered by the Lender pursuant to the preceding sentence within ninety (90) calendar days after the Termination Date.

Section 2.16    Payments .

(a)    The Borrower shall make each payment (including without limitation principal of or interest on any Borrowing or any Fees or other amounts) hereunder and under any other Loan Document no later than 11:00 a.m., California time, on the date when due in Dollars to the Lender at its offices at 100 West Washington, Phoenix, Arizona, or at such other location as it may direct the Borrower in writing to use, in immediately available funds.

(b)    Whenever any payment (including without limitation principal of or interest on any Borrowing or any Fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.

(c)    The Borrower authorizes the Lender to collect all principal and interest due under each Loan by charging the Borrower's demand deposit account number 4159-518950 with the Lender, or any other demand deposit account maintained by the Borrower with the Lender, for the full amount thereof. Should there be insufficient funds in any such demand deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by the Borrower.

Section 2.17    Taxes .

(a)    All payments by the Borrower under this Agreement shall be made without setoff or counterclaim and in such amounts as may be necessary in order that all such payments after deduction or withholding for or on account of any present or future taxes, levies, imposts, duties, withholdings or other charges of whatsoever nature and all liabilities with respect thereto, other than any taxes on or measured by the gross or net income of the Lender pursuant to the income and/or franchise tax laws of the jurisdictions in which the Lender is incorporated or organized or in which the principal office of the Lender or the branch that is a party to this Agreement of the Lender is located (all such nonexcluded taxes, levies, imposts, duties, withholdings and liabilities being hereinafter referred to as "Taxes"), shall not be less than the amounts otherwise specified to be paid by the Borrower to or for the account of the Lender (or any transferee or assignee (each, a "Transferee")) under this Agreement. With respect to each deduction or withholding for or on account of any Taxes of the Lender (or Transferee), the Borrower shall promptly (and in any event not later than forty-five (45) days thereafter) furnish to the Lender (or Transferee) a receipt evidencing payment thereof.

(b)    In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Document (hereinafter referred to as "Stamp Taxes").

(c)    The Borrower will indemnify the Lender (or Transferee) for the full amount of Taxes and Stamp Taxes (including without limitation any Taxes or Stamp Taxes imposed by any jurisdiction on amounts payable under this Section) paid by the Lender (or Transferee) and any liability (including without limitation penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Stamp Taxes were correctly or legally asserted by the relevant taxing authority or other Governmental Authority. Such indemnifica