Exhibit 10.1
 

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AMENDED AND RESTATED CREDIT AGREEMENT
 
Dated as of May 24, 2007
 
among
 
ODYSSEY HEALTHCARE OPERATING A, LP,
 
ODYSSEY HEALTHCARE OPERATING B, LP, and
 
HOSPICE OF THE PALM COAST, INC.
 
as Borrowers,
 
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
 
as Credit Parties,
 
THE LENDERS SIGNATORY HERETO
 
FROM TIME TO TIME,
 
as Lenders,
 
and
 
GENERAL ELECTRIC CAPITAL CORPORATION,
 
as Agent and Lender
 
GECC CAPITAL MARKETS GROUP, INC.,
 
as Lead Arranger
 

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TABLE OF CONTENTS
       
Page
1. AMOUNT AND TERMS OF CREDIT
2
1.1.
 
Credit Facilities.
2
1.2.
 
Letters of Credit.
3
1.3.
 
Prepayments.
4
1.4.
 
Use of Proceeds.
5
1.5.
 
Interest and Applicable Margins.
6
1.6.
 
[Intentionally Omitted]
7
1.7.
 
[Intentionally Omitted].
8
1.8.
 
Cash Management Systems.
8
1.9.
 
Fees.
9
1.10.
 
Receipt of Payments.
9
1.11.
 
Application and Allocation of Payments.
9
1.12.
 
Loan Account and Accounting.
9
1.13.
 
Indemnity.
10
1.14.
 
Access.
11
1.15.
 
Taxes.
12
1.16.
 
Capital Adequacy; Increased Costs; Illegality.
12
1.17.
 
Single Loan; Joint and Several Obligations.
14
2. CONDITIONS PRECEDENT
15
2.1.
 
Conditions to the Initial Loans.
15
2.2.
 
Further Conditions to Each Loan.
16
3. REPRESENTATIONS AND WARRANTIES
17
3.1.
 
Existence; Compliance with Law.
17
3.2.
 
Executive Offices, Collateral Locations, FEIN.
17
3.3.
 
Power, Authorization, Enforceable Obligations.
18
3.4.
 
Financial Statements and Projections.
18
3.5.
 
Material Adverse Effect.
19
3.6.
 
Ownership of Property; Liens.
20
3.7.
 
Labor Matters.
20
3.8.
 
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.
20
3.9.
 
Government Regulation.
21
3.10.
 
Margin Regulations.
21
3.11.
 
Taxes.
21
3.12.
 
ERISA.
22
3.13.
 
No Litigation.
23
3.14.
 
Brokers.
23
3.15.
 
Intellectual Property.
23
3.16.
 
Full Disclosure.
24
3.17.
 
Environmental Matters.
24
3.18.
 
Insurance.
25
3.19.
 
Deposit and Disbursement Accounts.
25
3.20.
 
[Intentionally Omitted]
25
3.21.
 
[Intentionally Omitted]
25
3.22.
 
Agreements and Other Documents.
25
3.23.
 
Solvency.
26
3.24.
 
Compliance With Health Care Laws.
26
3.25.
 
HIPAA Compliance.
27

 
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4. FINANCIAL STATEMENTS AND INFORMATION
28
4.1.
 
Reports and Notices.
28
4.2.
 
Communication with Accountants.
28
5. AFFIRMATIVE COVENANTS
28
5.1.
 
Maintenance of Existence and Conduct of Business.
28
5.2.
 
Payment of Charges.
29
5.3.
 
Books and Records.
29
5.4.
 
Insurance; Damage to or Destruction of Collateral.
29
5.5.
 
Compliance with Laws and Corporate Integrity Agreement.
31
5.6.
 
Supplemental Disclosure.
31
5.7.
 
Intellectual Property.
31
5.8.
 
Environmental Matters.
32
5.9.
 
Landlords’ Agreements, Mortgagee Agreements, Bailee Letters, Lease Performance
and Real Estate Purchases.
32
5.10.
 
Further Assurances.
33
5.11.
 
Non-Guarantor Subsidiaries.
33
6. NEGATIVE COVENANTS
34
6.1.
 
Mergers, Subsidiaries, Etc.
34
6.2.
 
Investments; Loans and Advances.
36
6.3.
 
Indebtedness.
37
6.4.
 
Employee Loans and Affiliate Transactions.
37
6.5.
 
Capital Structure and Business.
38
6.6.
 
Guaranteed Indebtedness.
38
6.7.
 
Liens.
38
6.8.
 
Sale of Stock and Assets.
39
6.9.
 
ERISA.
39
6.10.
 
Financial Covenants.
39
6.11.
 
Hazardous Materials.
39
6.12.
 
Sale-Leasebacks.
40
6.13.
 
Cancellation of Indebtedness.
40
6.14.
 
Restricted Payments.
40
6.15.
 
Change of Corporate Name or Location; Change of Fiscal Year.
40
6.16.
 
No Impairment of Intercompany Transfers.
41
6.17.
 
No Speculative Transactions.
41
6.18.
 
Leases; Real Estate Purchases.
41
6.19.
 
Business Associate Agreement.
41

 
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7. TERM
42
7.1.
 
Termination.
42
7.2.
 
Survival of Obligations Upon Termination of Financing Arrangements.
42
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
43
8.1.
 
Events of Default.
43
8.2.
 
Remedies.
44
8.3.
 
Waivers by Credit Parties.
45
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
46
9.1.
 
Assignment and Participations.
46
9.2.
 
Appointment of Agent.
47
9.3.
 
Agent's Reliance, Etc.
47
9.4.
 
GE Capital and Affiliates.
47
9.5.
 
Lender Credit Decision.
48
9.6.
 
Indemnification.
48
9.7.
 
Successor Agent.
48
9.8.
 
Setoff and Sharing of Payments.
49
9.9.
 
Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.
50
10. SUCCESSORS AND ASSIGNS
52
10.1.
 
Successors and Assigns.
52
11. MISCELLANEOUS
53
11.1.
 
Complete Agreement; Modification of Agreement.
53
11.2.
 
Amendments and Waivers.
54
11.3.
 
Fees and Expenses.
55
11.4.
 
No Waiver.
56
11.5.
 
Remedies.
56
11.6.
 
Severability.
56
11.7.
 
Conflict of Terms.
56
11.8.
 
Confidentiality.
57
11.9.
 
GOVERNING LAW.
57
11.10.
 
Notices.
58
11.11.
 
Section Titles.
59
11.12.
 
Counterparts.
59
11.13.
 
WAIVER OF JURY TRIAL.
59
11.14.
 
Press Releases and Related Matters.
59
11.15.
 
Reinstatement.
60
11.16.
 
Advice of Counsel.
60
11.17.
 
No Strict Construction.
60
11.18.
 
USA PATRIOT Act Notice.
60
11.19.
 
Effect of Amendment and Restatement on Existing Credit Agreement.
61

 
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12. CROSS-GUARANTY
62
12.1.
 
Cross-Guaranty.
62
12.2.
 
Waivers by Borrowers.
63
12.3.
 
Benefit of Guaranty.
63
12.4.
 
Subordination of Subrogation, Etc.
63
12.5.
 
Election of Remedies.
63
12.6.
 
Limitation.
64
12.7.
 
Contribution with Respect to Guaranty Obligations.
64
12.8.
 
Liability Cumulative.
65

 
-iv-

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INDEX OF APPENDICES
 
Annex A (Recitals)
-
Definitions
Annex B (Section 1.2)
-
Letters of Credit
Annex C (Section 1.8)
-
Cash Management System
Annex D (Section 2.1(a))
-
Closing Checklist
Annex E (Section 4.1(a))
-
Financial Statements and Projections -Reporting
Annex F (Section 6.10)
-
Financial Covenants
Annex G (Section 9.9(a))
-
Lenders' Wire Transfer Information
Annex H (Section 11.10)
-
Notice Addresses
Annex I (from Annex A-Commitments definition)
-
Commitments as of Closing Date

 
Exhibit 1.1(a)(i)
-
Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii)
-
Form of Revolving Note
Exhibit 1.5(e)
-
Form of Notice of Conversion/Continuation
Exhibit 9.1(a)
-
Form of Assignment Agreement

 
Schedule 1.1
-
Agent's Representatives
Disclosure Schedule 3.1
-
Type of Entity; State of Organization
Disclosure Schedule 3.2
-
Executive Offices; Collateral Locations; FEIN
Disclosure Schedule 3.4(a)
-
Financial Statements
Disclosure Schedule 3.4(b)
-
Projections
Disclosure Schedule 3.6
-
Real Estate and Leases
Disclosure Schedule 3.7
-
Labor Matters
Disclosure Schedule 3.8
-
Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11
-
Tax Matters
Disclosure Schedule 3.12
-
ERISA Plans
Disclosure Schedule 3.13
-
Litigation
Disclosure Schedule 3.15
-
Intellectual Property
Disclosure Schedule 3.17
-
Hazardous Materials
Disclosure Schedule 3.18
-
Insurance
Disclosure Schedule 3.19
-
Deposit and Disbursement Accounts
Disclosure Schedule 3.22
-
Material Agreements
Disclosure Schedule 3.24
-
Medicare/Medicaid
Disclosure Schedule 6.3
-
Indebtedness
Disclosure Schedule 6.4(a)
-
Transactions with Affiliates
Disclosure Schedule 6.7
-
Existing Liens

-v-

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AMENDED AND RESTATED CREDIT AGREEMENT
 
This AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 24, 2007 among
ODYSSEY HEALTHCARE OPERATING A, LP, a Delaware limited partnership ("OpCoA"),
ODYSSEY HEALTHCARE OPERATING B, LP, a Delaware limited partnership ("OpCoB"),
HOSPICE OF THE PALM COAST, INC., a Florida not for profit corporation ("Palm
Coast"; OpCoA, OpCoB and Palm Coast being referred to together as the
"Borrowers" and each individually as a "Borrower"), the other Credit Parties
signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
(in its individual capacity, "GE Capital"), for itself, as Lender, and as Agent
for Lenders; and the other Lenders signatory hereto from time to time.
 
RECITALS
 
WHEREAS, Borrowers are each a party to that certain Credit Agreement dated as of
May 14, 2004, by and among Agent, GE Capital as the sole lender party thereto,
Borrowers and the other Credit Parties signatory from time to time thereto, as
amended by that certain Consent and Amendment No. 1 to Credit Agreement dated as
of November 1, 2004, as further amended by that certain Waiver and Amendment No.
2 to Credit Agreement dated as of February 22, 2006, as further amended by that
certain Consent, Waiver and Amendment No. 3 to Credit Agreement dated as of
September 29, 2006, as further amended by that certain Consent and Amendment No.
4 to Credit Agreement dated as of October 19, 2006, as further amended by that
certain Amendment No. 5 to Credit Agreement dated as of May 4, 2007 and as
further amended by that certain Amendment No. 6 to Credit Agreement dated as of
May 14, 2007 (the "Existing Credit Agreement");
 
WHEREAS, the parties desire to amend and restate the Existing Credit Agreement
to, among other things, (a) increase the amount of the Revolving Loan Commitment
and (b) provide (i) working capital financing for Borrowers, (ii) funds for
Permitted Acquisitions, Restricted Payments and other general corporate purposes
of Borrowers and (iii) funds for other purposes permitted hereunder; and for
these purposes, Lenders are willing to make certain loans and other extensions
of credit to Borrowers of up to such amount upon the terms and conditions set
forth herein; and
 
WHEREAS, Borrowers have secured all of their obligations under the Loan
Documents by granting to Agent, for the benefit of Agent and Lenders, a security
interest in and lien upon substantially all of their existing personal property
and after-acquired personal property; and
 
1

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WHEREAS, each Credit Party, other than Borrowers and the Non-Guarantor
Subsidiaries, has guaranteed all of the obligations of Borrowers to Agent and
Lenders under the Loan Documents and granted to Agent, for the benefit of Agent
and Lenders, a security interest in and lien upon substantially all of its
existing personal property and after-acquired personal property, including,
without limitation, the Stock of each Subsidiary owned by such Credit Party to
secure such guaranty; and
 
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Disclosure Schedules, Exhibits and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
 
1.
AMOUNT AND TERMS OF CREDIT

 
1.1. Credit Facilities.
 
(a) Revolving Credit Facility.
 
(i) Subject to the terms and conditions hereof, each Lender agrees to make
available to Borrowers from time to time until the Commitment Termination Date
its Pro Rata Share of advances (each, a "Revolving Credit Advance"). The Pro
Rata Share of the Revolving Loan of any Lender shall not at any time exceed its
separate Revolving Loan Commitment and the Revolving Loans of all Lenders shall
not at any time exceed the Maximum Amount. The obligations of each Lender
hereunder shall be several and not joint. Until the Commitment Termination Date,
Borrowers may from time to time borrow, repay and reborrow under this
Section 1.1(a). Each Revolving Credit Advance shall be made on notice by
Borrowers to one of the representatives of Agent identified in Schedule 1.1 at
the address specified therein. Any such notice must be given no later than (1)
noon (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) noon (New York time) on the
date which is 3 Business Days prior to the proposed Revolving Credit Advance, in
the case of a LIBOR Loan. Each such notice (a "Notice of Revolving Credit
Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent. If Borrowers desire to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, Borrowers must comply with
Section 1.5(e).
 
(ii) Except as provided in Section 1.12, each Borrower shall execute and deliver
to each Lender a note to evidence the Revolving Loan Commitment of that Lender.
Each note shall be in the principal amount of the Revolving Loan Commitment of
the applicable Lender, dated the Closing Date and substantially in the form of
Exhibit 1.1(a)(ii) (each a "Revolving Note" and, collectively, the "Revolving
Notes"). Each Revolving Note shall represent the joint and several obligation of
each Borrower to pay the full principal amount of the applicable Lender's
Revolving Loan Commitment or, if less, such Lender's Pro Rata Share of the
aggregate unpaid principal amount of all Revolving Credit Advances together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of the
aggregate Revolving Loan and all other non-contingent Obligations shall be due
and payable in full in immediately available funds on the Commitment Termination
Date.
 
(iii) [Intentionally Omitted].
 
(iv) The Borrowers may request, in writing, that the then effective Revolving
Loan Commitments be increased by up to $10,000,000, which increase shall be
effective upon (i) the receipt by Agent of written commitments by one or more
Lenders (which may include new Lenders to this Agreement by means of a joinder
in form and substance reasonably satisfactory to Agent) to provide the entirety
of such increased amount and (ii) satisfaction of each of the following
conditions: (A) no Event of Default shall have occurred and be continuing or
shall occur as a result of such increase in Revolving Loan Commitments, in each
case as of the time of the making of such request by Borrowers for such increase
through and including the date, if any, that the Revolving Loan Commitment has
been so increased, (B) no Material Adverse Effect shall have occurred as of the
time of the making of such request by Borrowers for such increase through and
including the date, if any, that the Revolving Loan Commitment has been so
increased, (C) each Credit Party shall, and shall cause its Subsidiaries to,
execute and deliver such documents and instruments and take such other actions
(including, without limitation, executing and issuing new Revolving Notes) as
may be reasonably requested by the Agent in connection with such increase,
(D) GE Capital, for its own account, shall have received payment in full from
Borrowers of an arranger fee, if any, referred to in the GE Capital Fee Letter,
(E) the Lender or Lenders providing such incremental increase in the Revolving
Loan Commitments shall have received payment in full from Borrowers of any
closing fee required by such Lenders in connection with such commitment increase
and (F) Borrowers shall have delivered a certificate, in form and substance
reasonably satisfactory to Agent, indicating that all of the conditions to such
increase set forth in this clause (iv) have been satisfied. No Lender shall have
any obligation, without such Lender's written consent, to increase its
individual Revolving Loan Commitment pursuant to this clause (iv). Within two
(2) Business Days of the consummation of any increase to the Revolving Loan
Commitments contemplated by this clause (iv), the Lenders shall effect such
inter-Lender transfers and settlements necessary to give effect to changes in
the Pro Rata Shares as a result of such increase. Any Lender that shall fail to
receive full settlement within such two (2) Business Day period shall be
entitled to receive interest thereon at the Index Rate from the Lender or
Lenders that shall have failed to make full settlement. Agent hereby agrees to
use its best efforts to solicit Lender commitments to Borrowers' request for any
such increased amount pursuant to this clause (iv).
 
(b) [Intentionally Omitted].
 
(c) [Intentionally Omitted]
 
(d) Reliance on Notices. Agent shall be entitled to rely upon, and shall be
fully protected in relying upon, any Notice of Revolving Credit Advance, Notice
of Conversion/Continuation or similar notice believed by Agent in good faith to
be genuine. Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary. Agent
and each Lender may regard any notice or other communication pursuant to any
Loan Document from either Borrower as a notice or communication from all
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or Borrowers hereunder to another Borrower or Borrowers.
 
1.2. Letters of Credit.
 
Subject to and in accordance with the terms and conditions contained herein and
in Annex B, Borrowers shall have the right to request, and Lenders agree to
incur, or purchase participations in, Letter of Credit Obligations in respect of
each Borrower.
 
2

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1.3. Prepayments.
 
(a) Reductions in Revolving Loan Commitments. Borrowers may at any time on at
least 5 days' prior written notice by Borrowers to Agent permanently reduce (but
not terminate) the Revolving Loan Commitment; provided, that (A) any such
prepayments or reductions shall be in a minimum amount of $500,000 and integral
multiples of $100,000 in excess of such amount and (B) after giving effect to
such reductions, Borrowers shall comply with Section 1.3(b)(i). In addition,
Borrowers may at any time on at least 10 days' prior written notice by Borrowers
to Agent terminate the Revolving Loan Commitment; provided, that upon such
termination, all Loans and other Obligations shall be due and payable in full
and all Letter of Credit Obligations shall be cash collateralized or otherwise
satisfied in accordance with Annex B hereto. Any voluntary prepayment and any
reduction or termination of the Revolving Loan Commitment must be accompanied by
payment of any LIBOR funding breakage costs in accordance with Section 1.13(b).
Upon any such reduction or termination of the Revolving Loan Commitment, each
Borrower's right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf, shall simultaneously be
permanently reduced or terminated, as the case may be; provided, that a
permanent reduction of the Revolving Loan Commitment shall require a
corresponding pro rata reduction in the L/C Sublimit.
 
(b) Mandatory Prepayments.
 
(i) If at any time the aggregate outstanding balances of the Revolving Loan
exceed the Maximum Amount (an "Overadvance"), Borrowers shall, within one
Business Day of the earlier of Borrower's knowledge of the existence of such
Overadvance or notice from Agent of the existence of such Overadvance, repay the
aggregate outstanding Revolving Credit Advances to the extent required to
eliminate such excess. If any such excess remains after repayment in full of the
aggregate outstanding Revolving Credit Advances, Borrowers shall provide cash
collateral for the Letter of Credit Obligations in the manner set forth in
Annex B to the extent required to eliminate such excess.
 
(ii) After the occurrence and during the continuation of an Event of Default,
within three Business Days of receipt by any Credit Party of proceeds of any
asset disposition (excluding proceeds of asset dispositions permitted by
Section 6.8(a)), or any sale of Stock of any Subsidiary of any Credit Party,
Borrowers shall prepay the Loans in an amount equal to all such proceeds, net of
(A) reasonable and customary commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by Borrowers in connection therewith (in each case, paid to
non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if
any, and (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c).
 
3

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(iii) After the occurrence and during the continuation of an Event of Default,
if any Credit Party incurs Indebtedness (other than Indebtedness permitted by
Section 6.3), no later than three Business Days following the date of receipt of
the proceeds thereof, Borrowers shall prepay the Loans in an amount equal to all
such proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. Any such
prepayment shall be applied in accordance with Section 1.3(c).
 
(c) Application of Certain Mandatory Prepayments. Any prepayments made by any
Borrower pursuant to Sections 1.3(b)(ii) or (b)(iii) above or Section 5.4(c)
shall be applied as follows: first, to Fees and reimbursable expenses of Agent
then due and payable pursuant to any of the Loan Documents; second, to interest
then due and payable on Revolving Credit Advances; third, to the principal
balance of Revolving Credit Advances outstanding until the same has been paid in
full; and last, to any Letter of Credit Obligations to provide cash collateral
therefor in the manner set forth in Annex B, until all such Letter of Credit
Obligations have been fully cash collateralized in the manner set forth in
Annex B. The Revolving Loan Commitments shall not be permanently reduced by the
amount of any such prepayments.
 
(d) No Implied Consent. Nothing in this Section 1.3 shall be construed to
constitute Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.
 
1.4. Use of Proceeds.
 
Borrowers shall utilize the proceeds of the Revolving Loan solely for the
financing of Borrowers' ordinary working capital and Capital Expenditures, to
finance Permitted Acquisitions, to make Restricted Payments in accordance with
Section 6.14 hereof and for general corporate needs.
 
4

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1.5. Interest and Applicable Margins.
 
(a) Borrowers shall pay interest to Agent, for the ratable benefit of Lenders in
accordance with the various Loans being made by each Lender, in arrears on each
applicable Interest Payment Date, at the Index Rate plus the Applicable Revolver
Index Margin per annum or, at the election of Borrowers, the applicable LIBOR
Rate plus the Applicable Revolver LIBOR Margin per annum, based on the aggregate
Revolving Credit Advances outstanding from time to time.
 
As of the Closing Date, the Applicable Margins are as follows:
 
Applicable Revolver Index Margin
 
0.00%
 
Applicable Revolver LIBOR Margin
 
1.00%
 

The Applicable Margins shall be adjusted by reference to the following grids:
 
If Leverage Ratio is:
Applicable Revolver Index Margin:
Applicable Revolver LIBOR Margin:
< 1.0x
0.00%
1.00%
> 1.0x, but < 1.50x
0.25%
1.25%
> 1.50x, but < 2.0x
0.50%
1.50%
> 2.0x
0.75%
1.75%

Adjustments in the Applicable Margins commencing with the Fiscal Quarter ending
June 30, 2007 shall be implemented quarterly on a prospective basis, for each
calendar month commencing at least five (5) days after the date of delivery to
Lenders of the quarterly unaudited or annual audited (as applicable) Financial
Statements evidencing the need for an adjustment. Concurrently with the delivery
of those Financial Statements, Borrowers shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins.  Failure to timely deliver such Financial Statements shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the
Applicable Margins to the highest level set forth in the foregoing grid, until
the first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not required. If an
Event of Default has occurred and is continuing at the time any reduction in the
Applicable Margins is to be implemented, that reduction shall be deferred until
the first day of the first calendar month following the date on which such Event
of Default is waived or cured. If, as a result of any restatement of or other
adjustment to the Financial Statements or for any other reason, Agent or
Requisite Lenders determine that (a) the Leverage Ratio as calculated by
Borrowers as of any applicable date was inaccurate and (b) a proper calculation
of the Leverage Ratio would have resulted in a higher level of pricing for any
period, then Borrowers shall automatically and retroactively be obligated to pay
to Lenders, and shall pay to Lenders promptly on demand by Agent, an amount
equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such
period.
 
(b) If any payment on any Loan becomes due and payable on a day other than a
Business Day, the maturity thereof will be extended to the next succeeding
Business Day (except as set forth in the definition of LIBOR Period) and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
 
(c) All computations of Fees calculated on a per annum basis and interest shall
be made by Agent on the basis of a 360-day year (or, in the case of Index Rate
Loans, calculated on the basis of a 365/366-day year), in each case for the
actual number of days occurring in the period for which such interest and Fees
are payable. The Index Rate is a floating rate determined for each day. Each
determination by Agent of an interest rate and Fees hereunder shall be final,
binding and conclusive on Borrowers, absent manifest error.
 
(d) So long as an Event of Default has occurred and is continuing under
Section 8.1(h) or (i) or so long as any Event of Default has occurred and is
continuing under Section 8.1(a) and at the election of Agent (or upon the
written request of Requisite Lenders) confirmed by written notice from Agent to
Borrowers, the interest rates applicable to the Loans and the Letter of Credit
Fees shall be increased by two percentage points (2%) per annum above the rates
of interest or the rate of such Fees otherwise applicable hereunder ("Default
Rate"), and all outstanding Obligations shall bear interest at the Default Rate
applicable to such Obligations. Interest and Letter of Credit Fees at the
Default Rate shall (x) with respect to any Event of Default under Section 8.1(h)
or (i), accrue from the initial date of such Event of Default or (y) with
respect to any Event of Default under Section 8.1(a), accrue from the date of
receipt of written notice from Agent of such Event of Default and shall continue
until that Event of Default is cured or waived and shall be payable upon demand.
 
(e) Subject to the conditions precedent set forth in Section 2.2, Borrowers
shall have the option to (i) request that any Revolving Credit Advance be made
as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans
from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index
Rate Loan, subject to payment of LIBOR breakage costs in accordance with
Section 1.13(b) if such conversion is made prior to the expiration of the LIBOR
Period applicable thereto, or (iv) continue all or any portion of any Loan as a
LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding
LIBOR Period of that continued Loan shall commence on the first day after the
last day of the LIBOR Period of the Loan to be continued. Any Loan or group of
Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $500,000 and
integral multiples of $100,000 in excess of such amount. Any such election must
be made by noon (New York time) on the 3rd Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which Borrowers wish to convert any Index Rate Loan to a LIBOR
Loan for a LIBOR Period designated by Borrowers in such election. If no election
is received with respect to a LIBOR Loan by noon (New York time) on the 3rd
Business Day prior to the end of the LIBOR Period with respect thereto (or if an
Event of Default has occurred and is continuing or if the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrowers must make such election by notice to Agent in writing, by telecopy or
overnight courier. In the case of any conversion or continuation, such election
must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e).
 
(f) Notwithstanding anything to the contrary set forth in this Section 1.5, if a
court of competent jurisdiction determines in a final order that the rate
of interest payable hereunder exceeds the highest rate of interest permissible
under law (the "Maximum Lawful Rate"), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Agent, on behalf of Lenders,
is equal to the total interest that would have been received had the interest
rate payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrowers or as a
court of competent jurisdiction may otherwise order.
 
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1.6. [Intentionally Omitted]
 
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1.7. [Intentionally Omitted].
 
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1.8. Cash Management Systems.
 
On or prior to the date of the making of the initial Revolving Credit Advance or
the incurrence of the initial Letter of Credit Obligations, Borrowers will
establish and will maintain until the Termination Date, the cash management
systems described in Annex C (the "Cash Management Systems").
 
1.9. Fees.
 
(a) Borrowers shall pay to GE Capital, individually, the Fees specified in that
certain fee letter of even date herewith among Borrowers and GE Capital (the "GE
Capital Fee Letter"), at the times specified for payment therein.
 
(b) As additional compensation for the Lenders, Borrowers shall pay to Agent,
for the ratable benefit of Lenders, in arrears, on or before the fifth Business
Day of each month prior to the Commitment Termination Date and on the Commitment
Termination Date, a Fee for Borrowers' non-use of the Revolving Loan Commitments
in an amount equal to one quarter of one percent (0.25%) per annum (calculated
on the basis of a 360 day year for actual days elapsed) multiplied by the
difference between (x) the Maximum Amount (as it may be adjusted from time to
time) and (y) the average for the period of the daily closing balances of the
aggregate Revolving Loan outstanding during the period for which such Fee is
due.
 
(c) Borrowers shall pay to Agent, for the ratable benefit of Lenders, the Letter
of Credit Fee as provided in Annex B.
 
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1.10. Receipt of Payments.
 
Borrowers shall make each payment under this Agreement not later than 2:00 p.m.
(New York time) on the day when due in immediately available funds in Dollars to
the Collection Account. For purposes of computing interest and Fees as of any
date, all payments shall be deemed received on the Business Day on which
immediately available funds therefor are received in the Collection Account
prior to 2:00 p.m. New York time. Payments received after 2:00 p.m. New York
time on any Business Day or on a day that is not a Business Day shall be deemed
to have been received on the following Business Day.
 
1.11. Application and Allocation of Payments.
 
(a) So long as no Event of Default has occurred and is continuing, (i) voluntary
prepayments shall be applied as determined by Borrowers, subject to the
provisions of Section 1.3(a); and (ii) mandatory prepayments shall be applied as
set forth in Section 1.3(c). All payments and prepayments applied to a
particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when an Event of Default has occurred and is continuing or
following the Commitment Termination Date, each Borrower hereby irrevocably
waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that
Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations of Borrowers as Agent may deem advisable
notwithstanding any previous entry by Agent in the Loan Account or any other
books and records. In the absence of a specific determination by Agent with
respect thereto, payments shall be applied to amounts then due and payable in
the following order: (1) to Fees and Agent's expenses reimbursable hereunder;
(2) to interest on the other Loans, ratably in proportion to the interest
accrued as to each Loan; (3) to principal payments on the other Loans and to
provide cash collateral for Letter of Credit Obligations in the manner described
in Annex B, ratably to the aggregate, combined principal balance of the other
Loans and outstanding Letter of Credit Obligations; and (4) to all other
Obligations, including expenses of Lenders to the extent reimbursable under
Section 11.3.
 
(b) At any time an Event of Default under Section 8.1(a) has occurred and is
continuing for at least ten (10) Business Days, Agent is authorized to, and at
its sole election may, charge to the Revolving Loan balance on behalf of each
Borrower and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest and
principal, other than principal of the Revolving Loan, owing by Borrowers under
this Agreement or any of the other Loan Documents if and to the extent Borrowers
fail to pay promptly any such amounts as and when due, it being understood that
in the event Agent charges the Revolving Loan balance for any unpaid amount, the
Event of Default then in existence under Section 8.1(a) solely as a result of
Borrowers' failure to pay such amount shall be cured by such charge to
Borrowers' Revolving Loan balance. At Agent's option and to the extent permitted
by law, any charges so made shall constitute part of the Revolving Loan
hereunder. 
 
1.12. Loan Account and Accounting.
 
Agent shall maintain a loan account (the "Loan Account") on its books to record:
all Advances, all payments made by Borrowers, and all other debits and credits
as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall be prima facie evidence of the amounts due and
owing to Agent and Lenders by each Borrower; provided, that any failure to so
record or any error in so recording shall not limit or otherwise affect any
Borrower's duty to pay the Obligations. Agent shall render to Borrowers a
monthly accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account as to Borrowers for the immediately preceding month.
Unless Borrowers notify Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within 45 days after the
date thereof, each and every such accounting shall (absent manifest error) be
deemed final, binding and conclusive on Borrowers in all respects as to all
matters reflected therein. Only those items expressly objected to in such notice
shall be deemed to be disputed by Borrowers. Notwithstanding any provision
herein contained to the contrary, any Lender may elect (which election may be
revoked) to dispense with the issuance of Notes to that Lender and may rely on
the Loan Account as evidence of the amount of Obligations from time to time
owing to it.
 
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1.13. Indemnity.
 
(a) Each Credit Party that is a signatory hereto shall jointly and severally
indemnify and hold harmless each of Agent, Lenders and their respective
Affiliates, and each such Person's respective officers, directors, employees,
attorneys, agents and representatives (each, an "Indemnified Person"), from and
against any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including reasonable attorneys' fees and disbursements
and other costs of investigation or defense, including those incurred upon any
appeal) that may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended, suspended or
terminated under this Agreement and the other Loan Documents and the
administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's bad faith, gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
 
(b) To induce Lenders to provide the LIBOR Rate option on the terms provided
herein, if (i) any LIBOR Loans are repaid in whole or in part prior to the last
day of any applicable LIBOR Period (whether that repayment is made pursuant to
any provision of this Agreement or any other Loan Document or occurs as a result
of acceleration, by operation of law or otherwise); (ii) any Borrower shall
default in payment when due of the principal amount of or interest on any LIBOR
Loan; (iii) any Borrower shall refuse to accept any borrowing of, or shall
request a termination of, any borrowing of, conversion into or continuation of,
LIBOR Loans after Borrowers have given notice requesting the same in accordance
herewith; or (iv) any Borrower shall fail to make any prepayment of a LIBOR Loan
after Borrowers have given a notice thereof in accordance herewith, then
Borrowers shall jointly and severally indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable hereunder. As promptly as
practicable under the circumstances, each Lender shall provide Borrowers with
its written calculation of all amounts payable pursuant to this Section 1.13(b),
and such calculation shall be binding (absent manifest error) on the parties
hereto unless Borrowers shall object in writing within 10 Business Days of
receipt thereof, specifying the basis for such objection in reasonable detail.
 
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1.14. Access.
 
Except to the extent prohibited by applicable law and by confidentiality
agreements, each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon 3 Business Days' prior notice as
frequently as Agent reasonably determines to be appropriate, but, unless an
Event of Default has occurred and is continuing, no more than twice in any
Fiscal Year: (a) provide Agent and any of its officers, employees and agents
access to its properties, facilities, advisors and employees (including
officers) of each Credit Party and to the Collateral, (b) permit Agent, and any
of its officers, employees and agents, to inspect, audit and make extracts from
any Credit Party's books and records, and (c) permit Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party;
provided, that if no Event of Default has occurred and is continuing, Borrowers
shall not be responsible for the costs of any such visits, inspections or
verifications in any Fiscal Year. If a Default or Event of Default has occurred
and is continuing or if access is necessary to preserve or protect the
Collateral as determined by Agent, each such Credit Party shall provide such
access to Agent and to each Lender at all times and without advance notice. Each
Credit Party shall, so long as any Event of Default has occurred and is
continuing, make available to Agent and its counsel, as quickly as is possible
under the circumstances, originals or copies of all books and records that Agent
may reasonably request. Each Credit Party shall deliver any document or
instrument necessary for Agent, as it may from time to time reasonably request,
to obtain records from any service bureau or other Person that maintains records
for such Credit Party, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by such Credit
Party. Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrowers.
 
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1.15. Taxes.
 
(a) Any and all payments by each Borrower hereunder (including any payments made
pursuant to Section 12) or under the Notes shall be made, in accordance with
this Section 1.15, free and clear of and without deduction for any and all
present or future Taxes. If any Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder (including any sum payable
pursuant to Section 12) or under the Notes, (i) the sum payable shall be
increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 1.15) Agent or Lenders, as applicable, receive an amount equal to
the sum they would have received had no such deductions been made, (ii) such
Borrower shall make such deductions, and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within 45 days after the date of any payment of Taxes, Borrowers
shall furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of such payment reasonably satisfactory to
Agent. Agent and Lenders shall not be obligated to return or refund any amounts
received pursuant to this Section.
 
(b) Each Credit Party that is a signatory hereto shall jointly and severally
indemnify and, within 10 days of written demand therefor, pay Agent and each
Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
 
(c) Each Lender organized under the laws of a jurisdiction outside the United
States (a "Foreign Lender") as to which payments to be made under this Agreement
or under the Notes are exempt from United States withholding tax under an
applicable statute or tax treaty shall provide to Borrowers and Agent a properly
completed and executed IRS Form W-8ECI or Form W-8BEN or other applicable form,
certificate or document prescribed by the IRS or the United States certifying as
to such Foreign Lender's entitlement to such exemption (a "Certificate of
Exemption"). Any foreign Person that seeks to become a Lender under this
Agreement shall provide a Certificate of Exemption to Borrowers and Agent prior
to becoming a Lender hereunder. No foreign Person may become a Lender hereunder
if such Person fails to deliver a Certificate of Exemption in advance of
becoming a Lender.
 
1.16. Capital Adequacy; Increased Costs; Illegality.
 
(a) If any Lender shall have determined that any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case, adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Lender and thereby reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder, then Borrowers shall from time to time
within 5 Business Days of written demand by such Lender (with a copy of such
demand to Agent) pay to Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction. A certificate
as to the amount of that reduction and showing the basis of the computation
thereof in reasonable detail submitted by such Lender to Borrowers and to Agent
shall, absent manifest error, be final, conclusive and binding for all purposes.
 
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(b) If, due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), in each case adopted after
the Closing Date, there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining any Loan, then Borrowers
shall from time to time, within 5 Business Days of written demand by such Lender
(with a copy of such demand to Agent), pay to Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost in
reasonable detail, submitted to Borrowers and to Agent by such Lender, shall be
conclusive and binding on Borrowers for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable commercial
efforts to minimize costs and expenses incurred by it and payable to it by
Borrowers pursuant to this Section 1.16(b).
 
(c) Notwithstanding anything to the contrary contained herein, if, after the
Closing Date, the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that Lender without, in
that Lender's opinion, adversely affecting it or its Loans or the income
obtained therefrom, on written notice thereof and demand therefor by such Lender
to Borrowers through Agent, (i) the obligation of such Lender to agree to make
or to make or to continue to fund or maintain LIBOR Loans shall terminate and
(ii)  Borrowers shall forthwith prepay in full all outstanding LIBOR Loans owing
by Borrowers to such Lender, together with interest accrued thereon, unless
Borrowers, within 5 Business Days after the delivery of such notice and demand,
convert all LIBOR Loans into Index Rate Loans.
 
(d) Within 15 days after receipt by Borrowers of written notice and demand from
any Lender (an "Affected Lender") for payment of additional amounts or increased
costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrowers may, at
their option, notify Agent and such Affected Lender of its intention to replace
the Affected Lender. So long as no Default or Event of Default has occurred and
is continuing, Borrowers, with the consent of Agent, may obtain, at Borrowers'
expense, a replacement Lender ("Replacement Lender") for the Affected Lender,
which Replacement Lender must be reasonably satisfactory to Agent. If Borrowers
obtain a Replacement Lender within 90 days following notice of their intention
to do so, the Affected Lender must sell and assign its Loans and Commitments to
such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale; provided, that Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment. Notwithstanding the foregoing, Borrowers shall not have the
right to obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within 15 days following its receipt
of Borrowers' notice of intention to replace such Affected Lender. Furthermore,
if Borrowers give a notice of intention to replace and do not so replace such
Affected Lender within 90 days thereafter, Borrowers' rights under this
Section 1.16(d) shall terminate with respect to such replacement attempt and
Borrowers shall promptly pay all increased costs or additional amounts demanded
by such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
 
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1.17. Single Loan; Joint and Several Obligations.
 
All Loans to each Borrower and all of the other Obligations of each Borrower
arising under this Agreement and the other Loan Documents shall constitute one
general joint and several obligation of Borrowers secured, until the Termination
Date, by all of the Collateral.
 
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2.
CONDITIONS PRECEDENT

 
2.1. Conditions to the Initial Loans.
 
No Lender shall be obligated to make the initial Revolving Credit Advance or
incur the initial Letter of Credit Obligations, or to take, fulfill, or perform
any other action hereunder, until the following conditions have been satisfied
or provided for in a manner satisfactory to Agent, or waived in writing by Agent
and Lenders:
 
(a) Credit Agreement; Loan Documents. This Agreement or counterparts hereof
shall have been duly executed by, and delivered to, Borrowers, each other Credit
Party, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all those listed in the Closing Checklist attached
hereto as Annex D, each in form and substance reasonably satisfactory to Agent.
 
(b) Approvals. Agent shall have received (i) satisfactory evidence that the
Credit Parties have obtained all required consents and approvals of all Persons
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Loan Documents or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent affirming
that no such consents or approvals are required.
 
(c) Payment of Fees. Borrowers shall have paid the Fees required to be paid on
the Closing Date in the respective amounts specified in Section 1.9 (including
the Fees specified in the GE Capital Fee Letter), and shall have reimbursed
Agent for all fees, costs and expenses of closing incurred (to the extent
Borrowers have been notified of such costs and expenses) as of or prior to the
Closing Date.
 
(d) Capital Structure; Other Indebtedness. The capital structure of each Credit
Party and the terms and conditions of all Indebtedness of each Credit Party
shall be acceptable to Agent in its sole discretion.
 
(e) Due Diligence. Agent shall have completed its legal due diligence
(including, without limitation, lien, tax lien, judgment and litigation
searches), with results reasonably satisfactory to Agent.
 
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2.2. Further Conditions to Each Loan.
 
Except as otherwise expressly provided herein, no Lender shall be obligated to
fund any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation, if, as of the date thereof:
 
(a) any representation or warranty by any Credit Party contained herein or in
any other Loan Document is untrue or incorrect in any material respect as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement and Agent or Requisite Lenders have
determined not to make such Advance, convert or continue any Loan as LIBOR Loan
or incur such Letter of Credit Obligation as a result of the fact that such
warranty or representation is untrue or incorrect in any material respect;
 
(b) any event or circumstance having a Material Adverse Effect has occurred
since the date hereof as determined by the Requisite Lenders and Agent or
Requisite Lenders have determined not to make such Advance, convert or continue
any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a result
of the fact that such event or circumstance has occurred;
 
(c) any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligation), and Agent or Requisite Lenders shall have determined not to
make any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation as a result of that Default or Event of Default; or
 
(d) after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligations), the outstanding principal amount of the aggregate Revolving
Loans would exceed the Maximum Amount.
 
The request and acceptance by any Borrower of the proceeds of any Advance or the
incurrence of any Letter of Credit Obligations shall be deemed to constitute, as
of the date thereof, (i) a representation and warranty by Borrowers that the
conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by
Borrowers of the cross-guaranty provisions set forth in Section 12 and of the
granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
 
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3.
REPRESENTATIONS AND WARRANTIES

 
To induce Lenders to make the Loans and to incur Letter of Credit Obligations,
the Credit Parties executing this Agreement, jointly and severally, make the
following representations and warranties to Agent and each Lender with respect
to all Credit Parties, each and all of which shall survive the execution and
delivery of this Agreement.
 
3.1. Existence; Compliance with Law.
 
Each Credit Party (a) is a corporation, limited liability company or limited
partnership duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization set forth in
Disclosure Schedule 3.1; (b) is duly qualified to conduct business and is in
good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in exposure to losses,
damages or liabilities in excess of $1,000,000; (c) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease and to
conduct its business as now, heretofore and proposed to be conducted;
(d) subject to specific representations regarding Environmental Laws, has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
 
3.2. Executive Offices, Collateral Locations, FEIN.
 
As of the Closing Date, each Credit Party’s name as it appears in official
filings in its state of incorporation or organization, state of incorporation or
organization, organization type, organization number, if any, issued by its
state of incorporation or organization, and the current location of each Credit
Party's chief executive office and business premises are set forth in Disclosure
Schedule 3.2, and, except as set forth on Disclosure Schedule 3.2 none of such
locations has changed to another state within twelve months preceding the
Closing Date and each Credit Party has only one state of incorporation or
organization. In addition, Disclosure Schedule 3.2 lists the federal employer
identification number of each Credit Party.
 
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3.3. Power, Authorization, Enforceable Obligations.
 
The execution, delivery and performance by each Credit Party of the Loan
Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Credit Party's power; (b) have been duly authorized
by all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Credit Party's charter,
bylaws or partnership or operating agreement as applicable; (d) do not violate
any law or regulation, or any order or decree of any court or Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Person other than those
in favor of Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person, except those that have been obtained or are
otherwise referred to in Section 2.1(b), all of which will have been duly
obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity regardless of whether considered in a proceeding in
law or equity.
 
3.4. Financial Statements and Projections.
 
Except for the Projections, all Financial Statements concerning Holdings and its
Subsidiaries that are referred to below have been prepared in accordance with
GAAP consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for the
absence of footnotes and normal year-end audit adjustments) and present fairly
in all material respects the financial position of the Persons covered thereby
as at the dates thereof and the results of their operations and cash flows for
the periods then ended.
 
(a) Financial Statements. The following Financial Statements attached hereto as
Disclosure Schedule 3.4(a) have been delivered on or prior to the date hereof:
 
(i) The audited consolidated balance sheet at December 31, 2006 and the related
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Year then ended, certified by Ernst & Young LLP.
 
(ii) The unaudited consolidated balance sheet at March 31, 2007 and the related
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Quarter then ended.
 
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(b) Projections. The Projections delivered on the date hereof and attached
hereto as Disclosure Schedule 3.4(b) have been prepared by Borrowers in light of
the past operations of their businesses, and reflect projections for the five
year period beginning on January 1, 2007 on an annual basis. The Projections are
based upon the same accounting principles as those used in the preparation of
the financial statements described above and the estimates and assumptions
stated therein, all of which Borrowers believe to be reasonable and fair in
light of current conditions and current facts known to Borrowers and, as of the
Closing Date, reflect Borrowers' good faith and reasonable estimates of the
future financial performance of Borrowers and of the other information projected
therein for the period set forth therein (it being understood that all such
Projections will be subject to uncertainties and contingencies and that no
representation is given that any particular projection will be realized).
 
3.5. Material Adverse Effect.
 
Between December 31, 2006 and the Closing Date: (a) no Credit Party has incurred
any obligations, contingent or noncontingent liabilities, liabilities for
Charges, long-term leases or unusual forward or long-term commitments that,
alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default and to the best of Borrowers' knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between December 31, 2006 and the Closing Date
no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
 
3.6. Ownership of Property; Liens.
 
As of the Closing Date, the real estate ("Real Estate") listed in Disclosure
Schedule 3.6 constitutes all of the real property owned, leased, or subleased by
any Credit Party. Each Credit Party owns good and indefeasible fee simple title
to all of its owned Real Estate, and valid and marketable leasehold interests in
all of its leased Real Estate, all as described on Disclosure Schedule 3.6, and
a summary of terms of all such leases reasonably satisfactory to Agent has been
delivered to Agent. Disclosure Schedule 3.6 further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets material
to its business, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties or assets for their intended purposes. As of the Closing Date, none
of the properties and assets of any Credit Party are subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to any Credit Party that could reasonably be expected to result
in any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Disclosure Schedule 3.6 also describes, as of the
Closing Date, any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate owned by a Credit Party or
granted by, or in favor of, any Credit Party pertaining to any other Real
Estate. As of the Closing Date, no portion of any Credit Party's Real Estate has
suffered any material damage by fire or other casualty loss that has not
heretofore been repaired and restored in all material respects to its original
condition (normal wear and tear excepted) or otherwise remedied. As of the
Closing Date, all material permits required to have been issued or appropriate
to enable the Real Estate to be lawfully occupied and used for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect.
 
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3.7. Labor Matters.
 
As of the Closing Date (a) no strikes or other material labor disputes against
any Credit Party are pending or, to any Credit Party's knowledge, threatened;
(b) hours worked by and payment made to employees of each Credit Party comply in
all material respects with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule 3.7, no Credit Party is a party to or bound by any
collective bargaining agreement, management agreement, employment agreement,
bonus, restricted stock, stock option, or stock appreciation plan or agreement
or any similar plan, agreement or arrangement (and true and complete copies of
any collective bargaining agreements, management agreements and employment
agreements described on Disclosure Schedule 3.7 have been delivered to Agent);
(e) there is no organizing activity involving any Credit Party pending or, to
any Credit Party's knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any Credit
Party's knowledge, threatened with the National Labor Relations Board, and no
labor organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) except as set forth in Disclosure Schedule 3.7,
there are no material complaints or charges against any Credit Party pending or,
to the knowledge of any Credit Party, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Credit Party of any individual.
 
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.
 
Except as set forth in Disclosure Schedule 3.8, as of the Closing Date, no
Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. All
of the issued and outstanding Stock of each Credit Party (excluding Holdings) is
owned by each of the Stockholders and in the amounts set forth in
Disclosure Schedule 3.8. Except as set forth in Disclosure Schedule 3.8, there
are no outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in Section 6.3 (including Disclosure
Schedule 6.3).
 
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3.9. Government Regulation.
 
No Credit Party is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder. The making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers, the
application of the proceeds thereof and repayment thereof will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
 
3.10. Margin Regulations.
 
No Credit Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as "Margin Stock"). No
Credit Party owns any Margin Stock, and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Indebtedness that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
of the Loans or other extensions of credit under this Agreement to be considered
a "purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
 
3.11. Taxes.
 
All tax returns, reports and statements, including information returns, required
by any Governmental Authority to be filed by any Credit Party have been filed
with the appropriate Governmental Authority and all Charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding Charges or other amounts less than $500,000 in
aggregate or being contested in accordance with Section 5.2(b). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in compliance in all material respects with all
applicable federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities. Disclosure
Schedule 3.11 sets forth as of the Closing Date those taxable years for which
any Credit Party's tax returns are currently being audited by the IRS or any
other applicable Governmental Authority, and any assessments or threatened
assessments in connection with such audit, or otherwise currently outstanding.
Except as described in Disclosure Schedule 3.11, no Credit Party has executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges in an aggregate amount greater than
$500,000: (a) under any agreement (including any tax sharing agreements) or
(b) to each Credit Party's knowledge, as a transferee. As of the Closing Date,
no Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
could reasonably be expected to have a Material Adverse Effect.
 
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3.12. ERISA.
 
(a) Disclosure Schedule 3.12 lists (i) all ERISA Affiliates and (ii) all Plans
and separately identifies all Pension Plans, including Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the latest
IRS/DOL 5500-series form for each such Plan, have been delivered to Agent.
Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that could
reasonably be expected to result in the loss of such qualification or tax-exempt
status. Each Plan is in compliance in all material respects with the applicable
provisions of ERISA and the IRC, including the timely filing of all reports
required under the IRC or ERISA, including the statement required by 29 CFR
Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has failed to
make any contribution or pay any amount due as required by either Section 412 of
the IRC or Section 302 of ERISA or the terms of any such Plan. Neither any
Credit Party nor ERISA Affiliate has engaged in a "prohibited transaction," as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with
any Plan, that could reasonably be expected to subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
 
(b) Except as set forth in Disclosure Schedule 3.12: (i) no Title IV Plan has
any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Credit Party, threatened claims (other than claims for benefits in the
normal course), sanctions, actions or lawsuits, asserted or instituted against
any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party
or ERISA Affiliate has incurred or reasonably expects to incur any liability as
a result of a complete or partial withdrawal from a Multiemployer Plan;
(v) within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a "standard termination" as
that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of
any Credit Party or any ERISA Affiliate (determined at any time within the last
five years) with Unfunded Pension Liabilities been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate (determined at such time); (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than ten percent (10%) of fair market value of the
assets of any Plan measured on the basis of fair market value as of the latest
valuation date of any Plan; and (vii) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an insurance company that is
not rated AAA by the Standard & Poor's Corporation or an equivalent rating by
another nationally recognized rating agency.
 
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3.13. No Litigation.
 
No action, claim, lawsuit, demand, investigation or proceeding is now pending
or, to the knowledge of any Credit Party, threatened against any Credit Party,
before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (a) that challenges any Credit Party's
right or power to enter into or perform any of its obligations under the Loan
Documents to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) that has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
be reasonably be expected to have a Material Adverse Effect. Except as set forth
on Disclosure Schedule 3.13, as of the Closing Date there is no Litigation
pending or, to any Credit Party's knowledge, threatened, that seeks damages in
excess of $1,000,000 not otherwise covered by or in excess of any applicable
insurance policy of a Credit Party, or injunctive relief against, or alleges
criminal misconduct of, any Credit Party.
 
3.14. Brokers.
 
No broker or finder brought about the obtaining, making or closing of the Loans,
and no Credit Party or Affiliate thereof has any obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.
 
3.15. Intellectual Property.
 
As of the Closing Date, each Credit Party owns or has rights to use all
Intellectual Property necessary to continue to conduct its business as now
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule 3.15. Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect. Except as set forth in Disclosure Schedule 3.15,
no Credit Party is aware of any infringement claim by any other Person with
respect to any Intellectual Property.
 
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3.16. Full Disclosure.
 
No information contained in this Agreement, any of the other Loan Documents, any
Projections or Financial Statements or other written reports from time to time
delivered hereunder or any written statement furnished by or on behalf of any
Credit Party to Agent or any Lender pursuant to the terms of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made (it being understood that all Projections will be subject to
uncertainties and contingencies and that no representation is given that any
particular projection will be realized). Borrowers will take no action, or omit
to take any action, that would cause the Liens granted to Agent, on behalf of
itself and Lenders, pursuant to the Collateral Documents to not be at any time
fully perfected first priority Liens in and to the Collateral described therein
(to the extent the Collateral Documents and applicable law allow for such
perfection), subject, as to priority, only to Permitted Encumbrances.
 
3.17. Environmental Matters.
 
(a) Except as set forth in Disclosure Schedule 3.17, as of the Closing Date:
(i) the Real Estate is free of contamination from any Hazardous Material except
for such contamination that would not adversely impact the value or
marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $1,000,000; (ii) no
Credit Party has caused or suffered to occur any Release of Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate; (iii) the
Credit Parties are and have been in compliance with all Environmental Laws,
except for such noncompliance that would not result in Environmental Liabilities
which could reasonably be expected to exceed $1,000,000; (iv) the Credit Parties
have obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities that could
reasonably be expected to exceed $1,000,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$1,000,000 , and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of $1,000,000 or injunctive relief against, or that alleges
criminal misconduct by, any Credit Party; (vii) no written notice has been
received by any Credit Party identifying it as a "potentially responsible party"
or requesting information under CERCLA or analogous state statutes, and to the
knowledge of the Credit Parties, there are no facts, circumstances or conditions
that may result in any Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes; and (viii) the
Credit Parties have provided to Agent copies of all existing environmental
reports, reviews and audits and all written information pertaining to actual or
potential Environmental Liabilities, in each case relating to any Credit Party.
 
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(b) Each Credit Party hereby acknowledges and agrees that Agent (i) is not now,
and has not ever been, in control of any of the Real Estate or any Credit
Party's affairs, and (ii) does not have the capacity through the provisions of
the Loan Documents or otherwise to influence any Credit Party's conduct with
respect to the ownership, operation or management of any of its Real Estate or
compliance with Environmental Laws or Environmental Permits.
 
3.18. Insurance.
 
Disclosure Schedule 3.18 lists all insurance policies of any nature maintained,
as of the Closing Date, for current occurrences by each Credit Party, as well as
a summary of the terms of each such policy.
 
3.19. Deposit and Disbursement Accounts.
 
Disclosure Schedule 3.19 lists all banks and other financial institutions at
which any Credit Party maintains deposit or other accounts as of the Closing
Date, and such Schedule correctly identifies the name, address and telephone
number of each depository, the name in which the account is held, a description
of the purpose of the account, and the complete account number therefor.
 
3.20. [Intentionally Omitted]
 
3.21. [Intentionally Omitted]
 
3.22. Agreements and Other Documents.
 
As of the Closing Date, each Credit Party has provided to Agent or its counsel,
on behalf of Lenders, accurate and complete copies (or summaries) of all of the
following agreements or documents to which it is subject and each of which is
listed in Disclosure Schedule 3.22: supply agreements and purchase agreements
not terminable by such Credit Party within 60 days following written notice
issued by such Credit Party and involving transactions in excess of $1,000,000
per annum; leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $1,000,000 per annum;
licenses and permits held by the Credit Parties, the absence of which could be
reasonably likely to have a Material Adverse Effect; instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party in
an amount in excess of $500,000 and any Lien granted by such Credit Party with
respect thereto; and instruments and agreements evidencing the issuance of any
equity securities, warrants, rights or options to purchase equity securities of
such Credit Party.
 
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3.23. Solvency.
 
Both before and after giving effect to (a) the Loans and Letter of Credit
Obligations to be made or incurred on the Closing Date or such other date as
Loans and Letter of Credit Obligations requested hereunder are made or incurred,
(b) the disbursement of the proceeds of such Loans pursuant to the instructions
of Borrowers; and (c) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is and will be Solvent.
 
3.24. Compliance With Health Care Laws. 
 
Without limiting the generality of Sections 3.1 or 5.5 or any other
representation or warranty made herein, Credit Parties and each of the
facilities operated by Credit Parties and, to Credit Parties' knowledge, each of
Credit Parties' licensed employees and contractors (other than contracted
agencies) in the exercise of their respective duties on behalf of any Credit
Party or any such facilities, is in compliance with all applicable statutes,
laws, ordinances, rules and regulations of any federal, state or local
governmental authority with respect to regulatory matters primarily relating to
patient healthcare (including without limitation Title XVIII of the Social
Security Act, as amended, governing Medicare and regulations pertaining thereto;
all federal laws and regulations affecting the medical assistance program
established by Titles V, XIX, XX, and XXI of the Social Security Act, and all
state laws, regulations and plans for medical assistance enacted in connection
with the federal laws and regulations; Section 1128B(b) of the Social Security
Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties Involving
Medicare or State Health Care Programs) and regulations pertaining thereto,
commonly referred to as the "Federal Anti-Kickback Statute;" Section 1877 of the
Social Security Act, as amended, 42 U.S.C Section 1395nn (Ethics in Patient
Referrals Act) and regulations pertaining thereto, commonly referred to as the
"Stark Statute;" 31 U.S.C. §3729 et seq. commonly known as the “False Claims
Act” and regulations pertaining thereto; federal laws and regulations regarding
the submission of false claims, false billing, false coding, and similar state
laws and regulations; federal and state laws and regulations applicable to
reimbursement and reassignment; federal and state licensing laws and
regulations; laws and regulations administered by the federal Food and Drug
Administration; laws and regulations administered by the federal Drug
Enforcement Administration and analogous state agencies; and state certificate
of need laws (collectively, "Healthcare Laws")), except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Credit Party has maintained in all material respects all records required to be
maintained by the Food and Drug Administration, Drug Enforcement Agency and
State Boards of Pharmacy and the federal and state Medicare and Medicaid
programs as required by the Healthcare Laws and, to the knowledge of such Credit
Party, there are no presently existing circumstances which could reasonably be
expected to result in violations of the Healthcare Laws that could reasonably be
expected to have a Material Adverse Effect. Each Credit Party and each of its
Affiliates is acting in compliance with the Corporate Integrity Agreement, and
its corporate compliance plan in all material respects. Each Credit Party and
its Affiliates have such permits, licenses, franchises, certificates and other
approvals or authorizations of governmental or regulatory authorities as are
necessary under applicable law to own their respective properties and to conduct
their respective business (including without limitation such permits as are
required under such federal, state and other health care laws, and under such
HMO or similar licensure laws and such insurance laws and regulations, as are
applicable thereto), and with respect to those facilities and other businesses
that participate in Medicare and/or Medicaid, to receive reimbursement under
Medicare and Medicaid, except where the failure to have such licenses, permits,
franchises, certificates or other government approvals or authorizations could
not reasonably be expected to have a Material Adverse Effect. Except as listed
in Disclosure Schedule 3.24, to Credit Parties' knowledge, there currently exist
no restrictions, deficiencies, required plans of correction actions or other
such remedial measures with respect to federal and state Medicare and Medicaid
certifications or licensure.
 
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3.25. HIPAA Compliance.
 
(a) To the extent that and for so long as (i) any Credit Party is a "covered
entity" as defined in 45 C.F.R. § 160.103, (ii) any Credit Party and/or its
business and operations are subject to or covered by the HIPAA administrative
requirements codified at 45 C.F.R. Parts 160 and 162 (the "Transactions Rule")
and/or the HIPAA security and privacy requirements codified at 45 C.F.R. Parts
160 and 164 (the "Privacy and Security Rules"), and/or (iii) any Credit Party
sponsors any "group health plans" as defined in 45 C.F.R. § 160.103, such Credit
Party has, except to the extent that the failure to do any of the following
could not reasonably be expected to have a Material Adverse Effect: (x)
completed surveys, audits, inventories, reviews, analyses and/or assessments,
including risk assessments, (collectively "Assessments") of all areas of its
business and operations subject to HIPAA and/or that could be adversely affected
by the failure of such Credit Party to be HIPAA Compliant (as defined below) to
the extent these Assessments are appropriate or required for such Credit Party
to be HIPAA Compliant; (y) developed a plan for becoming HIPAA Compliant (a
"HIPAA Compliance Plan"); and (z) implemented those provisions of its HIPAA
Compliance Plan necessary to ensure that such Credit Party is HIPAA Compliant.
For purposes of this Agreement, "HIPAA Compliant" shall mean that a Credit Party
(1) is in compliance in all material respects with the applicable requirements
of HIPAA, including all requirements of the Transactions Rule and the Privacy
and Security Rules and (2) is not subject to, and could not reasonably be
expected to become subject to, any civil or criminal penalty or any
investigation, claim or process that could reasonably be expected to have a
Material Adverse Effect.
 
(b) Each Credit Party represents that it, collectively with the other entities
identified herein as a " Credit Party" and/or certain other affiliates of such
Credit Party have elected to be treated as a single covered entity in accordance
with the Privacy and Security Rules (45 C.F.R. § 164.105(b)) (the "Affiliated
Covered Entities"), have documented such affiliation in accordance with 45
C.F.R. §164.105(b), and are in compliance with the requirements of 45 C.F.R.
§164.105(b). As such, each Credit Party represents and warrants that it has the
legal right, power and authority to execute the Business Associate Agreement on
behalf of the Affiliated Covered Entity, in accordance with the Privacy and
Security Rules, and that the provisions of the Business Associate Agreement
shall be binding upon each Credit Party and all of such Credit Party's
affiliates that are participating as Affiliated Covered Entities, in accordance
with the Privacy and Security Rules, as if each and every such affiliate were a
party to such Business Associate Agreement directly.
 
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4.
FINANCIAL STATEMENTS AND INFORMATION

 
4.1. Reports and Notices.
 
Each Credit Party executing this Agreement hereby agrees that from and after the
Closing Date and until the Termination Date, it shall deliver to Agent or to
Agent and Lenders, as required, the Financial Statements, notices, Projections
and other information at the times, to the Persons and in the manner set forth
in Annex E.
 
4.2. Communication with Accountants.
 
Each Credit Party executing this Agreement authorizes (a) Agent and (b) so long
as an Event of Default has occurred and is continuing, each Lender, to
communicate directly with its independent certified public accountants,
including Ernst & Young LLP, and authorizes and, at Agent's request, shall
instruct those accountants and advisors to disclose and make available to Agent
and each Lender any and all Financial Statements and other supporting financial
documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party; provided, however, that such
accountants' failure to disclose or make materials available to Agent and
Lenders as a result of such accountants' confidentiality policies shall not
constitute a breach of this Section 4.2.
 
5.
AFFIRMATIVE COVENANTS

 
Each Credit Party executing this Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof and until the Termination
Date:
 
5.1. Maintenance of Existence and Conduct of Business.
 
Except as otherwise expressly permitted in this Agreement, each Credit Party
shall: (a) do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its rights and franchises; (b)
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; and (c) at all times maintain, preserve and protect all of
its material assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices.
 
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5.2. Payment of Charges.
 
(a) Subject to Section 5.2(b), each Credit Party shall pay and discharge or
cause to be paid and discharged promptly all Charges due and payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due.
 
(b) Each Credit Party may in good faith contest, by appropriate proceedings, the
validity or amount of any Charges, Taxes or claims; provided, that (i) adequate
reserves with respect to such contest are maintained on the books of such Credit
Party, in accordance with GAAP; (ii) no Lien shall be imposed to secure payment
of such Charges (other than payments to warehousemen and/or bailees) that is
superior to any of the Liens securing the Obligations and such contest is
maintained and prosecuted continuously and with diligence and operates to
suspend collection or enforcement of such Charges; (iii) none of the Collateral
becomes subject to forfeiture or loss as a result of such contest; (iv) such
Credit Party shall promptly pay or discharge such contested Charges, Taxes or
claims and all additional charges, interest, penalties and expenses, if any, and
shall deliver to Agent evidence reasonably acceptable to Agent of such
compliance, payment or discharge, if such contest is terminated or discontinued
adversely to such Credit Party or the conditions set forth in this
Section 5.2(b) are no longer met; and (v) Agent has not advised Borrowers in
writing that Agent reasonably believes that nonpayment or nondischarge thereof
could have or result in a Material Adverse Effect.
 
5.3. Books and Records.
 
Each Credit Party shall keep adequate books and records with respect to its
business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a).
 
5.4. Insurance; Damage to or Destruction of Collateral.
 
(a) The Credit Parties shall, at their sole cost and expense, maintain the
policies of insurance described on Disclosure Schedule 3.18 as in effect on the
date hereof or otherwise in form and amounts and with insurers reasonably
acceptable to Agent; provided that the Credit Parties shall have at least ten
(10) Business Days to effect any changes in their policies of insurance
described on Disclosure Schedule 3.18 requested by Agent. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to
Agent) shall contain provisions pursuant to which the insurer agrees to provide
30 days' prior written notice to Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy. If any Credit Party at
any time or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above, or to pay all premiums relating thereto, Agent may
at any time or times thereafter obtain and maintain such policies of insurance
and pay such premiums and take any other action with respect thereto that Agent
deems advisable. Agent shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Agent shall not be
deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including reasonable attorneys' fees, court costs and other
charges related thereto, shall be payable on demand by Borrowers to Agent and
shall be additional Obligations hereunder secured by the Collateral.
 
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(b) Agent reserves the right at any time upon any change in any Credit Party's
risk profile (including any change in the product mix maintained by any Credit
Party or any laws affecting the potential liability of such Credit Party) to,
after prior written notice to Borrowers, require additional forms and limits of
insurance to, in Agent's reasonable opinion, adequately protect both Agent's and
Lenders' interests in all or any portion of the Collateral and to ensure that
each Credit Party is protected by insurance in amounts and with coverage
customary for its industry. If reasonably requested by Agent in writing, each
Credit Party shall deliver to Agent from time to time a report of a reputable
insurance broker, reasonably satisfactory to Agent, with respect to its
insurance policies.
 
(c) Each Credit Party shall deliver to Agent, in form and substance reasonably
satisfactory to Agent, endorsements to (i) all "All Risk" insurance naming
Agent, on behalf of itself and Lenders, as loss payee, and (ii) all general
liability and other liability policies naming Agent, on behalf of itself and
Lenders, as additional insured. Each Credit Party irrevocably makes, constitutes
and appoints Agent (and all officers, employees or agents designated by Agent),
so long as any Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed $1,000,000, as such Credit Party's true
and lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such "All Risk" policies of insurance, endorsing the name
of such Credit Party on any check or other item of payment for the proceeds of
such "All Risk" policies of insurance and for making all determinations and
decisions with respect to such "All Risk" policies of insurance. Agent shall
have no duty to exercise any rights or powers granted to it pursuant to the
foregoing power-of-attorney, but, while exercising any rights and powers
hereunder, agrees to act in good faith. Borrowers shall promptly notify Agent of
any loss, damage, or destruction to the Collateral in the amount of $1,000,000
or more, whether or not covered by insurance. After deducting from such proceeds
the expenses, if any, incurred by Agent in the collection or handling thereof,
Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.3(c), or permit or require the
applicable Credit Party to use such money, or any part thereof, to replace,
repair, restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if the
casualty giving rise to such insurance proceeds could not reasonably be expected
to have a Material Adverse Effect, such insurance proceeds do not exceed
$3,000,000 in the aggregate and no Event of Default has occurred and is
continuing, Agent shall make available to the applicable Credit Party such
proceeds and permit such Credit Party to replace, restore, repair or rebuild the
property; provided, that if such Credit Party shall not have completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, such Credit Party shall
pay such proceeds to Agent and Agent may apply such insurance proceeds to the
Obligations in accordance with Section 1.3(c). To the extent not used to
replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.3(c).
 
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5.5. Compliance with Laws and Corporate Integrity Agreement.
 
Each Credit Party shall comply with all federal, state, local and foreign laws
and regulations applicable to it, including all Healthcare Laws and those laws
and regulations relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except, in each case, to the extent that the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. Each Credit Party shall, and shall cause each of
its Subsidiaries to, comply with the terms and conditions of the Corporate
Integrity Agreement in all material respects.
 
5.6. Supplemental Disclosure.
 
From time to time as may be reasonably requested by Agent (which request will
not be made more frequently than once each year absent the occurrence and
continuance of an Event of Default), the Credit Parties shall supplement each
Disclosure Schedule hereto, or any representation herein or in any other Loan
Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided, that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
any preceding specific date.
 
5.7. Intellectual Property.
 
Each Credit Party will (i) conduct its business and affairs without infringement
of or interference with any Intellectual Property of any other Person in any
material respect and (ii) within ten (10) Business Days of the filing thereof,
provide Agent with written notice of the registration of any Intellectual
Property with any Governmental Authority.
 
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5.8. Environmental Matters.
 
Each Credit Party shall and shall cause each Person within its control to:
(a) conduct its operations and keep and maintain its Real Estate in compliance
with all Environmental Laws and Environmental Permits other than noncompliance
that could not reasonably be expected to have a Material Adverse Effect;
(b) implement any and all investigation, remediation, removal and response
actions that are appropriate or necessary to comply with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate except where
noncompliance could be reasonably likely to result in Environmental Liabilities
in excess of $1,000,000; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities in excess of
$1,000,000; and (d) promptly forward to Agent a copy of any order, notice,
request for information or any communication or report received by such Credit
Party in connection with any such violation or Release or any other matter
relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$1,000,000, in each case whether or not the Environmental Protection Agency or
any Governmental Authority has taken or threatened any action in connection with
any such violation, Release or other matter. If Agent at any time has a
reasonable basis to believe that there may be a violation of any Environmental
Laws or Environmental Permits by any Credit Party or any Environmental Liability
arising thereunder, or a Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Estate, that, in each case, could
reasonably be expected to have a Material Adverse Effect, then each Credit Party
shall, upon Agent's written request (i) cause the performance of such
environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrowers' expense, as Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Agent and shall be in
form and substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
 
5.9. Landlords’ Agreements, Mortgagee Agreements, Bailee Letters, Lease
Performance and Real Estate Purchases.
 
(a) Each Credit Party shall use commercially reasonable efforts to obtain a
landlord’s agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property, mortgagee of owned property or bailee with
respect to any location where data, systems or information critical to the
business of any Credit Party are located, which agreement or letter shall
contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee or bailee may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to Agent. Each
Credit Party shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located.
 
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(b) In the event that the aggregate value of the real property owned by the
Credit Parties is greater than $25,000,000 and the aggregate outstanding amount
of the Revolving Loans is greater than $35,000,000 for ten (10) Business Days in
total subsequent to the Closing Date, to the extent not previously delivered to
the Agent, each Credit Party shall promptly deliver to Agent a Mortgage on any
real property owned or thereafter acquired by such Credit Party, together with
all Mortgage Supporting Documents relating thereto (or, if such real property is
located in a jurisdiction outside the United States, similar documents deemed
appropriate by Agent to obtain the equivalent in such jurisdiction of a
first-priority mortgage on such real property) and all legal opinions relating
to the matters described in this Section 5.9(b), which opinions shall be as
reasonably required by, and in form and substance and from counsel reasonably
satisfactory to, Agent. For the avoidance of doubt, the Credit Parties shall
continue to be obligated to deliver such Mortgages, Mortgage Supporting
Documents and legal opinions described in the preceding sentence notwithstanding
the fact that the aggregate value of such owned real property declines below
$25,000,000 and the aggregate outstanding amount of the Revolving Loans declines
below $35,000,000 after being in excess of $35,000,000 for ten (10) Business
Days in total subsequent to the Closing Date.
 
5.10. Further Assurances.
 
Each Credit Party executing this Agreement agrees that it shall and shall cause
each other Credit Party to, at such Credit Party's expense and upon request of
Agent, duly execute and deliver, or cause to be duly executed and delivered, to
Agent such further instruments and do and cause to be done such further acts as
may be necessary or proper in the reasonable opinion of Agent to carry out more
effectively the provisions and purposes of this Agreement or any other Loan
Document. Without limitation on the foregoing, Borrowers hereby agree to use
their commercially reasonable efforts to cause the Credit Party that is the
accountholder of each securities account at Banc of America Securities LLC to
enter into, and have Banc of America Securities LLC enter into, a Control Letter
with Agent with respect to such securities accounts as soon as reasonably
practicable after the Closing Date, each of which Control Letters may be in a
form substantially similar to the Control Letter existing on the Closing Date
between Parent, Agent and Banc of America Securities LLC.
 
5.11. Non-Guarantor Subsidiaries. 
 
Upon Agent's request at any time either after the occurrence and during the
continuance of an Event of Default or after such time that the aggregate
outstanding amount of the Revolving Loans exceeds $35,000,000 for 10 (ten)
Business Days in total subsequent to the Closing Date, each Credit Party shall
cause the Non-Guarantor Subsidiaries to execute a Guaranty, in form and
substance reasonably satisfactory to Agent and, subject to Section 5.9(b), shall
cause a first priority perfected Lien (subject to Permitted Encumbrances) to be
granted in favor of Agent in all the assets and Stock of the Non-Guarantor
Subsidiaries, and Credit Parties and the Non-Guarantor Subsidiaries shall
execute such documents and take such actions (including the delivery of legal
opinions, organizational documents, good standing certificates, resolutions and
incumbency certificates) as may be reasonably required by Agent in connection
therewith. For avoidance of doubt, the Credit Parties shall continue to be
obligated to cause the Non-Guarantor Subsidiaries to provide a Guaranty and
grant the Liens described in the immediately preceding sentence notwithstanding
the cure or waiver of the applicable Event of Default or the aggregate
outstanding amount of the Revolving Loans ceasing to exceed $35,000,000 after
being in excess of $35,000,000 for ten (10) Business Days in total subsequent to
the Closing Date, as applicable, at any time after the date Agent requested the
delivery of such Guaranty and the granting of such Liens in accordance with this
Section 5.11.
 
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6.
NEGATIVE COVENANTS

 
Each Credit Party executing this Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof until the Termination
Date:
 
6.1. Mergers, Subsidiaries, Etc.
 
No Credit Party shall directly or indirectly, by operation of law or otherwise,
(a) form any Subsidiary other than any of the Non-Guarantor Subsidiaries or
acquire any Subsidiary, or (b) merge with, consolidate with, acquire all or
substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person (or business unit thereof). Notwithstanding the foregoing,
(i) any Credit Party may merge into any other Credit Party that is not a
Non-Guarantor Subsidiary; provided, that a Borrower shall be the survivor of any
such merger to which a Borrower is a party, (ii) any Credit Party that is not a
Non-Guarantor Subsidiary may acquire all or substantially all of the Stock of
any other Credit Party, (iii) any Credit Party that is not a Borrower or a
Non-Guarantor Subsidiary may acquire all or substantially all of the assets of
any other Credit Party that is also not a Borrower or a Non-Guarantor
Subsidiary, (iv) any Borrower may acquire all or substantially all of the assets
or Stock of any other Credit Party, (v) any Credit Party may acquire all or
substantially all of the assets or Stock of any Person (the "Target") and, (vi)
any Borrower may form a Subsidiary in order to acquire all or substantially all
of the stock or assets of a Target (in each case of (i) through (vi), herein
referred to as, a "Permitted Acquisition") subject to the satisfaction of each
of the following conditions, each to the reasonable satisfaction of Agent:
 
(A) (1) Agent shall receive prompt written notice after the completion of any
Permitted Acquisition with total consideration and other amounts payable of less
than $5,000,000 (a "Threshold Acquisition"), and (2) with respect to any
proposed Permitted Acquisition with total consideration and other amounts
payable of $5,000,000 or more, Agent shall receive at least fifteen (15)
Business Days' prior written notice of such proposed Permitted Acquisition,
which notice shall, in each case, include a reasonably detailed description of
such proposed Permitted Acquisition;
 
(B) At the time of such Permitted Acquisition and after giving effect thereto,
(1) no Default or Event of Default has occurred and is continuing; (2) the sum
of all consideration and other amounts payable (including all transaction costs,
non-competition payments or similar payments and all Indebtedness and Guaranteed
Indebtedness incurred or assumed in connection therewith or Indebtedness,
liabilities and contingent obligations otherwise reflected in a consolidated
balance sheet of the Credit Parties after giving effect to such Permitted
Acquisition) in connection with all Permitted Acquisitions completed subsequent
to the Closing Date shall not exceed $50,000,000, and (3) such Permitted
Acquisition shall only involve assets located in the United States and
comprising a business, or those assets of a business, that involve the provision
of hospice or home health services such that the consummation of such Permitted
Acquisition would not subject Agent or any Lender to regulatory or third party
approvals in connection with the exercise of its rights and remedies under this
Agreement or any other Loan Documents other than the approvals applicable to a
hospice or home health service provider;
 
(C) the consideration and other amounts payable in connection with such
Permitted Acquisition shall be payable in cash on the date of consummation of
such Permitted Acquisition, other than (1) unsecured Indebtedness in an amount
not to exceed 20% of the aggregate consideration and other amounts payable in
connection with such Permitted Acquisition and (2) amounts due and payable after
the date of the consummation of such Permitted Acquisition under customary
non-competition agreements in an amount not to exceed $1,000,000 per agreement;
 
(D) such Permitted Acquisition shall be consensual and shall have been approved
by the Target's board of directors or other governing body and, if applicable,
the Target's Stockholders;
 
(E) no Indebtedness or Guaranteed Indebtedness shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Borrowers and Target
after giving effect to such Permitted Acquisition, except (1) Loans made
hereunder and (2) Indebtedness and/or Guaranteed Indebtedness permitted under
Section 6.3 or Section 6.6, as applicable;
 
(F) the Target shall have Pro Forma Acquisition EBITDA of not less than $0 for
the trailing twelve month period preceding the date of the consummation of the
Permitted Acquisition, as determined based upon the Target's financial
statements for its most recently completed fiscal year and its most recent
interim financial period completed within 60 days prior to the date of
consummation of such Permitted Acquisition;
 
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(G) the business and assets acquired in such Permitted Acquisition shall be free
and clear of all Liens (other than Permitted Encumbrances);
 
(H) at or prior to the closing of any Permitted Acquisition, subject to Section
5.9(b), Agent will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets acquired pursuant thereto or, as
applicable, in the assets and Stock of the Target, and Borrowers and the Target
shall have executed such documents and taken such actions as may be reasonably
required by Agent in connection therewith;
 
(I) concurrently with delivery of the notice referred to in clause (A) above,
Borrowers shall have delivered to Agent, in form and substance satisfactory to
Agent in its reasonable credit judgment:
 

 
(1)
a pro forma consolidated balance sheet, income statement and cash flow statement
of Holdings and its Subsidiaries (the "Acquisition Pro Forma"), based on recent
financial statements, which shall fairly present in all material respects the
assets, liabilities, financial condition and results of operations of Holdings
and its Subsidiaries in accordance with GAAP consistently applied, but taking
into account such Permitted Acquisition and the funding of all Loans in
connection therewith, and such Acquisition Pro Forma shall (x) reflect that, on
a pro forma basis, Holdings and its Subsidiaries would have had a Leverage Ratio
not in excess of 1.0 to 1.0 for the four quarter period reflected in the
Compliance Certificate most recently delivered to Agent pursuant to Section 4.1
prior to the consummation of such Permitted Acquisition (after giving effect to
such Permitted Acquisition and all Loans funded in connection therewith as if
made on the first day of such period), and (y) reflect that, on a pro forma
basis, no Event of Default has occurred and is continuing or would result after
giving effect to such Permitted Acquisition; and

 

 
(2)
a certificate of the chief financial officer of Holdings to the effect that: (x)
the Credit Parties will be Solvent upon the consummation of the Permitted
Acquisition; (y) the Acquisition Pro Forma fairly presents the financial
condition of Holdings and its Subsidiaries (on a consolidated basis) as of the
date thereof after giving effect to the Permitted Acquisition; and (z) Holdings
and its Subsidiaries have completed their due diligence investigation with
respect to the Target and such Permitted Acquisition, which investigation was
conducted in a commercially reasonable manner, consistent with past practices;

 
(J) on or prior to the date of such Permitted Acquisition (or promptly
thereafter for any Threshold Acquisition), Agent shall have received (1) a copy
of the acquisition agreement and (2) copies of all other related agreements,
instruments, opinions, certificates, lien search results and other documents
reasonably requested by Agent.
 
Notwithstanding anything to the contrary in this Section 6.1, Borrowers shall
not be required to satisfy the conditions set forth in subsections (C), (F) and
(I) above for any Threshold Acquisition.
 
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6.2. Investments; Loans and Advances.
 
Except as otherwise expressly permitted by this Section 6, no Credit Party shall
make or permit to exist any investment in, or make, accrue or permit to exist
loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise, except that: (a) Borrowers
may hold investments comprised of notes payable, or stock or other securities
issued by Account Debtors to any Borrower pursuant to negotiated agreements with
respect to settlement of such Account Debtor's Accounts in the ordinary course
of business, so long as the aggregate amount of such Accounts so settled by
Borrowers does not exceed $500,000; (b) each Credit Party may make and maintain
investments in any other Credit Party; provided, that, (i) the aggregate amount
of investments made by Credit Parties (other than any Non-Guarantor Subsidiary)
in Odyssey Fort Worth and Odyssey Detroit shall not exceed $8,000,000 and (ii)
the aggregate amount of investments made by Credit Parties (other than any
Non-Guarantor Subsidiary) in all Non-Guarantor Subsidiaries (excluding Odyssey
Fort Worth and Odyssey Detroit) shall not exceed $20,000,000; (c) Borrowers may
make investments in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within
one year from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and currently having the
highest rating obtainable from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc., (iii) certificates of deposit maturing no more than one
year from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $300,000,000 and having a senior
unsecured rating of "A" or better by a nationally recognized rating agency (an
"A Rated Bank"), (iv) time deposits maturing no more than 30 days from the date
of creation thereof with A Rated Banks and (v) mutual funds that invest solely
in one or more of the investments described in clauses (i) through (iv) above,
and (d) other investments not exceeding $5,000,000 in the aggregate at any time
outstanding.
 
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6.3. Indebtedness.
 
No Credit Party shall create, incur, assume or permit to exist any Indebtedness,
except (without duplication) (i) Indebtedness secured by purchase money security
interests and Capital Leases permitted in Section 6.7(c), (ii) the Loans and the
other Obligations, (iii) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, (iv) existing Indebtedness described in Disclosure
Schedule 6.3 and refinancings thereof or amendments or modifications thereto
that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit Party than the
terms of the Indebtedness being refinanced, amended or modified, (v) (i)
Indebtedness consisting of intercompany loans and advances made by any Credit
Party (other than the Non-Guarantor Subsidiaries) to any other Credit Party;
provided, that, Credit Parties shall not make intercompany loans or advances to
the Non-Guarantor Subsidiaries in excess of the respective amounts permitted
under Section 6.2(b) less the amount of any other investments made under Section
6.2(b) and (ii) Subordinated Indebtedness consisting of intercompany loans and
advances made by any Non-Guarantor Subsidiary to any other Credit Party, (vi)
Indebtedness arising upon the draw of one or more Permitted L/Cs, and (vii)
unsecured Indebtedness incurred (x) in connection with Permitted Acquisitions
not exceeding $10,000,000 in the aggregate at any time outstanding and (y) in
connection with any single Permitted Acquisition not exceeding $5,000,000 in the
aggregate.
 
6.4. Employee Loans and Affiliate Transactions.
 
(a) No Credit Party shall enter into or be a party to any transaction with any
Affiliate (other than another Credit Party that is not a Non-Guarantor
Subsidiary) thereof except in the ordinary course of and pursuant to the
reasonable requirements of such Credit Party's business and upon fair and
reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm's length transaction with a Person not an Affiliate
of such Credit Party. In addition, if any such transaction or series of related
transactions involves payments in excess of $1,000,000 in the aggregate, the
terms of these transactions must be disclosed in advance, in writing, to Agent
and Lenders. All such transactions existing as of the date hereof are described
in Disclosure Schedule 6.4(a).
 
(b) No Credit Party shall enter into any lending or borrowing transaction with
any employees of any Credit Party, except loans to its respective employees in
the ordinary course of business consistent with past practices for travel and
entertainment expenses, relocation costs and similar purposes and stock option
financing up to a maximum of $100,000 to any employee and up to a maximum of
$500,000 in the aggregate at any one time outstanding.
 
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6.5. Capital Structure and Business.
 
No Credit Party shall (a) issue or sell any shares of preferred Stock to the
extent the terms of such preferred Stock provide for, or permit the holders of
such preferred Stock to require, a mandatory redemption or any other cash
payment prior to May 24, 2009 unless such redemption or other cash payment is
subject to the terms of this Agreement and the other Loan Documents, (b) make
any change in its capital structure as described in Disclosure Schedule 3.8,
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; provided, that Holdings may issue or sell shares of its Stock
for cash so long as no Change of Control occurs after giving effect thereto, or
(c) amend its charter or bylaws in a manner that would adversely affect Agent or
Lenders or such Credit Party's duty or ability to repay the Obligations. No
Credit Party shall engage in any business other than the businesses currently
engaged in by it or businesses reasonably related thereto.
 
6.6. Guaranteed Indebtedness.
 
No Credit Party shall create, incur, assume or permit to exist any Guaranteed
Indebtedness in an aggregate amount greater than $1,000,000 except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party (other than a Non-Guarantor Subsidiary), (b) for
Guaranteed Indebtedness incurred for the benefit of any other Credit Party
(other than a Non-Guarantor Subsidiary) if the primary obligation is expressly
permitted by this Agreement and (c) reimbursement obligations in respect of
Permitted L/Cs.
 
6.7. Liens.
 
No Credit Party shall create, incur, assume or permit to exist any Lien on or
with respect to its Accounts or any of its other properties or assets (whether
now owned or hereafter acquired) (including any fee ownership interests in Real
Estate which have not been required to be encumbered as Collateral pursuant to
Section 5.9(b) hereof) except for (a) Permitted Encumbrances; (b) Liens in
existence on the date hereof and summarized on Disclosure Schedule 6.7 securing
the Indebtedness described on Disclosure Schedule 6.3 and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided, that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; and
(c) Liens created after the date hereof by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness with respect to assets acquired by any Credit Party in the
ordinary course of business, involving the incurrence of an aggregate amount of
purchase money Indebtedness and Capital Lease Obligations of not more than
$5,000,000 outstanding at any one time for all such Liens (provided that such
Liens attach only to the assets subject to such purchase money debt and such
Indebtedness is or was incurred within 20 days following such purchase and does
not exceed one hundred percent (100%) of the purchase price of the subject
assets). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, as additional collateral for the Obligations,
except operating leases, Capital Leases or Licenses which prohibit Liens upon
the assets that are subject thereto.
 
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6.8. Sale of Stock and Assets.
 
Except as otherwise expressly permitted by Section 6.1 of this Agreement, no
Credit Party shall sell, transfer, convey, assign or otherwise dispose of any of
its properties or other assets, including the Stock of any of its Subsidiaries
(whether in a public or a private offering or otherwise) or any of its Accounts,
other than (a) the sale of Inventory in the ordinary course of business, and
(b) the sale, transfer, conveyance or other disposition by a Credit Party of
assets (other than the sale of Inventory in the ordinary course of business)
having a net book value not exceeding $1,000,000 in any single transaction or
$3,000,000 in the aggregate in any Fiscal Year. With respect to any disposition
of assets or other properties permitted pursuant to clause (b) above, subject to
Section 1.3(b), Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit the applicable Credit
Party to effect such disposition and shall execute and deliver to Borrowers, at
Borrowers' expense, appropriate UCC-3 termination statements and other releases
as reasonably requested by Borrowers.
 
6.9. ERISA.
 
No Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or
permit to occur an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or permit to
occur an ERISA Event to the extent such ERISA Event could reasonably be expected
to have a Material Adverse Effect.
 
6.10. Financial Covenants.
 
Borrowers shall not breach or fail to comply with any of the Financial
Covenants.
 
6.11. Hazardous Materials.
 
No Credit Party shall cause or permit a Release of any Hazardous Material on,
at, in, under, above, to, from or about any of the Real Estate where such
Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value of any of the Real Estate or any of
the Collateral, other than such violations or Environmental Liabilities that
could not reasonably be expected to have a Material Adverse Effect.
 
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6.12. Sale-Leasebacks.
 
No Credit Party shall engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its assets.
 
6.13. Cancellation of Indebtedness.
 
No Credit Party shall cancel any claim or debt owing to it in excess of
$500,000, except for reasonable consideration negotiated on an arm's length
basis and in the ordinary course of its business consistent with past practices.
 
6.14. Restricted Payments.
 
No Credit Party shall make any Restricted Payment, except (a) payments with
respect to intercompany loans and advances between Credit Parties to the extent
permitted by Section 6.3, (b) dividends and distributions by Subsidiaries of any
Credit Party paid to such Credit Party, (c) employee loans permitted under
Section 6.4(b), (d) management fees paid by any Credit Party to any other Credit
Party (other than Non-Guarantor Subsidiaries), and (e) payments by Holdings to
purchase or redeem its Stock (or warrants, options or other rights to acquire
such Stock) in an aggregate amount not to exceed $51,000,0000 in Fiscal Year
2007 and $30,000,000 in any Fiscal Year thereafter; provided that, with respect
to clause (e) only, (i) no Default or Event of Default exists at the time of any
such payment or would occur as a result of the payment thereof and (ii)
Borrowers are in compliance with the Financial Covenants on a pro forma basis
for the four Fiscal Quarter period most recently ended prior to the making of
such Restricted Payment as if the Restricted Payment (as well as any other
Restricted Payment made since the end of such period) had occurred on the first
day of such four Fiscal Quarter period.
 
6.15. Change of Corporate Name or Location; Change of Fiscal Year.
 
No Credit Party shall (a) change its name as it appears in official filings in
the state of its incorporation or other organization, (b) change its chief
executive office, principal place of business, or the location of its records
concerning the Collateral, or (c) change its organization identification number,
if any, issued by its state of incorporation or other organization, in each case
without at least 30 days prior written notice to Agent and, in the case of a
change in any Credit Party's chief executive office, a landlord agreement that
is reasonably satisfactory to Agent shall have been obtained with respect to
such location, and provided that any such new location shall be in the
continental United States. No Credit Party shall change its Fiscal Year. No
Credit Party shall (a) change the type of entity that it is, or (b) change its
state of incorporation or organization, in each case without at least 30 days
prior written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken.
 
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6.16. No Impairment of Intercompany Transfers.
 
No Credit Party shall directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement
and the other Loan Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment of
dividends or distributions or the making or repayment of intercompany loans by a
Subsidiary of any Borrower to any Borrower or between Borrowers.
 
6.17. No Speculative Transactions.
 
No Credit Party shall engage in any transaction involving commodity options,
futures contracts or similar transactions, except solely to hedge against
fluctuations in the prices of commodities owned or purchased by it and the
values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
 
6.18. Leases; Real Estate Purchases.
 
Except as permitted under Section 6.1 in connection with a Permitted
Acquisition, no Credit Party shall purchase a fee simple ownership interest in
any single parcel of Real Estate with a purchase price in excess of $5,000,000.
 
6.19. Business Associate Agreement.
 
No Credit Party shall terminate the Business Associate Agreement.

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7.
TERM

 
7.1. Termination.
 
The financing arrangements contemplated hereby shall be in effect until the
Commitment Termination Date, and the Loans and all other Obligations shall be
automatically due and payable in full on such date.
 
7.2. Survival of Obligations Upon Termination of Financing Arrangements.
 
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided, that the provisions of
Section 11, the payment obligations under Sections 1.15 and 1.16, and the
indemnities contained in the Loan Documents shall survive the Termination Date.
 
 
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8.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES

 
8.1. Events of Default.
 
The occurrence of any one or more of the following events (regardless of the
reason therefor) shall constitute an "Event of Default" hereunder:
 
(a) Any Borrower (i) fails to make any payment of principal of the Loans when
due and payable, (ii) fails to make any payment of interest on, or Fees owing in
respect of, the Loans or any of the other Obligations within 3 Business Days
following the date such interest, Fees or other Obligations are due and payable,
or (iii) fails to pay or reimburse Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within 10 days following Agent's
demand for such reimbursement or payment of expenses.
 
(b) Any Credit Party fails or neglects to perform, keep or observe any of the
provisions of Sections 1.4, 5.4(a) or 6, or any of the provisions set forth in
Annex F, respectively. 
 
(c) Any Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 1.8 or 4 or any provisions set forth in Annexes C or E,
respectively, and the same shall remain unremedied for the earlier of 3 Business
Days after (i) any Senior Officer's knowledge of such breach or (ii) receipt by
Borrowers of written notice from Agent of such breach.
 
(d) Any Credit Party fails or neglects to perform, keep or observe any other
provision of this Agreement or of any of the other Loan Documents (other than
any provision embodied in or covered by any other clause of this Section 8.1)
and the same shall remain unremedied for the earlier of 15 days after (i) any
Senior Officer's knowledge of such breach or (ii) receipt by Borrowers of
written notice from Agent of such breach; provided, however, that if such breach
is not susceptible to cure within such 15-day period and Borrowers are
diligently pursuing such cure at the expiration of such 15-day period, such
15-day period shall be extended an additional 15 days.
 
(e) A default or breach occurs under any other agreement, document or instrument
to which any Credit Party is a party that is not cured within any applicable
grace period therefor, and such default or breach (i) involves the failure to
make any payment when due in respect of any Indebtedness or Guaranteed
Indebtedness (other than the Obligations) of any Credit Party in excess of
$1,000,000 in the aggregate (including (x) undrawn committed or available
amounts and (y) amounts owing to all creditors under any combined or syndicated
credit arrangements), or (ii) causes, or permits any holder of such Indebtedness
or Guaranteed Indebtedness or a trustee to cause, Indebtedness or Guaranteed
Indebtedness or a portion thereof in excess of $1,000,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or cash collateral in respect thereof to be demanded, in each
case, regardless of whether such default is waived, or such right is exercised,
by such holder or trustee.
 
(f) Any representation or warranty herein or in any Loan Document or in any
written statement, report, financial statement or certificate made or delivered
to Agent or any Lender by any Credit Party is untrue or incorrect in any
material respect as of the date when made or deemed made.
 
(g) Assets of any Credit Party with a fair market value of $500,000 or more are
attached, seized, levied upon or subjected to a writ or distress warrant, or
come within the possession of any receiver, trustee, custodian or assignee for
the benefit of creditors of any Credit Party and such condition continues for 30
days or more.
 
(h) A case or proceeding is commenced against any Credit Party seeking a decree
or order in respect of such Credit Party (i) under the Bankruptcy Code, or any
other applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any substantial
part of any such Credit Party's assets, or (iii) ordering the winding-up or
liquidation of the affairs of such Credit Party, and such case or proceeding
shall remain undismissed or unstayed for 60 days or more or a decree or order
granting the relief sought in such case or proceeding shall be entered by a
court of competent jurisdiction.
 
(i) Any Credit Party (i) files a petition seeking relief under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consents to or fails to contest in a timely and appropriate
manner the institution of proceedings thereunder or the filing of any such
petition or the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of any such Credit Party's assets,
(iii) makes an assignment for the benefit of creditors, (iv) takes any action in
furtherance of any of the foregoing, or (v) admits in writing its inability to,
or is generally unable to, pay its debts as such debts become due.
 
(j) A final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate at any time are outstanding against one or more of
the Credit Parties and the same are not, within 30 days after the entry thereof,
discharged or execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any such stay.
 
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(k) Any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Credit Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby due to any action or omission by any
Credit Party.
 
(l) Any Change of Control occurs.
 
8.2. Remedies.
 
(a) If any Default or Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice,
suspend the Revolving Loan facility with respect to additional Advances and/or
the incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be made or
incurred in Agent's sole discretion (or in the sole discretion of the Requisite
Lenders, if such suspension occurred at their direction) so long as such Default
or Event of Default is continuing. If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the outstanding principal balance of the Loans and the
Letter of Credit Fees to the Default Rate.
 
(b) If any Event of Default has occurred and is continuing, Agent may (and at
the written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan facility with respect to further Advances or
the incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrowers and each other Credit Party; (iii) conduct, at Borrowers' expense,
such appraisals of Borrowers' assets as may be desired by Agent or Lenders or
(iv) exercise any rights and remedies provided to Agent under the Loan Documents
or at law or equity, including all remedies provided under the Code; provided,
that upon the occurrence of an Event of Default specified in Sections 8.1(h) or
(i), the Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
 
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8.3. Waivers by Credit Parties.
 
Except as otherwise provided for in this Agreement or by applicable law, each
Credit Party waives (including for purposes of Section 12): (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, 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 Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard,
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security that might be required by any court prior to allowing Agent
to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
 
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9.
ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT

 
9.1. Assignment and Participations.
 
(a) Subject to the terms of this Section 9.1, any Lender may make an assignment
to a Qualified Assignee of, or sell participations in, at any time or times, the
Loan Documents, Loans, Letter of Credit Obligations and any Commitment or any
portion thereof or interest therein, including any Lender's rights, title,
interests, remedies, powers or duties thereunder. Any assignment by a Lender
shall: (i) require the consent of Agent (which consent shall not be unreasonably
withheld or delayed with respect to a Qualified Assignee) and the execution of
an assignment agreement (an "Assignment Agreement") substantially in the form
attached hereto as Exhibit 9.1(a) and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, Agent; (ii) be conditioned on such
assignee Lender representing to the assigning Lender and Agent that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $5,000,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $5,000,000;
(iv) include a payment to Agent of an assignment fee of $3,500; and (v) so long
as no Event of Default has occurred and is continuing, require the consent of
Borrowers (which consent shall not be unreasonably withheld or delayed with
respect to a Qualified Assignee, it being understood that Borrowers shall not be
unreasonable in withholding their consent based on the negative reputation of a
potential Qualified Assignee or as a result of a potential Qualified Assignee
being a lead agent or arranger for a financing of a competitor of Borrowers in
the hospice services business that is of comparable size to Borrowers).
Borrowers agree that upon request of Agent they shall provide a list of
potential Qualified Assignees for which they intend to withhold their consent
and the reasons therefor. In the case of an assignment by a Lender under this
Section 9.1, the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all other Lenders hereunder. The assigning
Lender shall be relieved of its obligations hereunder with respect to its
Commitments or assigned portion thereof from and after the date of such
assignment. Each Borrower hereby acknowledges and agrees that any permitted
assignment shall give rise to a direct obligation of Borrowers to the assignee
and that the assignee shall be considered to be a "Lender". In all instances,
each Lender's liability to make Loans hereunder shall be several and not joint
and shall be limited to such Lender's Pro Rata Share of the applicable
Commitment. In the event Agent or any Lender assigns or otherwise transfers all
or any part of the Obligations in accordance herewith, Agent or any such Lender
shall so notify Borrowers and Borrowers shall, upon the written request of Agent
or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned. Notwithstanding the foregoing provisions of this Section 9.1(a), any
Lender may at any time pledge the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank, and any Lender that is an investment fund may assign the Obligations held
by it and such Lender's rights under this Agreement and the other Loan Documents
to another investment fund managed by the same investment advisor; provided,
that no such pledge to a Federal Reserve Bank shall release such Lender from
such Lender's obligations hereunder or under any other Loan Document.
 
(b) Any participation by a Lender of all or any part of its Commitments shall be
made with the understanding that all amounts payable by Borrowers hereunder
shall be determined as if that Lender had not sold such participation, and that
the holder of any such participation shall not be entitled to require such
Lender to take or omit to take any action hereunder except actions directly
affecting (i) any reduction in the principal amount of, or interest rate or Fees
payable with respect to, any Loan in which such holder participates, (ii) any
extension of the scheduled amortization of the principal amount of any Loan in
which such holder participates or the final maturity date thereof, and (iii) any
release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.8, each
Borrower acknowledges and agrees that a participation shall give rise to a
direct obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender". Except as set forth in the preceding sentence no
Borrower or Credit Party shall have any obligation or duty to any participant.
Neither Agent nor any Lender (other than the Lender selling a participation)
shall have any duty to any participant and may continue to deal solely with the
Lender selling a participation as if no such sale had occurred.
 
(c) Except as expressly provided in this Section 9.1, no Lender shall, as
between Borrowers and that Lender, or Agent and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans,
the Notes or other Obligations owed to such Lender.
 
(d) Each Credit Party executing this Agreement shall assist any Lender permitted
to sell assignments or participations under this Section 9.1 as reasonably
required to enable the assigning or selling Lender to effect any such assignment
or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in Section 3.4(c).
 
(e) Subject to Section 11.8, any Lender may furnish any information concerning
Credit Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants); provided,
that such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 11.8.
 
(f) So long as no Event of Default has occurred and is continuing, no Lender
shall assign or sell participations in any portion of its Loans or Commitments
to a potential Lender or participant, if, as of the date of the proposed
assignment or sale, the assignee Lender or participant would be subject to
capital adequacy or similar requirements under Section 1.16(a), increased costs
under Section 1.16(b), an inability to fund LIBOR Loans under Section 1.16(c),
or withholding taxes in accordance with Section 1.15(a).
 
(g) Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Lender"), may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing by the Granting Lender to Agent and Borrowers, the
option to provide to Borrowers all or any part of any Loans that such Granting
Lender would otherwise be obligated to make to Borrowers pursuant to this
Agreement; provided, that (i) nothing herein shall constitute a commitment by
any SPC to make any Loan; and (ii) if an SPC elects not to exercise such option
or otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if such Loan were made by such Granting Lender. No
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender). Any
SPC may (i) with written notice to, but without the prior written consent of,
Borrowers and Agent and without paying any processing fee therefor assign all or
a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by Borrowers and Agent in writing)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) subject to the terms of
Section 11.8, disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC. Subject
to the terms of Section 11.2, this Section 9.1(g) may not be amended without the
prior written consent of each Granting Lender, all or any of whose Loans are
being funded by an SPC at the time of such amendment. For the avoidance of
doubt, the Granting Lender shall for all purposes, including without limitation,
the approval of any amendment or waiver of any provision of any Loan Document or
the obligation to pay any amount otherwise payable by the Granting Lender under
the Loan Documents, continue to be the Lender of record hereunder.
 
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9.2. Appointment of Agent.
 
GE Capital is hereby appointed to act on behalf of all Lenders as Agent under
this Agreement and the other Loan Documents. The provisions of this Section 9.2
are solely for the benefit of Agent and Lenders and no Credit Party nor any
other Person shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and the other Loan Documents, Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party or any other
Person. Agent shall have no duties or responsibilities except for those
expressly set forth in this Agreement and the other Loan Documents. The duties
of Agent shall be mechanical and administrative in nature and Agent shall not
have, or be deemed to have, by reason of this Agreement, any other Loan Document
or otherwise a fiduciary relationship in respect of any Lender. Except as
expressly set forth in this Agreement and the other Loan Documents, Agent shall
not have any duty to disclose, and shall not be liable for failure to disclose,
any information relating to any Credit Party or any of their respective
Subsidiaries or any Account Debtor that is communicated to or obtained by GE
Capital or any of its Affiliates in any capacity. Neither Agent nor any of its
Affiliates nor any of their respective officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages caused by its or their own bad faith,
gross negligence or willful misconduct, as determined by a final court of
competent jurisdiction.
 
If Agent shall request instructions from Requisite Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any Person by reason
of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Loan Document (a) if such action would,
in the opinion of Agent, be contrary to law or the terms of this Agreement or
any other Loan Document, (b) if such action would, in the opinion of Agent,
expose Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders or all affected Lenders, as applicable.
 
9.3. Agent's Reliance, Etc.
 
Neither Agent nor any of its Affiliates 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 damages caused by its or their own bad faith, gross
negligence or willful misconduct, as determined by a final court of competent
jurisdiction. Without limiting the generality of the foregoing, Agent: (a) may
treat the payee of any Note as the holder thereof until Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
reasonably satisfactory to 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 by it in good faith in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Loan Documents; (d) shall not have
any duty 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 Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (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; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
 
9.4. GE Capital and Affiliates.
 
With respect to its Commitments hereunder, GE Capital 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 Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include GE Capital in its
individual capacity. GE Capital and its Affiliates may lend money to, invest in,
and generally engage in any kind of business with, any Credit Party, any of
their Affiliates and any Person who may do business with or own securities of
any Credit Party or any such Affiliate, all as if GE Capital were not Agent and
without any duty to account therefor to Lenders. GE Capital and its Affiliates
may accept fees and other consideration from any Credit Party for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.
 
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9.5. Lender Credit Decision.
 
Each Lender acknowledges that it has, independently and without reliance upon
Agent or any other Lender and based on the Financial Statements referred to in
Section 3.4(a) and such other documents and information as it has deemed
appropriate, made its own credit and financial analysis of the Credit Parties
and its own decision to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Each Lender acknowledges the potential conflict of
interest of each other Lender as a result of Lenders holding disproportionate
interests in the Loans, and expressly consents to, and waives any claim based
upon, such conflict of interest.
 
9.6. Indemnification.
 
Lenders agree to indemnify Agent (to the extent not reimbursed by Credit Parties
and without limiting the obligations of Borrowers hereunder), ratably according
to their respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted to
be taken by Agent in connection therewith; 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 Agent's gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by Credit Parties.
 
9.7. Successor Agent.
 
Agent may resign at any time by giving not less than 30 days' prior written
notice thereof to Lenders and Borrowers. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment within 30 days after the resigning Agent's giving
notice of resignation, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent, which shall be a Lender, if a Lender is willing to
accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if
such commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $300,000,000. If no successor Agent has been appointed
pursuant to the foregoing, within 30 days after the date such notice of
resignation was given by the resigning Agent, such resignation shall become
effective and the Requisite Lenders shall thereafter perform all the duties of
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Agent or
Requisite Lenders hereunder shall be subject to the prior approval of Borrowers,
such approval not to be unreasonably withheld or delayed; provided, that such
approval shall not be required if an Event of Default has occurred and is
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as Agent under this Agreement and the other Loan Documents.
 
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9.8. Setoff and Sharing of Payments.
 
In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default and subject to Section 9.9(f), each Lender
is hereby authorized at any time or from time to time, without notice to any
Credit Party or to any other Person, any such notice being hereby expressly
waived, to offset and to appropriate and to apply any and all balances held by
it at any of its offices for the account of any Borrower or Guarantor
(regardless of whether such balances are then due to such Borrower or Guarantor)
and any other properties or assets at any time held or owing by that Lender or
that holder to or for the credit or for the account of any Borrower or Guarantor
against and on account of any of the Obligations that are not paid when due. Any
Lender exercising a right of setoff or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance with
their respective Pro Rata Shares (other than offset rights exercised by any
Lender with respect to Sections 1.13, 1.15 or 1.16). Each Credit Party that,
during the existence and continuance of an Event of Default, is a Borrower or
Guarantor agrees, to the fullest extent permitted by law, that (a) any Lender
may exercise its right to offset with respect to amounts in excess of its Pro
Rata Share of the Obligations and may sell participations in such amounts so
offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations by
that Lender shall be rescinded and the purchase price restored without interest.
 
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9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.
 
(a) Advances; Payments.
 
(i) Agent shall notify Lenders, promptly after receipt of a Notice of Revolving
Credit Advance and in any event prior to 1:00 p.m. (New York time) on the date
such Notice of Revolving Advance is received, by telecopy, telephone or other
similar form of transmission. Each Lender shall make the amount of such Lender's
Pro Rata Share of such Revolving Credit Advance available to Agent in same day
funds by wire transfer to Agent's account as set forth in Annex G not later than
3:00 p.m. (New York time) on the requested funding date, in the case of an Index
Rate Loan, and not later than 11:00 a.m. (New York time) on the requested
funding date, in the case of a LIBOR Loan. After receipt of such wire transfers
(or, in the Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Agent shall make the requested Revolving Credit
Advance to Borrowers. All payments by each Lender shall be made without setoff,
counterclaim or deduction of any kind.
 
(ii) On the 2nd Business Day of each calendar week or more frequently at Agent's
election (each, a "Settlement Date"), Agent shall advise each Lender by
telephone, or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that each Lender has funded all payments or
Advances required to be made by it and has purchased all participations required
to be purchased by it under this Agreement and the other Loan Documents as of
such Settlement Date, Agent shall pay to each Lender such Lender's Pro Rata
Share of principal, interest and Fees paid by Borrowers since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. To the
extent that any Lender (a "Non-Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrowers.
Such payments shall be made by wire transfer to such Lender's account (as
specified by such Lender in Annex G or the applicable Assignment Agreement) not
later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
 
(b) Availability of Lender's Pro Rata Share. Agent may assume that each Lender
will make its Pro Rata Share of each Revolving Credit Advance available to Agent
on each funding date. If such Pro Rata Share is not, in fact, paid to Agent by
such Lender when due, Agent will be entitled to recover such amount on demand
from such Lender without setoff, counterclaim or deduction of any kind. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon Agent's
demand, Agent shall promptly notify Borrowers and Borrowers shall immediately
repay such amount to Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
Borrowers may have against any Lender as a result of any default by such Lender
hereunder. To the extent that Agent advances funds to any Borrower on behalf of
any Lender and is not reimbursed therefor on the same Business Day as such
Advance is made, Agent shall be entitled to retain for its account all interest
accrued on such Advance until reimbursed by the applicable Lender.
 
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(c) Return of Payments.
 
(i) If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
Borrowers and such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.
 
(ii) If Agent determines at any time that any amount received by Agent under
this Agreement must be returned to any Borrower or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will not
be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
 
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to make any
Revolving Credit Advance or any payment required by it hereunder on the date
specified therefor shall not relieve any other Lender (each such other Lender,
an "Other Lender") of its obligations to make such Advance or purchase such
participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance,
purchase a participation or make any other payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender
shall not have any voting or consent rights under or with respect to any Loan
Document or constitute a "Lender" (or be included in the calculation of
"Requisite Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document. At Borrowers' request, Agent or a Person
reasonably acceptable to Agent shall have the right with Agent's consent and in
Agent's sole discretion (but shall have no obligation) to purchase from any
Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at Agent's
request, sell and assign to Agent or such Person, all of the Commitments of that
Non-Funding Lender for an amount equal to the principal balance of all Loans
held by such Non-Funding Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
 
(e) Dissemination of Information. Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to, any Credit Party, with notice of any Event of Default
of which Agent has actually become aware and with notice of any action taken by
Agent following any Event of Default; provided, that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such failure
is attributable to Agent's gross negligence or willful misconduct, as determined
by a final court of competent jurisdiction. Lenders acknowledge that Borrowers
are required to provide Financial Statements to Lenders in accordance with
Annex E hereto and agree that Agent shall have no duty to provide the same to
Lenders.
 
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(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
 
10.
SUCCESSORS AND ASSIGNS

 
10.1. Successors and Assigns.
 
This Agreement and the other Loan Documents shall be binding on and shall inure
to the benefit of each Credit Party, Agent, Lenders and their respective
successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and Lenders shall be void. The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of each
Credit Party, Agent and Lenders with respect to the transactions contemplated
hereby and no Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement or any of the other Loan Documents.
 
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11.
MISCELLANEOUS

 
11.1. Complete Agreement; Modification of Agreement.
 
The Loan Documents constitute the complete agreement between the parties with
respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in Section 11.2. Any letter of interest, commitment
letter or fee letter (other than the GE Capital Fee Letter) if any, between any
Credit Party and Agent or any Lender or any of their respective Affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be superseded by this Agreement.
 
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11.2. Amendments and Waivers.
 
(a) Except for actions expressly permitted to be taken by Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or any consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent, Borrowers, and by Requisite Lenders or all affected
Lenders, as applicable. Except as set forth in clause (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
 
(b) [Intentionally Omitted.]
 
(c) No amendment, modification, termination or waiver shall, unless in writing
and signed by Agent and each Lender directly affected thereby: (i) increase the
principal amount of any Lender's Commitment (which action shall be deemed to
directly affect all Lenders; (ii) reduce the principal of, rate of interest on
(other than a reduction from the Default Rate to the interest rate that would
have been applicable to such Obligations in the event the Agent or Requisite
Lenders had not elected to impose the Default Rate) or Fees payable with respect
to any Loan or Letter of Credit Obligations of any affected Lender; (iii) extend
any scheduled payment date (other than payment dates of mandatory prepayments
under Section 1.3(b)(ii)-(iii)) or final maturity date of the principal amount
of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender; (v) release
any Guaranty or, except as otherwise permitted herein or in the other Loan
Documents, release, or permit any Credit Party to sell or otherwise dispose of,
any Collateral with a value exceeding $5,000,000 in the aggregate (which action
shall be deemed to directly affect all Lenders); (vi) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Loans that
shall be required for Lenders or any of them to take any action hereunder; and
(vii) amend or waive this Section 11.2 or the definition of the term "Requisite
Lenders", insofar as such definition affects the substance of this Section 11.2.
Furthermore, no amendment, modification, termination or waiver affecting the
rights or duties of Agent or L/C Issuer under this Agreement or any other Loan
Document shall be effective unless in writing and signed by Agent or L/C Issuer,
as the case may be, in addition to Lenders required hereinabove to take such
action. Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given. No amendment, modification, termination or waiver shall be required for
Agent to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
 
(d) If, in connection with any proposed amendment, modification, waiver or
termination (a "Proposed Change"):
 
(i) requiring the consent of all affected Lenders, the consent of Requisite
Lenders is obtained, but the consent of other Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained as described in
this clause (i) and in clause (ii) below being referred to as a "Non-Consenting
Lender"), or
 
(ii) requiring the consent of Requisite Lenders, the consent of Lenders holding
fifty-one percent (51%) or more of the aggregate Commitments is obtained, but
the consent of Requisite Lenders is not obtained,
 
then, so long as Agent is not a Non-Consenting Lender, at Borrowers' request,
Agent or a Person reasonably acceptable to Agent shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued but unpaid interest and Fees with respect thereto through the date of
sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
 
(e) Upon payment in full in cash and performance of all of the Obligations
(other than unasserted indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall promptly deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
 
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11.3. Fees and Expenses.
 
Borrowers shall reimburse Agent (and, with respect to clauses (c), (d) and (e)
below, all Lenders) for all fees, costs and expenses, including the reasonable
fees, costs and expenses of counsel, consultants, auditors or other advisors
(including environmental and management consultants and appraisers), incurred in
connection with the negotiation and preparation of the Loan Documents, closing
of the transactions contemplated hereunder and those the perfection of Liens on
Collateral and incurred in connection with:
 
(a) the forwarding to Borrowers or any other Person on behalf of Borrowers by
Agent of the proceeds of any Loan (including a wire transfer fee of $25 per wire
transfer);
 
(b) any amendment, modification or waiver of, consent with respect to, or
termination of, any of the Loan Documents or advice in connection with the
syndication and administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
 
(c) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Agent, any Lender, any Borrower or any other Person and whether as
a party, witness or otherwise), other than any such litigation, contest,
dispute, suit, proceeding or action instituted by Agent or any Lender against
one or more other Lenders or the Agent only, in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Borrowers or any other Person that may be obligated to Agent by virtue of the
Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided, that
in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided,
further, that no Person shall be entitled to reimbursement under this clause (c)
in respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's bad faith, gross
negligence or willful misconduct, as determined by a final court of competent
jurisdiction;
 
(d) any attempt to enforce any remedies of Agent against any or all of the
Credit Parties or any other Person that may be obligated to Agent or any Lender
by virtue of any of the Loan Documents, including any such attempt to enforce
any such remedies in the course of any work-out or restructuring of the Loans
during the pendency of one or more Events of Default; provided, that in the case
of reimbursement of counsel for Lenders other than Agent, such reimbursement
shall be limited to one counsel for all such Lenders;
 
(e) any workout or restructuring of the Loans during the pendency of one or more
Events of Default; and
 
(f) efforts to verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
 
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent; provided, that,
without limitation on Borrowers' obligation to pay the same hereunder, Agent
shall give Borrowers prompt written notice if the fees and expenses incurred on
or prior to the Closing Date in connection with the negotiation and preparation
of this Agreement and related Loan Documents and closing of the transactions
contemplated hereunder are expected to exceed $50,000. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
reasonable fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and reasonable
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.
 
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11.4. No Waiver.
 
Agent's or any Lender's failure, at any time or times, to require strict
performance by the Credit Parties of any provision of this Agreement or any
other Loan Document shall not waive, affect or diminish any right of Agent or
such Lender thereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of Section 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Agent and the applicable required
Lenders, and directed to Borrowers specifying such suspension or waiver.
 
11.5. Remedies.
 
Agent's and Lenders' rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that Agent or any
Lender may have under any other agreement, including the other Loan Documents,
by operation of law or otherwise. Recourse to the Collateral shall not be
required.
 
11.6. Severability.
 
Wherever possible, each provision of this Agreement and the other Loan Documents
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement or any other Loan
Document 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 or such other Loan Document.
 
11.7. Conflict of Terms.
 
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Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
 
11.8. Confidentiality.
 
Agent and each Lender agree to use commercially reasonable efforts (equivalent
to the efforts Agent or such Lender applies to maintaining the confidentiality
of its own confidential information) to maintain as confidential all
confidential information provided to them by the Credit Parties and designated
as confidential for a period of two years following receipt thereof, except that
Agent and any Lender may disclose such information (a) to Persons employed or
engaged by Agent or such Lender; (b) to any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenants
contained in this Section 9.1(e) and Section 11.8 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a)
above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) that ceases to
be confidential through no fault of Agent or any Lender. 
 
11.9. GOVERNING LAW.
 
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE
LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,
NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT
AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY;
PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY 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 CREDIT PARTY 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, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
 
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11.10. Notices.
 
(a) Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to (A) the party to be notified and sent to the address or facsimile number
indicated in Annex H, or (B) otherwise to the party to be notified at its
address specified on the signature page of any applicable Assignment Agreement,
(ii) posted to Intralinks® (to the extent such system is available and set up by
or at the direction of the Agent prior to posting) in an appropriate location by
uploading such notice, demand, request, direction or other communication to
www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded fax
coversheet or using such other means of posting to Intralinks® as may be
available and reasonably acceptable to the Agent prior to such posting, (iii)
posted to any other E-System set up by or at the direction of Agent in an
appropriate location or (iv) addressed to such other address as shall be
notified in writing (A) in the case of Borrowers and Agent, to the other parties
hereto and (B) in the case of all other parties, to Borrowers and Agent.
Transmission by electronic mail (including E-Fax, even if transmitted to the fax
numbers set forth in clause (i) above) shall not be sufficient or effective to
transmit any such notice under this clause (a) unless such transmission is an
available means to post to any E-System.
 
(b) Effectiveness. All communications described in clause (a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one Business Day after delivery to such courier service, (iii)
if delivered by mail, when deposited in the mails, (iv) if delivered by
facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender’s receipt of confirmation of proper transmission,
and (v) if delivered by posting to any E-System, on the later of the date of
such posting in an appropriate location and the date access to such posting is
given to the recipient thereof in accordance with the standard procedures
applicable to such E-System. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrowers or Agent) designated in Annex H to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.
 
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11.11. Section Titles.
 
The Section titles and Table of Contents contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
 
11.12. Counterparts.
 
This Agreement may be executed in any number of separate counterparts, each of
which shall collectively and separately constitute one agreement.
 
11.13. WAIVER OF JURY TRIAL.
 
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
 
11.14. Press Releases and Related Matters.
 
Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement or the other Loan Documents without at least 2 Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement. Agent or such Lender shall provide a draft of
any such tombstone or similar advertising material to Borrowers for review and
comment prior to the publication thereof. Agent reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.
 
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11.15. Reinstatement.
 
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Borrower for
liquidation or reorganization, should any Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of any Borrower's assets,
and shall continue to be effective or to be reinstated, as the case may be, if
at any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
 
11.16. Advice of Counsel.
 
Each of the parties represents to each other party hereto that it has discussed
this Agreement and, specifically, the provisions of Sections 11.9 and 11.13,
with its counsel.
 
11.17. No Strict Construction.
 
The parties hereto have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
 
11.18. USA PATRIOT Act Notice. 
 
Each Lender that is subject to the Patriot Act (as hereinafter defined) and
Agent (for itself and not on behalf of any Lender) hereby notifies each Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies each Borrower, which
information includes the name and address of each Borrower and other information
that will allow such Lender or Agent, as applicable, to identify such Borrower
in accordance with the Patriot Act.

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11.19. Effect of Amendment and Restatement on Existing Credit Agreement. 
 
(a) On the Closing Date, the Existing Credit Agreement is amended and restated
in its entirety by this Agreement. The parties hereto acknowledge and agree that
(i) this Agreement, the Notes and the other Loan Documents executed and
delivered in connection herewith do not constitute a novation, payment and
reborrowing, or termination of the "Obligations" (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement as in effect prior to the
Closing Date; (ii) such "Obligations" are in all respects continuing (as amended
and restated hereby) with only the terms thereof being modified as provided in
this Agreement; (iii) the Liens and security interests as granted under the Loan
Documents (whether delivered hereunder or in connection with the Existing Credit
Agreement) securing payment of such "Obligations" are in all respects continuing
and in full force and effect and secure the payment of the Obligations (as
defined in this Agreement); and (iv) upon the effectiveness of this Agreement
all loans outstanding under the Existing Credit Agreement immediately before the
effectiveness of this Agreement will be Loans hereunder and all outstanding
letters of credit under the Existing Credit Agreement will be Letters of Credit
hereunder, in each case on the terms and conditions set forth in this Agreement.
 
(b) Notwithstanding the modification effected by this Agreement of the
representations, warranties and covenants of the Borrowers contained in the
Existing Credit Agreement, the Borrowers acknowledge and agree that any choses
in action or other rights created in favor of the Agent, the “Agent” under the
Existing Credit Agreement, any lender under the Existing Credit Agreement, any
Lender and each of their respective successors and assigns arising out of the
representations, warranties and covenants of the Borrowers contained in or
delivered (including representations, warranties and covenants delivered in
connection with the making of Loans or other extensions of credit thereunder) in
connection with the Existing Credit Agreement, shall survive the execution and
delivery of this Agreement; provided that it is understood and agreed that the
Borrowers' monetary obligations under the Existing Credit Agreement in respect
of the loans thereunder are evidenced by this Agreement.
 
(c) All indemnification obligations of the Borrowers pursuant to the Existing
Credit Agreement shall survive the amendment and restatement of the Existing
Credit Agreement pursuant to this Agreement.
 
(d) Except as expressly amended and restated hereby and by the Notes, the
Existing Credit Agreement and the other Loan Documents are and shall continue in
full force and effect. On and after the Closing Date, (a) each reference in the
Loan Documents to the "Credit Agreement," "thereunder," "thereof" or similar
words referring to the Credit Agreement shall mean and be a reference to this
Agreement (as further amended, restated, modified or otherwise supplemented from
time to time) and (b) each reference in the Loan Documents to a "Note" or
amendment or restatement thereof shall be a reference to a Note hereunder, and
(c) each reference to "Agent", "L/C Issuer" or "Lender" in a Loan Document shall
be a reference to the Agent, L/C Issuer or Lender hereunder as the case may be.
 
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12.
CROSS-GUARANTY

 
12.1. Cross-Guaranty.
 
Each Borrower hereby agrees that such Borrower is jointly and severally liable
for, and hereby absolutely and unconditionally guarantees to Agent and Lenders
and their respective successors and assigns, the full and prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of,
all Obligations owed or hereafter owing to Agent and Lenders by each other
Borrower. Each Borrower agrees that its guaranty obligation hereunder is a
continuing guaranty of payment and performance and not of collection, that its
obligations under this Section 12 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Section 12 shall be absolute and unconditional, irrespective of, and
unaffected by,
 
(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, this Agreement, any other Loan Document or any other
agreement, document or instrument to which any Borrower is or may become a
party;
 
(b) the absence of any action to enforce this Agreement (including this
Section 12) or any other Loan Document or the waiver or consent by Agent and
Lenders with respect to any of the provisions thereof;
 
(c) the existence, value or condition of, or failure to perfect its Lien
against, any security for the Obligations or any action, or the absence of any
action, by Agent and Lenders in respect thereof (including the release of any
such security);
 
(d) the insolvency of any Credit Party; or
 
(e) any other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.
 
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
 
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12.2. Waivers by Borrowers.
 
Each Borrower expressly waives all rights it may have now or in the future under
any statute, or at common law, or at law or in equity, or otherwise, to compel
Agent or Lenders to marshall assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Credit Party, any other party or against
any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Agent and Lenders that the foregoing waivers are
of the essence of the transaction contemplated by this Agreement and the other
Loan Documents and that, but for the provisions of this Section 12 and such
waivers, Agent and Lenders would decline to enter into this Agreement.
 
12.3. Benefit of Guaranty.
 
Each Borrower agrees that the provisions of this Section 12 are for the benefit
of Agent and Lenders and their respective successors, transferees, endorsees and
assigns, and nothing herein contained shall impair, as between any other
Borrower and Agent or Lenders, the obligations of such other Borrower under the
Loan Documents.
 
12.4. Subordination of Subrogation, Etc.
 
Notwithstanding anything to the contrary in this Agreement or in any other Loan
Document, and except as set forth in Section 12.7, each Borrower hereby
expressly and irrevocably subordinates to payment of the Obligations any and all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Obligations are
indefeasibly paid in full in cash. Each Borrower acknowledges and agrees that
this subordination is intended to benefit Agent and Lenders and shall not limit
or otherwise affect such Borrower's liability hereunder or the enforceability of
this Section 12, and that Agent, Lenders and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this Section 12.4.
 
12.5. Election of Remedies.
 
If Agent or any Lender may, under applicable law, proceed to realize its
benefits under any of the Loan Documents giving Agent or such Lender a Lien upon
any Collateral, whether owned by any Borrower or by any other Person, either by
judicial foreclosure or by non-judicial sale or enforcement, Agent or any Lender
may, at its sole option, determine which of its remedies or rights it may pursue
without affecting any of its rights and remedies under this Section 12. If, in
the exercise of any of its rights and remedies, Agent or any Lender shall
forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any Borrower or any other Person, whether because of any
applicable laws pertaining to "election of remedies" or the like, each Borrower
hereby consents to such action by Agent or such Lender and waives any claim
based upon such action, even if such action by Agent or such Lender shall result
in a full or partial loss of any rights of subrogation that each Borrower might
otherwise have had but for such action by Agent or such Lender. Any election of
remedies that results in the denial or impairment of the right of Agent or any
Lender to seek a deficiency judgment against any Borrower shall not impair any
other Borrower's obligation to pay the full amount of the Obligations. In the
event Agent or any Lender shall bid at any foreclosure or trustee's sale or at
any private sale permitted by law or the Loan Documents, Agent or such Lender
may bid all or less than the amount of the Obligations and the amount of such
bid need not be paid by Agent or such Lender but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Agent,
Lender or any other party is the successful bidder, shall be conclusively deemed
to be the fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this Section 12,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which Agent or
any Lender might otherwise be entitled but for such bidding at any such sale.
 
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12.6. Limitation.
 
Notwithstanding any provision herein contained to the contrary, each Borrower's
liability under this Section 12 (which liability is in any event in addition to
amounts for which such Borrower is primarily liable under Section 1) shall be
limited to an amount not to exceed as of any date of determination the greater
of:
 
(a) the net amount of all Loans advanced to Borrowers under this Agreement and
then re-loaned or otherwise transferred to, or for the benefit of, Borrowers;
and
 
(b) the amount that could be claimed by Agent and Lenders from such Borrower
under this Section 12 without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law after taking into account, among other things, such
Borrower's right of contribution and indemnification from each other Borrower
under Section 12.7.
 
12.7. Contribution with Respect to Guaranty Obligations.
 
(a) To the extent that any Borrower shall make a payment under this Section 12
of all or any of the Obligations (other than Loans made to that Borrower for
which it is primarily liable) (a "Guarantor Payment") that, taking into account
all other Guarantor Payments then previously or concurrently made by any other
Borrower, exceeds the amount that such Borrower would otherwise have paid if
each Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Borrower's "Allocable Amount" (as
defined below) (as determined immediately prior to such Guarantor Payment) bore
to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
 
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(b) As of any date of determination, the "Allocable Amount" of any Borrower
shall be equal to the maximum amount of the claim that could then be recovered
from such Borrower under this Section 12 without rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
 
(c) This Section 12.7 is intended only to define the relative rights of
Borrowers and nothing set forth in this Section 12.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
 
(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of Borrower to which such
contribution and indemnification is owing.
 
(e) The rights of the indemnifying Borrowers against other Credit Parties under
this Section 12.7 shall be exercisable upon the full and indefeasible payment of
the Obligations and the termination of the Commitments.
 
12.8. Liability Cumulative.
 
The liability of Borrowers under this Section 12 is in addition to and shall be
cumulative with all liabilities of each Borrower to Agent and Lenders under this
Agreement and the other Loan Documents to which such Borrower is a party or in
respect of any Obligations or obligation of the other Borrower, without any
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
 
[Remainder of page intentionally left blank.]
 
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
 

BORROWERS:
 
ODYSSEY HEALTHCARE OPERATING A, LP
 
By:
Its:
 
Odyssey HealthCare GP, LLC
General Partner
 
 
By: /s/ R. Dirk Allison
Name: R. Dirk Allison
Title: Senior Vice President and Chief Financial Officer

ODYSSEY HEALTHCARE OPERATING B, LP
 
By:
Its:
 
Odyssey HealthCare GP, LLC
General Partner
 
 
By: /s/ R. Dirk Allison
Name: R. Dirk Allison
Title: Senior Vice President and Chief Financial Officer

HOSPICE OF THE PALM COAST, INC.
 
 
By: /s/ R. Dirk Allison
Name: R. Dirk Allison
Title: Senior Vice President and Chief Financial Officer

 
AGENT AND LENDERS:
 
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender
 
By:/s/ John Dale
Duly Authorized Signatory

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The following Persons are signatories to this Agreement in their capacity as
Credit Parties and not as Borrowers.

ODYSSEY HEALTHCARE, INC.
 
By /s/ R. Dirk Allison
Its: Senior Vice President and Chief Financial Officer
 
ODYSSEY HEALTHCARE HOLDING COMPANY
 
By /s/ R. Dirk Allison
Its: Senior Vice President and Chief Financial Officer
 
ODYSSEY HEALTHCARE GP, LLC
 
By /s/ R. Dirk Allison
Its: Senior Vice President and Chief Financial Officer
 
ODYSSEY HEALTHCARE LP, LLC
 
By /s/ Jean M. Hunn
Its: Manager
 
ODYSSEY HEALTHCARE MANAGEMENT, LP
 
By:
Its:
 
Odyssey HealthCare GP, LLC
General Partner
 
 
By /s/ R. Dirk Allison 
Its: Senior Vice President and Chief Financial Officer
 

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ANNEX A (Recitals)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
DEFINITIONS
 

Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings, and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
 
"Account Debtor" means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).
 
"Accounting Changes" has the meaning ascribed thereto in Annex F.
 
"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the Code), (b) all of each Credit Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all rights
to payment due to any Credit Party for property sold, leased, licensed, assigned
or otherwise disposed of, for a policy of insurance issued or to be issued, for
a secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit
Party), (e) all health care insurance receivables and (f) all collateral
security and guaranties of any kind, given by any Account Debtor or any other
Person with respect to any of the foregoing.
 
"Advance" means any Revolving Credit Advance.
 
"Affected Lender" has the meaning ascribed to it in Section 1.16(d).
 
"Affiliate" means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, ten percent (10%) or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
 
Annex A - 1

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"Agent" means GE Capital in its capacity as Agent for Lenders or its successor
appointed pursuant to Section 9.7.
 
"Agreement" means the Amended and Restated Credit Agreement dated as of the date
hereof by and among Borrowers, the other Credit Parties party thereto, GE
Capital, as Agent and Lender and the other Lenders from time to time party
thereto, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
 
"Appendices" has the meaning ascribed to it in the recitals to the Agreement.
 
"Applicable Margins" means collectively the Applicable Revolver Index Margin and
the Applicable Revolver LIBOR Margin.
 
"Applicable Revolver Index Margin" means the per annum interest rate margin from
time to time in effect and payable in addition to the Index Rate applicable to
the Revolving Loan, as determined by reference to Section 1.5(a).
 
"Applicable Revolver LIBOR Margin" means the per annum interest rate from time
to time in effect and payable in addition to the LIBOR Rate applicable to the
Revolving Loan, as determined by reference to Section 1.5(a).
 
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
 
"Bankruptcy Code" means the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.
 
"Blocked Accounts" has the meaning ascribed to it in Annex C.
 
"Borrowers" and "Borrower" have the respective meanings ascribed thereto in the
preamble to the Agreement.
 
"Business Associate Agreement" means that certain Business Associate Agreement
duly executed by and between Holdings and Agent and dated as of or prior to the
date of this Agreement, together with all exhibits and schedules thereto, as the
same may be amended, modified, restated or supplemented from time to time in
accordance with the terms thereof.
 
Annex A - 2

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"Business Day" means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the States of Illinois and/or
New York and in reference to LIBOR Loans shall mean any such day that is also a
LIBOR Business Day.
 
"Capital Expenditures" means, with respect to any Person, all expenditures (by
the expenditure of cash or the incurrence of Indebtedness) by such Person during
any measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto that have a useful life of more than one year
and that are required to be capitalized under GAAP, excluding in each instance,
any such expenditures made pursuant to a Permitted Acquisition.
 
"Capital Lease" means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
 
"Capital Lease Obligation" means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
 
"Cash Collateral Account" has the meaning ascribed to it Annex B.
 
"Cash Equivalents" has the meaning ascribed to it in Annex B.
 
"Cash Management Systems" has the meaning ascribed to it in Section 1.8.
 
"Certificate of Exemption" has the meaning ascribed to it in Section 1.15(c).
 
"Change of Control" means any of the following: (a) any person or group of
persons (within the meaning of the Securities Exchange Act of 1934) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of thirty-five percent (35%) or more of the issued and outstanding shares
of capital Stock of Holdings having the right to vote for the election of
directors of Holdings under ordinary circumstances; (b) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Holdings (together with any new
directors whose election by the board of directors of Holdings or whose
nomination for election by the Stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office;
(c) Holdings ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its direct
Subsidiaries; (d) Parent ceases to own and control all of the economic and
voting rights associated with all of the outstanding capital Stock of any of its
direct Subsidiaries; (e) Odyssey GP ceases to own and control all of the
economic and voting rights associated with all of the outstanding capital Stock
of any of its direct Subsidiaries; or (f) Odyssey LP ceases to own and control
all of the economic and voting rights associated with all of the outstanding
capital Stock of any of its direct Subsidiaries.
 
Annex A - 3

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"Charges" means all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
income or gross receipts of any Credit Party, (d) any Credit Party's ownership
or use of any properties or other assets, or (e) any other aspect of any Credit
Party's business.
 
"Chattel Paper" means any "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Credit Party.
 
"Closing Checklist" means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex D.
 
"Closing Date" means May 24, 2007.
 
"Code" means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided, further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.
 
"Collateral" means the property covered by the Security Agreement and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations.
 
"Collateral Documents" means the Security Agreement, the Master Pledge
Agreement, the OpCoB Pledge Agreement, the Guaranties, the Trademark Security
Agreements, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
 
Annex A - 4

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"Collection Account" means that certain account of Agent, account number
502-710-79 in the name of Agent at Deutsche Bank Trust Company Americas in New
York, New York ABA No. 021 001 033, or such other account as may be specified in
writing by Agent as the "Collection Account."

"Commitment Termination Date" means the earliest of (a) May 24, 2009, (b) the
date of termination of Lenders' obligations to make Advances and to incur Letter
of Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b), and (c) the date of prepayment in full by Borrowers of the Loans
and the cancellation and return (or stand-by guarantee) of all Letters of Credit
or the cash collateralization of all Letter of Credit Obligations pursuant to
Annex B, and the permanent reduction of all Commitments to zero dollars ($0).
 
"Commitments" means (a) as to any Lender, such Lender's Revolving Loan
Commitment as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments, which aggregate commitment
shall be $40,000,000 on the Closing Date, and as to each of clauses (a) and (b),
as such Commitments may be increased, reduced, amortized or adjusted from time
to time in accordance with the Agreement.
 
"Compliance Certificate" has the meaning ascribed to it in Annex E.
 
"Contracts" means all "contracts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
 
"Control Letter" means a letter agreement, in form and substance reasonably
satisfactory to Agent, between Agent and (i) the issuer of uncertificated
securities with respect to uncertificated securities in the name of any Credit
Party, (ii) a securities intermediary with respect to securities, whether
certificated or uncertificated, securities entitlements and other financial
assets held in a securities account in the name of any Credit Party, (iii) a
futures commission merchant or clearing house, as applicable, with respect to
commodity accounts and commodity contracts held by any Credit Party, whereby,
among other things, the issuer, securities intermediary or futures commission
merchant disclaims any security interest in the applicable financial assets,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Credit Party.
 
Annex A - 5

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"Copyright License" means any and all rights now owned or hereafter acquired by
any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
 
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
 
"Corporate Integrity Agreement" means the corporate integrity agreement, dated
July 6, 2006, by and between The Office of Inspector General of the Department
of Health and Human Services and Holdings, as it may be amended.
 
"Credit Parties" means Odyssey Healthcare Management LP, a Delaware limited
partnership, Holdings, Parent, Odyssey GP, Odyssey LP, each Non-Guarantor
Subsidiary, each Borrower, and each of their respective Subsidiaries.
 
"Default" means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
 
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
 
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
 
"Disclosure Schedules" means the Schedules prepared by Borrowers and denominated
as Disclosure Schedules 1.4 through 6.7 in the Index to the Agreement.
 
"Documents" means all "documents," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
 
"Dollars" or "$" means lawful currency of the United States of America.
 
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) the amount of non-cash charges (including
depreciation and amortization) for such period, (v) amortized debt discount for
such period, and (vi) the amount of any deduction to consolidated net income as
the result of any grant to any members of the management of such Person of any
Stock, in each case to the extent included in the calculation of consolidated
net income of such Person for such period in accordance with GAAP, but without
duplication, plus (d) Pro Forma Acquisition EBITDA. For purposes of this
definition, the following items shall be excluded in determining consolidated
net income of a Person: (1) except as otherwise included in the calculation of
Pro Forma Acquisition EBITDA, the income (or deficit) of any other Person
accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into, such Person or any of such Person's Subsidiaries; (2) the
income (or deficit) of any other Person (other than a Subsidiary) in which such
Person has an ownership interest, except to the extent any such income has
actually been received by such Person in the form of cash dividends or
distributions; (3) the undistributed earnings of any Subsidiary of such Person
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period; (5) any write-up of any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
 
Annex A - 6

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"Environmental Laws" means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation Authorization
Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
 
"Environmental Liabilities" means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
 
Annex A - 7

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"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
 
"Equipment" means all "equipment," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located and, in any
event, including all such Credit Party's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any regulations promulgated thereunder.
 
"ERISA Affiliate" means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of
the IRC.
 
"ERISA Event" means, with respect to any Credit Party or any ERISA Affiliate,
(a) with respect to a Title IV Plan, any event described in Section 4043(c) of
ERISA for which notice to the PBGC has not been waived; (b) the withdrawal of
any Credit Party or ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the filing
of a notice of intent to terminate a Title IV Plan in a distress termination
described in Section 4041(c) of ERISA or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) with respect to
a Title IV Plan, the existence of an “accumulated funding deficiency” (as
defined in Section 412 of the IRC or Section 302 of ERISA) whether or not
waived, or the failure to make by its due date a required installment under
Section 412(m) of the Code or the failure to make any required contribution to a
Multiemployer Plan; (g) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to a Title IV Plan; (h) the making of any amendment to any
Title IV Plan which could result in the imposition of a lien or the posting of a
bond or other security; (i) with respect to a Title IV Plan an event described
in Section 4062(e) of ERISA; (j) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (k) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; (l) the loss of a Qualified Plan’s qualification
or tax exempt status; or (m) the termination of a Plan described in Section 4064
of ERISA.
 
Annex A - 8

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"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
 
"E-System" means any electronic system, including Intralinks® and any other
Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by Agent, any of its Affiliates, or any of such Person’s
respective officers, directors, employees, attorneys, agents and representatives
or any other Person, providing for access to data protected by passcodes or
other security system.
 
"Event of Default" has the meaning ascribed to it in Section 8.1.
 
"Existing Credit Agreement" has the meaning ascribed to it in the recitals to
the Agreement.
 
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29 U.S.C. §201
et seq.
 
"Federal Funds Rate" means, for any day, a floating rate equal to the weighted
average of the rates on overnight Federal funds transactions among members of
the Federal Reserve System, as determined by Agent in its sole discretion, which
determination shall be final, binding and conclusive (absent manifest error).
 
Annex A - 9

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"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
 
"Fees" means any and all fees payable to Agent or any Lender pursuant to the
Agreement or any of the other Loan Documents.
 
"Financial Covenants" means the financial covenants set forth in Annex F.
 
"Financial Statements" means the consolidated income statements, statements of
cash flows and balance sheets of Holdings and its Subsidiaries delivered in
accordance with Section 3.4 and Annex E.
 
"Fiscal Quarter" means any of the quarterly accounting periods of Borrowers,
ending on March 31, June 30, September 30 and December 31 of each year.
 
"Fiscal Year" means any of the annual accounting periods of Borrowers ending on
December 31 of each year.
 
"Fixed Charge Coverage Ratio" means, with respect to any Person for any fiscal
period, the ratio of (1) EBITDA of such Person for such fiscal period, minus
unfinanced Capital Expenditures made by such Person during such period, minus
cash taxes paid by such Person during such period and minus Pro Forma
Acquisition EBITDA for such period, to (2) Fixed Charges incurred or accrued by
such Person for such period.
 
"Fixed Charges" means, with respect to any Person for any fiscal period, (a) the
aggregate of all Interest Expense paid or accrued during such period, plus
(b) scheduled payments of principal with respect to Indebtedness during such
period.
 
"Fixtures" means all "fixtures" as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party.
 
"Foreign Lender" has the meaning ascribed to it in Section 1.15(c).
 
"Funded Debt" means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
 
Annex A - 10

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"GAAP" means generally accepted accounting principles in the United States of
America consistently applied, as such term is further defined in Annex F to the
Agreement.
 
"GE Capital" means General Electric Capital Corporation, a Delaware corporation.
 
"GE Capital Fee Letter" has the meaning ascribed to it in Section 1.9.
 
"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, including all
right, title and interest that such Credit Party may now or hereafter have in or
under any Contract, all payment intangibles, customer lists, Licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, Software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.
 
"Goods" means all "goods" as defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, including embedded software to
the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
 
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
 
"Guaranteed Indebtedness" means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation ("primary obligation") of any other Person (the
"primary obligor") in any manner, including any obligation or arrangement of
such Person to (a) purchase or repurchase any such primary obligation,
(b) advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
 
Annex A - 11

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"Guaranties" means, collectively, each guaranty executed by any Guarantor in
favor of Agent and Lenders in respect of the Obligations.
 
"Guarantors" means each Credit Party, other than the Borrowers and, until they
shall have executed and delivered a Guaranty in compliance with Section 5.12,
the Non-Guarantor Subsidiaries, and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Agent, for itself and the
ratable benefit of Lenders, in connection with the transactions contemplated by
the Agreement and the other Loan Documents.
 
"Hazardous Material" means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a "solid
waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
 
"Healthcare Laws" has the meaning ascribed to it in Section 3.24.
 
"HIPAA" means the Health Insurance Portability and Accountability Act of 1996,
as the same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.
 
"Holdings" means Odyssey HealthCare, Inc., a Delaware corporation.
 
Annex A - 12

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"Indebtedness" means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than six months unless being
contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness and (i) the
Obligations.
 
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.13.
 
"Indemnified Person" has the meaning ascribed to in Section 1.13.
 
"Index Rate" means, for any day, a floating rate equal to the higher of (i) the
rate publicly quoted from time to time by The Wall Street Journal as the "prime
rate" (or, if The Wall Street Journal ceases quoting a prime rate the highest
per annum rate of interest published by the Federal Reserve Board in Federal
Reserve statistical release H.15 (519) entitled "Selected Interest Rates" as the
Bank prime loan rate or its equivalent), and (ii) the Federal Funds Rate plus 50
basis points per annum. Each change in any interest rate provided for in the
Agreement based upon the Index Rate shall take effect at the time of such change
in the Index Rate.
 
"Index Rate Loan" means a Loan or portion thereof bearing interest by reference
to the Index Rate.
 
"Instruments" means all "instruments," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and, in any
event, including all certificated securities, all certificates of deposit, and
all promissory notes and other evidences of Indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel
Paper.
 
Annex A - 13

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"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.
 
"Interest Expense" means, with respect to any Person for any fiscal period,
interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
 
"Interest Payment Date" means (a) as to any Index Rate Loan, the first Business
Day of each month to occur while such Loan is outstanding, and (b) as to any
LIBOR Loan, the last day of the applicable LIBOR Period; provided, that, in
addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and
(y) the Commitment Termination Date shall be deemed to be an "Interest Payment
Date" with respect to any interest that has then accrued under the Agreement.
 
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded Software.
 
"Investment Property" means all "investment property" as such term is defined in
the Code now owned or hereafter acquired by any Credit Party, wherever located,
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of any Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account;
(iii) all securities accounts of any Credit Party; (iv) all commodity contracts
of any Credit Party; and (v) all commodity accounts held by any Credit Party.
 
"IRC" means the Internal Revenue Code of 1986 and all regulations promulgated
thereunder.
 
"IRS" means the Internal Revenue Service.
 
Annex A - 14

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"L/C Issuer" has the meaning ascribed to it in Annex B.
 
"L/C Sublimit" has the meaning ascribed to it in Annex B.
 
"Lenders" means, collectively, (i) GE Capital, and, if GE Capital shall decide
to assign all or any portion of the Obligations pursuant to the terms of this
Agreement, such term shall include any assignee of GE Capital and (ii) each
other Person or Persons, if any, that shall from time to time become a party to
this Agreement as a Lender pursuant to a joinder in form and substance
acceptable to Agent and, if any, such Person or Persons shall decide to assign
all or any portion of the Obligations, such term shall include any assignees of
such Person or Persons.
 
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
 
"Letter of Credit Obligations" means all outstanding obligations incurred by
Agent and Lenders at the request of Borrowers, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of
Letters of Credit by Agent or another L/C Issuer or the purchase of a
participation as set forth in Annex B with respect to any Letter of Credit. The
amount of such Letter of Credit Obligations shall equal the maximum amount that
may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
 
"Letters of Credit" means documentary or standby letters of credit issued for
the account of any Borrower by any L/C Issuer, and bankers' acceptances issued
by any Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
 
"Leverage Ratio" means, with respect to Holdings and its Subsidiaries, on a
consolidated basis, the ratio of (a) Funded Debt of Holdings and its
Subsidiaries as of any date of determination, to (b) EBITDA for the twelve
months ending on that date of determination.
 
"LIBOR Business Day" means a Business Day on which banks in the City of London
are generally open for interbank or foreign exchange transactions.
 
"LIBOR Loan" means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.
 
"LIBOR Period" means, with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day selected by Borrowers pursuant to the Agreement and ending
one, two, three or six months thereafter, as selected by Borrowers' irrevocable
notice to Agent as set forth in Section 1.5(e); provided, that the foregoing
provision relating to LIBOR Periods is subject to the following:
 
(a) if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding LIBOR Business Day;
 
Annex A - 15

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(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end 2 LIBOR Business Days prior to such date;
 
(c) any LIBOR Period that begins on the last LIBOR Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such LIBOR Period) shall end on the last LIBOR
Business Day of a calendar month;
 
(d) Borrowers shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and
 
(e) Borrowers shall select LIBOR Periods so that there shall be no more than 5
separate LIBOR Loans in existence at any one time.
 
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined by Agent
equal to:
 
(a) the offered rate for deposits in United States Dollars for the applicable
LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time),
on the second full LIBOR Business Day next preceding the first day of such LIBOR
Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by
 
(b) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on the
day that is 2 LIBOR Business Days prior to the beginning of such LIBOR Period
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Federal Reserve Board that are required to be maintained by
a member bank of the Federal Reserve System.
 
Annex A - 16

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If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrowers.
 
"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.
 
"Lien" means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).
 
"Litigation" has the meaning ascribed to it in Section 3.13.
 
"Loan Account" has the meaning ascribed to it in Section 1.12.
 
"Loan Documents" means the Agreement, the Notes, the Collateral Documents, and
all other agreements, instruments, documents and certificates identified in the
Closing Checklist executed and delivered to, or in favor of, Agent or any
Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to the
Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
 
"Loans" means the Revolving Loan.
 
"Lock Boxes" has the meaning ascribed to it in Annex C.
 
"Margin Stock" has the meaning ascribed to in Section 3.10.
 
"Master Pledge Agreement" means the Pledge Agreement dated as of May 14, 2004
executed by Holdings, Parent, Odyssey GP and Odyssey LP in favor of Agent, on
behalf of itself and Lenders, pledging all Stock of Subsidiaries and all
intercompany notes owing to or held by any of them.
 
"Material Adverse Effect" means a material adverse effect on (a) the business,
industry, assets, operations or financial or other condition of the Credit
Parties considered as a whole, (b) any Credit Party's ability to pay any of the
Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and Lenders,
on the Collateral or the priority of such Liens, or (d) Agent's or any Lender's
rights and remedies under the Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, any event or occurrence adverse to one
or more Credit Parties which results or could reasonably be expected to result
in costs and/or liabilities or loss of revenues, individually or in the
aggregate, in any 30-day period in excess of fifteen percent (15%) of the lesser
of (x) the Maximum Amount and (y) EBITDA for the twelve-month period ending as
of the last day of the most recently ended Fiscal Quarter (based on the
Compliance Certificate most recently delivered pursuant to Section 4.1) shall
constitute a Material Adverse Effect.
 
Annex A - 17

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"Maximum Amount" means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Lenders as of that date.
 
"Maximum Lawful Rate" has the meaning ascribed to it in Section 1.5(f).
 
"Mortgage" means any mortgage, deed of trust or other document executed or
required herein to be executed by any Credit Party and granting a security
interest over real property in favor of Agent as security for the Obligations.
 
"Mortgage Supporting Documents" means, with respect to any Mortgage for a parcel
of real property, each document (including title searches and evidence regarding
recording and payment of fees, property insurance premiums and taxes relating
thereto) that Agent may reasonably request, to create, register, or perfect a
valid Lien on such parcel of real property in favor of Agent for the benefit of
the Lenders, subject only to Permitted Encumbrances and such other Liens as
Agent may approve.
 
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
 
"Non-Funding Lender" has the meaning ascribed to it in Section 9.9(a)(ii).
 
"Non-Guarantor Subsidiaries" means Odyssey Fort Worth, Odyssey Detroit, Odyssey
Manatee County, Odyssey Collier County, Odyssey Northwest Florida, Odyssey
Austin, Odyssey Hillsborough County, Odyssey Marion County, Odyssey Pinellas
County and any other Subsidiary that was formed for a purpose other than to
acquire any of the stock or assets of a Target.
 
"Notes" means, collectively, the Revolving Notes.
 
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
 
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a).
 
"OpCoA" has the meaning ascribed thereto in the preamble to the Agreement.
 
Annex A - 18

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"OpCoB" has the meaning ascribed thereto in the preamble to the Agreement.
 
"OpCoB Pledge Agreement" means the Pledge Agreement dated as of the Closing Date
executed by OpCoB in favor of Agent, on behalf of itself and Lenders, pledging
all Stock of Subsidiaries and all intercompany notes owing to and held by OpCoB.
 
"Obligations" means all loans, advances, debts, liabilities and obligations for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by any Credit Party to Agent or any
Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
 
"Odyssey Austin" means Odyssey HealthCare Austin, LLC, a Delaware limited
liability company.
 
"Odyssey Collier County" means Odyssey HealthCare of Collier County, Inc., a
Delaware corporation.
 
"Odyssey Detroit" means Odyssey HealthCare Detroit, LLC, a Delaware limited
liability company.
 
"Odyssey Fort Worth" means Odyssey HealthCare Fort Worth, LLC, a Delaware
limited liability company.
 
"Odyssey GP" means Odyssey HealthCare GP, LLC, a Delaware limited liability
company.
 
"Odyssey Hillsborough County" means Odyssey HealthCare of Hillsborough County,
Inc., a Delaware corporation.
 
"Odyssey LP" means Odyssey HealthCare LP, LLC, a Delaware limited liability
company.
 
"Odyssey Manatee County" means Odyssey HealthCare of Manatee County, Inc., a
Delaware corporation.
 
"Odyssey Marion County" means Odyssey HealthCare of Marion County, Inc., a
Delaware corporation.
 
Annex A - 19

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"Odyssey Northwest Florida" means Odyssey HealthCare of Northwest Florida, Inc.,
a Delaware corporation.
 
"Odyssey Pinellas County" means Odyssey HealthCare of Pinellas County, Inc., a
Delaware corporation.
 
"Palm Coast" has the meaning ascribed thereto in the preamble to the Agreement.
 
"Parent" means Odyssey HealthCare Holding Company, a Delaware corporation.
 
"Patent License" means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on
which a Patent is in existence.
 
"Patents" means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
 
"PBGC" means the Pension Benefit Guaranty Corporation.
 
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
 
"Permitted Acquisition" has the meaning ascribed to it in Section 6.1.
 
"Permitted Encumbrances" means the following encumbrances: (a) Liens for taxes
or assessments or other governmental Charges not yet due and payable or which
are being contested in accordance with Section 5.2(b); (b) pledges or deposits
of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $500,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) cash deposits
securing reimbursement obligations in respect of outstanding Permitted L/Cs, in
an amount not to exceed 105% of the face amount of such Permitted L/Cs; (h) any
attachment or judgment lien not constituting an Event of Default under
Section 8.1(j); (i) zoning restrictions, easements, licenses, or other
restrictions on the use of any Real Estate or other minor irregularities in
title (including leasehold title) thereto, so long as the same do not materially
impair the use, value, or marketability of such Real Estate; (j) presently
existing or hereafter created Liens in favor of Agent, on behalf of Lenders; and
(k) Liens expressly permitted under clauses (b) and (c) of Section 6.7 of the
Agreement.
 
Annex A - 20

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"Permitted L/Cs" means one or more letters of credit (other than Letters of
Credit) in an aggregate stated face amount not to exceed $10,000,000 at any time
outstanding, having reimbursement obligations secured by no Liens other then
Permitted Encumbrances.
 
"Person" means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
seven years on behalf of participants who are or were employed by any Credit
Party or ERISA Affiliate.
 
"Proceeds" means "proceeds," as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
 
Annex A - 21

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"Pro Forma Acquisition EBITDA" means (i) EBITDA attributable to each Permitted
Acquisition (with such pro forma adjustments as are reasonably acceptable to
Agent, as indicated by its written approval thereof, based upon data presented
to Agent to its reasonable satisfaction) consummated during the one (1) year
period preceding the date of determination calculated solely for a number of
months immediately preceding the consummation of the applicable Permitted
Acquisition, which number equals twelve (12) minus the number of months
following the consummation of the applicable Permitted Acquisition for which
financial statements of Holdings and its Subsidiaries have been delivered to
Agent pursuant to Section 4.1 and (ii) for purposes of determining compliance
with Section 6.1, EBITDA of the Target of any proposed Permitted Acquisition
(adjusted with such pro forma adjustments as are reasonably acceptable to Agent
based upon data presented to Agent to its reasonable satisfaction) calculated
for the twelve (12) months immediately preceding the consummation of the
proposed Permitted Acquisition.
 
"Projections" means Holdings' and its Subsidiaries forecasted consolidated
profit and loss statements, all consistent with the historical Financial
Statements of the Credit Parties, together with appropriate supporting details
and a statement of underlying assumptions.
 
"Pro Rata Share" means with respect to all matters relating to any Lender,
(a) with respect to the Revolving Loan, the percentage obtained by dividing
(i) the Revolving Loan Commitment of that Lender by (ii) the aggregate Revolving
Loan Commitments of all Lenders, (b) with respect to all Loans, the percentage
obtained by dividing (i) the aggregate Commitments of that Lender by (ii) the
aggregate Commitments of all Lenders, and (c) with respect to all Loans on and
after the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Loans held by that
Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders.
 
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Moody's at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided, that no
Person determined by Agent (or, so long as no Event of Default has occurred and
is continuing, Borrowers) to be acting in the capacity of a vulture fund or
distressed debt purchaser shall be a Qualified Assignee, and no Person or
Affiliate of such Person (other than a Person that is already a Lender) holding
Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.
 
Annex A - 22

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"Qualified Plan" means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.
 
"Real Estate" has the meaning ascribed to it in Section 3.6.
 
"Refinancing Offer" has the meaning ascribed to it in Section 5.10.
 
"Relationship Bank" has the meaning ascribed to it in Annex C.
 
"Release" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
 
"Replacement Lender" has the meaning ascribed to it in Section 1.16(d).
 
"Requisite Lenders" means Lenders having (a) more than sixty-six and two-thirds
percent (66 2/3%) of the Commitments of all Lenders, or (b) if the Commitments
have been terminated, more than sixty-six and two-thirds percent (66 2/3%) of
the aggregate outstanding amount of all Loans.
 
"Restricted Payment" means, with respect to any Credit Party (a) the declaration
or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Stock;
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of such Credit Party's Stock or any other payment or
distribution made in respect thereof, either directly or indirectly; (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) by such Credit Party to any Stockholder of such Credit
Party or its Affiliates.
 
"Retiree Welfare Plan" means, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
 
Annex A - 23

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"Revolving Credit Advance" has the meaning ascribed to it in Section 1.1(a)(i).
 
"Revolving Loan" means, at any time, the sum of (i) the aggregate amount of
Revolving Credit Advances outstanding to Borrower plus (ii) the aggregate Letter
of Credit Obligations incurred on behalf of Borrower. Unless the context
otherwise requires, references to the outstanding principal balance of the
Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
 
"Revolving Loan Commitment" means (a) as to any Lender, the aggregate commitment
of such Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such Lender, as such amount may be adjusted, if
at all, from time to time in accordance with the Agreement and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances or incur Letter of Credit Obligations, which aggregate commitment shall
be $40,000,000 on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
 
"Revolving Note" has the meaning ascribed to it in Section 1.1(a)(ii).
 
"Security Agreement" means the Security Agreement dated as of May 14, 2004
entered into by and among Agent, on behalf of itself and Lenders, and each
Credit Party that is a signatory thereto.
 
"Senior Officer" means, with respect to any Person, the chairman of the board,
the president, the chief executive officer, the chief operating officer, the
general counsel, or any equivalent officer (regardless of his or her title),
and, in respect of financial or accounting matters, the chief financial officer,
the vice president of finance, the treasurer, or any equivalent officer
(regardless of his or her title).
 
"Settlement Date" has the meaning ascribed to it in Section 9.9(a)(ii).
 
"Software" means all "software" as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, other than software embedded in any
category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
 
"Solvent" means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
 
Annex A - 24

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"Stock" means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
 
"Stockholder" means, with respect to any Person, each holder of Stock of such
Person.
 
"Subordinated Debt" means any Indebtedness of any Credit Party subordinated to
the Obligations in a manner and form satisfactory to Agent in its reasonable
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.
 
"Subsidiary" means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
 
"Supporting Obligations" means all "supporting obligations" as such term is
defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments
or Investment Property.
 
"Target" has the meaning ascribed to it in Section 6.1.
 
Annex A - 25

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"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on or measured by
the net income of Agent or a Lender by the jurisdictions under the laws of which
Agent and Lenders are organized or conduct business or any political subdivision
thereof.
 
"Termination Date" means the date on which (a) the Loans have been indefeasibly
repaid in full, (b) all other Obligations under the Agreement and the other Loan
Documents have been completely discharged (c) all Letter of Credit Obligations
have been cash collateralized, canceled or backed by standby letters of credit
in accordance with Annex B, and (d) none of Borrowers shall have any further
right to borrow any monies under the Agreement.
 
"Threshold Acquisition" has the meaning ascribed to it in Section 6.1.
 
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan), that is
subject to Title IV of ERISA or Section 412 of the IRC, and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
 
"Trademark Security Agreements" means the Trademark Security Agreements made in
favor of Agent, on behalf of Lenders, by each applicable Credit Party.
 
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
 
"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
 
"Unfunded Pension Liability" means, at any time, the aggregate amount, if any,
of the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
all determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five years following a transaction which might
reasonably be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by any Credit Party or any ERISA
Affiliate as a result of such transaction.
 
Annex A - 26

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"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
 
Rules of construction with respect to accounting terms used in the Agreement or
the other Loan Documents shall be as set forth in Annex F. All other undefined
terms contained in any of the Loan Documents shall, unless the context indicates
otherwise, have the meanings provided for by the Code to the extent the same are
used or defined therein; in the event that any term is defined differently in
different Articles or Divisions of the Code, the definition contained in Article
or Division 9 shall control. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.
 
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words "including", "includes" and "include"
shall be deemed to be followed by the words "without limitation"; the word "or"
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
 
Annex A - 27

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ANNEX B (Section 1.2)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
LETTERS OF CREDIT
 

(a) Issuance. Subject to the terms and conditions of the Agreement, Agent and
Lenders agree to incur, from time to time prior to the Commitment Termination
Date, upon the request of any Borrower, Letter of Credit Obligations by causing
Letters of Credit to be issued by GE Capital or a Subsidiary thereof or a bank
or other legally authorized Person selected by or acceptable to Agent in its
sole discretion (each, an "L/C Issuer") for Borrowers' account on behalf of a
Credit Party and guaranteed by Agent; provided, that if the L/C Issuer is a
Lender, then such Letters of Credit shall not be guaranteed by Agent but rather
each Lender shall, subject to the terms and conditions hereinafter set forth,
purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter of
Credit Obligations shall not at any time exceed the lesser of (i) $10,000,000
(the "L/C Sublimit") and (ii) the Maximum Amount less the aggregate outstanding
principal balance of the Revolving Credit Advances. No such Letter of Credit
shall have an expiry date that is more than one year following the date of
issuance thereof, unless otherwise determined by the Agent, in its sole
discretion, and neither Agent nor Lenders shall be under any obligation to incur
Letter of Credit Obligations in respect of, or purchase risk participations in,
any Letter of Credit having an expiry date that is later than five (5) Business
Days prior to the Commitment Termination Date; provided, that any Letter of
Credit may provide for a renewal thereof for additional one (1) year periods
(which shall in no event extend beyond the date which is five (5) Business Days
prior to the Commitment Termination Date).
 
(b) Advances Automatic; Participations.
 
(i) In the event that Agent or any Lender shall make any payment on or pursuant
to any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Credit Advance under Section 1.1(a) of
the Agreement regardless of whether a Default or Event of Default has occurred
and is continuing and notwithstanding any Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Lender to make available to Agent for Agent's own account its Pro Rata
Share of any such Revolving Credit Advance or payment by Agent under or in
respect of a Letter of Credit shall not relieve any other Lender of its
obligation hereunder to make available to Agent its Pro Rata Share thereof, but
no Lender shall be responsible for the failure of any other Lender to make
available such other Lender's Pro Rata Share of any such payment.
 
Annex B - 1

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(ii) If it shall be illegal or unlawful for any Borrower to incur Revolving
Credit Advances as contemplated by paragraph (b)(i) above because of an Event of
Default described in Sections 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any Lender to be deemed to have assumed a ratable share
of the reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is
a Lender, then (A) immediately and without further action whatsoever, each
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender's Pro Rata Share (based on the Revolving Loan
Commitments) of the Letter of Credit Obligations in respect of all Letters of
Credit then outstanding and (B) thereafter, immediately upon issuance of any
Letter of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Lender's Pro Rata Share (based on
the Revolving Loan Commitments) of the Letter of Credit Obligations with respect
to such Letter of Credit on the date of such issuance. Each Lender shall fund
its participation in all payments or disbursements made under the Letters of
Credit in the same manner as provided in the Agreement with respect to Revolving
Credit Advances.
 
(c) Cash Collateral.
 
(i) If Borrowers are required to provide cash collateral for any Letter of
Credit Obligations pursuant to the Agreement prior to the Commitment Termination
Date, Borrowers will pay to Agent for the ratable benefit of itself and Lenders
cash or cash equivalents acceptable to Agent ("Cash Equivalents") in an amount
equal to one hundred five percent (105%) of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
Borrowers. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution acceptable to Agent. The Cash Collateral Account shall be
in the name of Borrowers and shall be pledged to, and subject to the control of,
Agent, for the benefit of Agent and Lenders, in a manner satisfactory to Agent.
Each Borrower hereby pledges and grants to Agent, on behalf of itself and
Lenders, a security interest in all such funds and Cash Equivalents held in the
Cash Collateral Account from time to time and all proceeds thereof, as security
for the payment of all amounts due in respect of the Letter of Credit
Obligations and other Obligations, whether or not then due. The Agreement,
including this Annex B, shall constitute a security agreement under applicable
law.
 
(ii) If any Letter of Credit Obligations, whether or not then due and payable,
shall for any reason be outstanding on the Commitment Termination Date,
Borrowers shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit and guaranties thereof,
if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guaranty of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
30 additional days) as, and in an amount equal to one hundred five percent
(105%) of, the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding Letter of Credit Obligations relate
and shall be issued by a Person, and shall be subject to such terms and
conditions, as are satisfactory to Agent in its reasonable discretion.
 
Annex B - 2

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(iii) From time to time after funds are deposited in the Cash Collateral Account
by any Borrower, whether before or after the Commitment Termination Date, Agent
may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, and in such order as Agent may elect, as
shall be or shall become due and payable by such Borrower to Agent and Lenders
with respect to such Letter of Credit Obligations of such Borrower and, upon the
satisfaction in full of all Letter of Credit Obligations of such Borrower, to
any other Obligations of any Borrower then due and payable.
 
(iv) No Borrower nor any Person claiming on behalf of or through any Borrower
shall have any right to withdraw any of the funds or Cash Equivalents held in
the Cash Collateral Account, except that upon the termination of all Letter of
Credit Obligations and the payment of all amounts payable by Borrowers to Agent
and Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be applied to other Obligations then due and owing and upon
payment in full of such Obligations, any remaining amount shall be paid to
Borrowers or as otherwise required by law. Interest earned on deposits in the
Cash Collateral Account shall be for the account of Borrowers.
 
(d) Fees and Expenses. Borrowers agree to pay to Agent for the benefit of
Lenders, as compensation to such Lenders for Letter of Credit Obligations
incurred hereunder, (i) all costs and expenses incurred by Agent or any Lender
on account of such Letter of Credit Obligations, and (ii) for each month during
which any Letter of Credit Obligation shall remain outstanding, a fee (the
"Letter of Credit Fee") in an amount equal to the Applicable Revolver LIBOR
Margin. Such fee shall be paid to Agent for the benefit of the Lenders in
arrears, on the first day of each month and on the Commitment Termination Date.
In addition, Borrowers shall pay to any L/C Issuer, on demand, such fees
(excluding all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
 
(e) Request for Incurrence of Letter of Credit Obligations. Borrowers shall give
Agent at least 2 Business Days' prior written notice requesting the incurrence
of any Letter of Credit Obligation. The notice shall be accompanied by the form
of the Letter of Credit (which shall be acceptable to the L/C Issuer) and a
completed application for standby Letter of Credit or application and agreement
for documentary Letter of Credit or application for documentary Letter of Credit
(as applicable), each to be in form and substance satisfactory to Agent, in its
reasonable discretion. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrowers and approvals by Agent and
the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrowers,
Agent and the L/C Issuer.
 
Annex B - 3

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(f) Obligation Absolute. The obligation of Borrowers to reimburse Agent and
Lenders for payments made with respect to any Letter of Credit Obligation shall
be absolute, unconditional and irrevocable, without necessity of presentment,
demand, protest or other formalities, and the obligations of each Lender to make
payments to Agent with respect to Letters of Credit shall be unconditional and
irrevocable. Such obligations of Borrowers and Lenders shall be paid strictly in
accordance with the terms hereof under all circumstances including the
following:
 
(i) any lack of validity or enforceability of any Letter of Credit or the
Agreement or the other Loan Documents or any other agreement;
 
(ii) the existence of any claim, setoff, defense or other right that any
Borrower or any of their respective Affiliates or any Lender may at any time
have against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such transferee may be acting), Agent, any
Lender, or any other Person, whether in connection with the Agreement, the
Letter of Credit, the transactions contemplated herein or therein or any
unrelated transaction (including any underlying transaction between any Borrower
or any of their respective Affiliates and the beneficiary for which the Letter
of Credit was procured);
 
(iii) any draft, demand, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
 
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit or such
guaranty;
 
(v) any other circumstance or event whatsoever, that is similar to any of the
foregoing; or
 
(vi) the fact that a Default or an Event of Default has occurred and is
continuing.
 
(g) Indemnification; Nature of Lenders' Duties.
 
(i) In addition to amounts payable as elsewhere provided in the Agreement,
Borrowers hereby agree to pay and to protect, indemnify, and save harmless Agent
and each Lender from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and allocated costs of internal counsel) that Agent or any Lender may incur
or be subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or guaranty thereof, or (B) the failure of Agent or any
Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or guaranty thereof as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than to the
extent solely as a result of the bad faith, gross negligence or willful
misconduct of Agent or such Lender (as finally determined by a court of
competent jurisdiction).
 
Annex B - 4

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(ii) As between Agent and any Lender and Borrowers, Borrowers assume all risks
of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries, of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law, neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions required
in order to demand payment under such Letter of Credit; provided, that in the
case of any payment by Agent under any Letter of Credit or guaranty thereof,
Agent shall be liable to the extent such payment was made solely as a result of
its bad faith, gross negligence or willful misconduct (as finally determined by
a court of competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (D) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they may be in cipher; (E) errors in interpretation of technical
terms; (F) any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof; (G) the credit of the proceeds of any
drawing under any Letter of Credit or guaranty thereof; and (H) any consequences
arising from causes beyond the control of Agent or any Lender. None of the above
shall affect, impair, or prevent the vesting of any of Agent's or any Lender's
rights or powers hereunder or under the Agreement.
 
(iii) Nothing contained herein shall be deemed to limit or to expand any
waivers, covenants or indemnities made by Borrowers in favor of any L/C Issuer
in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among Borrowers and such L/C
Issuer.
 

Annex B - 5

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ANNEX C (Section 1.8)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
CASH MANAGEMENT SYSTEMS
 
Borrowers shall, and shall cause their respective Subsidiaries to, establish and
maintain the Cash Management Systems described below:
 
(a) Borrowers may maintain, in their names, one or more accounts (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a bank
reasonably acceptable to Agent into which (i) Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances made to Borrowers and
(ii) proceeds of any checks, cash or other items of payment received by any
Borrower shall be deposited.
 
(b) On or before the date of the making of the initial Revolving Credit Advance
or the incurrence of the initial Letter of Credit Obligations, each bank where a
Disbursement Account is maintained and all other banks identified in Disclosure
Schedule 3.19 (each, a "Relationship Bank") shall have entered into tri-party
deposit account control agreements with Agent, for the benefit of itself and
Lenders, and Borrowers and the applicable Subsidiaries thereof, as applicable,
in form and substance reasonably acceptable to Agent, which shall become
operative on or prior to the date of the making of the initial Revolving Credit
Advance or the incurrence of the initial Letter of Credit Obligations. Each such
deposit account control agreement shall provide, among other things, that
(i) the bank executing such agreement has no rights of setoff or recoupment or
any other claim against such account, as the case may be, other than for payment
of its service fees and other charges directly related to the administration of
such account and for returned checks or other items of payment and as may
otherwise be agreed to by Agent and (ii) the bank party thereto shall agree to
comply with Agent's instructions directing disposition of funds on deposit
without further consent of any Borrower or the applicable Subsidiary (as
applicable). Agent hereby agrees with each Credit Party that (A) Agent shall not
deliver to any bank described above any notice directing disposition of funds on
deposit unless and until the occurrence and continuance of an Event of Default
and (B) promptly upon the cure or waiver of the Event of Default that gave rise
to the notice in the preceding clause (A), so long as no other Event of Default
has occurred and is continuing at such time, Agent shall deliver written notice
to the applicable bank described above notifying such bank that the funds on
deposit shall thereafter be disposed of as directed by the Credit Parties;
provided, that in the event the applicable bank refuses to dispose of funds on
deposit as directed by the Credit Parties after receipt of such written notice,
the Agent agrees to terminate the applicable tri-party deposit account control
agreement with such bank so long as prior to such termination such bank has
executed and delivered to Agent a replacement tri-party deposit account control
agreement, in form and substance described above.
 
Annex C - 1

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(c) So long as no Event of Default has occurred and is continuing, any Borrower
may amend Disclosure Schedule 3.19 to add or replace a Relationship Bank or
replace any Disbursement Account; provided, that (i) Agent shall have consented
in writing in advance to the opening of such account with the relevant bank and
(ii) prior to the time of the opening of such account, Borrowers or their
Subsidiaries, as applicable, and such bank shall have executed and delivered to
Agent a tri-party deposit account control agreement, in the form and substance
described above. Borrowers or their applicable Subsidiaries shall close any of
their accounts (and establish replacement accounts in accordance with the
foregoing sentence) promptly and in any event within 30 days following written
notice from Agent that the creditworthiness of any bank holding an account is no
longer acceptable in Agent's reasonable judgment, or as promptly as practicable
and in any event within 60 days following written notice from Agent that the
operating performance, funds transfer or availability procedures or performance
with respect to accounts of the bank holding such accounts or Agent's liability
under any tri-party deposit account control agreement with such bank is no
longer acceptable in Agent's reasonable judgment.
 
(d) Following the occurrence and during the continuance of an Event of Default,
at the request of Agent or Requisite Lenders Borrowers shall (i) establish lock
boxes ("Lock Boxes") and/or blocked accounts ("Blocked Accounts") at one or more
of the banks set forth in Disclosure Schedule 3.19, and shall request in writing
and otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes, (ii) deposit and cause their
Subsidiaries to deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all cash,
checks, drafts or other similar items of payment relating to or constituting
payments made in respect of any and all Collateral (whether or not otherwise
delivered to a Lock Box) into one or more Blocked Accounts in such Borrower's
name or any such Subsidiary's name and at a Relationship Bank and (iii) deliver
to each Relationship Bank instructions, revocable only upon Agent's express
written authorization, directing each Relationship Bank to immediately forward
all amounts on deposit to the Collection Account through daily sweeps from such
accounts into the Collection Account.
 
(e) The Disbursement Accounts, each account maintained with a Relationship Bank
and the Lock Boxes and Blocked Accounts (if any) shall be cash collateral
accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the Loans and all other Obligations, and in which
each Borrower and each Subsidiary thereof shall have granted a Lien to Agent, on
behalf of itself and Lenders, pursuant to the Security Agreement.
 
(f) All amounts deposited in the Collection Account shall be deemed received by
Agent in accordance with Section 1.10 and shall be applied (and allocated) by
Agent in accordance with Section 1.11. In no event shall any amount be so
applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account.
 
Annex C - 2

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(g) Each Borrower shall and shall cause its officers, employees, or other
Persons acting for or in concert with such Borrower (each a "Related Person") to
(i) at any time after the Agent or Requisite Lenders make the request referred
to in paragraph (d) of this Annex C and during the continuance of an Event of
Default, hold in trust for Agent, for the benefit of itself and Lenders, all
checks, cash and other items of payment received by any Borrower or any such
Related Person and (ii) within 1 Business Day after receipt by such Borrower or
any such Related Person of any checks, cash or other items of payment, deposit
the same into a deposit account subject to a deposit account control agreement
described herein. Each Borrower and each Related Person thereof acknowledges and
agrees that all cash, checks or other items of payment constituting proceeds of
Collateral are part of the Collateral. All proceeds of the sale or other
disposition of any Collateral, shall be deposited directly into a deposit
account subject to a deposit account control agreement described herein.
Annex C - 3

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ANNEX D (Section 2.1(a))
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
CLOSING CHECKLIST
 

In addition to, and not in limitation of, the conditions described in
Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date, except with respect to the items specified in
paragraph E(b), which items must be received by Agent in form and substance
satisfactory to Agent on or prior to the making of the initial Revolving Credit
Advance or the incurrence of the initial Letter of Credit Obligations (each
capitalized term used but not otherwise defined herein shall have the meaning
ascribed thereto in Annex A to the Agreement):
 
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
 
B. Revolving Notes. Duly executed originals of the Revolving Notes for each
applicable Lender, dated the Closing Date.
 
C. Insurance. Satisfactory evidence that the insurance policies required by
Section 5.4 are in full force and effect, together with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements, as
requested by Agent, in favor of Agent, on behalf of Lenders.
 
D. Security Interests and Code Filings. Evidence satisfactory to Agent that
Agent (for the benefit of itself and Lenders) has a valid and perfected first
priority security interest in the Collateral, subject only to Permitted
Encumbrances, including (i) such documents duly executed by each Credit Party as
Agent may request in order to perfect its security interests in the Collateral
and (ii) copies of Code search reports listing all effective financing
statements that name any Credit Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral.
 
E. Cash Management System; Blocked Account Agreements. Evidence satisfactory to
Agent that Cash Management Systems complying with Annex C to the Agreement have
been established and are currently being maintained in the manner set forth in
such Annex C, together with copies of duly executed deposit account control
agreements, reasonably satisfactory to Agent, with each bank where a
Disbursement Account is maintained as required by Annex C.
 
F. Charter and Good Standing. For each Borrower and Guarantor, such Person's
(a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation and
(c) good standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, each dated a recent date prior to the Closing Date and certified
by the applicable Secretary of State or other authorized Governmental Authority.
 
Annex D - 1

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G. Bylaws and Resolutions. For each Borrower and Guarantor, (a) such Person's
bylaws (or analogous governing agreement), together with all amendments thereto
and (b) resolutions of such Person's Board of Directors (or analogous governing
board), approving and authorizing the execution, delivery and performance of the
Loan Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
 
H. Incumbency Certificates. For each Borrower and Guarantor, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
 
I. Opinions of Counsel. Duly executed originals of opinions of Vinson & Elkins,
counsel for the Credit Parties, together with local counsel opinions of the
Credit Parties' Florida local counsel, each in form and substance reasonably
satisfactory to Agent and its counsel, dated the Closing Date.
 
J. OpCoB Pledge Agreement. Duly executed originals of the OpCoB Pledge Agreement
accompanied by (as applicable) (a) share certificates representing all of the
outstanding certificated Stock being pledged pursuant to the OpCoB Pledge
Agreement and stock powers for such share certificates executed in blank and
(b) the original instruments evidencing Indebtedness, if any, being pledged
pursuant to the OpCoB Pledge Agreement, duly endorsed in blank.
 
K. Accountants' Letters. A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit
Parties to communicate with Agent and Lenders in accordance with Section 4.2.
 
L. Fee Letter. Duly executed originals of the GE Capital Fee Letter.
 
M. Officer's Certificate. Agent shall have received duly executed originals of a
certificate of the chief financial officer of each Borrower, in his or her
capacity as an officer but not individually, dated the Closing Date, stating
that, since December 31, 2006 (a) no event or condition has occurred or is
existing which could reasonably be expected to have a Material Adverse Effect;
(b) no Litigation has been commenced which, if successful, could reasonably be
expected to have a Material Adverse Effect or could challenge any of the
transactions contemplated by the Agreement and the other Loan Documents; and
(c) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of any Borrower or any of its
Subsidiaries.
 
Annex D - 2

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N. Audited Financials; Financial Condition. Agent shall have received the
Financial Statements, Projections and other materials set forth in Section 3.4,
certified by Holdings' chief financial officer, in each case in form and
substance reasonably satisfactory to Agent, and Agent shall be satisfied, in its
sole discretion, with all of the foregoing.
 
O. Reaffirmation. Agent shall have received duly executed originals of a Consent
and Reaffirmation of Guaranty dated the Closing Date executed by each Guarantor.
 
P. Other Documents. Such other certificates, documents and agreements respecting
any Credit Party as Agent may reasonably request.
 
Annex D - 3

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ANNEX E (Section 4.1(a))
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
FINANCIAL STATEMENTS AND PROJECTIONS—REPORTING
 

Borrowers shall deliver or cause to be delivered to Agent or to Agent and
Lenders, as indicated, the following:
 
(a) Quarterly Financials. To Agent and Lenders, within 45 days after the end of
each Fiscal Quarter, consolidated financial information regarding Holdings and
its Subsidiaries, certified by the chief financial officer of Holdings,
including (i) unaudited balance sheets as of the close of such Fiscal Quarter
and the related statements of income and cash flow for that portion of the
Fiscal Year ending as of the close of such Fiscal Quarter and (ii) unaudited
statements of income and cash flows for such Fiscal Quarter, in each case
setting forth in comparative form the figures for the corresponding period in
the prior year, all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (A) a statement
in reasonable detail (each, a "Compliance Certificate") showing the calculations
used in determining compliance with each of the Financial Covenants that is
tested on a quarterly basis and (B) the certification of the chief financial
officer of Holdings that (i) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial
position, results of operations and statements of cash flows of Holdings and its
Subsidiaries, on both a consolidated basis, as at the end of such Fiscal Quarter
and for that portion of the Fiscal Year then ended, and (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Default or Event of Default in existence as of such time or,
if a Default or Event of Default has occurred and is continuing, describing the
nature thereof and all efforts undertaken to cure such Default or Event of
Default.
 
(b) Operating Plan. To Agent and Lenders, as soon as available, but not later
than 45 days after the end of each Fiscal Year, an annual operating plan for
Borrowers, on a consolidated basis, approved by the Board of Directors of
Borrowers, for the following Fiscal Year, which (i) includes a statement of all
of the material assumptions on which such plan is based, (ii) includes monthly
balance sheets, income statements and statements of cash flows for the following
year and (iii) integrates sales, gross profits, operating expenses, operating
profit and cash flow projections, all prepared on the same basis and in similar
detail as that on which operating results are reported (and in the case of cash
flow projections, representing management's good faith estimates of future
financial performance based on historical performance), and including plans for
personnel, Capital Expenditures and facilities.
 
(c) Annual Audited Financials. To Agent and Lenders, within 120 days after the
end of each Fiscal Year, audited Financial Statements for Holdings and its
Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year, which
Financial Statements shall be prepared in accordance with GAAP and certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (i) a statement prepared in reasonable detail showing
the calculations used in determining compliance with each of the Financial
Covenants as of the end of such Fiscal Year, (ii) the annual letters to such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters, and (iii) the certification of the
chief executive officer or chief financial officer of Borrowers that all such
Financial Statements present fairly in accordance with GAAP the financial
position, results of operations and statements of cash flows of Holdings and its
Subsidiaries on a consolidated basis, as at the end of such Fiscal Year and for
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
 
Annex E - 1

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(d) Management Letters. To Agent and Lenders, within 5 Business Days after
receipt thereof by any Credit Party, copies of all management letters, exception
reports or similar letters or reports received by such Credit Party from its
independent certified public accountants.
 
(e) Default Notices. To Agent and Lenders, as soon as practicable, and in any
event within 5 Business Days after an executive officer of any Borrower has
actual knowledge of the existence of any Default, Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
 
(f) SEC Filings and Press Releases. To Agent and Lenders, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices
and proxy statements made publicly available by any Credit Party to its security
holders; (ii) all regular and periodic reports and all registration statements
and prospectuses, if any, filed by any Credit Party with any securities exchange
or with the Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Person.
 
(g) Subordinated Debt and Equity Notices. To Agent, as soon as practicable,
copies of all material written notices given or received by any Credit Party
with respect to any Subordinated Debt or Stock of such Person, and, within 2
Business Days after any Credit Party obtains knowledge of any matured event of
default with respect to any Subordinated Debt, notice of such event of default.
 
(h) Supplemental Schedules. To Agent, supplemental disclosures, if any, required
by Section 5.6.
 
Annex E - 2

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(i) Litigation. To Agent in writing, promptly upon learning thereof, notice of
any Litigation commenced or threatened against any Credit Party that (i) seeks
damages in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is asserted
or instituted against any Plan, its fiduciaries or its assets or against any
Credit Party or ERISA Affiliate in connection with any Plan, (iv) alleges
criminal misconduct by any Credit Party, or (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Liabilities.
 
(j) Insurance Notices. To Agent, disclosure of losses or casualties required by
Section 5.4.
 
(k) Investments. To Agent, notice of the transfer of any investments identified
in Section 6.2(c) in an aggregate amount greater than $10,000,000 to any account
not subject to a Control Letter in effect on the Closing Date or entered into
after the Closing Date in accordance with the last sentence of Section 5.10 of
the Credit Agreement.
 
(k) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall from time to time reasonably request.
 
Annex E - 3

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ANNEX F (Section 6.10)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
FINANCIAL COVENANTS
 
Borrowers shall not breach or fail to comply with any of the following financial
covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
 
(a) Minimum Fixed Charge Coverage Ratio. Holdings and its Subsidiaries shall
have on a consolidated basis at the end of each Fiscal Quarter, a Fixed Charge
Coverage Ratio for the twelve-month period then ended (or with respect to the
Fiscal Quarters ending on or before December 31, 2007, the period commencing on
March 31, 2007, and ending on the last day of such Fiscal Quarter) of not less
than 1.20 to 1.00.
 
(b) Maximum Leverage Ratio. Holdings and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter, a Leverage Ratio as of the
last day of such Fiscal Quarter and for the twelve-month period then ended of
not more than 2.50 to 1.00
 
Annex F - 1

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Unless otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. If any "Accounting Changes" (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Borrowers, Agent and Lenders agree to enter into negotiations in order to
amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions),
(ii) changes in accounting principles concurred in by any Borrower's certified
public accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17
and EITF 88-16, and the application of the accounting principles set forth in
FASB 109, including the establishment of reserves pursuant thereto and any
subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. All such adjustments resulting from expenditures made subsequent to
the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDA in such
period. If Agent, Borrowers and Requisite Lenders agree upon the required
amendments, then after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Agent, Borrowers and Requisite Lenders cannot agree upon the required amendments
within 30 days following the date of implementation of any Accounting Change,
then all Financial Statements delivered and all calculations of financial
covenants and other standards and terms in accordance with the Agreement and the
other Loan Documents shall be prepared, delivered and made without regard to the
underlying Accounting Change. For purposes of Section 8.1, a breach of a
Financial Covenant contained in this Annex F shall be deemed to have occurred as
of the earlier of the date the Financial Statements reflecting such breach are
delivered to Agent or the date such Financial Statements were required to be
delivered to Agent.
 
Annex F - 2

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ANNEX G (Section 9.9(a))
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
WIRE TRANSFER INFORMATION
 

Name:
General Electric Capital Corporation
Bank:
Deutsche Bank Trust Company Americas
New York, New York
ABA #:
021001033
Account #:
50271079
Account Name:
GECC/CAF Depository
Reference:
CFC Odyssey

Annex G - 1

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ANNEX H (Section 11.10)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
NOTICE ADDRESSES
 

(A) If to Agent or GE Capital, at
 
General Electric Capital Corporation
 
500 West Monroe Street, 11th Floor
 
Chicago, IL 60661
 
 
 
Attention: Odyssey Account Manager
 
Telecopier No.: (312) 441-7598
 
Telephone No.: (312) 463-3814
 
 
 
with copies to:
 
General Electric Capital Corporation
 
Two Bethesda Metro Center, Suite 600
 
Bethesda, Maryland 20814
 
Attention: General Counsel
 
Telecopier No.: (301) 664-9866
 
(B) If to Borrowers, at
 
Odyssey HealthCare, Inc.
 
717 North Harwood, Suite 1500
 
Dallas, Texas 75201
 
Attention: General Counsel
 
Telecopier No.: (214) 922-9752
 
Telephone No.: (214) 245-3176
 
 
 
with copies to:
 
Vinson & Elkins L.L.P.
 
3700 Trammell Crow Center
 
2100 Ross Avenue
 
Dallas, Texas 75201-2975
 
Attention: James Markus
 
Telecopier No.: (214) 999-7836
 
Telephone No.: (214) 220-7836
 

Annex H - 1

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ANNEX I (from Annex A - Commitments definition)
 
to
 
AMENDED AND RESTATED CREDIT AGREEMENT
 

Revolving Loan Commitment:
Lender(s)

$40,000,000
 

General Electric Capital Corporation
 

Annex I - 1

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