EXHIBIT 10.6
 
TERM LOAN AGREEMENT
 
THIS TERM LOAN AGREEMENT (together with all amendments, modifications and
supplements hereto and restatements hereof, this “Agreement”) is made and
entered into as of August 10, 2007 by and among WALCO INTERNATIONAL, INC.
(“Borrower”), a Delaware corporation, EACH OF THE CREDIT PARTIES WHICH IS NOW OR
HEREAFTER A GUARANTOR HEREUNDER, EACH OF THE FINANCIAL INSTITUTIONS WHICH IS A
SIGNATORY HERETO OR WHICH MAY FROM TIME TO TIME BECOME A PARTY HERETO
(individually, a “Lender” and collectively, the “Lenders”) and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity,
together with its successors and assigns, the “Agent”).
 
W I T N E S S E T H:
 
THAT, in consideration of the mutual covenants, agreements and undertakings
herein contained, the parties hereto agree as follows:
 
1. Definitions.
 
1.1. Certain Defined Terms.  Unless a particular word or phrase is otherwise
defined or the context otherwise requires, capitalized words and phrases used in
the Loan Documents have the meanings provided below.
 
Accounts shall have the meaning set forth in Article 9 of the UCC and in the
PPSA.
 
Adjusted LIBO Rate shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the sum of (a) the product of (i) the LIBO Rate in
effect for such Interest Period and (ii) Statutory Reserves and (b) the
Applicable Margin.
 
Affiliate of any Person shall mean any other Person which controls or is
controlled by or under common control with such Person.  For purposes of this
definition, “control” (including “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person through the
ownership of securities or by contract; provided that no Lender shall be an
Affiliate of the Borrower. Without limiting the generality of the foregoing,
control of the right to vote of five percent (5%) or more of all voting
securities of a Person or beneficial ownership of five percent (5%) of the
outstanding equity interests in such Person shall be deemed to be control for
purposes of compliance with the provisions of Section 7.6 hereof; provided,
however, that with respect to any key management employees of the Borrower,
control of the right to vote of five percent (5%) or greater, but less than
fifteen percent (15%), of all voting securities of the Parent and/or the
Borrower or beneficial ownership of five percent (5%) or greater, but less than
fifteen percent (15%), of the outstanding equity interests in the Parent and/or
the Borrower by such key management employee shall not be deemed to be control
for purposes of compliance with the provisions of Section 7.6 hereof.
 
Agent shall have the meaning specified in the preamble to this Agreement.
 
Alternate Base Rate shall mean, for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the sum of (a) the greater of (i)
the Prime Rate (computed on the basis of the actual number of days elapsed over
a 360-day year) in effect on such day, and (ii) the Federal Funds Effective Rate
(computed on the basis of the actual number of days elapsed over a 360-day year)
in effect for such day plus ½ of 1% and (b) the Applicable Margin.  For purposes
of this Agreement, any change in the Alternate Base Rate due to a change in the
Prime Rate or Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Effective Rate,
respectively.  If for any reason the Agent shall have determined (which
determination shall be conclusive and binding, absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (a)(ii) until the circumstances giving rise to such
inability no longer exist.
 
Alternate Base Rate Borrowing shall mean, as of any date, that portion of the
principal balance of the Term Loans bearing interest at the Alternate Base Rate
as of such date.
 
Annual Audited Financial Statements shall mean (a) the annual financial
statements of the Credit Parties and their Subsidiaries, including all notes
thereto, which statements shall include, on a Consolidated basis, a balance
sheet as of the end of such fiscal year and a statement of operations, a
retained earnings statement and a statement of cash flows for such fiscal year,
all setting forth in comparative form the corresponding figures from the
previous fiscal year and accompanied by a report and opinion of independent
certified public accountants with an accounting firm of national standing and
with a reputation satisfactory to the Agent, which report shall not contain any
material qualification (and be without comment as to the accountants’ opinion
whether the Borrower is a “going concern” or can continue to be a “going
concern”), except that such report may contain qualification with respect to new
accounting principles mandated by the Financial Accounting Standards Board (or
its successor organization), and shall state that such financial statements, in
the opinion of such accountants, present fairly, in all material respects, the
financial position of such Person as of the date thereof and the results of its
operations and cash flows for the period covered thereby in conformity with GAAP
and (b) to the extent required by the Agent, annual consolidating financial
statements of the Credit Parties and their Subsidiaries containing a balance
sheet as of the end of such fiscal year and a statement of operations for such
fiscal year prepared in reasonable detail.  Such statements shall be accompanied
by a certificate of such accountants that in making the appropriate audit and/or
investigation in connection with such report and opinion, such accountants did
not become aware of any Default or Event of Default with respect to any of the
financial covenants set forth in Sections 7.11 and 7.12 hereof, or if in the
opinion of such accountant any such Default or Event of Default exists, a
description of the nature and status thereof.
 
Applicable Lending Office shall mean, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of an Alternate Base Rate Borrowing and such
Lender’s LIBOR Lending Office in the case of a LIBOR Borrowing.
 
Applicable Margin shall mean, a rate per annum of 2.00% for LIBOR Borrowings and
a rate per annum of 1.00% for Alternate Base Rate Borrowings;
 
Approved Fund shall mean any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers, advises or
manages a Lender.
 
Assignment and Acceptance shall have the meaning specified in Section 10.12(c)
hereof.
 
Blocked Person shall mean (i) a Person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order No. 13224; (ii) a
Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;  (iii) a Person or entity with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law; (iv) a Person or entity that commits, threatens or conspires
to commit or supports “terrorism” as defined in the Executive Order No.
13224;  (v) a Person or entity that is named as a “specially designated
national” on the most current list published by the U.S. Treasury Department
Office of Foreign Asset Control at its official website or any replacement
website or other replacement official publication of such list, or (vi) a Person
or entity who is affiliated or associated with a Person or entity listed above.
 
Borrower shall have the meaning specified in the preamble of this Agreement.
 
Business Day shall mean any day when commercial banking institutions in San
Francisco, California, are open for the transaction of banking business and the
Lenders’ Applicable Lending Offices are generally open for business; provided,
however, that with respect to LIBOR Borrowings, Business Day shall also mean a
day on which transactions in dollar deposits between lenders may be carried on
in the London eurodollar interbank market.
 
Business Entity shall mean corporations, partnerships, limited liability
companies, joint ventures, joint stock associations, business trusts and other
business entities.
 
Canadian Subsidiary shall mean any Subsidiary of that is organized and domiciled
in the Canada.
 
Capital Expenditures shall mean, with respect to any Person for any period, all
capital expenditures of such Person, on a Consolidated basis, for such period
(including without limitation, the aggregate amount of Capital Lease Obligations
incurred during such period which are required to be capitalized and reported as
a liability on the consolidated balance sheet of such Person), determined in
accordance with GAAP, consistently applied.  For the avoidance of doubt, the
term “Capital Expenditures” shall not include those items described in Section
7.4(e)(7).
 
Capital Lease Obligations shall mean the obligations of a Person to pay that
portion of rent or other amounts constituting payments of principal under a
lease of (or other agreement conveying the right to use) real and/or personal
Property which obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including Statement
of Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board, as amended), provided that for purposes of this Agreement, the amount of
such obligations shall be only the capitalized amount thereof, determined in
accordance with GAAP (including such Statement No. 13).
 
Cash Dividends shall mean, with respect to any Person for any period, all fixed
and calculable cash dividend payments actually made with respect to any Equity
Interests of such Person for such period.
 
Cash Management Obligations shall mean any and all obligations and liabilities
of Borrower or any of its Subsidiaries to the Revolving Credit Agent or any of
the Revolving Credit Lenders, whether direct, indirect, joint, several, or joint
and several, arising under or in any way relating to or incurred in connection
with (a) any deposit accounts maintained by Borrower or any of its Subsidiaries
with the Revolving Credit Agent or any of the Revolving Credit Lenders or any of
their respective Affiliates, (b) any cash management services or treasury
administration services provided by the Revolving Credit Agent or any of the
Revolving Credit Lenders or any of their respective Affiliates (c) any
documentation relating thereto, or (d) any services or transactions relating
thereto, including without limitation, daylight overdraft exposure and credit
card, debit card and other similar products.
 
Change of Control shall mean the occurrence of any of the following at any time
after the Closing Date:
 
(a) at any time prior the consummation of an initial public offering of any
Equity Interests in the Parent, Charlesbank and/or its respective Affiliates
shall fail to either (i) beneficially own in the aggregate, directly or
indirectly, more than 50% of the aggregate voting power of all issued and
outstanding classes of Equity Interests in the Parent having the right to elect
Board of Directors of the Parent, or (ii) have the right to cause enough of
their nominees in the aggregate to be elected or appointed, and remain serving
at all times as, Board of Directors of the Parent so as to constitute a majority
of such Board of Directors;
 
(b) at any time after the consummation of an initial public offering of any
Equity Interests in the Parent, any Person and/or its respective Affiliates
shall either (i) beneficially own in the aggregate, directly or indirectly, 35%
or more of the aggregate voting power of all issued and outstanding classes of
Equity Interests in the Parent having the right to elect Board of Directors of
the Parent, or (ii) have the right to cause enough of their nominees in the
aggregate to be elected or appointed, and remain serving at all times as, Board
of Directors of the Parent so as to constitute a majority of such Board of
Directors;
 
(c) at any time the Parent shall cease to own directly, free and clear of all
Liens (other than in favor of the Collateral Agent for the ratable benefit of
the Lenders and subordinate and inferior Liens permitted under Section 7.2),
both legal title to and beneficial ownership of 100% of all issued and
outstanding Equity Interests of the Borrower; provided, however, that a transfer
of the legal title to and beneficial ownership of Equity Interests of the
Borrower having no more than 10% of the aggregate voting power of all classes of
Equity Interests in the Borrower or 10% of the total economic equity interests
of the Borrower to management employees of the Borrower shall not trigger a
Change of Control; or
 
(d) at any time (i) the Parent shall cease to have the right to elect, directly
or indirectly, by virtue of beneficial ownership of Equity Interests of the
Borrower, contract or otherwise, at least a majority in number of the members of
the Board of Directors of the Borrower or (ii) less than a majority in number of
the members of the Board of Directors of the Borrower shall have been elected or
appointed, directly or indirectly, by the Parent.
 
As used above, “beneficially own” shall have the same meaning as defined in
Rules 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as amended, or
any successor provision thereto.
 
Charlesbank shall mean Charlesbank Equity Fund VI, Limited Partnership, a
Massachusetts limited partnership.
 
Closing Date shall mean the date on which each requirement of Section 4 is
satisfied or waived by the Agent.
 
Code shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
 
Collateral shall mean all collateral and security as described in the Security
Documents.
 
Collateral Agent shall mean JPMorgan Chase Bank, N.A., in its capacity as the
collateral agent of the holders of the Revolving Credit Agreement Debt and the
Obligations with respect to the Collateral in accordance with and pursuant to
the terms of the First Lien Intercreditor Agreement, and any successor
collateral agent under the terms of the First Lien Intercreditor Agreement.
 
Consequential Loss shall mean, with respect to (a) the payment of principal of
or interest on a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period, (b) the failure to borrow or convert a LIBOR
Borrowing on the date specified by the Borrower for any reason, or (c) any
cessation of the Adjusted LIBO Rate to apply to the Term Loans or any part
thereof pursuant to Section 2.7 hereof, in each case whether voluntary or
involuntary, any loss, expense, penalty, premium or liability incurred by any of
the Lenders or the Agent as a result thereof, including without limitation, any
interest paid by any of the Lenders to lenders of funds borrowed by it to make
or carry the Term Loans and any other costs and expenses sustained or incurred
in liquidating or employing deposits from third parties acquired to effect or
maintain the Term Loans.
 
Consolidated shall mean, for any Person, as applied to any financial or
accounting term, such term determined on a consolidated basis in accordance with
GAAP (except as otherwise required herein) for such Person and all Subsidiaries
thereof.
 
Contingent Obligation shall mean, as to any Person, any obligation of such
Person guaranteeing the payment or performance of any Indebtedness, leases,
dividends or other obligations (collectively “primary obligations”) of any other
Person (the “primary obligor”), whether directly or indirectly, including
without limitation, any obligation of the Person for whom Contingent Obligations
is being determined, (a) to purchase any such primary obligation or other
property constituting direct or indirect security therefor, (b) assume or
contingently agree to become or be secondarily liable in respect of any such
primary obligation, (c) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital or
equity capital for the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (d) to 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, or (e) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of checks or other
negotiable instruments in the ordinary course of business.
 
Contribution Agreement shall mean any Contribution Agreement executed by and
among the Borrower and its Subsidiaries and as the same may be further amended,
modified, supplemented, restated and joined in pursuant to a Joinder Agreement,
from time to time.
 
Credit Parties shall mean the Borrower and the Guarantors, and Credit Party
shall mean any one of such Persons.
 
Debt Service Expense shall mean, with respect to the Credit Parties for any
period, the aggregate of regularly scheduled principal payments of all Funded
Debt (including, without limitation, regularly scheduled principal payments of
the Term Loans and any mandatory principal payments of the Term Loans pursuant
to Section 2.3(a), but excluding any principal payments of the Revolving Loans
(as defined in the Revolving Credit Agreement) to the extent there is not an
equivalent permanent reduction in the Total Revolving Credit Commitment (as
defined in the Revolving Credit Agreement)), made or to be made by such Person
during such period, on a Consolidated basis, in accordance with GAAP,
consistently applied.  Notwithstanding the foregoing, for purposes of
calculating the Debt Service Expense for any period ending prior to September
26, 2007, the component of the Debt Service Expense for regularly scheduled
principal payments of the Term Loans (but not any other regularly scheduled
principal payments of any other Funded Debt, including without limitation, any
scheduled payments of the Term Loans under Section 2.3(a)) shall be deemed to be
$450,000.
 
Default Rate shall mean, on any day, as follows: (a) with respect to principal
which is outstanding under any Term Note, the sum of the interest applicable
pursuant to the terms of this Agreement on such day plus two percent per annum
(it being understood that the Default Rate with respect to the applicable
principal amount shall only be calculated with reference to the applicable
Adjusted LIBO Rate until the Interest Period applicable thereto expires, and
upon the expiration of such applicable Interest Period, the Default Rate for
such applicable principal amount shall be computed on the basis of the Alternate
Base Rate for such day plus two percent per annum), and (b) with respect to
accrued interest, fees and other Obligations (other than past due principal
outstanding under any Term Note), the sum of the Alternate Base Rate for such
day plus two percent per annum.
 
Discontinued Operations shall mean, as of any day, operations of any Credit
Party or any of its Subsidiaries which have been discontinued, and which, as of
such day, have been fully terminated, disposed of or liquidated.
 
Domestic Lending Office shall mean, with respect to any Lender, the office of
such Lender specified as its “Domestic Lending Office” opposite its name on the
signature pages hereof, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
 
Domestic Subsidiary shall mean any Subsidiary of that is organized and domiciled
in the Unites States of America.
 
EBITDA shall mean, with respect to the Credit Parties for any period, Net Income
for such period plus (a) without duplication and to only the extent deducted in
determining Net Income for such period, the sum of (i) Interest Expense, (ii)
federal, state and local income or franchise taxes, (iii) all amounts
attributable to depreciation and amortization expense, (iv) any extraordinary
charges, (v) Permitted Management Fees and customary and reasonable director’s
fees and board expenses for board of directors of the Credit Parties, (vi)
amounts used to repurchase from Charlesbank and/or any of its Affiliates the
equity securities of the Parent to the extent included within Permitted
Affiliate Transactions, and (vii) any other non-cash charges (including without
limitation, (A) the issuance of restricted stock or stock options, (B) equity
losses of Affiliates that are not a Subsidiary of any Credit Party, and (C) all
charges attributable to the use of the purchase accounting method), but
excluding any non-cash charge in respect of an item that was included in Net
Income in a prior period and any non-cash charge that relates to the write-down
or write-off of Inventory, minus (b) without duplication and to the extent
included in Net Income, (i) any cash payments made during such period in respect
of non-cash charges described in clause (a)(vii) taken in a prior period and
(ii) any extraordinary gains and any non-cash items of income, in each case of
such Person for such period, computed and calculated, without duplication, on a
Consolidated basis and in accordance with GAAP, consistently applied.
 
Eligible Assignee shall mean (i) a Lender, (ii) an Affiliate of a Lender, (iii)
an Approved Fund, or (iv) any other commercial lender, finance company,
insurance company, financial institution or fund reasonably acceptable to the
Agent and the Borrower; provided, however, that if an Event of Default has
occurred and is continuing, such approval by the Borrower shall not be required.
 
Environmental Claim shall mean any third party (including any Governmental
Authority) action, lawsuit, claim or proceeding (including claims or proceedings
at common law) which seeks to impose or alleges any liability for (i) pollution
or contamination by, or releases or threatened releases of, Hazardous Substances
into the air, surface water, ground water or land or the clean-up, abatement,
removal, remediation or monitoring of such pollution, contamination or Hazardous
Substances; (ii) generation, recycling, reclamation, handling, treatment,
storage, disposal or transportation of Hazardous Substances; (iii) exposure to
Hazardous Substances; (iv) the safety or health of employees or other Persons in
connection with any of the activities specified in any other subclause of this
definition; or (v) the manufacture, processing, distribution in commerce,
presence or use of Hazardous Substances.  An “Environmental Claim” includes a
common law action, as well as a proceeding to issue, modify or terminate an
Environmental Permit, or to adopt or amend a regulation, to the extent that such
a proceeding attempts to redress violations of the applicable permit, license,
or regulation as alleged by any Governmental Authority.
 
Environmental Liabilities shall mean all liabilities arising from any
Environmental Claim or Requirement of Environmental Law under any theory of
recovery, at law or in equity, and whether based on negligence, strict liability
or otherwise, including: remedial, removal, response, abatement, restoration
(including natural resources), investigative, or monitoring liabilities,
personal injury and damage to property, natural resources or injuries to
persons, and any other related costs, expenses, losses, damages, penalties,
fines or liabilities, including attorney’s fees and court costs.  Environmental
Liability shall mean any one of them.
 
Environmental Permit shall mean any permit, license, approval or other
authorization under any applicable law or regulation of the United States or of
any state, municipality or other subdivision thereof relating to pollution or
protection of health or the environment, including laws or regulations relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, Hazardous Substances or toxic materials or wastes into ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, recycling, presence, use, treatment,
storage, disposal, transport, or handling of wastes, pollutants, contaminants or
Hazardous Substances.
 
Equipment shall have the meaning set forth in Article 9 of the UCC and in the
PPSA.
 
Equity Interests shall mean as to a Business Entity, all capital stock,
partnership interests, membership interests or other indicia of equity rights,
including without limitation, any warrants, options or other rights to acquire
such interests, issued by such Business Entity from time to time.
 
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all rules, regulations, rulings and interpretations
adopted by the Internal Revenue Service or the Department of Labor thereunder.
 
ERISA Affiliate shall mean any trade or business (whether or not incorporated)
which together with the Borrower or any Subsidiary of the Borrower would be
treated as a single employer under the provisions of Title I or Title IV of
ERISA.
 
Event of Default shall mean any of the events specified in Section 8.1 hereof or
otherwise specified as an Event of Default in any other Loan Document, provided
there has been satisfied any requirement in connection with any such event for
the giving of notice or the lapse of time, or both, and Default shall mean any
of such events, whether or not any such requirement for the giving of notice, or
the lapse of any applicable grace or curative period (if any), or both, has been
satisfied.
 
Excess Cash Flow shall mean, for any fiscal year of the Credit Parties, the
amount, if any, of (a) the sum, without duplication, of (i) Net Income for such
fiscal year, (ii) the amount of all non-cash charges (including depreciation and
amortization, but excluding any depreciation and amortization applicable to
Discontinued Operations) deducted in arriving at such Net Income, (iii) the
aggregate net amount of non-cash loss on the disposition of property by the
Credit Parties and their Subsidiaries during such fiscal year (other than sales
of Inventory in the ordinary course of business), but only to the extent
deducted in arriving at such Net Income, (iv) equity losses during such fiscal
year attributable to Affiliates that are not a Subsidiary of any Credit Party,
but only to the extent deducted in arriving at such Net Income, and (v)
decreases, if any, in Net Working Capital as of the end of such fiscal year when
compared to Net Working Capital at the beginning of such fiscal year, minus (b)
the sum, without duplication, of (i) the amount of all non-cash credits included
in arriving at such Net Income, (ii) the aggregate amount Unfinanced Capital
Expenditures of the Credit Parties and their Subsidiaries during such fiscal
year, (iii) Debt Service Expense for such fiscal year, (iv) all optional
prepayments of the Term Loans during such fiscal year, (v) the aggregate net
amount of non-cash gain on the disposition of Property by the Credit Parties and
their Subsidiaries during such fiscal year (other than sales of Inventory in the
ordinary course of business), but only to the extent included in arriving at
such Net Income, (vi) amounts used during such fiscal year to repurchase from
Charlesbank and/or any of its Affiliates the equity securities of the Parent to
the extent included within Permitted Affiliate Transactions, but only to the
extent included in arriving at such Net Income, (vii) equity gains during such
fiscal year attributable to Affiliates that are not a Subsidiary of any Credit
Party, but only to the extent included in arriving at such Net Income, (viii)
increases, if any, in Net Working Capital as of the end of such fiscal year when
compared to Net Working Capital at the beginning of such fiscal year, and (ix)
Cash Dividends during such fiscal year to the extent permitted under Section
7.10.
 
Excess Interest Amount shall have the meaning attributed to such term in Section
2.14 hereof.
 
Federal Funds Effective Rate shall mean, for any day, a rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.
 
Financed Capital Expenditures shall mean (i) Capital Expenditures which are
financed at the time of purchase with Indebtedness otherwise permitted
hereunder, and (ii) Capital Lease Obligations to the extent the same constitute
Capital Expenditures otherwise permitted hereunder.
 
First Lien Intercreditor Agreement shall mean the Intercreditor and Collateral
Agency Agreement, dated as of the Closing Date, by and among the Borrower, the
other Credit Parties, the Agent, the Collateral Agent, and the Revolving Credit
Agent, as the same may be amended, modified, supplemented, renewed, restated or
replaced in accordance with the terms of this Agreement.
 
Fixed Charge Coverage Ratio shall mean, with respect to the Credit Parties and
their Subsidiaries for any period, the ratio of (a) EBITDA less (i) Unfinanced
Capital Expenditures less (ii) cash payments of federal, state and local income
or franchise taxes to (b) the sum of (i) Debt Service Expense, (ii) cash
Interest Expense, and (iii) Unfinanced Cash Dividends, in each case of such
Person for the applicable period, computed and calculated on a Consolidated
basis in accordance with GAAP, consistently applied and without
duplication.  All components of the Fixed Charge Coverage Ratio shall be
determined (1) on a Consolidated basis for the twelve (12) most recent
consecutive calendar months ending on or prior to the date of determination and
(2) in accordance with GAAP, consistently applied.
 
Funded Debt shall mean, as to a particular Person at any particular time, the
sum of (a) all obligations for borrowed money (whether as a direct obligor on a
promissory note, bond, debenture or other similar instrument, as a reimbursement
obligor with respect to an issued letter of credit or similar instrument, as an
obligor under a Contingent Obligation in respect of borrowed money, or as any
other type of direct or contingent obligor), and (b) all Capital Lease
Obligations (other than the interest component of such obligations), each
calculated without duplication, on a Consolidated basis, and in accordance with
GAAP.
 
GAAP shall mean, as to a particular Person, those principles and practices (a)
which are recognized as such by the Financial Accounting Standards Board or
successor organization, and (b) which are consistently applied (or with respect
to which any change in principles and practice mandated by the Financial
Accounting Standards Board or successor organization are disclosed in writing to
the Agent) for all periods after the date hereof in a manner consistent with the
manner in which such principles and practices were applied to the most recent
audited financial statements of the relevant Person furnished to the Agent and
the Lenders prior to the Closing Date (or with respect to which any change in
principles and practice mandated by the Financial Accounting Standards Board or
successor organization are disclosed in writing to the Agent).
 
Global Amendment shall mean the Global Amendment, dated as of the Closing Date,
executed by and among the Credit Parties, the Agent, the Collateral Agent and
the Revolving Credit Agent.
 
Governmental Authority shall mean any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, instrumentality, department,
commission, board, bureau, central bank, authority, court or other tribunal, in
each case whether executive, legislative, judicial, regulatory or
administrative, having jurisdiction over the Agent, any of the Lenders, any
Credit Party, any Subsidiary of any Credit Party, or their respective Property.
 
Grantor shall mean any Grantor, Assignor, Pledgor or Debtor, as such terms are
defined in any of the Security Documents.
 
Guarantors shall mean the Parent and its Subsidiaries, other than the Borrower
and any non-Domestic Subsidiaries not required to become a Guarantor pursuant to
Section 6.10.  In no event shall Inactive Subsidiaries shall be required to
execute or join in a Guaranty or any applicable Security Agreements except as
required under the terms of Section 6.10.
 
Guaranty shall mean each and every guaranty of the Obligations from time to time
executed and delivered to the Agent by any Guarantor, as amended supplemented,
modified, joined in pursuant to a Joinder Agreement and restated from time to
time.
 
Hazardous Substance shall mean any hazardous or toxic waste, substance or
product or material defined or regulated by any Requirements of Environmental
Law, including solid waste (as defined under The Resource Conservation and
Recovery Act or its regulations, as amended), petroleum and any fraction thereof
and any radioactive materials and waste.
 
Hedging Obligations of a Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collateral protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
 
Highest Lawful Rate shall mean, with respect to the Agent or any Lender, the
maximum nonusurious rate of interest permitted to be charged by, as applicable,
the Agent or such Lender under applicable laws (if any) of the United States or
any state from time to time in effect.
 
Inactive Subsidiaries shall mean each of the Subsidiaries listed as inactive on
Schedule 5.8.
 
Indebtedness shall mean, as to any Person, without duplication: (a) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money; (b) any other indebtedness which is evidenced by a bond,
debenture or similar instrument; (c) all Capital Lease Obligations of such
Person; (d) all obligations of such Person for the deferred purchase price of
Property or services (except current trade accounts payable arising in the
ordinary course of business and current accrued expenses, not the result of
borrowing, arising in the ordinary course of business); (e) all reimbursement
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations created for the account of such Person; (f)
all indebtedness, liabilities, and obligations secured by any Lien on any
Property owned by such Person even though such Person has not assumed or has not
otherwise become liable for the payment of any such indebtedness, liabilities or
obligations secured by such Lien, but only to the extent of the value of the
Property subject to such Lien (or, if less, the amount of the underlying
indebtedness, liability or obligation); (g) all Cash Management Obligations of
such Person and net liabilities of such Person in respect of Hedging Obligations
(calculated on a basis satisfactory to the Agent and in accordance with accepted
practice); (h) all liabilities of such Person in respect of unfunded vested
benefits under any Plan; and (i) all other indebtedness, liabilities and
obligations of such Person which are required to be included or listed in the
liabilities section of such Person’s balance sheet according to GAAP; provided,
that such term shall not mean or include (1) any Indebtedness in respect of
which monies sufficient to pay and discharge the same in full (either on the
expressed date of maturity thereof or on such earlier date as such Indebtedness
may be duly called for redemption and payment) shall be deposited with a
depository, agency or trustee acceptable to the Agent in trust for the payment
thereof, (2) any operating leases entered into in the ordinary course of
business (to the extent such operating leases do not constitute Capital Lease
Obligations) or (3) Permitted Management Fees.
 
Interest Expense shall mean, for any period, the total interest expense of the
Credit Parties and their Subsidiaries, determined on a Consolidated basis in
accordance with GAAP, consistently applied, and shall in any event include,
without limitation, (a) the amortization or write-off of debt discounts, (b) the
amortization or write-off of all debt issuance costs, commissions, discounts and
other fees payable in connection with the incurrence, amendment or refinancing
of Indebtedness (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing), (c)
the portion of payments under Capital Lease Obligation allocable to interest
expense, and (d) net costs under Hedging Obligations in respect of interest
rates to the extent such net costs are allocable to such period in accordance
with GAAP.
 
Interest Payment Dates shall mean (a) for Alternate Base Rate Borrowings, (1)
the last Business Day of each calendar month prior to the Term Loan Maturity
Date, and (2) the Term Loan Maturity Date; and (b) for LIBOR Borrowings, (1) if
the Interest Period applicable to such LIBOR Borrowing is equal to or less than
three (3) months, the end of such Interest Period, and (2) in all other cases,
on that day which is three (3) calendar months following the first day of the
applicable Interest Period (or, if there be no corresponding day, on the next
succeeding day which is a Business Day) and at the end of such Interest Period.
 
Interest Period shall mean the period commencing on the date of the applicable
LIBOR Borrowing and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that is
one (1), two (2) or three (3) months thereafter; provided, however, that (a) if
an Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (b) no
Interest Period shall end later than the Term Loan Maturity Date, and (c)
interest shall accrue from and including the first day of an Interest Period to,
but excluding, the last day of such Interest Period.
 
Inventory shall have the meaning set forth in Article 9 of the UCC and in the
PPSA.
 
Investment shall mean the purchase or other acquisition of any securities or
Indebtedness of, or the making of any loan, advance, extension of credit,
transfer of Property or capital contribution to, or the incurring of any
Contingent Obligation in respect of the Indebtedness of, any Person.
 
Joinder Agreement shall mean any agreement, in Proper Form, executed by a
Subsidiary of any Credit Party from time to time in accordance with Section 6.10
hereof, pursuant to which such Subsidiary joins in the execution and delivery of
this Agreement, a Guaranty, the applicable Security Documents and the
Contribution Agreement.
 
Legal Requirement shall mean any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority.
 
Lender or Lenders shall have the meaning specified in the preamble of this
Agreement.
 
Leverage Ratio shall mean, with respect to the Credit Parties and their
Subsidiaries as of any date that the Leverage Ratio is calculated, the ratio of
(a) Funded Debt of the Credit Parties and their Subsidiaries as of such date to
(b)(i) EBITDA for the Credit Parties and their Subsidiaries for the applicable
calculation period.  For purposes of calculating the Leverage Ratio, the
components of the Leverage Ratio shall be determined on a Consolidated basis and
the EBITDA component shall be determined for the four most recent consecutive
fiscal quarters of the Credit Parties ending on or prior to the date of
determination.
 
LIBOR Borrowing shall mean, as of any date, that portion of the principal
balance of the Term Loans bearing interest at the Adjusted LIBO Rate as of such
date.
 
LIBOR Lending Office shall mean, with respect to any Lender, the office of such
Lender specified as its “LIBOR Lending Office” opposite or below its name on the
signature pages hereof, or (if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify in writing to the Borrower and the Agent.
 
LIBO Rate shall mean, with respect to any LIBOR Borrowing for any Interest
Period, the rate per annum determined by the Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the commencement of
such Interest Period by reference to the British Bankers’ Association LIBOR (as
set forth by any service selected by the Agent that has been nominated by the
British Bankers’ Association as an authorized information vendor for the purpose
of displaying such rates) for U.S. dollars for a period equal to such Interest
Period; provided that, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall
be the interest rate per annum determined by the Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Agent at approximately 11:00 a.m. (London time) on the date that is two
Business Days prior to the beginning of such Interest Period.
 
Lien shall mean, with respect to any asset of any Person, (a) any mortgage,
pledge, charge, encumbrance, security interest, collateral assignment or other
lien or restriction of any kind on such asset, whether based on common law,
constitutional provision, statute or contract, (b) the interest of any vendor or
a lessor under any conditional sale agreement, title retention agreement or
capital lease relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities, or (d) any other right of or arrangement with any creditor to have
such creditor’s claim satisfied out of such assets, or the proceeds therefrom,
prior to the general creditors of such Person owning such assets.
 
Loan Documents shall mean this Agreement, the Term Notes, the Security
Documents, the Guaranties, the Contribution Agreement, the Joinder Agreements,
the First Lien Intercreditor Agreement, all instruments, certificates and
agreements now or hereafter executed and delivered to the Agent and/or the
Lenders in connection with or pursuant to any of the foregoing and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
 
Lockbox Agreement shall collectively mean one or more lockbox agreements
required by the Collateral Agent, in Proper Form, to be executed and delivered
to the Collateral Agent by the Borrower and each of its Subsidiaries required by
the Collateral Agent, together with all modifications and/or replacements
thereof which are approved in writing by the Collateral Agent, for purposes of
facilitating the collection of Accounts in accordance with the terms of Section
6.15 hereof.  On or prior to the Closing Date, the Borrower and each of its
applicable Subsidiaries has executed and delivered to the Collateral Agent one
or more Lockbox Agreements in Proper Form.  No Inactive Subsidiary shall be
required to execute and deliver any Lockbox Agreement unless and until such
Inactive Subsidiary is required to become a Guarantor under the terms of Section
6.10.
 
Loan Notice shall have the meaning specified in Section 2.11.
 
Material Adverse Effect shall mean a material adverse effect on (a) the
business, assets, property, or condition (financial or otherwise) of the Credit
Parties taken as a whole, (b) the ability of the Credit Parties to perform or
pay the Obligations in accordance with the terms hereof or of any other Loan
Document, (c) the validity or enforceability of this Agreement, any of the Term
Notes or any other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder, or (d) the validity or enforceability of the
Agent’s Lien on any material portion of the Collateral or the priority of such
Lien.
 
Monthly Unaudited Financial Statements shall mean the financial statements of
the Credit Parties and their Subsidiaries, including all notes thereto, which
statements shall include (a) a balance sheet as of the end of the respective
calendar month or fiscal quarter, as applicable, (b) a statement of operations
for such respective calendar month or fiscal quarter, as applicable, and for the
fiscal year to date, subject to normal year-end adjustments, all setting forth
in comparative form the corresponding figures for the corresponding period of
the preceding fiscal year and for the Credit Parties’ Consolidated projections
for such period and (c) a statement of cash flows for the fiscal year to date,
subject to normal year-end adjustments, setting forth in comparative form the
corresponding figures in the corresponding period of the preceding fiscal year
and for the Credit Parties’ Consolidated projections for such period, all
prepared in reasonable detail and in accordance with GAAP and certified by a
Responsible Officer of the Parent as fairly and accurately presenting in all
material respects the financial condition and results of operations of the
Credit Parties and their Subsidiaries, on a Consolidated basis, at the dates and
for the periods indicated therein.  The Monthly Unaudited Financial Statements
for the Credit Parties and their Subsidiaries shall be prepared on a
Consolidated basis, and to the extent required by the Agent, a consolidating
basis, the parties recognizing that such consolidating statements will be
prepared in accordance with GAAP only to the extent normal and customary.
 
Net Income shall mean, for any period, the consolidated net income (or loss) of
the Credit Parties and their Subsidiaries, determined on a Consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of any
Credit Party or is merged into or consolidated with any Credit Party or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of any Credit Party) in which any Credit Party or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by such Credit Party or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of any Credit Party to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation (other than under any Loan
Document) or any Legal Requirement applicable to such Subsidiary.
 
Net Working Capital shall mean, on any date of calculation thereof, the
remainder of (a) the aggregate amount of Eligible Accounts and Eligible
Inventory (valued, in each case, at the lower of cost or fair market value on a
first-in first-out basis) as determined in accordance with GAAP consistently
applied, minus (b) the Consolidated current liabilities of all Credit Parties
determined on such date in accordance with GAAP.
 
Net Recovery Rate shall mean the “net recovery value percentage” or “net
recovery rate” under an orderly liquidation scenario for the Inventory or
Equipment, as applicable, of the applicable Credit Parties, as specifically set
forth and described in the most recent “net orderly liquidation value” appraisal
of such Inventory or Equipment, as applicable, received by and acceptable to the
Agent in all respects.
 
Obligations shall mean, without duplication, all obligations, liabilities and
Indebtedness of the Borrower and the Guarantors with respect to the Security
Documents and all other Loan Documents, including without limitation, (i) the
principal of and interest on the Term Loans and (ii) the payment or performance
of all other obligations, liabilities and Indebtedness of the Borrower or the
Guarantors to the Agent and the Lenders hereunder, under the Term Notes, or
under any one or more of the other Loan Documents, including all fees, costs,
expenses and indemnity obligations hereunder and thereunder.  The Obligations
include interest (including post-petition interest, whether or not such interest
would be an allowable claim under any applicable bankruptcy or other similar
proceeding) and other obligations accruing or arising after (a) commencement of
any case under any bankruptcy or similar laws by or against the Borrower or any
Guarantor or (b) the personal liability of the Borrower or any Guarantor for the
Obligations shall be discharged or otherwise cease to exist by operation of law
or for any other reason.
 
Officer’s Certificate shall mean a certificate substantially in the form of
Exhibit B attached hereto.
 
Organizational Documents shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a limited partnership, the limited partnership
agreement and certificate of limited partnership of such limited partnership;
with respect to a joint venture, the joint venture agreement establishing such
joint venture; with respect to a limited liability company, the articles of
organization or certificate of formation and regulations or limited liability
company agreement of such limited liability company;  and with respect to a
trust, the instrument establishing such trust;  in each case including any and
all modifications thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
materially adverse to the Lenders and which are consented to by the Agent.
 
Parent shall mean collectively Animal Health International, Inc., a Delaware
corporation, Steer Intermediate Corporation, a Delaware corporation, Walco
Holdings, Inc., a Delaware corporation, and Walco Intermediate, Inc., a Delaware
corporation.  When the context of any applicable provision hereof requires that
each such entity be referred to separately and not collectively, the term Parent
shall be construed accordingly.
 
Parties shall mean all Persons other than the Agent, the Collateral Agent or any
Lender executing any Loan Documents.
 
PBGC shall mean the Pension Benefit Guaranty Corporation.
 
Permitted Affiliate Transactions shall mean any of the following: (a)
transactions with or among any Credit Party and any wholly-owned Subsidiary of
any Credit Party that is a Guarantor; (b) reasonable and customary directors’
fees, reasonable and customary directors’ indemnifications and similar
arrangements for directors and officers of the Credit Parties or any of its
Subsidiaries entered into in the ordinary course of business, together with any
payments made under any such indemnification arrangements; (c) customary and
reasonable loans and advances to officers, directors and employees of the Credit
Parties or any of their Subsidiaries for travel, entertainment, moving and other
relocation expenses, in each case made in the ordinary course of business; (d)
the incurrence of intercompany Indebtedness permitted pursuant to Section 7.1(g)
hereof; (e) Permitted Management Fees; and (f) other transactions, contracts or
agreements existing on the date of this Agreement and which are set forth on
Schedule 7.6 attached hereto, together with any renewals and extensions of such
existing transactions, contracts or agreements, so long as such renewals and
extensions are upon terms and conditions substantially identical to the terms
and conditions set forth in such existing transactions, contracts and agreements
(or otherwise no less favorable to the applicable Credit Party and its
Subsidiaries, as applicable).
 
Permitted Investment Securities shall mean each of the following, to the extent
the same is pledged as additional Collateral hereunder and is subject to a first
priority perfected Lien in favor of the Collateral Agent for the ratable benefit
of the Lenders (including a control or dominion agreement from any applicable
Person in favor of the Agent that is in all respects satisfactory to the
Agent):  (a) readily marketable, direct obligations of the United States of
America or any agency or wholly owned corporation thereof which are backed by
the full faith and credit of the United States, maturing within one (1) year
after the date of acquisition thereof, (b) certificates of deposit, commercial
paper (if rated no lower than A-1/P-1) or other short-term direct obligations of
any domestic financial institution having capital and surplus in excess of
$5,000,000,000, maturing within six months after the date of acquisition
thereof, (c) money market funds having aggregate assets in excess of
$5,000,000,000, and (d) other Investments mutually agreed to in writing by the
Borrower and the Agent.
 
Permitted Management Fees shall mean management fees, monitoring fees and/or
service fees payable to Charlesbank and/or any of its Affiliates in an amount up
to, but not exceeding $250,000 in the aggregate during any fiscal year of the
Credit Parties, plus reimbursement to Charlesbank and/or any of its Affiliates
of reasonable and customary out-of-pocket expenses incurred in connection with
such management services provided by Charlesbank and/or any of its Affiliates,
provided that if any Event of Default has occurred and is continuing at the time
for payment of such fees or expense reimbursement, as applicable (or would occur
after giving effect thereto), such fees and expense reimbursement shall accrue
and be payable only upon the cure (or waiver) of such Event of Default.
 
Person shall mean any individual, corporation, business trust, unincorporated
organization or association, partnership, joint venture, limited liability
company, Governmental Authority or any other form of entity.
 
Plan shall mean any plan subject to Title IV of ERISA and maintained for
employees of the Borrower or of any member of a “controlled group of
corporations”, as such term is defined in the Code, of which the Borrower, any
of its Subsidiaries or any ERISA Affiliate it may acquire from time to time is a
part, or any such plan to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is required to contribute on behalf of its employees.
 
PPSA shall mean the Personal Property Security Act (Alberta), as amended.
 
Prime Rate shall mean the rate of interest announced, from time to time, within
Wells Fargo at its principal office in San Francisco as its “prime rate”, with
the understanding that the “prime rate” is one of Wells Fargo’s base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate.  Without notice to the
Borrower or any other Person, the Prime Rate shall change automatically from
time to time as and in the amount by which said Prime Rate shall fluctuate, with
each such change to be effective as of the date of each change in such Prime
Rate.
 
Principal Office shall mean the principal office in San Francisco, California of
the Agent, or such other place as the Agent may from time to time by notice to
the Borrower designate.
 
Prohibited Transaction shall mean any non-exempt prohibited transaction set
forth in Section 406 of ERISA or Section 4975 of the Code.
 
Proper Form shall mean in form and substance satisfactory to the Agent, except
that as used in Section 4(g) hereof with respect to the Lenders, such term shall
mean in form and substance satisfactory to the Lenders.
 
Property shall mean any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.
 
Refinancing Indebtedness shall mean any Indebtedness of any Credit Parties or
any of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, other Indebtedness
of such Person, provided, that:
 
(a) such Refinancing Indebtedness is incurred only by such Persons who are
obligors on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded,
 
(b) the principal amount of such Refinancing Indebtedness does not exceed the
then outstanding principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded;
 
(c) the interest rate or rates to accrue under such Refinancing Indebtedness do
not exceed the lesser of (i) the interest rate or rates then accruing on the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded or
(ii) the prevailing market interest rate or rates which are then applicable to,
and generally available for, Indebtedness which is similar in type, amount,
maturity and other terms to the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded;
 
(d) the maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions (with respect to any Subordinated Indebtedness),
collateral security provisions (or absence thereof) and other terms of such
Refinancing Indebtedness are in each case the same or more favorable to the
applicable Credit Party and/or its applicable Subsidiaries as those in the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded;
 
(e) no Default or Event of Default has occurred and is continuing or would
result from the issuance or origination of such Refinancing Indebtedness;
 
(f) if the Indebtedness that is extended, refinanced, renewed, replaced,
defeased or refunded was subordinated in right of payment to the Obligations
and/or priority as to the Liens of the Collateral Agent for the ratable benefit
of the Lenders, then the terms and conditions of such Refinancing Indebtedness
must include subordination terms and conditions that are at least as favorable
to the Agent and the Lenders as those that were applicable to the extended,
refinanced, renewed, replaced, defeased or refunded Indebtedness; and
 
(g) if the Indebtedness being refinanced is subject to the First Lien
Intercreditor Agreement, such Refinancing Indebtedness is either (1) permitted
under the terms of the First Lien Intercreditor Agreement and will remain
subject to the terms of the First Lien Intercreditor Agreement or (2) subject to
an intercreditor agreement on terms no less favorable to the Agent and the
Lenders as those contained in the First Lien Intercreditor Agreement.
 
Regulation D shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation relating to reserve requirements applicable to member Lenders
of the Federal Reserve System.
 
Regulatory Change shall mean, with respect to any Lender, any change on or after
the date of this Agreement in any Legal Requirement (including Regulation D) or
the adoption or making on or after such date of any Legal Requirement applying
to a class of Lenders including such Lender under any Legal Requirement (whether
or not having the force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
 
Reportable Event shall mean a “reportable event” as defined in Section 4043(c)
of ERISA for which the notice requirement is not waived by the regulations
thereunder.
 
Required Lenders shall mean Lenders having greater than 66.67% of the Total Term
Loan Commitment; provided that after termination of the Total Term Loan
Commitment, Required Lenders shall mean Lenders having greater than 66.67% of
the aggregate amount of the outstanding Term Loans; provided further, however,
if only two (2) Lenders are then parties to this Agreement, Required Lenders
shall mean both of such Lenders.
 
Requirements of Environmental Law shall mean all requirements imposed by any law
(including The Resource Conservation and Recovery Act, The Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Clean Air Act, and any state analogues of any of the foregoing), rule,
regulation, or order of any Governmental Authority which relate to (i)
pollution, protection or clean-up of the air, surface water, ground water,
soils, or subsurface strata; (ii) solid, liquid or gaseous waste or Hazardous
Substance generation, recycling, reclamation, release, threatened release,
treatment, storage, disposal or transportation; (iii) exposure of Persons or
property to Hazardous Substances; (iv) the manufacture, presence, processing,
distribution in commerce, use, discharge, releases, threatened releases, or
emissions of Hazardous Substances into the environment; or (v) the storage of
any Hazardous Substances.  Requirement of Environmental Law shall mean any one
of them.
 
Responsible Officer shall mean, with respect to any Person, the chief executive
officer, the president, any vice president, the chief financial officer, the
controller or the treasurer of such Person.
 
Revolving Credit Agent shall mean JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Revolving Credit Agreement, and any successor
administrative agent under the terms of the Revolving Credit Agreement.
 
Revolving Credit Agreement shall mean that certain Amended and Restated Credit
Agreement, dated as of September 26, 2006, by and among the Credit Parties, the
Revolving Credit Lenders, JPMorgan Chase Bank, N.A., as administrative agent,
General Electric Capital Corporation, as documentation agent and J.P. Morgan
Securities Inc. as lead arranger and book runner, as amended pursuant that
certain First Amendment to Amended and Restated Credit Agreement, dated as of
June 29, 2007, and as further amended, restated or otherwise modified from time
to time.
 
Revolving Credit Agreement Debt shall mean any indebtedness issued pursuant to
the Revolving Credit Agreement.
 
Revolving Credit Lenders shall mean the lenders party to the Revolving Credit
Agreement from time to time.
 
Security Agreements shall mean (a) the Amended and Restated Security Agreement
(Personal Property-Borrower), dated effective as of September 26, 2006, between
the Borrower and the Collateral Agent, for the ratable benefit of the Lenders
and the Revolving Credit Lenders, covering all Accounts, Inventory, Equipment
and all other tangible and intangible personal Property of the Borrower as more
particularly described therein, (b) the Amended and Restated Security Agreement
(Personal Property-Domestic Subsidiaries), dated as of September 26, 2006,
between each of the Borrower’s Domestic Subsidiaries that is a Guarantor and the
Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, covering all Accounts, Inventory, Equipment and other tangible
and intangible personal Property of each of the Borrower’s Domestic Subsidiaries
that is a Guarantor as more particularly described therein, as the same may
hereafter be joined in pursuant to a Joinder Agreement, (c) the Amended and
Restated Security Agreement (Personal Property-Canadian Subsidiaries), dated
effective as of September 26, 2006, between each of the Borrower’s Canadian
Subsidiaries that is a Guarantor and the Collateral Agent, for the ratable
benefit of the Lenders and the Revolving Credit Lenders, covering all Accounts,
Inventory, Equipment and other tangible and intangible personal Property of each
of the Borrower’s Canadian Subsidiaries that is a Guarantor as more particularly
described therein, as the same may hereafter be joined in pursuant to a Joinder
Agreement, (d) the Amended and Restated Pledge Agreement, dated effective as of
the September 26, 2006, between the Borrower and the Collateral Agent, for the
ratable benefit of the Lenders and the Revolving Credit Lenders, covering (i)
all issued and outstanding Equity Interests in each of the Borrower’s direct
Subsidiaries that is a Guarantor and (ii) 65% of all issued and outstanding
Equity Interests in each of the Borrower’s non-Domestic Subsidiaries that is not
a Guarantor, (e) the Amended and Restated Pledge Agreement, dated effective as
of the September 26, 2006, between Province Livestock Supply, Ltd. and the
Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, covering all issued and outstanding Equity Interests in each of
the Borrower’s Subsidiaries that is a Guarantor and for which Province Livestock
Supply, Ltd. is the parent, (f) the Amended and Restated Pledge Agreement, dated
effective as of September 26, 2006, between Walco Intermediate, Inc. and the
Collateral Agent for the ratable benefit of the Lenders and the Revolving Credit
Lenders, covering all Equity Interests in the Borrower, (g) any and all other
security agreements, pledge agreements, collateral assignments or other similar
documents now or hereafter executed in favor of the Collateral Agent, for the
ratable benefit of the Lenders and the Revolving Credit Lenders, as security for
the payment or performance of any and/or all of the Obligations, and (h) any
amendment, modification, restatement or supplement of all or any of the
above-described agreements and assignments (including, without limitation, the
Global Amendment).
 
Security Documents shall mean the Security Agreements, all related financing
statements and any and all other agreements, mortgages, deeds of trust, chattel
mortgages, security agreements, pledges, guaranties, assignments of income,
assignments of contract rights, assignments or pledges of stock or partnership
interests, standby agreements, subordination agreements, undertakings and other
instruments and financing statements now or hereafter executed and delivered as
security for the payment and performance of the Obligations, as any of them may
from time to time be amended, modified, restated or
supplemented.  Notwithstanding the foregoing or any other provision herein or in
any Loan Document or any Security Document to the contrary, the real property
Collateral and the Liens of any Security Documents covering any real property
Collateral shall only secure the Obligations (as defined in the Revolving Credit
Agreement) and the Collateral Obligations (as defined in the First Lien
Intercreditor Agreement) and shall not secure any of the Obligations.
 
Statutory Reserves shall mean a fraction (expressed as a decimal), the numerator
of which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentage (including without limitation,
any marginal, special, emergency or supplemental reserves) expressed as a
decimal, established by the Board of Governors of the Federal Reserve System of
the United States and any other banking authority to which any Lender is subject
with respect to the Adjusted LIBO Rate for Eurocurrency Liabilities (as defined
in Regulation D), including without limitation, those reserve percentages
imposed under Regulation D.
 
Subordinated Indebtedness shall mean, with respect to any Credit Party,
Indebtedness subordinated in right of payment to the Credit Parties’ monetary
Obligations on terms satisfactory to and approved in writing by the Agent and
the Required Lenders, in their discretion, so long as all other terms thereof
(including without limitation, regularly scheduled payments and financial and
negative covenants) are satisfactory to and approved in writing by the Agent and
the Required Lenders, in their discretion.
 
Subsidiary shall mean, as to a particular parent Business Entity, any Business
Entity of which more than fifty percent (50%) of the Equity Interests issued by
such Business Entity is at the time directly or indirectly owned by such parent
Business Entity or by one or more of its Affiliates.
 
Term Loan Commitment shall mean, as to any Lender, the obligation of such Lender
to make a Term Loan in a principal amount up to, but not exceeding, the amount
set forth as such Lender’s Term Loan Commitment in Schedule 1.1 attached hereto.
 
Term Loan Commitment Percentage shall mean, with respect to any Lender, the
ratio, expressed as a percentage, of such Lender’s Term Loan Commitment to the
Total Term Loan Commitment.
 
Term Loan Maturity Date shall mean the earlier of (a) May 31, 2011 and (b) any
date the Term Loan Maturity Date is accelerated by the Agent pursuant to Section
8.1 hereof.
 
Term Loans shall mean the Term Loans made pursuant to Section 2.1 hereof.  Term
Loan shall mean any one of such Term Loans.
 
Term Notes shall mean the promissory notes, each substantially in the form of
Exhibit A attached hereto, of the Borrower evidencing the Term Loans, payable to
the order of the respective Lenders in the amount of each of said Lender’s Term
Loan Commitment, and all renewals, extensions, modifications, rearrangements and
replacements thereof, and substitutions therefor.  Term Note shall mean any one
of such promissory notes.
 
Total Term Loan Commitment shall mean, on any day, the aggregate of all of the
Lenders’ Term Loan Commitments on such day.  As of the Closing Date, the Total
Term Loan Commitment is $44,550,000.
 
Tri-Party Agreements shall collectively mean tri-party agreements, in Proper
Form, to be executed and delivered by and among the Collateral Agent, the
Borrower (and each of its Subsidiaries required by the Collateral Agent) and the
applicable financial institutions described in Schedule 6.15 attached hereto,
together with all modifications and/or replacements thereof which are approved
in writing by the Agent, for purposes of either (a) facilitating the collection
of Accounts in accordance with the terms of Section 6.15 hereof, to the extent
payments of Accounts are processed through cash management services (including
lockbox arrangements) provided by any such specified financial institution
and/or deposited in one or more accounts maintained by the Borrower or its
applicable Subsidiary with any such specified financial institution or
(b) evidencing control for purposes of perfection of the Collateral Agent’s
Lien, for the ratable benefit of the Lenders, against one or more deposit
accounts maintained by the Borrower or its applicable Subsidiary with any such
specified financial institution.  As of the Closing Date, Schedule 6.15 attached
hereto describes all such accounts to be covered by a Tri-Party Agreement and
specifies whether the applicable Tri-Party Agreement is for purposes of
facilitating the collection of Accounts or perfecting the Collateral Agent’s
Lien against such accounts.  The Borrower agrees that neither the Borrower nor
any of its Subsidiaries shall establish any additional deposit accounts
permitted to be maintained hereunder with a financial institution other than the
Collateral Agent unless such additional deposit accounts are covered by a
Tri-Party Agreement.
 
Type shall mean, with respect to the Term Loan or any portion thereof, its
character as a LIBOR Borrowing or an Alternate Base Rate Borrowing.
 
UCC shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the attachment, perfection or
priority of, or remedies with respect to, the Collateral Agent’s or any Lender’s
Lien on any Collateral.
 
Unfinanced Capital Expenditures shall mean all Capital Expenditures other than
Financed Capital Expenditures.
 
Unfinanced Cash Dividends shall mean, with respect to any Person for any period,
all Cash Dividends of such Person for such period that are not paid either from
net proceeds of the Term Loans, net proceeds of the Term Loans (as defined in
that certain Term Loan Agreement dated as of September 26, 2006, by and among
the Credit Parties, the lenders party thereto and Wilmington Trust Company, as
administrative agent) or from net proceeds of any other permitted Indebtedness
of such Person incurred after September 26, 2006.
 
Wells Fargo shall mean Wells Fargo Bank, National Association.
 
1.2. Accounting Terms and Determinations.  Except where specifically otherwise
provided:
 
(a) The symbol “$” and the word “dollars” shall mean lawful money of the United
States of America.
 
(b) Any accounting term not otherwise defined shall have the meaning ascribed to
it under GAAP.  If any of the Credit Parties are required after the Closing Date
to implement any change(s) in its accounting principles and practice as a result
of any changes in GAAP mandated by the Financial Accounting Standards Board or
successor organization, and if such change(s) result in any material change in
the method of calculation of the Fixed Charge Coverage Ratio, Excess Cash Flow,
Leverage Ratio and/or any other financial covenant under this Agreement, then
for all periods after the date of implementation of such change(s) until one or
more appropriate amendments of this Agreement addressing such change(s) in GAAP
are negotiated, executed and delivered by the parties hereto in a form
acceptable to all such parties, the Fixed Charge Coverage Ratio, Excess Cash
Flow, Leverage Ratio and/or such other financial covenant, as applicable, shall
be calculated hereunder utilizing GAAP as in effect prior to such change(s).
 
(c) Unless otherwise expressly provided, any accounting concept and all
financial covenants shall be determined on a Consolidated basis, and financial
measurements shall be computed without duplication.
 
(d) Wherever the term “including” or any of its correlatives appears in the Loan
Documents, it shall be read as if it were written “including (by way of example
and without limiting the generality of the subject or concept referred to)”.
 
(e) Wherever the word “herein” or “hereof” is used in any Loan Document, it is a
reference to that entire Loan Document and not just to the subdivision of it in
which the word is used.
 
(f) References in any Loan Document to Section numbers are references to the
Sections of such Loan Document.
 
(g) References in any Loan Document to Exhibits, Schedules, Annexes and
Appendices are to the Exhibits, Schedules, Annexes and Appendices to such Loan
Document, and they shall be deemed incorporated into such Loan Document by
reference.
 
(h) Any term defined in the Loan Documents which refers to a particular
agreement, instrument or document shall also mean, refer to and include all
modifications, amendments, supplements, restatements, renewals, extensions and
substitutions of the same; provided, that nothing in this subsection shall be
construed to authorize any such modification, amendment, supplement,
restatement, renewal, extension or substitution except as may be permitted by
other provisions of the Loan Documents.
 
(i) All times of day used in the Loan Documents mean local time in New York, New
York.
 
(j) Defined terms may be used in the singular or plural, as the context
requires.
 
1.3. UCC and PPSA Changes.  All terms used herein which are defined in the UCC
and/or the PPSA shall, unless otherwise provided, have the meanings ascribed to
them in the UCC and/or the PPSA, as applicable, both as in effect on the date of
this Agreement and as hereafter amended.  The parties intend that the terms used
herein which are defined in the UCC and/or the PPSA, as applicable, have, at all
times, the broadest and most inclusive meanings possible.  Accordingly, if the
UCC and/or the PPSA, as applicable, shall in the future be amended or held by a
court to define any term used herein more broadly or inclusively than the UCC
and/or the PPSA, as applicable, in effect on the date of this Agreement, then
such term as used herein shall be given such broadened meaning. If the UCC
and/or the PPSA, as applicable, shall in the future be amended or held by a
court to define any term used herein more narrowly, or less inclusively, than
the UCC and/or the PPSA, as applicable, in effect on the date of this Agreement,
such amendment or holding shall be disregarded in defining terms used in this
Agreement.
 
2. Term Loans; Term Notes; Payments; Prepayments; Interest Rates.
 
2.1. Term Loan Commitments.  Subject to the terms and conditions hereof, each
Lender, severally and not jointly, agrees to make a Term Loan to the Borrower on
the Closing Date, but in no event on or after 5:00 p.m., Eastern Daylight Time,
on the Closing Date, in a principal amount equal to the amount of such Lender’s
Term Loan Commitment.
 
2.2. Term Loans.
 
(a) Subject to Section 4 hereof, the Term Loans (i) shall be advanced and made
ratably by the Lenders in accordance with the Lenders’ respective Term Loan
Commitments, and (ii) the Term Loans shall be made by the Lenders on the Closing
Date but in no event on or after the Term Loan Commitment Termination Date.
 
(b) Each Lender shall make its Term Loan available on the proposed dates thereof
by causing its Applicable Lending Office to pay the amount required to a deposit
account designated and maintained by the Borrower with JPMorgan Chase Bank, N.A.
in immediately available funds not later than 1:00 p.m.
 
(c) The obligations of the Lenders hereunder are several and not joint;
therefore, notwithstanding anything herein to the contrary:  (i) no Lender shall
be required to make a Term Loan in excess of such Lender’s Term Loan Commitment;
(ii) if a Lender fails to make its Term Loan as or when required hereunder and
the Borrower subsequently makes a repayment on the Term Loans, such repayment
shall be split among the non-defaulting Lenders in accordance with their
respective Term Loan Commitment Percentages until each non-defaulting Lender has
received its Term Loan Commitment Percentage of all of the outstanding Term
Loans, then the balance of such repayment shall be divided among all of the
Lenders in accordance with their respective Term Loan Commitments; and (iii) the
failure of any Lender to make any Term Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (provided, that no Lender shall
be responsible for the failure of any other Lender to make a Term Loan such
other Lender is obligated to make hereunder).
 
2.3. Mandatory and Voluntary Prepayments.
 
(a) To the extent permitted by Section 7.11(f) of the Revolving Credit
Agreement, the Borrower shall make a prepayment of the Term Loans, to the extent
the same are then outstanding, in an amount equal to twenty-five percent (25%)
of Excess Cash Flow for each fiscal year of the Credit Parties (commencing with
the fiscal year ending June 30, 2008).  For purposes hereof, Excess Cash Flow
will be computed by the Borrower and be subject to the review and reasonable
approval of the Required Lenders, based on the Credit Parties’ Annual Audited
Financial Statements for the applicable fiscal year. The Borrower shall submit
such computation in reasonable detail to the Agent, along with the amount of
such resulting prepayment of the Terms Loans required by this subparagraph (a)
based on such calculations by the Borrower, at the same time the applicable
Annual Audited Financial Statements of the Credit Parties are delivered to and
received by the Agent in accordance with the terms of Section 6.3 hereof.  Upon
receipt of such payment, the Agent shall immediately apply such payment against
the Term Loans in accordance with the terms hereof, reserving any right to
require payment of any deficiency in such amount. Within ten (10) Business Days
after receipt by the Agent of such calculations of and payment by the Borrower,
the Agent, at the request of the Required Lenders, shall notify the Borrower in
writing of any error by the Borrower in the computation of the amount of the
prepayment of the Term Loans required by this subparagraph (a), and in the event
of any such error, the Borrower shall pay to the Agent any deficiency in the
amount of the requisite prepayment of the Term Loans within five (5) Business
Days after receipt of such notification from the Agent.  Any prepayments
required by this subparagraph (a) shall be applied to outstanding Term Loans
(together with any Consequential Loss resulting from such prepayment); provided,
however, that the Borrower shall not be required to make any prepayment of any
LIBOR Borrowings pursuant to this subparagraph (a) until the last day of the
Interest Period with respect thereto so long as such prepayment is deposited by
the Borrower in a cash collateral account with the Agent to be held in such
account on terms satisfactory to the Agent, with all amounts in such cash
collateral account (including any interest earned thereon, if any) to be
automatically applied by the Agent against the applicable Term LIBOR Borrowings
on the last day of the Interest Period with respect thereto.  Any amount of the
Term Loans prepaid in accordance with the provisions of this subparagraph (a)
may not be reborrowed.
 
(b) In addition to the mandatory prepayments required by Section 2.3(a) above,
and to the extent permitted by Section 7.11(f) of the Revolving Credit
Agreement, the Borrower shall have the right, at its option, to prepay any of
the Term Loans in whole at any time or in part from time to time, without
premium or penalty, except as otherwise provided in this Section 2.3 or
subsections (a), (b) or (c) of Section 2.7 hereof.  Each prepayment of Term
Loans under this subsection shall be in a minimum amount of $100,000, and
applied to the prepayment of the aggregate unpaid principal amount of the Term
Notes.  Prepayments under this subsection (b) shall be subject to the following
additional conditions:
 
(1) In giving notice of prepayment as hereinafter provided, the Borrower shall
specify, for the purpose of paragraphs (2) and (3) immediately following, the
manner of application of such prepayment as between Alternate Base Rate
Borrowings and LIBO Rate Borrowings; provided, that in no event shall any LIBO
Rate Borrowing be partially prepaid.
 
(2) Prepayments applied to any LIBO Rate Borrowing may be made on any Business
Day, provided, that (i) the Borrower shall have given the Agent at least five
(5) Business Days’ prior irrevocable written or telecopied notice of such
prepayment, specifying the principal amount of the LIBOR Borrowing to be prepaid
and the prepayment date; and (ii) if such prepayment is made on any day other
than the last day of the Interest Period corresponding to the LIBOR Borrowing to
be prepaid, the Borrower shall pay upon demand directly to the Agent for the
account of the Lenders the Consequential Loss as a result of such prepayment.
 
(3) Prepayments applied to any Alternate Base Rate Borrowing may be made on any
Business Day, provided, that with respect thereto, the Borrower shall have given
the Agent prior irrevocable written notice or notice by telephone (which is to
be promptly confirmed in writing) of any such prepayment on the Business Day of
such prepayment, specifying the principal amount of the Alternate Base Rate
Borrowing to be prepaid.
 
(c) If any notice of any prepayment has been given, the principal amount
specified in such notice, together with (in the case of any prepayment of a
LIBOR Borrowing) interest thereon to the date of prepayment and any resulting
Consequential Loss, shall be due and payable on such prepayment date.
 
2.4. Term Notes; Payments.
 
(a) Subject to the provisions of Section 10.12 hereof relating to replacement
and substitution of the Term Notes, the Term Loan made by a Lender shall be
evidenced by a single Term Note dated as of the Closing Date, delivered and
payable to such Lender in a principal amount equal to such Lender’s Term Loan
Commitment as of the Closing Date.
 
(b) If not earlier prepaid in full, and to the extent permitted by Section
7.11(f) of the Revolving Credit Agreement, the aggregate principal balance of
the Term Loans, as evidenced by the Term Notes, shall be due and payable in
quarterly installments of $112,500, each due on each September 30, December 31,
March 31, and June 30 of each calendar year, commencing on September 30,
2007.  To the extent not previously paid, the aggregate outstanding principal
balance of the Term Loans shall be finally due and payable on the Term Loan
Maturity Date.
 
(c) Subject to Section 10.6 hereof, the Borrower hereby agrees to pay accrued
interest on the unpaid principal balance of the Term Loans on the Interest
Payment Dates, commencing with the first of such dates to occur after the date
hereof.  After the Term Loan Maturity Date, accrued and unpaid interest on the
Term Loans shall be payable on demand.
 
2.5. Application of Payments and Prepayments.
 
(a) Prepayments on the Term Loans, including without limitation, prepayments in
accordance with Sections 2.3(a) hereof, shall be applied to payment of the
aggregate unpaid principal amounts of the Term Notes in inverse order of
maturity, with the balance of any such prepayments, if any, being applied to
accrued interest.  Payments of accrued interest on each Term Note in accordance
with Section 2.4(c) hereof shall be applied to the aggregate accrued interest
then outstanding under the Term Notes.  Payments of regularly scheduled
installments of principal on each Term Note in accordance with Section 2.4(b)
hereof shall be applied to the aggregate principal amount outstanding under the
Term Notes in direct order of maturity, while payment by the Borrower of the
aggregate principal amount outstanding under the Term Notes on the Term Loan
Maturity Date shall be applied to principal.
 
(b) All payments remitted to the Agent, and, absent the existence of an Event of
Default, all such payments not relating to principal or interest of specific
Term Loans, or not constituting payment of specific fees or other specific
Obligations, and all proceeds of Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements then due to the Agent hereunder;
second, to pay any fees or expense reimbursements then due to the Lenders from
any Credit Party; third, to pay interest due in respect of all Term Loans;
fourth, to pay or prepay principal of the Term Loans; and fifth, to the payment
of any other Obligation due to the Agent or any Lender.  Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless an Event of Default has occurred and is continuing, neither
the Agent nor any Lender shall apply any payments which it receives to any LIBOR
Borrowing, except (a) on the expiration date of the Interest Period applicable
to any such LIBOR Borrowing, or (b) in the event, and only to the extent, that
there are no outstanding Alternate Base Rate Borrowings and the Borrower has
consented to such application.
 
(c) Each payment or prepayment received by the Agent hereunder or under any Term
Note for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds.
 
(d) All sums payable by the Borrower to the Agent hereunder or pursuant to the
Term Notes or any of the other Loan Documents for its own account or the account
of the Lenders shall be payable in United States dollars in immediately
available funds not later than 12:00 noon on the date such payment or prepayment
is due and shall be made without set-off, counterclaim or deduction of any
kind.  Any such payment or prepayment received and accepted by the Agent after
12:00 noon shall be considered for all purposes (including the payment of
interest, to the extent permitted by law) as having been made on the next
succeeding Business Day.  All such payments or prepayments shall be made at the
Principal Office.  If any payment or prepayment becomes due and payable on a day
which is not a Business Day, then the date for the payment thereof shall be
extended to the next succeeding Business Day and interest shall be payable
thereon at the then applicable rate per annum during such extension.
 
2.6. Interest Rates for Term Loans.
 
(a) Subject to Section 10.6 hereof, the Term Notes shall bear interest on their
respective outstanding principal balances at the LIBO Rate; provided, that (1)
all principal outstanding, whether then due and payable, after the occurrence of
an Event of Default which has not been cured to the satisfaction of the Agent
and the Required Lenders or waived in writing by the Agent and the Required
Lenders shall bear interest at the Default Rate, which shall be due and payable
upon demand, and (2) past due principal and interest shall bear interest at the
Default Rate, which shall be payable on demand.  Interest on the Term Loans
shall be calculated at the LIBO Rate, except where it is expressly provided
pursuant to this Agreement, the Alternate Base Rate is to apply.
 
(b) All interest and fees will be computed on the basis of a year of 360 days
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable, unless the effect of so computing
shall be to cause the rate of interest to exceed the Highest Lawful Rate.
 
2.7. Special Provisions Applicable to LIBOR Borrowings.
 
(a) If, after the date of this Agreement, the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by the Agent or any Lender with any request or directive (whether or
not having the force of law) of any Governmental Authority shall at any time
make it unlawful or impracticable for any Lender to permit the establishment of
or to maintain any LIBOR Borrowing, the commitment of the Lenders to establish
or maintain the Adjusted LIBO Rate affected by such adoption or change shall
forthwith be canceled, the Agent or such Lender shall use reasonable efforts to
give the Borrower written notice thereof within a reasonable time after
discovery of such adoption or change by the Agent or such Lender, as applicable
(it being agreed, however, that any failure to provide such notice to the
Borrower shall not in any manner affect the rights under this Section 2.7(a) of
the Agent or any Lender), and the Borrower shall forthwith, upon demand by the
Agent to the Borrower, (1) convert the Adjusted LIBO Rate with respect to which
such demand was made to the Alternate Base Rate; (2) pay all accrued and unpaid
interest to date on the amount so converted; and (3) pay any amounts required to
compensate the Agent and the Lenders for any additional cost or expense which
the Agent or any Lender may incur as a result of such adoption of or change in
such Legal Requirement or in the interpretation or administration thereof and
any Consequential Loss which the Agent or any Lender may incur as a result of
such conversion to the Alternate Base Rate.
 
(b) If the adoption of any applicable Legal Requirement or any change in any
applicable Legal Requirement or in the interpretation or administration thereof
by any Governmental Authority or compliance by the Agent or any Lender with any
request or directive (whether or not having the force of law) from any
Governmental Authority shall at any time as a result of any portion of the
principal balance of the Term Notes being maintained on the basis of the
Adjusted LIBO Rate:
 
(1) impose, modify, increase or deem applicable any reserve requirement
(excluding that portion of any reserve requirement included in the calculation
of the Statutory Reserves), special deposit requirement or similar requirement
(including state law requirements and Regulation D) imposed, modified, increased
or deemed applicable by any Governmental Authority against assets held by the
Agent or any Lender, or against deposits or accounts in or for the account of
the Agent or any Lender, or against loans made by the Agent or any Lender, or
against any other funds, obligations or other Property owned or held by the
Agent or any Lender; or
 
(2) impose on the Agent or any Lender any other materially restrictive or
limiting condition regarding any LIBOR Borrowing; and the result of any of the
foregoing is to increase the cost to any Lender of agreeing to make or of
making, renewing or maintaining such borrowing on the basis of the Adjusted LIBO
Rate, or reduce the amount of principal or interest received by any Lender, then
the Agent or such Lender shall use reasonable efforts to give the Borrower
written notice thereof within a reasonable time after discovery of such adoption
or change by the Agent or such Lender, as applicable (it being agreed, however,
that any failure to provide such notice to the Borrower shall not in any manner
affect the rights under this Section 2.7(b) of the Agent or any Lender), and,
upon demand by such Lender, the Borrower shall pay to such Lender, from time to
time as specified by such Lender, additional amounts which shall compensate such
Lender for such increased cost or reduced amount.  Such Lender will promptly
notify the Borrower in writing of any event, upon becoming actually aware of it,
which will entitle any Lender to additional amounts pursuant to this
paragraph.  Such Lender’s determination of the amount of any such increased
cost, increased reserve requirement or reduced amount shall be conclusive and
binding, absent manifest error, provided that the calculation thereof and reason
therefore is certified and is set forth in reasonable detail in such
certification by such Lender.
 
The Borrower shall have the right, if it receives from any Lender any notice
referred to in the preceding paragraph, upon three (3) Business Days’ notice to
the Agent, either (i) to repay in full (but not in part) any borrowing with
respect to which such notice was given, together with any accrued interest
thereon, or (ii) to convert the Adjusted LIBO Rate in effect with respect to
such borrowing from such Lender to the Alternate Base Rate; provided, that any
such repayment or conversion shall be accompanied by payment of (x) the amount
required to compensate the appropriate Lender or Lenders for the increased cost
or reduced amount referred to in the preceding paragraph; (y) all accrued and
unpaid interest to date on the amount so repaid or converted; and (z) any
Consequential Loss which may be incurred as a result of such repayment or
conversion.  Additionally, if it receives from any Lender any notice referred to
in the preceding paragraph, the Borrower shall also have the corresponding
rights in Section 10.16(c).
 
(c) If for any reason with respect to any Interest Period the Agent shall have
in good faith determined (which determination shall be conclusive and binding
upon the Borrower) that: (1) the Agent is unable through its customary general
practices to determine a rate at which the Agent is offered deposits in United
States dollars by prime banks in the London interbank market, in the appropriate
amount for the appropriate period, or by reason of circumstances affecting the
London interbank market, generally, the Agent is not being offered deposits for
the applicable Interest Period and in an amount equal to the amount of the
Agent’s pro-rata portion of any LIBOR Borrowing requested by the Borrower, or
(2) the Adjusted LIBO Rate will not adequately and fairly reflect the cost to
any Lender of making and maintaining any LIBOR Borrowing hereunder for any
proposed Interest Period, then the Agent shall give the Borrower notice thereof
and thereupon each outstanding LIBOR Borrowing then in effect shall be
converted, without any notice to or from the Borrower, upon the termination of
the Interest Period then in effect to an Alternate Base Rate Borrowing.
 
(d) Each Credit Party, jointly and severally with all other Credit Parties,
hereby agrees to indemnify the Agent and each of the Lenders against and hold
each of them harmless from any Consequential Loss which it may incur or sustain
as a consequence of any prepayment (mandatory or optional) or default by the
Borrower in the payment of any principal amount of or interest on each Term Note
or any failure by the Borrower to convert or to borrow any LIBOR Borrowing on
the date specified by the Borrower.  This agreement shall survive the payment of
each Term Note.  A certificate as to any additional amounts payable to the Agent
or any Lender pursuant to this paragraph, detailing the basis therefore and
submitted by the Agent or such Lender to the Borrower shall be conclusive and
binding upon the Credit Parties, absent manifest error, provided the calculation
thereof is set forth in reasonable detail in such notice.
 
(e) If the Borrower requests quotes of the Adjusted LIBO Rate for different
Interest Periods being considered for election by the Borrower, the Agent will
use reasonable efforts to provide such quotes to the Borrower
promptly.  However, all such quotes provided shall be representative only and
shall not be binding on the Agent or any Lender, nor shall they be
determinative, directly or indirectly, of any Adjusted LIBO Rate or any
component of any such rate, nor will the Borrower’s failure to receive or the
Agent’s failure to provide any requested quote or quotes either (1) excuse or
extend the time for performance of any obligation of the Borrower or for the
exercise of any right, option or election of the Borrower or (2) impose any duty
or liability on the Agent or any Lender.  If the Borrower requests a list of the
Business Days in any calendar month, the Agent will use reasonable efforts to
provide such list promptly.  However, any such list provided shall be understood
to identify only those days which the Agent believes in good faith at the time
such list is prepared will be the Business Days for such month.  The Agent shall
not have any liability for any failure to provide, delay in providing, error or
mistake in or omission from, any such quote or list.
 
(f) With respect to any Lender having a LIBOR Lending Office which differs from
its Domestic Lending Office, all Term Loans advanced by such Lender’s LIBOR
Lending Office shall be deemed to have been made by such Lender and the
obligation of the Borrower to repay such Term Loans shall nevertheless be to
such Lender and shall be deemed held by such Lender, to the extent of such
portions of the Term Loan, for the account of such Lender’s LIBOR Lending
Office.
 
(g) Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of the
Term Loans hereunder in any manner it sees fit, it being understood, however,
that for the purposes of this Agreement, all determinations hereunder shall be
made as if such Lender had actually funded and maintained its portion of each
LIBOR Borrowing during each Interest Period for the Term Loans through the
purchase of deposits having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the LIBO Rate for such Interest Period.
 
(h) The Borrower’s obligation to pay increased costs and Consequential Loss with
regard to each LIBOR Borrowing as specified in this Section 2.7 hereof shall
survive termination of this Agreement.
 
2.8. Pro-Rata Treatment.
 
(a) Except to the extent otherwise provided herein:  (a) each borrowing from the
Lenders under Section 2.1 hereof shall be made pro-rata, according to each
Lender’s Term Loan Commitment Percentage as applicable; and (b) each payment or
prepayment by the Borrower of principal of or interest on Term Loans shall be
made to the Agent for the account of the Lenders pro-rata in accordance with the
respective unpaid principal amounts of such Term Loans held by the Lenders.
 
(b) (a)           Unless the Agent shall have been notified in writing by any
Lender prior to the Closing Date that such Lender will not make the amount that
would constitute such Lender’s Term Loan Commitment Percentage of the Term Loans
on the Closing Date available to the Agent at the Principal Office, the Agent
may assume that such Lender has made such amount available to the Agent on such
date, and the Agent may, in reliance upon such assumption and subject to the
terms and conditions of this Agreement, but shall not be obligated to, make such
amount available to the Borrower by depositing the same, in immediately
available funds, in a deposit account designated and maintained by the Borrower
with JPMorgan Chase Bank, N.A.  Any Lender failing to timely deliver its
requisite portion of the Term Loans shall deliver the same to the Agent as soon
as possible thereafter, together with interest on such amount for each day from
the due date for such payment to the date of payment by such Lender to the Agent
of such amount at a rate of interest per annum equal to the Federal Funds
Effective Rate for such period.  In addition, the Borrower hereby agrees that
upon demand by the Agent, the Borrower shall reimburse the Agent for any such
amount which any Lender has failed to timely deliver to the Agent, but which the
Agent may have previously made available to the Borrower in accordance with the
other provisions of this Section 2.8(b).
 
2.9. Sharing of Payments, Etc.  Each of the Credit Parties agrees that, in
addition to (and without limitation of) any right of set-off, bankers’ lien or
counterclaim a Lender may otherwise have, each Lender shall be entitled, at its
option, to offset balances held by it for the account of any of the Credit
Parties at any of its offices against any principal of or interest on any of
such Lender’s Term Loans to the Borrower hereunder, or any other Obligation of
the Borrower hereunder (regardless of whether such Obligations of the Borrower
are then due and regardless of whether such offset balances are then due to the
Borrower), in which case it shall promptly notify the Borrower and the Agent
thereof, provided, that such Lender’s failure to give such notice shall not
affect the validity thereof.  If a Lender shall obtain payment of any principal
of or interest on any Term Loan made by it under this Agreement, or other
obligation then due to such Lender hereunder, through the exercise of any right
of set-off (including, without limitation, any right of set-off or lien granted
under Section 10.19 hereof), banker’s lien, counterclaim or similar right, or
otherwise, it shall promptly purchase from the other Lenders participations in
the Term Loans made by, or the other obligations of the Borrower hereunder of,
the other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro-rata in accordance with
their respective Term Loan Commitment Percentages.  To such end all the Lenders
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.  Each of the Credit Parties agrees, to the fullest extent it may
effectively do so under applicable law, that any Lender so purchasing a
participation in the Loans made by or other obligations hereunder of, the other
Lenders may exercise all rights of set-off, bankers’ lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of said Loans or other obligations in the amount of such
participation.  Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
 
2.10. Recapture.  If on any Interest Payment Date the Agent does not receive for
the account of one or more Lenders payment in full of interest computed at the
Alternate Base Rate and/or the Adjusted LIBO Rate, as applicable (computed
without regard to any limitation by the Highest Lawful Rate), because the sum of
the Alternate Base Rate and/or the Adjusted LIBO Rate, as applicable (so
computed), exceeds or has exceeded the Highest Lawful Rate applicable to such
Lenders, the Borrower shall pay to the Agent for the account of such Lenders, in
addition to interest otherwise required, on each Interest Payment Date
thereafter, the Excess Interest Amount (calculated as of each such subsequent
Interest Payment Date); provided, that in no event shall the Borrower be
required to pay, for any computation period, interest at a rate exceeding the
Highest Lawful Rate applicable to such Lenders during such period.  As used
herein, the term “Excess Interest Amount” shall mean, on any day, the amount by
which (a) the amount of all interest which would have accrued prior to such day
on the outstanding principal of the Term Notes of the applicable Lender (had the
Alternate Base Rate and/or the Adjusted LIBO Rate, as applicable, at all times
been in effect without limitation by the Highest Lawful Rate applicable to such
Lender) exceeds (b) the aggregate amount of interest actually paid to the Agent
for the account of such Lender on its Term Notes on or prior to such day.
 
2.11. Conversion and Continuation of Term Loan.  Each conversion of the Term
Loan or any portion thereof from one Type to another, and each continuation of a
LIBOR Borrowing shall be made upon the Borrower’s irrevocable notice to the
Agent, which may be given by telephone.  Each such notice must be received by
the Agent not later than 12:00 p.m. three (3) Business Days prior to the
requested date of any conversion to or continuation of a LIBOR Borrowing or of
any conversion of a LIBOR Borrowing to an Alternate Base Rate Borrowing.  Each
telephonic notice by the Borrower pursuant to this Section 2.11 must be
confirmed promptly by delivery to the Agent of a written request in the form of
Exhibit C attached hereto (each, a “Loan Notice”), appropriately completed and
signed by a Responsible Officer of the Borrower. Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
conversion of the Term Loan from one Type to another or a continuation of a
LIBOR Borrowing, (ii) the requested date of the conversion or continuation
(which shall be a Business Day), (iii) the principal amount of the Term Loan to
be converted or continued, and (iv) if applicable, the duration of the Interest
Period with respect thereto.  If the Borrowers fail to give a timely notice
requesting a conversion or continuation, then the Term Loan shall be continued
or converted to, a LIBOR Borrowing with the same Interest Period as in effect
immediately prior thereto with respect to such Term Loan.  Any such automatic
conversion shall be effective as of the last day of the Interest Period then in
effect.  If the Borrower requests a conversion to, or continuation of a LIBOR
Borrowing in any such Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.  Except as
otherwise provided herein, a LIBOR Borrowing may be continued or converted only
on the last day of an Interest Period for such LIBOR Borrowing.  During the
existence of a Default, no Term Loan may be converted to or continued as a LIBOR
Borrowing without the consent of the Required Lenders.
 
3. Collateral.
 
3.1. Security Documents.  The Term Loans and all other Obligations shall be
secured by the Collateral described in the Security Documents and the First Lien
Intercreditor Agreement, and the Agent and the Lenders are entitled to the
benefits thereof.  The Credit Parties shall duly execute and deliver the
Security Documents, all consents of third parties necessary to permit the
effective granting of the Liens created thereby, and other documents, all in
Proper Form, as may be reasonably required by the Collateral Agent to grant to
the Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, a valid, perfected and enforceable first priority Lien on and
security interest in the Collateral (subject only to the Liens permitted under
Section 7.2 hereof), including without limitation, any and all original stock
certificates, stock transfer powers, assignments and other documents and
instruments necessary or desirable under the laws of any applicable jurisdiction
with regard to the Equity Interests covered by any Security Agreement.
 
3.2. Filing and Recording.  The Credit Parties shall, at their sole cost and
expense, cooperate with the Collateral Agent in causing all financing statements
and other Security Documents pursuant to this Agreement to be duly recorded
and/or filed or otherwise perfected in all places necessary to perfect the Liens
of the Collateral Agent, in the opinion of the Collateral Agent, and the Credit
Parties shall take such other actions as the Collateral Agent may reasonably
request, in order to perfect and protect the Liens of the Collateral Agent, for
the ratable benefit of the Lenders, in the Collateral.  Each of the Credit
Parties, to the extent permitted by law, hereby authorizes the Collateral Agent
to file any financing statement or other Security Document in respect of any
Lien created pursuant to the Security Documents which may at any time be
required to perfect such Liens or which, in the reasonable opinion of the
Collateral Agent, may at any time be desirable, although the same may have been
executed only by the Collateral Agent or, at the option of the Collateral Agent,
to sign such financing statement on behalf of any Credit Party, and file the
same, and each of the Credit Parties hereby irrevocably designates the
Collateral Agent, its agents, representatives and designees as its agent and
attorney-in-fact for this purpose.  In the event that any re-recording or
refiling thereof (or the filing of any statements of continuation or assignment
of any financing statement) is required to protect and preserve such Lien, the
Credit Parties shall, at the Credit Parties’ cost and expense, cause the same to
be recorded and/or refiled at the time and in the manner requested by the
Collateral Agent.
 
4. Conditions.  The obligation of the Lenders to make the Term Loans is subject
to the satisfaction of the following conditions:
 
(a) all representations and warranties of any of the Credit Parties set forth in
this Agreement and in any other Loan Document shall be true and correct in all
material respects with the same effect as though made on and as of such date,
except for (i) those representations and warranties which relate only to the
Closing Date and (ii) those changes in such representations and warranties
otherwise permitted by the terms of this Agreement;
 
(b) there shall have occurred no Material Adverse Effect, after giving effect to
the Term Loans;
 
(c) no Default or Event of Default shall have occurred and be continuing;
 
(d) if requested by the Agent, it shall have received a certificate executed by
a Responsible Officer of the Borrower as to the compliance with subparagraphs
(a) through (c) above;
 
(e) the making of the Term Loans shall not be prohibited by, or subject the
Agent or any Lender to, any penalty or onerous condition under any Legal
Requirement; and
 
(f) the Borrower shall have paid all legal fees and other expenses of the type
described in Section 10.9 hereof for which invoices have been presented through
the date of the Term Loans;
 
(g) the Agent and the Lenders shall have received the following which shall be
duly executed and in Proper Form:
 
(1) the Loan Documents executed by the applicable Credit Parties;
 
(2) a certificate of corporate resolutions and incumbency executed by the
Secretary or an Assistant Secretary of the Borrower dated as of the date hereof,
authorizing (i) the Borrower’s entering into the transactions contemplated
hereby and (ii) the delivery by the Borrower of the Loan Documents to be
executed and delivered by the Borrower;
 
(3) a certificate of corporate resolutions and incumbency executed by the
Secretary or an Assistant Secretary of each of the Guarantors dated as of the
date hereof, authorizing each of the Guarantors to (i) enter into the
transactions contemplated hereby and (ii) deliver the Loan Documents to be
executed and delivered by the Guarantors;
 
(4) certified copies of the Organizational Documents of the Borrower, each of
the Borrower’s Subsidiaries, and the Parent;
 
(5) certificates from the Secretary of State or other appropriate public
official of the State of Delaware as to the continued existence and good
standing of the Borrower in the State of Delaware;
 
(6) certificates from the Secretary of State or other appropriate public
official as to the continued existence and good standing of each of the
Guarantors in its applicable State of formation;
 
(7) certificates from the appropriate public officials of the States of Texas,
California, Colorado, Florida, Idaho, Iowa, Kansas, Nebraska, Oklahoma,
Tennessee, Utah and Wisconsin for the Borrower as to the good standing and
qualification as a foreign corporation, to the extent it is necessary to be
qualified to do business as a foreign corporation in these jurisdictions;
 
(8) [intentionally omitted];
 
(9) copies of the following financial information: (i) audited consolidated
financial statements of the Borrower and its Subsidiaries for the two most
recent fiscal years ended prior to the Closing Date as to which such financial
statements are available, (ii) unaudited interim consolidated financial
statements of the Borrower and its Subsidiaries for each quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (i) of this paragraph and (iii) the most recent projected income
statement, balance sheet and cash flows for each of the Borrower’s fiscal years
through June 30, 2011 (setting forth such projections on both an annual basis
and on a monthly basis for the fiscal year ending June 30, 2008 and on an annual
basis only for the remaining fiscal years);
 
(10) evidence that all material governmental and third party approvals necessary
in connection with the financing thereof and the continuing operations of the
Borrower and its Subsidiaries (including shareholder approvals, if any) have
been obtained on terms satisfactory to the Lenders and shall be in full force
and effect, and all applicable waiting periods have expired without any action
being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the financing thereof or, any
of the transactions contemplated hereby;
 
(11) the First Lien Intercreditor Agreement;
 
(12) a payoff letter from Wilmington Trust Company, indicating the amount of the
obligations of the Credit Parties to Wilmington Trust Company and certain other
lenders under the Term Loan Agreement dated as of September 26, 2006, and an
acknowledgment by Wilmington Trust Company (on behalf of itself and such
lenders) that upon receipt of such funds neither Wilmington Trust Company nor
any such lender will have any rights or interests under the Security Documents
or that certain Intercreditor Agreement, dated as of September 26, 2006, by and
among the Credit Parties, the Revolving Credit Agent, the Collateral Agent and
Wilmington Trust Company;
 
(13) evidence that all legal (including tax implications) and regulatory matters
in connection with the Term Loans are satisfactory to the Agent and the Lenders;
 
(14) a legal opinion from Goodwin Procter LLP, the independent counsel for the
Credit Parties, dated as of the Closing Date, addressed to the Agent and
acceptable in all respects to the Agent and the Lenders in their sole reasonable
discretion;
 
(15) certificates of insurance satisfactory to the Collateral Agent in all
respects evidencing the existence of all insurance required to be maintained by
the Borrower and its Subsidiaries pursuant to the terms of this Agreement and
the Security Documents;
 
(16) copies of all material employment agreements, management fee agreements and
tax sharing agreements with respect to any of the Credit Parties which the Agent
shall have requested;
 
(h) payment by the Borrower to the Lenders, the Agent and the Agent’s applicable
Affiliates of all fees required to be paid under the Loan Documents and all
expenses required to be paid under the Loan Documents for which invoices have
been presented; and
 
(i) receipt by the Agent and the Lenders of all other Loan Documents and any
other instruments or documents consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as the Agent may reasonably
request, executed by the Credit Parties or any other Person required by the
Agent.
 
5. Representations and Warranties.
 
Each of the Credit Parties represents and warrants to the Agent and the Lenders,
as to itself and each other Credit Party, that:
 
5.1. Organization.  Each Credit Party is duly organized, validly existing and in
good standing under the laws of the state of its incorporation or formation; has
all power and authority under its organizational documents to own its respective
Property and assets and to conduct its respective businesses as presently
conducted; and is duly qualified to do business and in good standing in each and
every state jurisdiction where its respective business requires such
qualification, except for those jurisdictions in which the failure to qualify
and/or be in good standing would not reasonably be expected to result in a
Material Adverse Effect.
 
5.2. Financial Statements.
 
(a) The Consolidated financial statements of the Credit Parties and their
Subsidiaries delivered to the Agent and the Lenders in connection with this
Agreement, including without limitation, (i) the Annual Audited Financial
Statements dated as of June 30, 2006 and (ii) the Monthly Unaudited Financial
Statements dated as of May 31, 2007, fairly present in all material respects, in
accordance with GAAP, the Consolidated financial condition and the results of
operations of the Credit Parties and their Subsidiaries as of the dates and for
the periods indicated, subject to year-end audit adjustments and the absence of
footnotes in the case of such unaudited or any pro forma statements, and no
Material Adverse Effect has occurred since the dates of such financial
statements.
 
(b) The Credit Parties have heretofore furnished to the Agent, for the calendar
months from the projected Closing Date through June 30, 2008 and for each fiscal
year of the Credit Parties thereafter through the Term Loan Maturity Date,
projected income statements, balance sheets and cash flows of the Credit Parties
and their Subsidiaries, on a Consolidated basis, together with one or more
schedules demonstrating prospective compliance with all financial covenants
contained in this Agreement, such projections disclosing all material
assumptions made by the Credit Parties in formulating such projections.  The
projections are based upon estimates and assumptions which the Credit Parties
believe are reasonable in light of the conditions which existed as of the time
the projections were made, have been prepared on the basis of the material
assumptions stated therein and reflect as of the Closing Date an estimate
believed reasonable by the Credit Parties as to the results of operations and
other information projected therein.
 
5.3. Enforceable Obligations; Authorization.  The Loan Documents are legal,
valid and binding obligations of the respective Credit Parties executing and
delivering the same, enforceable against such Credit Parties in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors rights
generally and by general equitable principles regardless of whether considered
in a proceeding in equity or at law.  The execution, delivery and performance of
the Loan Documents have all been duly authorized by all necessary corporate, and
if necessary shareholder, action; are within the power and authority of each of
the Credit Parties; do not and will not violate any Legal Requirement material
to the business, assets or operations of any of the Credit Parties taken as a
whole or the Organizational Documents of any of the Credit Parties; do not and
will not constitute a default under, any material agreement or instrument by
which any of the Credit Parties or any material portion of any of the Credit
Parties’ Property is bound or affected; and do not and will not result in the
creation of any Lien upon any Property of any of the Credit Parties except as
expressly contemplated therein.  All necessary approvals of any Governmental
Authority and all other requisite material permits, registrations and consents
for the performance have been obtained for the delivery and performance of the
Loan Documents.
 
5.4. Other Debt.  Except as set forth on Schedule 5.4 attached hereto, no Credit
Party is in default in the payment of any other Indebtedness or under any
agreement, mortgage, deed of trust, security agreement or lease to which it is a
party, the result of which would or could reasonably be expected to result in a
Material Adverse Effect.
 
5.5. Litigation.  Except as set forth on Schedule 5.5 attached hereto, to the
knowledge of the Credit Parties, there is no litigation or administrative
proceeding pending or threatened against, nor any outstanding judgment, order or
decree affecting, any of the Credit Parties or any of their Subsidiaries before
or by any Governmental Authority or arbitral body as to which there is a
reasonable possibility of an adverse determination and which individually or in
the aggregate have, or if adversely determined could reasonably be expected to
have, a Material Adverse Effect.  Except as set forth on Schedule 5.5 attached
hereto, as of the Closing Date there is no litigation or administrative
proceeding pending against, nor any outstanding judgment, order or decree
affecting, any of the Credit Parties or any of their Subsidiaries before or by
any Governmental Authority or arbitral body.  Except as set forth on Schedule
5.5 attached hereto, none of the Credit Parties, nor any of their Subsidiaries,
is knowingly in material default with respect to any judgment, writ, rule,
regulation, order or decree of any Governmental Authority.
 
5.6. Taxes.  Except as set forth on Schedule 5.6 attached hereto, the Credit
Parties and their Subsidiaries have filed all federal, state, local or foreign
tax returns required to have been filed by them and paid all taxes shown thereon
to be due, except those for which extensions have been obtained, and except for
those which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained in accordance with
GAAP.  There is no outstanding federal audit by the Internal Revenue Service of
the income tax returns of any of the Credit Parties or any of their Subsidiaries
claimed or raised in writing, and none of the Credit Parties or any of their
Subsidiaries have, as of the Closing Date, any extension of time with respect to
an assessment or deficiency relating to any Federal tax return that is still in
effect.  None of the Credit Parties or any of their Subsidiaries have, as of the
Closing Date, any extension of time with respect to an assessment or deficiency
relating to any state, local or foreign tax return that is still in effect,
other than extensions with respect to tax liabilities where the failure by the
applicable Credit Party to pay such tax liabilities would not have a Material
Adverse Effect.  None of the Credit Parties or any of their Subsidiaries is a
party to any tax sharing arrangement with any Person (other than the affiliated
group of which Walco Holdings is the parent).
 
5.7. No Material Misstatements.  No information, report, financial statement,
exhibit or schedule prepared and furnished by or on behalf of any Credit Party
to the Agent or any Lender in connection with this Agreement or any other Loan
Documents knowingly contains any material misstatement of fact or knowingly
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading at the
time prepared or furnished.
 
5.8. Subsidiaries.  As of the date hereof, the Credit Parties have no
Subsidiaries other than as listed on Schedule 5.8 attached hereto.  Except as
expressly indicated on Schedule 5.8 attached hereto, as of the Closing Date,
each of the Subsidiaries listed on Schedule 5.8 is wholly owned by the
applicable Credit Party. As of the Closing Date, Schedule 5.8 sets forth (a) the
jurisdiction of incorporation or organization of each Subsidiary of the Credit
Parties, and (b) the percentage of the applicable Credit Party’s ownership of
the Equity Interests of each Subsidiary of the Credit Parties.
 
5.9. Representations by Others.  All representations and warranties made by or
on behalf of any of the Credit Parties in any Loan Document shall constitute
representations and warranties of the Credit Parties hereunder.
 
5.10. Permits, Licenses, Etc.  Each of the Credit Parties possess all material
permits from each applicable Governmental Authority, licenses from each
applicable Governmental Authority, patents, patent rights, trademarks, trademark
rights, trade names, trade name rights and copyrights which are reasonably
required to conduct their respective businesses.
 
5.11. ERISA.  No Reportable Event has occurred with respect to any Plan which,
when taken together with all other such Reportable Events for which liability is
reasonably expected to occur, could reasonably be expected to result in any
material liability.  Each Plan complies in all material respects with all
applicable provisions of ERISA, and the Borrower or each ERISA Affiliate have
filed all reports required by ERISA and the Code to be filed with respect to
each Plan.  The Borrower does not have any knowledge of any event which could
reasonably be expected to result in a liability of the Borrower or any ERISA
Affiliate to the PBGC other than for applicable premiums.  No accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists with respect to any Plan.  No event has
occurred and no condition exists that could reasonably be expected to constitute
grounds for a Plan to be terminated under circumstances which would cause the
Lien provided under Section 4068 of ERISA to attach to any Property of the
Borrower or any ERISA Affiliate.  No event has occurred and no condition exists
that could reasonably be expected to cause the Lien provided under Section 302
of ERISA or Section 412 of the Code to attach to any Property of the Borrower or
any ERISA Affiliate.
 
5.12. Title to Properties; Possession Under Leases.
 
(a) Except as set forth on Schedule 5.12 attached hereto, the Credit Parties and
each of their respective Subsidiaries have good and marketable title to, or a
valid leasehold interest in, all of their respective Property and assets that
are material to their respective business taken as a whole shown on the most
recent Consolidated balance sheet for the Credit Parties and their Subsidiaries
provided under the terms of Section 6.3(a) or Section 6.3(b), and all assets and
Property that are material to their respective business taken as a whole,
acquired since the date of such respective balance sheets, except for such
Property as is no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business or
otherwise in accordance with this Agreement, and except for minor defects in
title that do not interfere with the ability of the Credit Parties or any of
their Subsidiaries to conduct their respective businesses as now conducted, all
such assets and Property are free and clear of all Liens other than those
permitted by Section 7.2 hereof.
 
(b) Except as set forth on Schedule 5.12 attached hereto, the Borrower and each
of its Subsidiaries have no knowledge of any material default under any material
leases to which any of them is a party and under which any of them is in
occupancy, except where non-compliance does not affect the Borrower’s or such
Subsidiary’s use or occupancy thereof, as applicable, and all such material
leases are in full force and effect.  Schedule 5.12 attached hereto sets forth
each of such leases of real Property in existence as of the Closing Date, and
upon the request of the Agent, the Borrower will provide the Agent with complete
and correct copies of all of such leases of real Property then in effect.
 
5.13. Assumed Names.  As of the Closing Date, neither the Borrower, nor any of
its Subsidiaries, is currently conducting its business under any assumed name or
names, except as set forth on Schedule 5.13 attached hereto. Upon written
request by the Agent, the Borrower shall promptly furnish the Agent with a then
current listing of all assumed names that the Borrower and/or any of its
Subsidiaries is then utilizing in conducting their respective businesses.
 
5.14. Investment Company Act.  None of the Credit Parties or any of their
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended.
 
5.15. Public Utility Holding Company Act.  None of the Credit Parties or any of
their Subsidiaries is a “public utility company,” or an “affiliate” or a
“subsidiary company” of a “public utility company,” or a “holding company,” or a
“subsidiary company” of a “registered holding company,” or an “affiliate” of a
“registered holding company” as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended (“PUHCA”).
 
5.16. Agreements.  Schedule 5.16 attached hereto is a complete and correct list,
as of the Closing Date, of (i) all credit agreements or indentures for borrowed
money and capitalized leases to which any of the Credit Parties or any of their
Subsidiaries is a party and all Property of any of the Credit Parties or any of
their Subsidiaries subject to any Lien securing such Indebtedness or capitalized
lease obligation, (ii) each letter of credit and guaranty to which any of the
Credit Parties or any of their Subsidiaries is a party, (iii) all other material
instruments in effect as of the date hereof providing for, evidencing, securing
or otherwise relating to any Indebtedness for borrowed money of any of the
Credit Parties or any of their Subsidiaries (other than the Indebtedness
hereunder), and (iv) all obligations of any of the Credit Parties or any of
their Subsidiaries to issuers of appeal bonds issued for account of any Credit
Party or any of its Subsidiaries.  The Borrower shall, upon, request by the
Agent, deliver to the Agent and the Lenders a complete and correct copy of all
such credit agreements, indentures, capitalized leases, letters of credit,
guarantees and other instruments described in Schedule 5.16 or arising after the
date hereof, including any modifications or supplements thereto, as in effect on
the date hereof.
 
5.17. Environmental Matters.  Except as disclosed on Schedule 5.17 attached
hereto or in any of the environmental assessments or studies described on
Schedule 5.17 attached hereto, to the Credit Parties’ knowledge: (a) each of the
Credit Parties and their Subsidiaries are in material compliance with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Requirement of
Environmental Law or Environmental Permit reasonably necessary to the conduct of
any material aspect of the business of any Credit Party or any of its
Subsidiaries; (b) each of the Credit Parties and their Subsidiaries (i) have
obtained and maintained in effect all Environmental Permits reasonably necessary
to the conduct of any material aspect of the business of any Credit Party or any
of its Subsidiaries, (ii) along with their respective Properties (whether leased
or owned) have been and are in material compliance with all applicable
Requirements of Environmental Law and Environmental Permits, (iii) along with
their respective Properties (whether leased or owned) are not subject to any
material (A) Environmental Claims or (B) Environmental Liabilities arising from
or based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof, and (iv) have not received individually
or collectively any notice of any material violation or alleged material
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with their respective Properties; and (c)
none of the Credit Parties or any of their Subsidiaries has actual knowledge of
any material violation of any applicable Requirements of Environmental Law and
Environmental Permits by, or of any material Environmental Claims or
Environmental Liabilities arising against, any of the prior owners or operators
and predecessors in interest with respect to any of the Credit Parties’ or any
of their Subsidiaries’ respective Property.
 
5.18. Solvency.
 
(a) Immediately after the consummation of the transactions contemplated
hereunder to occur on the Closing Date, (i) the fair value of the assets of each
Credit Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Credit Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Credit Party will be able to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Credit Party will not
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted
after the Closing Date; provided, however, that for purposes of the foregoing
representations and warranties by the Canadian Subsidiaries of the Borrower set
forth in clauses (i), (ii) and (iii), the contingent liabilities of such
Canadian Subsidiaries under the terms of the Guaranty and under the terms of the
guaranty by such Canadian Subsidiaries of the Revolving Credit Agreement shall
be excluded.  Notwithstanding the foregoing proviso, however, each Canadian
Subsidiary of the Borrower represents and warrants that applicable Canadian
bankruptcy and insolvency laws do not provide such Canadian Subsidiary with any
fraudulent conveyance or other similar defense to the enforcement of such
Canadian Subsidiary’s Obligations under the Guaranty or any applicable Security
Document to which such Canadian Subsidiary is a party.
 
(b) No Credit Party intends to, or will permit any of its Subsidiaries to, and
no Credit Party believes that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
 
5.19. Status of Collateral.  The Credit Parties are and shall be the sole
owners, free and clear of all Liens except in favor of the Collateral Agent or
otherwise permitted under Section 7.2 hereunder, of and fully authorized to
sell, transfer, pledge and/or grant a security interest in all of the Collateral
(other than Excluded Collateral, as defined in the applicable Security
Documents).
 
5.20. Revolving Credit Agreement Debt.  The Revolving Credit Agreement
constitutes the valid and binding obligation of the applicable Credit Parties,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, and moratorium laws and other laws affecting
creditors’ rights generally and by general principles of equity regardless of
whether considered in a proceeding in equity or at law.  The Credit Parties have
no knowledge that any of the representations and warranties contained in the
Revolving Credit Agreement were not true and correct in all material respects on
and as of the date given or, except as consented to by the Agent in writing or
otherwise disclosed in writing to the Agent prior to the Closing Date, that any
of the material terms thereof have been modified, amended or waived other than
as permitted under Section 7.19.
 
5.21. Transactions with Related Parties. Except as set forth on Schedule 5.21
attached hereto, any and all transactions, contracts, or other agreements
existing on the Closing Date which have been entered into by and among any
Credit Party and any officer, director, shareholder or Affiliate of any of the
Credit Parties (other than Permitted Affiliate Transactions), has been entered
into and made upon terms and conditions not less favorable to the applicable
Credit Parties than those terms which could have been obtained from wholly
independent and unrelated sources.
 
5.22. Patents, Trademarks and Copyrights.  Schedule 5.22 hereto sets forth a
true, accurate and complete listing, as of the date hereof, of all patents,
registered trademarks and copyrights, and applications therefor, of each of the
Credit Parties and each of their Subsidiaries as of the Closing Date.  Except as
created or permitted under the Loan Documents, no Lien exists with respect to
the interest of any Credit Party or any of its Subsidiaries in any such patents,
registered trademarks or copyrights or applications therefor, and no Credit
Party or any of its Subsidiaries has transferred or subordinated any interest it
may have in such patents, registered trademarks and copyrights and applications
therefor.  The Borrower shall, from time to time as necessary, deliver to the
Agent an updated Schedule 5.22 to this Agreement, together with a certificate of
a Responsible Officer of the Borrower certifying that the information set forth
on such schedule is true, correct and complete as of such date, which schedule
may be used to prepare additional Security Agreements, if necessary.
 
6. Affirmative Covenants.
 
Until the Obligations shall have been paid in full, each Credit Party executing
this Agreement covenants and agrees, jointly and severally with all of the
Credit Parties, to perform and observe (and cause each of its Subsidiaries to
perform and observe) each and all of the following covenants and agreements:
 
6.1. Businesses and Properties.  At all times: (a) do or cause to be done all
things necessary to obtain, preserve, renew and keep in full force and effect
the rights, licenses, permits, franchises, patents, copyrights, trademarks and
trade names material to the conduct of its businesses; (b) maintain and operate
such businesses in the same general manner in which they are presently conducted
and operated, provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or any discontinuance or sale of such
business permitted under Section 7.4; (c) comply in all material respects with
all Legal Requirements applicable to the operation of such businesses whether
now in effect or hereafter enacted (including without limitation, all Legal
Requirements relating to public and employee health and safety and all
Environmental Laws) and with any and all other Legal Requirements; and (d) keep
and maintain all Property material to the conduct of such businesses in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make, or cause to be made, all necessary repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times.
 
6.2. Taxes.  Pay and discharge promptly when due (giving effect to all
extensions of time permitted by the applicable Governmental Authority) all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its Property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
upon such properties or any part thereof (except as otherwise permitted by
Section 7.2 hereof), unless being contested in good faith by appropriate
proceedings and as to which adequate reserves in an amount not less than the
aggregate amount secured by such Liens have been established in accordance with
GAAP; provided, however, that such contested amounts giving rise to such Liens
shall be immediately paid upon commencement of any procedure or proceeding to
foreclose any of such Liens unless the same shall be validly stayed by a court
of competent jurisdiction or a surety bond, which is satisfactory in all
respects to the Agent, is delivered to the Agent for the ratable benefit of the
Lenders in an amount no less than such contested amounts.
 
6.3. Financial Statements and Information.  Furnish to the Agent each of the
following:
 
(a) as soon as available and in any event within ninety (90) days after the end
of each fiscal year of the Credit Parties, Annual Audited Financial Statements
of the Credit Parties and their Subsidiaries;
 
(b) as soon as available and in any event within thirty (30) days after the end
of each calendar month, Monthly Unaudited Financial Statements of the Credit
Parties and their Subsidiaries;
 
(c) concurrently with the financial statements provided for in Subsections
6.3(a) and 6.3(b) hereof, (1) an Officer’s Certificate, signed by a Responsible
Officer of applicable Credit Party, and (2) if applicable, a written certificate
in Proper Form, identifying each Subsidiary which is otherwise required by the
provisions of Section 6.10 hereof to become a Guarantor at the request of the
Agent, but which has not yet done so as of the date of such certificate, and
providing an explanation of the reasons why each such Subsidiary is not a
Guarantor, signed by a Responsible Officer of the applicable Credit Party;
 
(d) as soon as available and in any event within five (5) Business Days after
the date of issuance thereof (if any such audit report or management letter is
ever issued), any (1) interim or special audit report made by independent
accountants of the books of the Credit Parties or any of their Subsidiaries or
(2) management letter prepared by the independent public accountants who
reported on the financial statements provided for in Subsection 6.3(a) above,
with respect to the internal audit and financial controls of the Credit Parties
and their Subsidiaries;
 
(e) as soon as available and in any event within thirty (30) days prior to the
commencement of each fiscal year of the Credit Parties, management-prepared
Consolidated financial projections of the Credit Parties and their Subsidiaries
for the immediately following three (3) fiscal years (setting forth such
projections on both an annual basis and on a monthly basis for the upcoming
fiscal year and on an annual basis only for the two (2) fiscal years
thereafter), such projections to be prepared and submitted in such format and
detail as reasonably requested by the Agent; and
 
(f) such other information relating to the financial condition, operations and
business affairs of any Credit Party or any of its Subsidiaries as from time to
time may be reasonably requested by the Agent.
 
6.4. Inspections; Field Examinations; Appraisals and Physical Counts.
 
(a) Upon reasonable notice (which may be telephonic notice), at all reasonable
times and as often as the Agent may request, permit any authorized
representative designated by the Agent, including without limitation, any
consultant engaged by the Agent, together with any authorized representatives of
any Lender desiring to accompany the Agent, to visit and inspect the Properties
and financial records of the Credit Parties and to make extracts from such
financial records and permit any authorized representative designated by the
Agent (together with any accompanying representatives of any Lender) to discuss
the affairs, finances and condition of the Credit Parties with any Responsible
Officer and the Credit Parties’ independent public accountants, as
applicable.  The Agent agrees that it shall schedule any meeting with any such
independent public accountant through the Borrower, and a Responsible Officer of
the Borrower shall have the right to be present at any such meeting.
 
(b) The Agent and any of its consultants shall each have the right to examine
(and any authorized representatives of any Lender shall have the right to
accompany the Agent during any such examination), as often as they may request,
the existence and condition of the Accounts, books and records of the Borrower
and its Subsidiaries and to review their compliance with the terms and
conditions of this Agreement and the other Loan Documents, subject to
governmental confidentiality requirements.  They shall also have the right to
verify with any and all customers of the Borrower and its Subsidiaries the
existence and condition of the Accounts, as often as they may require, without
prior notice to or consent of the Borrower or any of its Subsidiaries.  Without
in any way limiting the foregoing, the Agent, and any of its consultants shall
have the right to (i) conduct field examinations of the Borrower and its
Subsidiaries operations at the Borrower’s expense as often as they may request
and (ii) to order and obtain an appraisal of the Collateral by an appraisal firm
satisfactory to the Agent, and any of their consultants as often as they may
request.  Without in any way limiting the foregoing, the Borrower agrees to
cooperate and to cause its Subsidiaries to cooperate in all respects with the
Agent, and any of their consultants in connection with any and all inspections,
examinations and other actions taken by them pursuant to this Section 6.4.  The
Borrower hereby agrees to promptly pay, upon demand by the Agent (or the
applicable Lender, if appropriate), any and all fees and expenses incurred by
the Agent or any Lender in connection with any inspection, examination,
appraisal or review permitted by the terms of this Section 6.4; provided,
however, that so long as no Default or Event of Default is continuing, the
Borrower shall only be obligated to pay for (x) two field examinations during
each consecutive 12-month period (limited to the prevailing rate then charged
for field examinations, which is initially anticipated to be $850.00 per day per
examiner, plus all out-of-pocket expenses of the relevant examiner related to
such filed examinations), (y) one Collateral appraisal (other than the initial
field examinations and appraisals for any Accounts, Equipment and/or Inventory
acquired through an acquisition or other Investment permitted under the terms of
this agreement, it being agreed that the Borrower shall be obligated to pay for
each such initial field examination and/or appraisal, as applicable, conducted
with respect to each such acquisition or Investment); provided further, however,
that the Borrower shall only be obligated to pay or reimburse such fees and
expenses of any Lender other than the Agent to the extent incurred by such
Lender after the occurrence of any Default or Event of Default which has not
been cured to the satisfaction of the Agent or waived in writing by the Agent
and the Required Lenders.
 
6.5. Further Assurances.  Upon request by the Agent, promptly execute and
deliver any and all other and further agreements and instruments and take such
further action as may be reasonably requested by the Agent to (a) cure any
defect in the execution and delivery of any Loan Document or more fully to
describe particular aspects of any of the Credit Parties’ agreements set forth
in the Loan Documents or so intended to be, (b) to carry out the provisions and
purposes of this Agreement an the other Loan Documents, and (c) grant, preserve,
protect and perfect the first priority Liens created or intended to be created
by the Security Documents in the Collateral.
 
6.6. Books and Records.  Maintain financial records and books in accordance with
accepted financial practice and GAAP.
 
6.7. Insurance.
 
(a) Keep its insurable Properties adequately insured at all times by financially
sound and reputable insurers.
 
(b) Maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage and employee
liability, as is customary with companies similarly situated and in the same or
similar businesses, provided, however, that such insurance shall insure the
Property of the Borrower and each of its Subsidiaries against all risk of
physical damage, including without limitation, loss by fire, explosion, theft,
fraud and such other casualties as may be reasonably satisfactory to the Agent,
but in no event at any time in an amount less than the replacement value of the
Collateral.
 
(c) Maintain in full force and effect worker’s compensation coverage and public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with its operations and with
the use of any Properties owned, occupied or controlled by the Borrower or any
of its Subsidiaries, in such amounts as the Agent shall reasonably deem
necessary.
 
(d) Maintain such other insurance as may be required by law or as may be
reasonably requested by the Agent for purposes of assuring compliance with this
Section 6.7.
 
All insurance covering tangible personal Property subject to a Lien in favor of
the Agent for the benefit of the Lenders granted pursuant to the Security
Documents shall provide that, in the case of each separate loss, the full amount
of insurance proceeds shall be payable to the Agent and shall further provide
for at least 30 days’ prior written notice to the Agent of the cancellation or
substantial modification thereof.
 
6.8. ERISA.  At all times, except where a failure to comply with any of the
following, individually or in the aggregate, would or could reasonably be
expected to result in a material obligation or liability of any Credit Party:
(a) make contributions to each Plan in a timely manner and in an amount
sufficient to comply with the minimum funding standards requirements of ERISA;
(b) immediately upon acquiring knowledge of (i) any Reportable Event in
connection with any Plan for which no administrative or statutory exemption
exists or (ii) any Prohibited Transaction in connection with any Plan, that
could result in the imposition of material damages or a material excise tax on
the Borrower or any Subsidiary thereof, furnish the Agent a statement executed
by a Responsible Officer of the Borrower or such Subsidiary setting forth the
details thereof and the action which the Borrower or any such Subsidiary
proposes to take with respect thereto and, when known, any action taken by the
Internal Revenue Service with respect thereto; (c) notify the Agent promptly
upon receipt by the Borrower or any Subsidiary thereof of any notice of the
institution of any proceedings or other actions which may result in the
termination of any Plan by the PBGC and furnish the Agent with copies of such
notice; (d) pay when due, or within any applicable grace period allowed by the
PBGC, all required premium payments to the PBGC; (e) furnish the Agent with
copies of the annual report for each Plan filed with the Internal Revenue
Service not later than ten (10) days after the Agent requests such report; (f)
furnish the Agent with copies of any request for waiver of the funding standards
or extension of the amortization periods required by Sections 303 and 304 of
ERISA or Section 412 of the Code promptly after the request is submitted to the
Secretary of the Treasury, the Department of Labor or the Internal Revenue
Service, as the case may be; and (g) pay when due all installment contributions
required under Section 302 of ERISA or Section 412 of the Code or within 10 days
of a failure to make any such required contributions when due furnish the Agent
with written notice of such failure.
 
6.9. Use of Proceeds.  Subject to the terms and conditions contained herein, use
the proceeds of the Term Loans for refinancing the exiting obligations of the
Credit Parties to Wilmington Trust Company and certain other lenders under the
Term Loan Agreement dated as of September 26, 2006;  provided, that no proceeds
of any Term Loan shall be used (w) for the purpose of purchasing or carrying
directly or indirectly any margin stock as defined in Regulation U (“Reg U”) of
the Board of Governors of the Federal Reserve System, (x) for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any such margin stock, (y) for any other purpose which would cause such
Loan to be a “purpose credit” within the meaning of Reg U and (z) for any
purpose which would constitute a violation of Reg U or of Regulations G, T or X
of the Board of Governors of the Federal Reserve System or any successor
regulation of any thereof or of any other rule, statute or regulation governing
margin stock from time to time.
 
6.10. Guarantors, Joinder Agreements.  Promptly inform the Agent of the creation
or acquisition of any Subsidiary of any Credit Party or the commencement of any
business operations by any Inactive Subsidiary after the Closing Date and,
within thirty (30) days after the written request of the Agent delivered in
accordance with Section 10.2 below, cause (a) each such Subsidiary that is a
Domestic Subsidiary or created under the laws of Canada to become a Guarantor by
execution and delivery to the Agent, for the ratable benefit of the Lenders, of
a Guaranty or a Joinder Agreement (if a Joinder Agreement is requested by the
Agent in lieu of a Guaranty), (b) a first priority perfected security interest
(subject to the terms of the First Lien Intercreditor Agreement) to be granted
to the Collateral Agent, for the ratable benefit of the Lenders, in all of the
Equity Interests of such Subsidiary owned by any Credit Party or any of its
other Subsidiaries if such newly acquired or created Subsidiary or previously
Inactive Subsidiary is a Domestic Subsidiary or created under the laws of
Canada, or if such newly acquired or created Subsidiary or previously Inactive
Subsidiary is not a Domestic Subsidiary or a Subsidiary created under the laws
of Canada, then not more than sixty-five percent (65%) of all issued and
outstanding Equity Interests of such Subsidiary shall be pledged as Collateral
pursuant to the foregoing pledge requirement for Equity Interests, (c) cause
each such Subsidiary that is a Domestic Subsidiary or created under the laws of
Canada to grant to the Collateral Agent a security interest securing the
Obligations, for the ratable benefit of the Lenders (subject only to (i) the
First Lien Intercreditor Agreement, (ii) Liens permitted under Sections 7.2(b)
and (e) as to Accounts and Permitted Investment Securities which do not have
priority over the Lien of the Collateral Agent for the ratable benefit of the
Lenders, (ii) Liens permitted under Section 7.2 as to all other Collateral which
do not have priority over the Lien of the Collateral Agent for the ratable
benefit of the Lenders, and (iii) purchase money Liens existing as of the date
of acquisition by Borrower or any other Subsidiary of the Borrower of such newly
acquired Subsidiary, if applicable) in all Accounts, Inventory, Equipment,
general intangibles and other tangible and intangible personal Property owned at
any time by such Subsidiary and all products and proceeds thereof (subject to
similar exceptions as set forth in the Security Documents), and (d) cause such
Subsidiary to deliver to the Agent such related certificates, legal opinions and
documents (including Organizational Documents) as the Agent may reasonably
require; provided, however, that any Subsidiary that is not a Domestic
Subsidiary or created under the laws of Canada shall not be required to become a
Guarantor or grant any Liens hereunder.  To the extent reasonably feasible, all
of the foregoing requirements shall be affected by the execution and delivery of
a Joinder Agreement in a form acceptable to the Agent.
 
6.11. Notice of Events.  Notify the Agent within one (1) Business Day after any
Responsible Officer of any of the Credit Parties acquires knowledge of the
occurrence of, or if any of the Credit Parties causes or intends to cause, as
the case may be, any of the following: (i) the institution of any lawsuit,
administrative proceeding or investigation affecting any Credit Party or any of
its Subsidiaries, including without limitation, any audit by the Internal
Revenue Service, the adverse determination under which could reasonably be
expected to have a Material Adverse Effect; (ii) any development or change in
the business or affairs of any Credit Party or any of its Subsidiaries which has
had or which is likely to have, in the reasonable judgment of any Responsible
Officer of any of the Credit Parties, a Material Adverse Effect; (iii) any Event
of Default or Default, together with a reasonably detailed statement by a
Responsible Officer on behalf of the Borrower of the steps being taken to cure
the effect of such Event of Default or Default; (iv) the occurrence of a default
or event of default by any Credit Party or any of its Subsidiaries under any
agreement or series of related agreements to which it is a party, which default
or event of default could reasonably be expected to have a Material Adverse
Effect; (v) any material violation by, or investigation of any Credit Party or
any of its Subsidiaries in connection with any actual or alleged material
violation of any Legal Requirement imposed by the Environmental Protection
Agency, the Occupational Safety and Health Administration or any other
Governmental Authority which has or is likely to have, in the reasonable
judgment of any Responsible Officer of any Credit Party, a Material Adverse
Effect; (vi) any significant change in the accuracy of any material
representations and warranties of the any Credit Party or any of its
Subsidiaries in this Agreement or any other Loan Document (including without
limitation, the representations and warranties in Section 5.20(b)); (vii) the
delivery of any written notice of default or event of default to any Credit
Party by any Revolving Credit Lender; and (viii) any amendment or modification
of the Loan Documents (as defined in the Revolving Credit Agreement), such
notice to be accompanied by copies of the actual amendment or modification
documents; and (ix) any of the following:  (1) the occurrence of a Reportable
Event with respect to any Plan; (2) the institution of any steps by the
Borrower, any ERISA Affiliate, the PBGC or any other Person to terminate any
Plan; (3) the institution of any steps by the Borrower or any ERISA Affiliate to
withdraw from any Plan; (4) a Prohibited Transaction in connection with any
Plan; (5) any material increase in the contingent liability of the Borrower or
any Subsidiary of the Borrower with respect to any post-retirement welfare
liability; or (6) the taking of any action by, or the threatening of the taking
of any action by, the Internal Revenue Service, the Department of Labor or the
PBGC with respect to any of the foregoing.
 
6.12. Environmental Matters.  Without limiting the generality of Section 6.1(c)
hereof, (a) comply in all material respects with all material limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Requirement of
Environmental Law, or Environmental Permit; (b) obtain and maintain in effect
all Environmental Permits reasonably necessary to the conduct of any material
aspect of its business; and (c) keep its Property free of any Environmental
Claims or Environmental Liabilities, other than Environmental Claims or
Environmental Liabilities, contingent or otherwise, disclosed in Schedule 5.17
attached hereto or any of the environmental assessments or studies described in
Schedule 5.17 attached hereto.  In the event that any Credit Party or any of its
Subsidiaries receives any demand or claim from any Person, including without
limitation, any Governmental Authority, asserting the liability of any Credit
Party or any of its Subsidiaries as a result of any Environmental Liabilities or
requesting or requiring that any Environmental Liabilities be remediated by any
Credit Party or any of its Subsidiaries, such Credit Party agrees to promptly
take action and thereafter diligently pursue the same to completion in a manner
necessary to cause the applicable Environmental Liabilities to be remediated as
soon as reasonably possible in accordance with all applicable Requirements of
Environmental Law.  Each Credit Party, jointly and severally with all other
Credit Parties, hereby indemnifies and agrees to hold the Agent and the Lenders
harmless from and against any and all liability, loss, damage, suit, action or
proceeding arising out of its respective business or the business of any of its
Subsidiaries, pertaining to any Environmental Liabilities, including without
limitation, claims of any Governmental Authority or any other Person arising
under any Requirement of Environmental Law; provided, that the foregoing
indemnity shall not apply to the extent, but only to the extent the applicable
liability, loss, damage, suit, action or proceeding is caused by the willful
misconduct, knowing and willful breach of any Loan Document or gross negligence
of the party seeking indemnification.
 
6.13. End of Fiscal Year.  Cause each of its fiscal years to end on June 30th of
the applicable year.
 
6.14. Pay Obligations and Perform Other Covenants.  Make full and timely payment
of the Obligations, whether now existing or hereafter arising, as and when due
and payable, duly comply with all of the terms and covenants contained in this
Agreement and in each of the other Loan Documents at all times and places and in
the manner set forth therein, and except for the filing of continuation
statements and the making of other filings by the Collateral Agent as secured
party or assignee, at all times take all actions necessary to maintain the Liens
and security interests provided for under or pursuant to this Agreement and the
Security Documents as valid perfected first priority Liens on the Collateral
intended to be covered thereby (subject to the terms of the First Lien
Intercreditor Agreement and subject only to the Liens expressly permitted by
Section 7.2 hereof) and supply all information to the Collateral Agent necessary
for such maintenance.
 
6.15. Cash Dominion; Collection and Application of Accounts.
 
(a) At the Borrower's own cost and expense, arrange (and cause each of its
Subsidiaries to arrange) for remittances on all Accounts to be made (i) directly
to one or more lockboxes designated by the Collateral Agent under the terms of
the Lockbox Agreement, or (ii) in such other manner as the Agent may
direct.  Unless the procedures discussed in Section 6.15(b) below are then in
effect, and in any event, at all times that no Revolving Credit Agreement Debt
is outstanding, (1) the proceeds of all Accounts collected through such
lockboxes or any other manner shall not be required to be remitted to the
Collateral Agent for application to the Revolving Credit Agreement Debt and for
other disbursements approved by the Collateral Agent as set forth in
Section 6.15(b) below, but instead shall be available for unrestricted use by
the Borrower, subject to the other terms of this Agreement (including without
limitation, the negative covenants of Article 7), so long as any collected cash
proceeds not applied against the Revolving Credit Agreement Debt or otherwise
utilized as permitted hereby, remain pledged as Collateral hereunder (i.e.,
invested as Permitted Investment Securities or held in JPMorgan Chase Bank, N.A.
deposit accounts or other accounts covered by a Tri-Party Agreement) and (2) the
Collateral Agent shall not cause any funds then available in any deposit account
covered by any Tri-Party Agreement evidencing control for purposes of perfection
of the Collateral Agent’s Lien (as opposed to facilitating the collection of
Accounts) to be transferred or paid to the Collateral Agent for any purpose.
 
(b) If (i) a Default or Event of Default shall occur, (ii) average Availability
(under and as defined in the Revolving Credit Agreement) during any consecutive
thirty (30) day period shall be less than $20,000,000, or (iii) Availability
(under and as defined in the Revolving Credit Agreement) shall be less than
$15,000,000 at any time, then all remittances on all Accounts processed through
the lockboxes and received by the Collateral Agent in accordance with Section
6.15(a) shall at all times thereafter be promptly deposited in one or more
controlled disbursement or other accounts designated by the Collateral Agent,
subject to withdrawal by the Collateral Agent only, as hereinafter provided and
in connection therewith, the Collateral Agent and JPMorgan Chase Bank N.A. are
irrevocably authorized to cause all remittances on all Accounts received by the
Collateral Agent or JPMorgan Chase Bank N.A. from whatever means, whether
pursuant to the Lockbox Agreement, any Tri-Party Agreement or otherwise, to be
promptly deposited in such account or accounts designated by the Collateral
Agent.  All remittances and payments that are deposited and received by the
Collateral Agent in accordance with the foregoing provisions of this Section
6.15(b) will be applied by the Collateral Agent on the same day received (or on
the next Business Day in the case of remittances and payments received after
11:00 a.m.) to reduce the outstanding balance of the Revolving Credit Agreement
Debt, subject to the continued accrual of interest for one (1) Business Day (or
two Business Days in the case of remittances and payments received after 11:00
a.m.) on the Revolving Credit Agreement Debt balances paid by such remittances
and payments and in any event subject to final collection in cash of the item
deposited.
 
(c) Once the procedures described in Section 6.15(b) above are implemented in
accordance with the terms thereof, such procedures shall continue in effect at
all times thereafter unless and until (i) the applicable Default or Event of
Default shall have been cured to the satisfaction of the Agent, or (ii) average
Availability (under and as defined in the Revolving Credit Agreement) during any
subsequent thirty (30) day consecutive day period is greater than $30,000,000,
as the case may be.
 
(d) Notwithstanding any provision to the contrary in this Section 6.15, the
Borrower and its Subsidiaries shall be permitted to have from time to time local
depository accounts maintained with financial institutions other than JPMorgan
Chase Bank, N.A. for local remittances, payroll, trust and escrow services of
the Borrower and its Subsidiaries in the ordinary course of business, with not
more than $500,000 in the aggregate being permitted to be held in all such local
depository or remittance accounts at any one time, provided in each case all
such accounts remain subject to a Tri-Party Agreement and which such permitted
amounts in such accounts shall not be subject to periodic sweeps to a controlled
disbursement account with the Collateral Agent unless an Event of Default then
exists.
 
(e) As long as the procedures implemented under Section 6.15(b) above are in
effect and are continuing, and except as otherwise permitted under Section
6.15(d) above, the Borrower and its Subsidiaries shall cause all payments, if
any, received by the Borrower or any of its Subsidiaries on account of Accounts
which are not forwarded directly to the above-described lockbox(es) or accounts
(whether in the form of cash, checks, notes, drafts, bills of exchanges, money
orders or otherwise) to be promptly deposited in the form received (but with any
endorsements of the Borrower or the applicable Subsidiary necessary for deposit
or collection) in the account or accounts designated by the Collateral Agent in
accordance with the provisions of Section 6.15(a) above.
 
6.16. Accounts and Other Collateral Matters.  Maintain books and records
pertaining to the respective Collateral owned by any Credit Party in detail,
form and scope as the Agent shall reasonably require. Each Credit Party will,
promptly after any of its Responsible Officers learns thereof, report to the
Collateral Agent any material loss or destruction of, or substantial damage to,
any of the Collateral, and any other matters materially affecting the value,
enforceability or collectibility of any of the Collateral.  If any amount
payable under or in connection with any Account is evidenced by a promissory
note or other instrument, as such terms are defined in the Uniform Commercial
Code, such promissory note or instrument shall be promptly pledged, endorsed,
assigned and delivered to the Collateral Agent as additional Collateral if the
original principal amount of such promissory note or instrument is $50,000 or
greater.  No Credit Party shall redate, or allow any of its Subsidiaries to
redate, any invoice or sale or without written notice to the Collateral Agent,
make or allow to be made sales on extended dating beyond that customary in the
industry. No Credit Party nor any of its Subsidiaries shall be entitled to
pledge the Agent’s or any Lender’s credit on any purchases or for any purpose
whatsoever.
 
6.17. Agreements.  Promptly after Agent’s request, the Borrower shall deliver or
cause to be delivered to the Agent copies of all material employment agreements,
management fee agreements, tax sharing agreements, loan agreements, notes and
other documentation evidencing any Indebtedness of any Credit Party or any of
its Subsidiaries which the Agent may request.
 
6.18. Post-Closing Covenants.  
 
(a) Within sixty (60) days of the Closing Date, Borrower shall deliver to the
Agent certificates from the appropriate public officials of the States of New
Mexico and South Dakota for the Borrower as to the good standing and
qualification as a foreign corporation, to the extent it is necessary to be
qualified to do business as a foreign corporation in these jurisdictions.
 
(b) Within sixty (60) days of the Closing Date, Veterinarian’s Outlet
Incorporated, a California corporation, shall have been merged with and into
Paul E. Brackmer, D.V.M., Inc., a California corporation; provided, that (i) the
Borrower shall have given the Agent ten (10) Business Days prior written notice
of such merger, (ii) upon consummation of such merger, Borrower shall take or
cause to have taken all steps deemed reasonably necessary by the Agent or the
Collateral Agent to perfect the Collateral Agent’s Liens in any assets acquired
by the surviving entity of such merger, including, without limitation, any
actions required to be taken pursuant to Section 6.10 of this Agreement, and
(iii) Borrower shall have delivered or cause to be delivered to Agent, (A) a
fully executed copy of the merger agreement (including all exhibits and
schedules thereto) in respect of such merger, together with all other documents
and instruments executed in connection therewith, all in form and substance
satisfactory to the Agent, (B) resolutions of the Board of Director’s of each of
the entities to be merged authorizing and approving such merger, each in form
and substance satisfactory to the Agent, and (C) upon consummation of such
merger, (x) certified copies of the Organizational Documents of the surviving
entity of such merger, (y) a certificate of the Secretary of State of the State
of California as to the continued existence and good standing of the surviving
entity of such merger in the State of California, and (z) updated Disclosure
Schedules to this Agreement modified, as applicable, to reflect such merger.
 
7. Negative Covenants.
 
Until the Obligations shall have been paid in full, each Credit Party executing
this Agreement covenants and agrees, jointly and severally with all of the
Credit Parties, that it will not do (and will not suffer or permit any of its
Subsidiaries, if any, to do) any of the following:
 
7.1. Indebtedness.  Create, incur, suffer or permit to exist, or assume or
guarantee or become or remain liable with respect to any Indebtedness, absolute,
contingent, or otherwise, except the following:
 
(a) Indebtedness to the Lenders and the Agent pursuant hereto;
 
(b) Indebtedness secured by Liens permitted by Section 7.2 hereof;
 
(c) Purchase money Indebtedness (including the amount of any Capital Lease
Obligations required to be capitalized and included as a liability on the
consolidated balance sheet of the Borrower and its Subsidiaries) incurred to
finance Capital Expenditures (to the extent otherwise permitted hereunder);
 
(d) The Revolving Credit Agreement Debt, with no renewals, extensions or
increases of any thereof being permitted (other than “payments-in-kind” of
accrued and unpaid interest), unless the same has been approved in writing by
the Agent and the Required Lenders or, in the case of the Revolving Credit
Agreement Debt, the same is expressly permitted under the terms of the First
Lien Intercreditor Agreement;
 
(e) Other liabilities or Indebtedness existing on the date of this Agreement and
set forth on Schedule 5.16 attached hereto;
 
(f) Current accounts payable and unsecured current liabilities (including
current accrued expenses), not the result of borrowings, to vendors, suppliers,
landlords, lessors and persons providing services, for expenditures on ordinary
trade terms for goods and services normally required by the Borrower or any of
its Subsidiaries in the ordinary course of business;
 
(g) Indebtedness of any Guarantor (other than the Parent) to the Borrower or to
any other Guarantor (other than the Parent), or the Indebtedness of the Borrower
to any Guarantor (other than the Parent), provided that no such Indebtedness may
be cancelled, compromised or otherwise discounted in any respect without the
written consent of the Required Lenders;
 
(h) Current and deferred taxes and other assessments and governmental charges
(to the extent permitted by Section 7.2(e) hereof).
 
(i) Cash Management Obligations incurred under the Revolving Credit Agreement
and related documents, and customary and prudent Hedging Obligations entered
into with Revolving Credit Lenders for the sole purpose of protecting the
Borrower and its Subsidiaries against fluctuations in interest rates, currency
exchange rates and similar risks, so long as such Hedging Obligations are not
speculative in nature and are incurred in the normal course of business and
consistent with industry practices;
 
(j) Refinancing Indebtedness, to the extent the same relates to any Indebtedness
permitted by Sections 7.1(c) and 7.1(e) hereof;
 
(k) Contingent Liabilities permitted pursuant to Section 7.3;
 
(l) Indebtedness arising under any performance or surety bond entered in the
ordinary course of business;
 
(m) Unsecured Indebtedness assumed, acquired or incurred pursuant to any
acquisition permitted under Section 7.4(e)(7), provided, that (1) all such
Indebtedness constitutes Subordinated Indebtedness and (2) the aggregate
principal amount of all such Indebtedness assumed, acquired or incurred,
together with the cash purchase price paid, in connection with all such
acquisitions permitted under Section 7.4(e)(7) does not exceed in the aggregate
during the period from September 26, 2006 through the Term Loan Maturity Date
the applicable aggregate consideration limits set forth in Section 7.4(e)(7);
 
(n) Indebtedness incurred to finance the purchase or maintenance of
publicly-tradable securities owned by any Credit Party, so long as (1) such
Indebtedness is secured by all such securities, and (2) such Indebtedness does
not exceed $500,000 in the aggregate at any one time outstanding;
 
(o) Subordinated Indebtedness of Animal Health International, Inc. or Steer
Intermediate Corporation, provided, that accrued and unpaid interest on such
Indebtedness shall only be payable in the form of “payments-in-kind”; and
 
(p) Other Indebtedness in an aggregate amount not to exceed at any one time
outstanding the difference between $3,000,000 and the principal amount of
Indebtedness then outstanding and permitted under Section 7.1(n).
 
The Agent, the Lenders and each Credit Party agree that, notwithstanding
anything contained in Section 7.1(g) or in any other provision contained in this
Agreement which may appear to be to the contrary, the payment of any and all
Indebtedness permitted by Sections 7.1(g) hereof, including without limitation,
all Indebtedness, now or hereafter outstanding and owing by any Credit Party to
another Credit Party under the Contribution Agreement (together with any and all
Liens from time to time securing the same as permitted by Section 7.2(i)
hereof), is hereby made and at all times hereafter shall be inferior and
subordinate in all respects to the Obligations from time to time owing to the
Agent or any Lender pursuant hereto and to any Lien against any Collateral from
time to time now or hereafter securing any of such Obligations pursuant to the
terms hereof and the Security Documents.  Each of the Credit Parties agrees to
execute and deliver on its own behalf, and to cause to be executed and delivered
by and on behalf of any of its Subsidiaries, any and all subordination
agreements, in form and content reasonably acceptable to the Agent or the
Collateral Agent, which they may hereafter require to further evidence the
subordination of the payment of the Indebtedness permitted by Section 7.1(g)
above, and the Liens permitted by Section 7.2(i) and any such contractual,
statutory or constitutional landlord’s Liens held by the Borrower.
 
7.2. Liens.  Create or suffer to exist any Lien upon any of its Property
(including without limitation, Equity Interests in any Credit Party’s
Subsidiaries) now owned or hereafter acquired, or acquire any Property upon any
conditional sale or other title retention device or arrangement or any purchase
money security agreement; provided, however, that the Credit Parties and their
Subsidiaries (or any of them) may create or suffer to exist:
 
(a) Liens in effect on the date hereof and which are described on Schedule 7.2
attached hereto, provided, that the Property covered thereby does not increase
in scope and such Liens may not be renewed and extended, unless the same relate
to Refinancing Indebtedness permitted by Section 7.1(e) above;
 
(b) Liens against the Collateral in favor of the Collateral Agent for the
ratable benefit of the Lenders as security for the Obligations and the Revolving
Credit Agreement Debt;
 
(c) Liens incurred and pledges and deposits made in the ordinary course of
business in connection with workers’ compensation, unemployment insurance,
old-age pensions and other social security benefits (not including any lien
described in Section 412(m) of the Code);
 
(d) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s, vendors’ and landlords’ liens and other similar liens, incurred
in good faith in the ordinary course of business and securing obligations which
are incurred in the ordinary course of business and are not overdue for a period
of more than 30 days or which are being contested in good faith by appropriate
proceedings pursued in good faith and as to which the Borrower or any of its
Subsidiaries, as the case may be, shall, to the extent required by GAAP,
consistently applied, have set aside on its books adequate reserves;
 
(e) Liens securing the payment of taxes, assessments and governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA),
that are not delinquent, are permitted by Section 6.2 hereof, or are being
diligently contested in good faith by appropriate proceedings and as to which
adequate reserves have been established in accordance with GAAP; provided,
however, that the aggregate amount of overdue taxes being diligently contested
in good faith at any one time secured by such Liens shall not exceed $1,000,000;
 
(f) Zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use of property or minor
irregularities of title (and with respect to leasehold interests, mortgages,
obligations, liens and other encumbrances incurred, created, assumed or
permitted to exist and arising by, through or under a landlord or owner of the
leased property, with or without consent of the lessee) which do not in the
aggregate materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business;
 
(g) Liens securing the performance of bids, tenders, leases, contracts (other
than for the repayment of borrowed money), statutory obligations, surety,
customs and appeal bonds and other obligations of like nature, incurred as an
incident to and in the ordinary course of business;
 
(h) Purchase money Liens securing the Indebtedness permitted by Section 7.1(c)
above, provided, as a result of the creation of any such Lien, (i) no Default or
Event of Default shall have occurred and is continuing, (ii) the principal
amount of such Lien does not exceed 100% of the purchase price of the asset
acquired with such permitted Indebtedness plus accrued interest on such
Indebtedness plus protective advances made by the holder of such permitted
Indebtedness, and (iii) such Lien shall not apply to any other Property other
than the asset acquired with such purchase money Indebtedness;
 
(i) Liens in favor of the Borrower or any Guarantor (other than the Parent)
securing any Indebtedness permitted pursuant to Sections 7.1(g) hereof;
 
(j) Liens on fixed assets securing Indebtedness permitted to be assumed,
acquired or incurred in connection with acquisitions permitted under Section
7.4(e)(7), provided, (i) the applicable Lien existed on the applicable Property
prior to the acquisition thereof by the Borrower or any Subsidiary or existed on
any Property of any Person that becomes a Subsidiary of the Borrower after the
date hereof prior to the time such Person becomes a Subsidiary, (ii)  the
applicable Lien shall not apply to any other Property of the Borrower or any
Subsidiary, and (iii) the applicable Lien shall secure only those obligations
which it secures on the date of the applicable acquisition or the date such
Person becomes a Subsidiary, as the case may be;
 
(k) Liens consisting of bankers’ liens and rights of setoff, but only to the
extent permitted under any applicable Tri-Party Agreements, and in each case,
arising by operation of law, and Liens on documents presented in letter of
credit drawings; and
 
(l) Liens on securities securing Indebtedness to the extent permitted in
accordance with Section 7.1(n).
 
Provided, however, notwithstanding anything contained above in this Section 7.2
to the contrary, if any of the permitted Liens are of the type that are being
contested in good faith by appropriate proceedings as to the Borrower or any of
its Subsidiaries, the Indebtedness giving rise to such contested Lien(s) must be
immediately paid upon commencement of any foreclosure process or proceeding with
respect to such Lien(s) unless the same shall be effectively stayed or a surety
bond with respect thereto (which is satisfactory in all respects to the Agent),
is posted.
 
7.3. Contingent Liabilities.  Create, incur, suffer or permit to exist, directly
or indirectly, any Contingent Obligations, other than:
 
(a) The Obligations of each Guarantor to the Agent and the Lenders under the
terms of any Guaranty;
 
(b) The guarantees by the Parent and any other Credit Party of the Borrower of
the Revolving Credit Agreement Debt;
 
(c) Any Contingent Obligations of the Borrower under any Hedging Obligations
permitted by Section 7.1(i) above;
 
(d) The guarantees by the Borrower of any Indebtedness of any other Credit Party
or by any Credit Party of any Indebtedness of the Borrower if such Indebtedness
so guaranteed is permitted under the terms of Section 7.1 above;
 
(e) Endorsements of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
 
(f) Obligations in respect of letters of credit under the Revolving Credit
Agreement;
 
(g) Agreements evidencing any Hedging Obligations to the extent permitted by
Section 7.3(c); and
 
(h) obligations relating to Liens permitted under Sections 7.2(c), 7(d), 7(e),
7(f) or 7(g).
 
7.4. Mergers, Consolidations and Dispositions and Acquisitions of Assets.  In
any single transaction or series of related transactions, directly or
indirectly:
 
(a) Wind up its affairs, liquidate or dissolve;
 
(b) Be a party to any merger or consolidation;
 
(c) Sell, convey, lease, transfer or otherwise dispose of all or any portion of
the assets (except for (1) the sale of Inventory in the ordinary course of
business for fair and adequate consideration and (2) the sale of equipment,
fixtures and other assets in accordance with the terms of Section 7.4(e)(5)
below) of the Borrower and/or its Subsidiaries, or agree to take any such
action;
 
(d) Sell, assign, pledge, transfer or otherwise dispose of, or in any way part
with control of, any Equity Interests of any of its Subsidiaries or any
Indebtedness or obligations of any character of any of its Subsidiaries, or
permit any such Subsidiary to do so with respect to any Equity Interests of any
other Subsidiary or any Indebtedness or obligations of any character of the
Borrower or any of its Subsidiaries, or permit any of its Subsidiaries to issue
any additional Equity Interests other than to the Borrower or any wholly-owned
Subsidiary of the Borrower; or
 
(e) Purchase or otherwise acquire, directly or indirectly, in a single
transaction or a series of related transactions, all or a substantial portion of
the assets of any Person or any shares of Equity Interests of, or similar
interest in, any Person;
 
provided, however that notwithstanding the foregoing, any of the following
described actions may be undertaken, so long as no Default or Event of Default
then exists or would exist immediately after giving effect to the applicable
event:
 
(1) any Business Entity comprising the Parent may merge or consolidate with any
other Business Entity comprising the Parent or may be dissolved or liquidated,
so long as such dissolution or liquidation results in all assets of such
Business Entity being owned by another Business Entity comprising the Parent;
 
(2) any Subsidiary of the Borrower may merge or consolidate with the Borrower or
any other Subsidiary of the Borrower, provided, that if one or more of the
entities so merging or consolidating was a Guarantor, and if the surviving
entity is not the Borrower or is not yet a Guarantor, such surviving entity must
become a Credit Party simultaneously with such merger by executing and
delivering to the Agent a Joinder Agreement, together with all requested
Security Documents, as required at such time by the Collateral Agent,
appropriately completed in Proper Form;
 
(3) any of the Borrower’s Subsidiaries may sell, lease, transfer or otherwise
dispose of any of its assets to the Borrower or any other Subsidiary of the
Borrower, provided, that if the entity selling, leasing, transferring or
otherwise disposing of its assets is a Guarantor, and if the entity to whom the
sale, lease, transfer or other disposition was made is not the Borrower or is
not yet a Guarantor, such entity must become a Credit Party simultaneously with
the consummation of such lease, transfer or disposition by executing and
delivering to the Agent a Joinder Agreement, together with all requested
Security Documents, as required at such time by the Collateral Agent,
appropriately completed in Proper Form;
 
(4) any Subsidiary of the Borrower may be dissolved or liquidated, so long as
such dissolution or liquidation results in all assets of such Subsidiary being
owned by the Borrower or a Subsidiary; provided, that if the entity dissolving
or liquidating is a Guarantor, and if the entity to whom all assets of such
dissolving or liquidating entity are transferred is not the Borrower or is not
yet a Guarantor, such entity to whom such assets are being transferred must
become a Credit Party simultaneously with the consummation of such dissolution
or liquidation by executing and delivering to the Agent a Joinder Agreement,
together with all requested Security Documents, as required at such time by the
Collateral Agent, appropriately completed in Proper Form;
 
(5) the Borrower and its Subsidiaries may (i) sell, exchange or otherwise
dispose of Permitted Investment Securities in the ordinary course of business;
(ii) terminate, surrender or sublease a lease of real Property by the Borrower
or any of its Subsidiaries in the ordinary course of business; (iii) sell
Equipment that is obsolete, worn out or no longer needed in the business of the
Borrower or any of its Subsidiaries; (iv) enter into sale-leaseback transactions
relating to Property having a fair market value not to exceed $1,000,000 in the
aggregate during the period from September 26, 2006 through the Term Loan
Maturity Date; and (v) sell any other fixed assets (including real Property,
equipment and fixtures) having a fair market value not to exceed $1,000,000 in
the aggregate during the period from September 26, 2006 through the Term Loan
Maturity Date; provided that all proceeds of any of the foregoing (other than
Section 7.4(e)(5)(ii) above) shall be paid to the Collateral Agent for
application to outstanding Loans (as defined in the Revolving Credit Agreement)
or Obligations, to the extent then outstanding, in accordance with the terms of
the First Lien Intercreditor Agreement;
 
(6) to the extent any Collateral is sold or otherwise disposed of as permitted
by this Section 7.4, such Collateral shall be sold or otherwise disposed of free
and clear of the Liens of the Security Documents and the Collateral Agent shall
take such actions, including executing and filing appropriate releases, as are
appropriate in connection therewith, and no approval of any of Lenders shall be
required therefor; and
 
(7) the Borrower and/or any other Credit Party may purchase or otherwise
acquire, directly or indirectly, in a single transaction or a series of related
transactions, all or a substantial portion of the assets of any Person or all or
a majority of issued and outstanding shares of Equity Interests of, or similar
interest in, any Person, so long as (a) immediately after giving effect to the
applicable purchase or acquisition, no Default or Event of Default exists
(including without limitation, the Credit Parties are in compliance with the
Fixed Charge Coverage Ratio requirements of Section 7.11, tested on a pro forma
basis assuming that such purchase or acquisition had occurred at the beginning
of the four (4) most recent consecutive fiscal quarters of the Credit Parties
ending on or immediately prior to the date of such purchase or acquisition), (b)
the aggregate purchase price paid (including without limitation, any
Indebtedness permitted to be assumed, acquired or incurred by the Borrower
and/or any of its Subsidiaries in connection therewith under Section 7.1(m)) for
all such purchases and acquisitions does not exceed $60,000,000 in the aggregate
during the period from September 26, 2006 through the Term Loan Maturity Date
for all such other purchases and acquisitions and (c) if the purchase price paid
(including without limitation, any Indebtedness permitted to be assumed,
acquired or incurred by the Borrower and/or any of its Subsidiaries in
connection therewith under Section 7.1(m)) exceeds $15,000,000 in the aggregate,
the Required Lenders shall have consented in writing to such purchase or
acquisition; and
 
(8) The Credit Parties may make Investments to the extent permitted by Section
7.7.
 
7.5. Nature of Business.  Materially change the nature of its business or enter
into any business (or at any time own, directly or indirectly, a majority of the
Equity Interests of any entity which is engaged in any business) which is
substantially different from the business in which the Borrower and its
Subsidiaries are engaged in as of the Closing Date.
 
7.6. Transactions with Related Parties.  Except for any Permitted Affiliate
Transactions, enter into or be a party to any other transaction, contract or
agreement of any kind with any officer, director, shareholder, partner, employee
or Affiliate of any Credit Party (including, without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any such Person), unless such transaction, contract or agreement is in
the ordinary course of and pursuant to the reasonable requirements of the
Borrower’s or any of its Subsidiaries’ business and is made upon fair and
reasonable terms and conditions not less favorable to such Person than those
which could have been obtained in a comparable transaction from wholly
independent and unrelated sources.
 
7.7. Investments, Loans.  Make, directly or indirectly, any loan or advance to
or have any Investment in any Person, or make any commitment to make such loan,
advance or Investment, except:
 
(a) Equity Interests of any Credit Party acquired or issued in accordance with
the other provisions of this Agreement, including without limitation, the
provisions of Section 6.10 above, or Equity Interests of any other Subsidiary of
any Credit Party with the prior written consent of the Agent;
 
(b) Permitted Investment Securities;
 
(c) loans otherwise permitted by the provisions of Section 7.1(g) above;
 
(d) loans to employees of the Borrower or any Subsidiary made in the ordinary
course of business, so long as the aggregate amount of all such loans
outstanding at any time does not exceed $100,000;
 
(e) Investments of the Borrower and the other Credit Parties permitted under the
terms of Section 7.4(e)(7);
 
(f) Investments consisting of Guarantees permitted by Section 7.3(d);
 
(g) Investments consisting of deferred payment obligations in connection with
sales of assets permitted under Section 7.4(e)(5); and
 
(h) Other Investments, including joint venture interests in non-Subsidiary
entities, in the aggregate amount not to exceed $500,000, provided that such
Investments have been approved by the Agent, such approval not to be
unreasonably withheld if the aggregate amount of such Investments does not
exceed $500,000 in the aggregate during the period from September 26, 2006
through the Term Loan Maturity Date.
 
7.8. ERISA Compliance.
 
(a) At any time engage in any Prohibited Transaction with respect to a Plan
which could reasonably be expected to result in a material liability; or permit
any Plan to be terminated in a manner which could result in the imposition of a
Lien on any Property of the Borrower or any of its Subsidiaries pursuant to
ERISA.
 
(b) Engage in any transaction in connection with which the Borrower or any
Subsidiary thereof would or could reasonably be expected to be subject to either
a material civil penalty assessed pursuant to the provisions of Section 502 of
ERISA or a material tax imposed under the provisions of Section 4975 of the
Code.
 
(c) Terminate any Plan in a “distress termination” under Section 4041 of ERISA,
or take any other action which could reasonably be expected to result in a
material liability of the Borrower or any Subsidiary thereof to the PBGC.
 
(d) Fail to make payment when due of all amounts which, under the provisions of
any Plan, the Borrower or any Subsidiary thereof is required to pay as
contributions thereto, or, with respect to any Plan, permit to exist any
material “accumulated funding deficiency” (within the meaning of Section 302 of
ERISA and Section 412 of the Code), whether or not waived, with respect thereto.
 
(e) Adopt an amendment to any Plan requiring the provision of security under
Section 307 of ERISA or Section 401(a)(29) of the Code.
 
7.9. Change in Accounting Method.  Make or permit any change in accounting
method or financial reporting practices except as may be required by GAAP, as in
effect from time to time.
 
7.10. Redemption, Dividends, Issuance of Equity Interests, Distributions and
Restricted Payments.  At any time, other than any Permitted Affiliate
Transactions:
 
(a) Redeem (whether as a result of mandatory or optional redemption obligations
or rights), purchase, retire or otherwise acquire, directly or indirectly, any
of its Equity Interests, any warrants or other similar instruments or set aside
any amount for any such purpose;
 
(b) Declare or pay, directly or indirectly, (i) any dividend or fund any
redemption, purchase, retirement or other acquisition of its Equity Interests,
except (1) dividends paid to the Borrower or any Guarantor which is a direct
parent of the Subsidiary paying the dividend (other than Cash Dividends to the
Parent, which shall not be paid at any time), and (2) non-cash dividends paid to
the holders of any Equity Interests of the Borrower or the Parent in the form of
additional Equity Interests of the Borrower or the Parent, as applicable, or
(ii) any management, consulting or monitoring fees to any Affiliate of the
Borrower or the Parent or any officer, director, shareholder, partner or
employee of any Affiliate of the Borrower or the Parent, except management or
consulting fees paid to the Borrower or any Guarantor (other than the Parent, to
which no management or consulting fees shall be paid);
 
(c) Issue any additional Equity Interests in the Borrower, except for Equity
Interests issued to the Parent;
 
(d) Make any other distribution of any Property, cash, securities or a
combination thereof, with respect to (whether by reduction of capital or
otherwise) any Equity Interests except as permitted in Section 7.10(b) above;
 
(e) Set apart any money for a sinking fund or other analogous fund for any
dividend or other distribution on its Equity Interests or for any redemption,
purchase, retirement, or other acquisition of any of its Equity Interests; or
 
(f) Redeem (whether as a result of mandatory or optional redemption obligations
or rights), purchase, defease or retire for value, or make any principal payment
or prepayment on, any Subordinated Indebtedness prior to the Term Loan Maturity
Date;
 
provided, however that notwithstanding the foregoing, any payments, dividends or
distributions on and any redemptions, purchases, retirements or other
acquisitions of Equity Interests otherwise prohibited under Sections 7.10(b) or
(e) shall be permitted to be made by the applicable Credit Party, so long as (1)
immediately after giving effect to the applicable payment, dividend or
distribution on or redemption, purchase, retirement or other acquisition of
Equity Interests, no Default or Event of Default exists (including without
limitation, the Credit Parties are in compliance with the Fixed Charge Coverage
Ratio requirements of Section 7.11, tested on a pro forma basis assuming that
payment, dividend, or distribution on or redemption, purchase, retirement or
other acquisition of Equity Interests had occurred at the beginning of the
twelve (12) most recent consecutive calendar months ending on or immediately
prior to the date of such payment, dividend, distribution, redemption, purchase,
retirement or acquisition of Equity Interests), (2) the aggregate amount of all
such payments, dividends or distributions on and redemptions, purchases,
retirements or other acquisitions of Equity Interests actually made from
September 26, 2006 through the Term Loan Maturity Date (excluding
“payments-in-kind” of accrued and unpaid interest) does not exceed
$55,000,000.  Notwithstanding the foregoing, however, in no event shall any
payment, dividend, distribution, redemption, purchase, retirement or acquisition
of Equity Interests otherwise permitted under the terms of the preceding
sentence be made to the extent the same is prohibited under the terms of the
Loan Documents (as defined in the Revolving Credit Agreement). Schedule 7.10
sets forth all payments, dividends or distributions on and any redemptions,
purchases, retirements or other acquisitions of Equity Interests permitted to be
made pursuant to the foregoing proviso to this Section 7.10 for the period from
September 26, 2006 through the Closing Date.
 
7.11. Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio of
the Credit Parties and their Subsidiaries, on a Consolidated basis, to be less
than 1.0 to 1.0 at any time.
 
7.12. Capital Expenditures.  Permit the Credit Parties and their Subsidiaries,
on a Consolidated basis, to make or incur Capital Expenditures (not including in
the definition of Capital Expenditures for this purpose any Capital Expenditures
included in any future acquisition permitted under Section 7.4(e)(7)) in excess
of $6,000,000 in the aggregate during each fiscal year.
 
7.13. Sale of Accounts.  Sell, assign, discount (other than customary and
reasonable discounts in the ordinary course of business), transfer or otherwise
dispose of any Accounts, promissory notes, drafts or trade acceptances or other
rights to receive payment held by it, with or without recourse.
 
7.14. Sale and Lease-Back Transactions.  Except as otherwise permitted under
Section 7.4(e)(5)(iv), enter into any arrangement, directly or indirectly, with
any Person whereby any Credit Party or any of its Subsidiaries shall sell or
transfer any Property, real or personal, which is used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such Property or other Property which such Credit Party or such Subsidiary
intends to use for substantially the same purpose or purposes as the Property
being sold or transferred.
 
7.15. Change of Name or Place of Business.  Permit any Credit Party or any of
its Subsidiaries to change its address, name, jurisdiction of organization,
location of its chief executive office or principal place of business or the
place it keeps its material books and records, unless such Credit Party has (a)
notified the Agent and the Collateral Agent of such change in writing at least
thirty (30) days before the effective date of such change, (b) taken such
action, reasonably satisfactory to the Collateral Agent, to have caused the
Liens against all Collateral in favor of the Collateral Agent for the ratable
benefit of the Lenders to be at all times fully perfected and in full force and
effect and (c) delivered such certificates from Governmental Authorities as the
Agent may require substantiating such name change.
 
7.16. Restrictive Agreements.  Other than as imposed by law, identified on
Schedule 7.16, or provided in this Agreement, the Revolving Credit Agreement,
directly or indirectly agree to restrict or condition (a) the payment of any
dividends or other distributions to the Borrower or any of its Subsidiaries;
(b) the payment of any Indebtedness owed to the Borrower or any of its
Subsidiaries; (c) the making of any loans or advances to the Borrower or any of
its Subsidiaries; or (d) the transfer of any of its properties or assets to the
Borrower or any of its Subsidiaries.
 
7.17. Modification or Waiver of Documents Governing Revolving Credit
Debt.  Request, join in or otherwise consent to any modification, amendment or
waiver of any material term of the Revolving Credit Agreement, except as
expressly permitted under the terms of the First Lien Intercreditor Agreement.
 
7.18. Anti-Terrorism
Laws.  (a)                                                                Knowingly
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person.
 
(a) Knowingly deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order No.
13224.
 
(b) Knowingly engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT
Act or any other Anti-Terrorism Law.
 
The Borrower shall, and shall cause each other Credit Party to, deliver to Agent
any certification or other evidence requested from time to time by the Agent in
its sole discretion, confirming such Credit Party’s compliance with this Section
7.18.
 
8. Events of Default and Remedies.
 
8.1. Events of Default.  If any of the following events shall occur and be
continuing, then the Agent may (and, if directed by the Required Lenders,
shall), by written notice (or facsimile notice) to the Borrower, take any or all
of the following actions at the same or different times: (1) accelerate the Term
Loan Maturity Date and declare the Term Notes and all other Obligations then
outstanding to be, and thereupon the Term Notes and all other Obligations shall
forthwith become, immediately due and payable, without further notice of any
kind, notice of intention to accelerate, presentment and demand or protest, or
other notice of any kind all of which are hereby expressly WAIVED by the
Borrower; and (2) terminate all or any portion of the Term Loan Commitments and
exercise any and all other rights pursuant to the Loan Documents or available
under applicable law:
 
(a) The Borrower shall fail to pay or prepay any Obligation (including
principal, interest, fees or any other amount) as and when due and payable,
whether at the due date thereof (by acceleration, lapse of time or otherwise) or
at any date fixed for prepayment thereof in accordance with the other provisions
of this Agreement; or
 
(b) An Event of Default (as defined in the Revolving Credit Agreement) shall
occur, or the Borrower or any of its Subsidiaries (i) shall fail to pay when
due, or within any applicable period of grace, any other Indebtedness (excluding
the Revolving Credit Agreement Debt and Indebtedness outstanding hereunder)
aggregating in excess of $250,000 in principal amount unless such payment is
being contested in good faith (by appropriate proceedings) and adequate reserves
have been provided therefor, or (ii) shall default (beyond any applicable grace
and curative periods) in any other manner with respect to any other Indebtedness
(excluding the Revolving Credit Agreement Debt and Indebtedness outstanding
hereunder) aggregating in excess of $250,000 in principal amount if the effect
of any such default or Event of Default shall be to accelerate or to permit the
holder of any such other Indebtedness, at its option, to accelerate the maturity
of such Indebtedness prior to the stated maturity thereof; or
 
(c) Any representation or warranty made or deemed made by the Borrower or any
Guarantor in connection with any Loan Document or in any certificate, report,
notice or financial statement furnished at any time in connection with this
Agreement shall prove to have been incorrect, false or misleading in any
material respect when made or deemed to have been made; or
 
(d) Except as provided in Sections 8.1(a) or 8.1(e), Default shall occur in the
punctual and complete performance or observance of any covenant, condition or
agreement to be observed or performed on the part of the Borrower, any of its
Subsidiaries or the Parent pursuant to the terms of any provision of this
Agreement or any other Loan Document, and such Default remains uncured five (5)
Business Days after the earlier to occur of (1) the Agent giving written notice
of such Default to the Borrower or (2) any Responsible Officer of the Borrower
or any of its Subsidiaries acquired actual knowledge of the existence of such
Default; or
 
(e) Default shall occur in the punctual and complete performance or observance
of any covenant, condition or agreement to be observed or performed on the part
of any Credit Party or any of its Subsidiaries pursuant to the terms of Section
6.2, Section 6.9, Section 6.11 or Article 7 hereof; or
 
(f) Final judgment or judgments (or any decree or decrees for the payment of any
fine or any penalty) for the payment of an uninsured money award in excess of
$500,000 in the aggregate shall be rendered against any Credit Party or any of
its Subsidiaries and the same shall remain undischarged and unpaid for a period
of thirty (30) days during which execution shall not be effectively stayed or
bonded; or
 
(g) Any Credit Party or any of its Subsidiaries shall have concealed, removed,
or permitted to be concealed or removed, any part of its Property, with intent
to hinder, delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its Property which is or could reasonably be expected to be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
 
(h) Any of the following shall occur where such occurrence could reasonably be
expected to result in any material liability of any Credit Party: (1) a
Reportable Event shall have occurred with respect to a Plan; (2) the filing by
the Borrower, any ERISA Affiliate, or an administrator of any Plan of a notice
of intent to terminate such Plan under the provisions of Section 4041 of ERISA;
(3) the receipt of notice by the Borrower, any ERISA Affiliate or an
administrator of a Plan that the PBGC has instituted proceedings to terminate
(or appoint a trustee to administer) such a Plan; (4) any other event or
condition exists which might reasonably be expected to, in the opinion of the
Agent, constitute grounds under the provisions of Section 4042 of ERISA for the
termination of or the appointment of a trustee to administer any Plan by the
PBGC; (5) a Plan shall fail to maintain a minimum funding standard required by
Section 412 of the Code for any plan year or a waiver of standard is granted
under the provisions of Section 412(d) of the Code; (6) the Borrower or any
ERISA Affiliate has incurred, or is likely to incur, a liability under the
provisions of Section 4062, 4063, 4064 or 4201 of ERISA; (7) the Borrower or any
ERISA Affiliate fails to pay the full amount of an installment required under
Section 412(m) of the Code; (8) any Prohibited Transaction involving any Plan;
or (9) the occurrence of any other event or condition with respect to any Plan
which would constitute an event of default or default under any other material
agreement entered into by the Borrower or any ERISA Affiliate; or
 
(i) This Agreement, any Term Note, any of the Security Documents or any other
Loan Documents, or any material provision thereof, shall for any reason cease to
be, or shall be asserted by any Credit Party, not to be, a legal, valid and
binding obligation of any Credit Party, enforceable in accordance with its
terms, or the Lien purported to be created by any of the Security Documents
shall for any reason cease to be, or be asserted by any Credit Party not to be,
a valid, first priority perfected Lien (subject to the terms of the First Lien
Intercreditor Agreement) against any material portion of the Collateral (except
to the extent otherwise permitted under this Agreement or any of the Security
Documents); or
 
(j) The Borrower or any of its Subsidiaries which is a party to the Lockbox
Agreement or any Tri-Party Agreement fails to perform and observe, and/or cause
to be performed and observed, all material covenants, provisions and conditions
to be performed, discharged and observed by the Borrower or any such Subsidiary
under the terms of the Lockbox Agreement or any Tri-Party Agreement; or
 
(k) Any financial institution which is a party to any Tri-Party Agreement fails
to perform and observe, and/or cause to be performed and observed, all material
covenants, provisions and conditions to be performed, discharged and observed by
such financial institution under the terms of any Tri-Party Agreement and such
failure remains uncured (or such defaulting financial institution and applicable
Tri-Party Agreement is not replaced by the Borrower with a substitute financial
institution and replacement Tri-Party Agreement both reasonably acceptable to
the Agent) five (5) Business Days after the Collateral Agent gives written
notice of such failure to the Borrower; or
 
(l) A Change of Control shall occur; or
 
(m) Any Credit Party or any of its Subsidiaries shall suffer any writ of
attachment or execution or any similar process to be issued or levied against it
or any substantial part of its Property having an aggregate value in excess of
$500,000 which is not released, stayed, bonded or vacated within thirty (30)
days after its issue or levy.
 
In addition, if any of the following events shall occur, then (1) the Term
Notes, and all other Obligations then outstanding and payable hereunder shall
automatically, without demand, presentment, protest, notice of intent to
accelerate, notice of acceleration or other notice to any Person of any kind,
all of which are hereby expressly WAIVED by the Borrower, become immediately due
and payable and (2) all Term Loan Commitments shall be immediately and
automatically terminated.
 
(n) Any Credit Party or any of its Subsidiaries shall commence a voluntary
proceeding seeking liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become due
or shall take any corporate action to authorize any of the foregoing; or
 
(o) An involuntary proceeding shall be commenced against any Credit Party or any
of its Subsidiaries seeking liquidation, reorganization, or other relief with
respect to it or its debts under any bankruptcy, insolvency, or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official for it or a
substantial part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of 60 days; or
 
(p) Any involuntary order shall be entered in any proceeding against any Credit
Party or any of its Subsidiaries decreeing the dissolution, liquidation or
split-up thereof, and such order shall remain in effect for sixty (60) days; or
 
(q) Any Credit Party or any of its Subsidiaries shall admit in writing its
inability to pay its debts as they become due or fail generally to pay its debts
as they become due.
 
8.2. Remedies Cumulative.  No remedy, right or power conferred upon the Agent or
any Lender is intended to be exclusive of any other remedy, right or power given
hereunder or now or hereafter existing at law, in equity, or otherwise, and all
such remedies, rights and powers shall be cumulative.
 
9. The Agent.
 
9.1. Appointment, Powers and Immunities.  Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and the other
Loan Documents with such powers as are specifically delegated to the Agent by
the terms hereof and thereof, together with such other powers as are reasonably
incidental thereto.  The Agent (which such term as used in this Section 9,
shall, in each case, include reference to its Affiliates and its own and its
Affiliates’ officers, directors, employees’ and agents) (a) shall not have
duties or responsibilities except those expressly set forth in this Agreement
and the other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee for any Lender; (b) shall not be responsible to
any Lender for, or have any duty to ascertain or inquire into, any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other certificate or document referred to or provided for herein or therein
or any property covered thereby or any failure by any Party or any other Person
(other than the Agent) to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or any other Loan Document except to the extent
requested by the Required Lenders, provided that the Agent shall not be required
to take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Documents or applicable law, and
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, INCLUDING PURSUANT TO ITS OWN NEGLIGENCE, except for its own gross
negligence or willful misconduct.  The Agent may engage agents and
attorneys-in-fact for purposes of performing its duties under this Agreement and
the other Loan Documents and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by them with
reasonable care.  In any foreclosure proceeding concerning any collateral for
the Term Notes, each holder of a Term Note if bidding for its own account or for
its own account and the accounts of other Lenders is prohibited from including
in the amount of its bid an amount to be applied as a credit against its Term
Note or the Term Notes of the other Lenders, instead such holder must bid in
cash only.  However, in any such foreclosure proceeding, the Agent may (but
shall not be obligated to) submit a bid for all Lenders (including itself) in
the form of a credit against the Term Notes of all of the Lenders, and the Agent
or its designee may (but shall not be obligated to), with the consent of the
Required Lenders, accept title to such collateral for and on behalf of all
Lenders.  The Lenders hereby empower, authorize and direct the Agent, on behalf
of the Lenders, to execute and deliver this Agreement, the other Loan Documents,
the First Lien Intercreditor Agreement and all related agreements, certificates,
documents, or instruments as shall be necessary or appropriate to effect the
purposes of the Loan Documents.  Each Lender agrees that any action taken by the
Agent in accordance with the terms of this Agreement, the First Lien
Intercreditor Agreement or the other Loan Documents, and the exercise by the
Agent of its powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.  Notwithstanding anything herein or in any other Loan Document to the
contrary, to the extent there is a conflict between this Agreement and any other
Loan Document concerning the provisions of this Section 9, this Agreement shall
govern and control.
 
9.2. Reliance.  The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (which may be counsel for the Borrower),
independent accountants and other experts selected by the Agent.  As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Agent shall in all cases (i) have the right to seek instruction from the
Required Lenders and (ii) be fully protected in acting, or in refraining from
acting, hereunder and thereunder in accordance with instructions of the Required
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.
 
9.3. Defaults.  The Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on Term Loans), unless it has received written notice
from a Lender or a Credit Party specifying such Default or Event of Default and
stating that such notice is a “Notice of Default.”  In the event that the Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment).  The Agent shall (subject to
Section 9.7 hereof) take such action with respect to such Default or Event of
Default as shall be directed by the Required Lenders and within its rights under
the Loan Documents and at law or in equity, provided that, unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, permitted or
within its rights under any of the Loan Documents or under applicable law with
respect to such Default or Event of Default.
 
9.4. Rights as a Lender.  With respect to its Term Loan Commitments or the Term
Loans, if any, the Agent in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Agent, and the term “Lender” or “Lenders”
shall, unless the context otherwise indicates, includes the Agent in its
individual capacity.  The Agent may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any kind of
banking, trust, letter of credit, agency or other business with any Credit Party
(and any of its Affiliates) as if it were not acting as the Agent, and the Agent
may accept fees and other consideration from any Credit Party (in addition to
the fees heretofore agreed to between the Borrower or any other Credit Party and
the Agent) for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
 
9.5. Indemnification.  The Lenders agree to indemnify the Agent (to the extent
not reimbursed under Section 10.9 or Section 10.10 hereof, but without limiting
the obligations of the Borrower and the other Credit Parties under said Sections
10.9 and 10.10), ratably in accordance with their respective Term Loan
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever (INCLUDING THE CONSEQUENCES OF THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON, but excluding the gross negligence or willful misconduct of
such indemnified person) which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any other documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby (including the
costs and expenses which the Borrower and the other Credit Parties is obligated
to pay under Sections 10.9 and 10.10 hereof but excluding, unless a Default or
Event of Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents, INCLUDING THE NEGLIGENCE OF SUCH INDEMNIFIED PERSON, but excluding
the gross negligence or willful misconduct of such indemnified person.  The
obligations of the Lenders under this Section 9.5 shall survive the termination
of this Agreement and the repayment of the Indebtedness arising in connection
with this Agreement.
 
9.6. Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has
received current financial information with respect to the Borrower and the
other Credit Parties and that it has independently and without reliance on the
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrower and the other
Credit Parties and decision to enter into this Agreement and that it will,
independently and without reliance upon the 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 analysis and decisions in taking or not taking action
under this Agreement or any of the other Loan Documents.  The Agent shall not be
required to keep itself informed as to the performance or observance by any
Party of this Agreement, or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Borrower or any other Credit Party.  Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent, or the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
the Borrower or any other Credit Party (or any of their Affiliates) which may
come into the possession of the Agent.
 
9.7. Failure to Act.  Notwithstanding anything herein to the contrary, the Agent
shall not be required to advance its own funds or otherwise incur financial
liability in the performance of its duties or the exercise  of its rights under
the Loan Documents and shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Lenders of their indemnification
obligations under Section 9.5 hereof and by the Credit Parties of their
indemnification obligations under Section 10.01 hereof against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
 
9.8. Resignation or Removal of Agent.  Subject to the provisions of this
paragraph, the Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower, and the Agent may be removed at any time with or
without cause by the Required Lenders.  Upon any such resignation or removal,
the Required Lenders shall have the right to appoint a successor Agent
reasonably acceptable to the Borrower.  If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent’s giving of notice of resignation or the
Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, but in any event shall be
discharged from its duties and obligations hereunder.  Any successor Agent shall
be an Eligible Assignee.  Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent.  Such successor Agent shall promptly specify by notice to the
Borrower and the Lenders its office for the purpose of any notices and payments
hereunder.  After any retiring Agent’s resignation or removal hereunder as
Agent, the provisions of this Section 9 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as the Agent.
 
10. Miscellaneous.
 
10.1. No Waiver.  No waiver of any Default or Event of Default shall be deemed
to be a waiver of any other Default or Event of Default.  No failure to exercise
and no delay on the part of the Agent or any Lender in exercising any right or
power under any Loan Document or at law or in equity shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
the abandonment or discontinuance of steps to enforce any such right or power,
preclude any further or other exercise thereof or the exercise of any other
right or power.  No course of dealing between any Credit Party and the Agent or
any Lender shall operate as a waiver of any right or power of the Agent or any
Lender.  No notice to or demand on any Credit Party or any other Person shall
entitle any Credit Party or any other Person to any other or further notice or
demand in similar or other circumstances.
 
10.2. Notices.  Except as otherwise expressly permitted hereunder or under any
other Loan Document, all notices under the Loan Documents shall be in writing
and either (i) delivered to the intended recipient, (ii) mailed by registered or
certified mail, return receipt requested, or (iii) sent by facsimile (promptly
confirmed by mail, except for any notice pursuant to Section 4. l(a) hereof
which need not be confirmed by mail), in each case to the intended recipient at
the “Address for Notices” specified below its name on the signature pages
hereof; or, as to any Lender who is a signatory hereto, at such other address as
shall be designated by such Lender in a notice to the Borrower and the Agent
given in accordance with this Section 10.2 or to such other address as a party
may designate in a notice given in accordance with the provisions of this
Section 10.2.  The Borrower may change its address for purposes hereof by
providing written notice of such address change to the Lenders and the Agent in
accordance with the provisions of this Section 10.2, with any such change in
address only being effective ten (10) Business Days after such change of address
has been deemed given in accordance with the provisions hereof.  Notices shall
be deemed to have been given (whether actually received or not) when delivered
(or, if mailed, on the next Business Day after deposit of such notice into the
mail); however, the notices required or permitted by Section 4.1(a) hereof shall
be effective only when actually received by the Agent.
 
10.3. Governing Law.  Unless otherwise specified therein, each Loan Document
shall be governed by and construed in accordance with the laws of the State of
New York (other than the conflicts of laws principles thereof) and the United
States of America.
 
10.4. Survival; Parties Bound.  All representations, warranties, covenants and
agreements made by or on behalf of any Credit Party in connection herewith shall
survive the execution and delivery of the Loan Documents and shall not be
affected by any investigation made by any Person.  The term of this Agreement
shall be until the termination or lapse of all Term Loan Commitments, the final
maturity of each Term Note, the payment of all amounts due under the Loan
Documents.
 
10.5. Counterparts.  This Agreement may be executed in several identical
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
 
10.6. Limitation of Interest.  The Borrower, the other Credit Parties and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws, if any.  Accordingly, the provisions of this Section 10.6 shall
govern and control over every other provision of this Agreement or any other
Loan Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls.  As used in this Section, the term
“interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided, that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal or in unequal parts during
the full term of the Term Loans and the Term Loan Commitments so that interest
for the entire term does not exceed the Highest Lawful Rate.  In no event shall
the Borrower, any other Credit Party or any other Person be obligated to pay, or
the Agent or any Lender have any right or privilege to reserve, receive or
retain, (Y) any interest in excess of the maximum amount of nonusurious interest
permitted under the laws of the United Stales or of any state, if any, which are
applicable to the Agent or such Lender, respectively, or (Z) total interest in
excess of the amount which the Agent or such Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Term Loans at the Highest Lawful Rate, if
any, applicable to the Agent or such Lender.  None of the terms and provisions
contained in this Agreement or in any other Loan Document which directly or
indirectly relate to interest shall ever be construed without reference to this
Section 10.6, or be construed to create a contract to pay any Lender for the
use, forbearance or detention of  money at an interest rate in excess of the
Highest Lawful Rate applicable to such Lender.  If the term of any Term Loans or
the Term Notes is shortened by reason of acceleration of maturity as a result of
any Default or Event of Default or by any other cause, or by reason of any
required or permitted prepayment, and if for that (or any other) reason the
Agent or any Lender at any time is owed or receives (and/or has received)
interest in excess of interest calculated at the Highest Lawful Rate applicable
to the Agent or such Lender, then and in any such event all of any such excess
interest owed to or received by the Agent or such Lender shall be canceled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to the
Agent or such Lender, it shall be credited pro tanto against the
then-outstanding principal balance of the Obligations to the Agent or such
Lender, effective as of the date or dates when the event occurs which causes it
to be excess interest, until such excess is exhausted or all of such principal
has been fully paid and satisfied, whichever occurs first, and any remaining
balance of such excess shall be promptly refunded to its payor.
 
10.7. Survival.  The obligations of the Borrower or any other Credit Party, as
applicable, under Sections 2.7, 10.9, 10.10 and 10.17 hereof shall survive the
repayment of the Term Loans and all other Obligations, the termination of the
Term Loan Commitments.
 
10.8. Captions.  The headings and captions appearing in the Loan Documents have
been included solely for convenience and shall not be considered in construing
the Loan Documents.
 
10.9. Expenses, Etc.  The Borrower agrees to pay or reimburse on demand of the
Agent the following: (a) the reasonable fees, expenses, disbursements and other
charges of Bingham McCutchen LLP and any legal counsel engaged by the Agent  in
connection with (i) the preparation, execution and delivery of this Agreement
(including the exhibits and schedules hereto) and the Loan Documents and the
making of the Term Loans hereunder and (ii) any modification, supplement or
waiver of any of the terms of this Agreement or any other Loan Document; (b) all
out-of-pocket costs and expenses (including the fees, disbursements and other
charges of counsel to the Agent and of one separate counsel for Lenders other
than the Agent), in connection with any Default or Event of Default or the
enforcement of this Agreement or any other Loan Documents; (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied on or
against the Agent or any Lender by any governmental or revenue authority in
respect of this Agreement or any other Loan Document; and (d) expenses of due
diligence incurred by the Agent prior to or as of the Closing Date and the
Borrower agrees to pay or reimburse on demand the Collateral Agent for all
out-of-pocket costs, expenses, taxes, assessments and other charges incurred by
the Collateral Agent in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement or any other
Loan Document.
 
Except as otherwise expressly limited elsewhere in this Agreement or in any
other Loan Document, the Borrower shall pay (i) all reasonable, documented
out-of-pocket expenses incurred by the Agent, the Collateral Agent, or their
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Agent or the Collateral Agent, in connection with the syndication and
distribution (including, without limitation, via the internet or through a
service such as Intralinks) of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions of the Loan Documents (whether or not
the transactions contemplated hereby or thereby shall be consummated), and (ii)
all reasonable out-of-pocket expenses incurred by the Agent, the Collateral
Agent, or any Lender, including the fees, charges and disbursements of any
counsel for the Agent, the Collateral Agent and of one separate counsel for
Lenders other than the Agent or the Collateral Agent, in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made hereunder, including all such out-of pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.  Expenses
being reimbursed by the Borrower under this Section include, without limiting
the generality of the foregoing, costs and expenses (subject to express
limitations set forth elsewhere in this Agreement or in any other Loan Document)
incurred in connection with:
 
(1) appraisals;
 
(2) field examinations and the preparation of appraisal, field examination or
audit reports based on the fees charged by a third party retained by the Agent
or the internally allocated fees for each Person employed by the Agent with
respect to each field examination;
 
(3) lien and title searches and title insurance;
 
(4) environmental reviews;
 
(5) taxes, fees and other charges for recording the mortgages, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Collateral Agent’s Liens;
 
(6) sums paid or incurred to take any action required of any Credit Party under
the Loan Documents that such Credit Party fails to pay or take; and
 
(7) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lockboxes, and costs and expenses
of preserving and protecting the Collateral.
 
10.10. Indemnification.  Each Credit Party, jointly and severally with all other
Credit Parties, hereby agrees to indemnify the Agent, the Lenders and each
Affiliate thereof and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities
(including Environmental Liabilities), claims (including Environmental Claims)
or damages to which any of them may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from any (a) actual or
proposed use by the Borrower or any other Credit Party of the proceeds of any
extension of credit by any Lender hereunder, (b) breach by any Credit Party of
this Agreement or any other Loan Document, (c) violation by any Credit Party or
any of its Subsidiaries of any law, rule, regulation or order including any
Requirements of Environmental Law, (d) Liens or security interests granted on
any Property pursuant to or under the Loan Documents, to the extent resulting
from any Hazardous Substance located in, on or under any such Property, (e)
ownership by the Lenders or the Agent of any Property following foreclosure
under the Loan Documents, to the extent such losses, liabilities, claims or
damages arise out of or result from any Hazardous Substance, located in, on or
under such Property prior to or at the time of such foreclosure, including
losses, liabilities, claims or damages which are imposed upon Persons under laws
relating to or regulating Hazardous Substances, solely by virtue of ownership,
(f) any Lender or the Agent being deemed an operator of any such Property by a
court or other regulatory or administrative agency or tribunal or other third
party, to the extent such losses, liabilities, claims or damages arise out of or
result from any Hazardous Substance, petroleum, petroleum product or petroleum
waste located in on or under such Property at or prior to the date of any
foreclosure thereon under the Loan Document, or (g) investigation, litigation or
other proceeding (including any threatened investigation or proceeding) relating
to any of the foregoing (including any proceeding brought by any Credit Party
against the Agent, any Lender and/or their respective Affiliates), and each
Credit Party, jointly and severally with all other Credit Parties, agrees to
reimburse the Agent and each Lender, and each Affiliate thereof and their
respective directors, officers, employees, counsel and agents, upon demand for
any out-of-pocket expenses (including reasonable legal fees) incurred in
connection with any such investigation or proceeding, AND WHETHER ANY SUCH LOSS,
LIABILITY, CLAIM OR DAMAGE RESULTS FROM THE NEGLIGENCE OF ANY SUCH INDEMNIFIED
PERSON; but excluding any such losses, liabilities, claims, damages or expenses
incurred by a Person or any Affiliate thereof or their respective directors,
officers, employees, counsel or agents by reason of (i) the gross negligence or
willful misconduct of or willful and knowing breach of any Loan Document by such
Person, affiliate, director, officer, employee or agent or (ii) ownership or
operation of any Property by the Lenders or the Agent following foreclosure
under the Loan Documents to the extent, but only to the extent, such losses,
liabilities, etc. are attributable to the post-foreclosure actions of the Lender
or the Agent.  Promptly after receipt by an indemnified person of notice of any
claim or the commencement of any action, such indemnified person shall, if any
claim in respect thereof is to be made against any Credit Party under this
Section 10.10, notify the such Credit Party in writing of the claim or the
commencement of that action.  The Credit Parties shall not be liable for any
settlement of any such claim or action involving the payment of monetary damages
effected without its written consent not to be unreasonably withheld.  If any
such claim or action shall be brought against an indemnified person, it shall
notify the applicable Credit Parties thereof, and such Credit Parties shall be
entitled to participate in the joint defense thereof.
 
10.11. Amendments, Waivers, Etc.
 
(a) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower, the Agent and the Required Lenders or (ii) in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
the Agent and the Credit Party or Credit Parties that are parties thereto, with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase the Term Loan Commitment of any Lender without the written consent of
such Lender, (ii) reduce or forgive the principal amount of any Term Loan or
reduce the rate of interest thereon, or reduce or forgive any interest or fees
payable hereunder, without the written consent of each Lender directly affected
thereby (provided, that any waiver of Default Rate interest shall not be
considered a reduction of interest), (iii) postpone any scheduled date of
payment of the principal amount of any Term Loan or any date for the payment of
any interest, fees or other Obligations payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Term Loan Commitment, without the written consent of each
Lender directly affected thereby, (iv) change any provision contained in
Sections 2.2(c), 2.5, 2.8, 2.9, 10.9(b) or 10.10 hereof or this Section 10.11 or
Section 10.16 hereof, without the written consent of each Lender directly
affected thereby, (v) change any of the provisions of this Section or the
definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi) release the
Borrower or any Guarantor from its obligation under its Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written
consent of each Lender, or (vii) except as otherwise expressly provided herein,
including without limitation, in Section 10.11(b) or in any Security Document,
release any of the Collateral without the written consent of each
Lender.  Anything in this Section 10.11 to the contrary, no amendment, waiver or
consent shall be made with respect to Section 9 without the written consent of
the Agent.
 
(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option
and in its sole discretion, to release any Liens granted to the Collateral Agent
by the Credit Parties on any Collateral (i) upon the termination of the all Term
Loan Commitments, and payment and satisfaction in full in cash of all Term Loans
and other Obligations, (ii) constituting Property being sold or disposed of if
the Credit Party disposing of such Property certifies to the Agent that the sale
or disposition is made in compliance with the terms of this Agreement (and the
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting Property leased to a Credit Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement, or
(iv) as required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Collateral Agent and the Lenders
pursuant to Article 8.  Except as provided in the preceding sentence or in
Section 7.4(e)(5), the Collateral Agent will not release any Liens on Collateral
without the prior written authorization of the Required Lenders; provided that,
the Collateral Agent may in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $1,000,000 during any calendar year
without the prior written authorization of the Required Lenders.  Any such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Credit Parties in respect of) all interests retained by the Credit Parties,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
 
10.12. Successors and Assigns.
 
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the other Credit Parties, the Agent, the Collateral Agent and the
Lenders and their respective successors and permitted assigns, provided that the
undertaking of the Lenders hereunder to make Term Loans to the Borrower shall
not inure to the benefit of any successor of the Borrower. Neither the Borrower
nor any Credit Party may assign or transfer any of its rights or obligations
hereunder without the prior written consent of all of the Lenders (and any
attempted assignment or transfer by any Credit Party without such consent shall
be null and void), and no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 10.12.  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than (i) the parties hereto, their respective successors and
assigns permitted hereby, (ii) any participant of a Lender (to the extent
provided in subparagraph (b) below), and (iii) to the extent expressly set forth
herein, the Affiliates of the Agent and each of the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
 
(b) Each Lender may sell participations to any Person in all or part of any Term
Loan, or all or part of its Term Notes, or Term Loan Commitments, to another
bank or other entity, in which event, without limiting the foregoing, the
provisions of Sections 10.10 and 10.16 shall inure to the benefit of each
purchaser of a participation and the pro-rata treatment of payments, as
described in Section 2.8, shall be determined as if such Lender had not sold
such participation.  In the event any Lender shall sell any participation, (i)
the Borrower, the Agent, the Collateral Agent and the other Lenders shall
continue to deal solely and directly with such selling Lender in connection with
such selling Lender’s rights and obligations under the Loan Documents (including
the Term Note(s) held by such selling Lender), (ii) such Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrower and the
other Credit Parties relating to the Term Loans, including the right to approve
any amendment, modification or waiver of any provision of this Agreement other
than (and then only if expressly permitted by the applicable participation
agreement) amendments, modifications or waivers with respect to (A) any
reduction of fees payable hereunder to the Lender, (B) any reduction of the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, the Term Loans and other sums to be
paid to the Lenders hereunder, and (C) any postponement of any date for the
payment of any amount payable in respect of the Term Loans of such Lender, (iii)
the Credit Parties each agree, to the fullest extent it may effectively do so
under applicable law, that any participant of a Lender may exercise all rights
of set-off, bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such participant were a direct holder of Term Loans
if such Lender has previously given notice of such participation to the
Borrower.
 
(c) Each Lender may assign to one or more Lenders or Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Term Loan Commitment and or Term Loans at the time owing
to it, the related Term Note or Term Notes held by it) (an “Assignment”);
provided, however, that, (i) the aggregate amount of the applicable Term Loan
Commitment or Term Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance (as defined below) with
respect to such assignment is delivered to the Agent) shall in no event be less
than $500,000 (except for certain exceptions approved by the Agent) and shall be
in an amount that is an integral multiple of $100,000 (unless all of the
assigning Lender’s applicable Term Loan Commitment or Term Loans is being
assigned); and (ii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in its records, and to
the Borrower, an Assignment and Acceptance in a form required by the Agent (each
an “Assignment and Acceptance”) with blanks appropriately completed, together
with any Term Note or Term Notes and a processing and recordation fee of $1,000
(for which the Borrower shall have no liability); provided that, (i) no such fee
shall be payable in connection with an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund of a Lender, (ii) only one fee shall be payable in
connection with simultaneous assignments by a Lender to related Approved Funds
and (iii) no such fee shall be payable in connection with assignments during the
five Business Days following the Closing Date.  Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, unless a shorter period of time may
be agreed to by the Agent in its sole and absolute discretion, (A) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
 
(d) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Lender assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assignor Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Credit Party or any of its Subsidiaries or the performance or observance
by the Borrower or any other Credit Party of any of its obligations hereunder;
(iii) such assignee confirms that it has received a copy of this Agreement and
the other Loan Documents, together with copies of the financial statements of
the Borrower previously delivered in accordance herewith and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it will keep confidential all information with respect to
any Credit Party furnished to it by the Borrower or such Credit Party, such
assignor Lender or the Agent (other than information generally available to the
public or otherwise available to the Agent on a non-confidential basis or
otherwise permitted pursuant to the terms of this Agreement); (v) such assignee
will, independently and without reliance upon the Agent, such assignor Lender or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all obligations that by the terms of the Loan Documents are required to be
performed by it as a Lender.
 
(e) The Agent shall maintain at its office a copy of each Assignment and
Acceptance delivered to it and a record of the names and addresses of the
Lenders and the Term Loan Commitments of, and principal amount of the Term
Loans, accrued and unpaid interest and other fees due thereunder owing to, each
Lender from time to time.  The entries in the register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each person the name of which is recorded therein as a Lender hereunder
for all purposes of the Loan Documents.  Such records shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
 
(f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and the assignee thereunder together with the Term Note(s) subject to
such assignment, the written consent to such assignment and the fee, if any,
payable with respect thereto, the Agent shall, if such Assignment and Acceptance
has been completed with blanks appropriately filled, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower and the
Lenders.  Contemporaneously with the receipt by the Borrower of such Assignment
and Acceptance and the surrender Term Note(s), the Borrower, at its own expense,
shall execute and deliver to the Agent in exchange for the surrendered Term
Note(s), a new Term Note or Term Notes payable to the order of such assignee in
an amount equal to the applicable Term Loan Commitment, or Term Loans, assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained Term Loan Commitments or Term Loans hereunder, a new Term Note or
Term Notes to the order of the assigning Lender in an amount equal to the
applicable Term Loans retained by it hereunder.  Such new Term Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of such
surrendered Term Note(s), shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the
surrendered Term  Note(s).  Such surrendered Term  Note shall be marked canceled
and returned to the Borrower.
 
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.12, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to any Credit Party and/or any of its Subsidiaries furnished to such
Lender by or on behalf of such Credit Party or such applicable Subsidiary.
 
(h) Notwithstanding anything herein to the contrary, any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including without
limitation, any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
10.13. Entire Agreement.  This Agreement and the other Loan Documents embody the
entire agreement and understanding among the Credit Parties, the Agent and the
Lenders relating to the subject matter hereof and supersedes all prior
proposals, agreements and understandings relating to the subject matter
hereof.  Any conflict between the provisions of this Agreement and the
provisions of any other Loan Documents shall be governed by the provisions of
this Agreement.  The Credit Parties certify that they are relying on no
representation, warranty, covenant or agreement except for those set forth in
this Agreement and the other Loan Documents of even date herewith.
 
10.14. Severability.  If any provision of any Loan Documents shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
 
10.15. Disclosures.  Every reference in the Loan Documents to disclosures of the
Borrower or any other Credit Party to the Agent and the Lenders in writing, to
the extent that such references refer to disclosures at or prior to the
execution of this Agreement, shall be deemed strictly to refer only to written
disclosures delivered to the Agent and the Lenders in an orderly manner prior to
or concurrently with the execution hereof.
 
10.16. Capital Adequacy.
 
(a) If after the date of this Agreement, any Lender shall have determined that
the adoption or effectiveness (regardless of whether previously announced) of
any applicable Legal Requirement or treaty regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, has or would have the effect of increasing the
cost of, or reducing the rate of return on the capital of such Lender (or any
holding company of which such Lender is a part) as a consequence of its
obligations hereunder or its Term Note to a level below that which such Lender
or holding company could have achieved but for such adoption, change or
compliance by an amount deemed by such Lender to be material, then from time to
time, upon demand by such Lender (with a copy to the Agent) in the form of a
certificate stating the cause of such demand and reasonably detailed
calculations therefor, the Borrower (subject to Section 10.6 hereof) agrees to
pay to such Lender such additional amount or amounts as will compensate such
Lender or holding company for such reduction.
 
(b) The certificate of any Lender setting forth such amount or amounts as shall
be necessary to compensate such Lender or its holding company as specified in
Subsection 10.16(a) above (and setting forth the calculation thereof in
reasonable detail) shall be conclusive and binding, absent manifest error.  The
Borrower shall pay such Lender the amount shown as due on any such certificate
within five days after such Lender delivers such certificate.  In preparing such
certificate, such Lender may employ such assumptions and allocations of costs
and expenses as it shall in good faith deem reasonable and may use any
reasonable averaging and attribution method.
 
10.17. Taxes.
 
(a) As used in this Section 10.17, the following terms shall have the following
meanings:
 
(1) “Indemnifiable Tax” means any Tax, but excluding, in any case, any Tax that
(a) would not be imposed in respect of a payment to a Lender or the Agent under
the Term Notes held by such Lender or the Agent or under any of the other Loan
Documents except for a present or former connection between the jurisdiction of
the Governmental Authority imposing such Tax and such Lender or the Agent (or a
shareholder or other Person with an interest therein), including a connection
arising from such Lender’s or the Agent’s (or shareholder thereof) being or
having been a citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such Lender or
the Agent having executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement, the Term Notes held by such Lender
or the Agent or any other Loan Documents, (b) is imposed under United States
federal income tax law or any state income or franchise tax law or (c) is
described in the final sentence of Section 17(e).
 
(2) “Tax” means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest thereon and penalties and
additions thereto) that is imposed by any Governmental Authority in respect of a
payment to a Lender or the Agent under the Term Notes or under any of the other
Loan Documents.
 
(b) If the Borrower is required by any applicable Legal Requirement to make any
deduction or withholding for or on account of any Tax from any payment to be
made by it under this Agreement, under the Term Notes or under any other Loan
Documents to a Lender or the Agent, then the Borrower shall (i) promptly notify
the Lender or the Agent that is entitled to such payment of such requirement to
so deduct or withhold such Tax, (ii) pay to the relevant Governmental
Authorities the full amount required to be so deducted or withheld, (iii)
promptly forward to such Lender or the Agent an official receipt (or copies
thereof), or other documentation reasonably acceptable to such Lender or the
Agent, evidencing such payment to such Governmental Authorities and (iv) if such
Tax is an Indemnifiable Tax, pay, to the extent permitted by law to such Lender
or the Agent, in addition to whatever net amount of such payment is paid to such
Lender or the Agent, such additional amount as is necessary to ensure that the
total amount actually received by such Lender or the Agent (free and clear of
Indemnifiable Tax) will equal the full amount of the payment such Lender or the
Agent would have received had no such deduction or withholding been
required.  If the Borrower pays any additional amount to a Lender or the Agent
pursuant to the preceding sentence and such Lender or the Agent shall receive a
refund of an Indemnifiable Tax with respect to which, in the good faith opinion
of such Lender or the Agent, such payment was made, such Lender or the Agent
shall pay to the Borrower the amount of such refund promptly upon receipt
thereof.
 
(c) In the event that any Governmental Authority notifies the Borrower that it
has improperly failed to withhold or deduct any Tax from a payment received by
any Lender or the Agent under the Term Notes held by such Lender or the Agent or
under any other Loan Documents, the Borrower agrees to timely and fully pay such
Tax to such Governmental Authority and such Lender or the Agent shall, upon
receipt of written notice of such payment with respect to any Tax other than an
Indemnifiable Tax, promptly pay to the Borrower, an amount necessary in order
that the amount of such payment to the Borrower after payment of all Taxes with
respect to such payment, shall equal the amount of any Tax other than an
Indemnifiable Tax that the Borrower paid to such Governmental Authority pursuant
to this clause (c).
 
(d) Each Lender or the Agent shall, upon request by the Borrower, take requested
measures to mitigate the amount of Indemnifiable Tax required to be deducted or
withheld from any payment made by the Borrower under this Agreement, under the
Term Notes or under any other Loan Documents if such measures can, in the sole
and absolute opinion of such Lender or the Agent, be taken without such Lender
or the Agent suffering any economic, legal, regulatory or other disadvantage
(provided, however, that no such Lender or the Agent shall be required to
designate a funding office that is not located in the United States of America).
 
(e) Each Lender or the Agent that (i) is organized under the laws of a
jurisdiction other than the United States of America and (ii)(A) is a party
hereto on the Closing Date or (B) becomes an assignee of an interest under this
Agreement under Section 10.12 after the Closing Date (unless such Lender or the
Agent was already a Lender or the Agent hereunder immediately prior to such
assignment) shall execute and deliver to the Borrower and the Agent one or more
(as the Borrower or the Agent may reasonably request) Forms W-8ECI, W-8BEN,
W-8IMY (as applicable) or other applicable form, certificate or document
prescribed by the United States Internal Revenue Service certifying as to such
Lender’s or the Agent’s entitlement to exemption from withholding or deduction
of Taxes. The Borrower shall not be required to pay additional amounts to any
Lender or the Agent pursuant to this Section 10.17 to the extent that the
obligation to pay such additional amounts would not have arisen but for the
failure of such Lender or the Agent to comply with this paragraph.
 
(f) Each Lender and the Agent agrees that if it subsequently recovers, or
receives a permanent net tax benefit with respect to any amounts of Taxes (i)
previously paid by it and as to which it has been indemnified by or on behalf of
the Borrower or (ii) previously deducted by the Borrower (including, without
limitation, any Taxes deducted from any additional sums payable under clause (b)
above), the relevant Lender or the Agent, as the case may be, shall reimburse
the Borrower to the extent of the amount of any such recovery or permanent net
tax benefit (but only to the extent of any indemnity payments made, or
additional amounts paid, by or on behalf of the Borrower under this Section
10.17 with respect to the Taxes giving rise to such recovery or tax benefit);
provided, however, that the Borrower, upon the request of the Lender or the
Agent, agrees to repay to such Lender or the Agent, the amount paid over to the
Borrower, in the event such Lender or the Agent is required to repay such amount
to the relevant taxing authority.
 
(g) Notwithstanding the foregoing, in no event shall the amount payable under
this Section 10.17 (to the extent, if any, constituting interest under
applicable laws) together with all amounts constituting interest under
applicable laws and payable in connection with this Agreement or the Term Notes,
exceed the Highest Lawful Rate or the maximum amount of interest permitted to be
charged by applicable laws.
 
10.18. Waiver of Claims.  Each Credit Party hereby waives and releases the
Agent, the Collateral Agent and all Lenders from any and all claims or causes of
action which the Borrower may own, hold or claim in respect of any of them as of
the date hereof.
 
10.19. Right of Setoff.  The Lenders each are hereby authorized at any time and
from time to time, without notice to any Credit Party (any such notice being
expressly waived by each Credit Party), to setoff and apply any and all deposits
(general or special, time or demand, provisional or final, whether or not such
setoff results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds or
property at any time held, and other Indebtedness at any time owing by the Agent
or such Lender to or for the credit or the account of any such Credit Party
against any and all of the Obligations irrespective of whether or not any of the
Obligations are then due and irrespective of whether or not Agent or such Lender
shall have made any demand under this Agreement, the Term Notes or any other
Loan Document.  Each Credit Party also hereby grants to Agent and to each of the
Lenders a security interest in and hereby transfers, assigns, sets over, and
conveys to the Agent and to each of the Lenders, as security for payment of all
Obligations, all such deposits, funds or property of any such Credit Party or
Indebtedness of the Agent or any Lender to any such Credit Party. Should the
right of the Agent or any Lender to realize funds in any manner set forth
hereinabove be challenged and any application of such funds be reversed, whether
by court order or otherwise, the Lenders shall make restitution or refund to
such Credit Party, pro rata in accordance with their respective Term Loan
Commitment Percentages.  Each Lender agrees to promptly notify the Borrower and
the Agent after any such setoff and application, provided that the failure to
give such notice will not affect the validity of such setoff and
application.  The rights of the Agent and the Lenders under this Section are in
addition to other rights and remedies (including without limitation other rights
of setoff) which the Agent or the Lenders may have.  This Section is subject to
the terms and provisions of Section 2.12 hereof.
 
10.20. Waiver of Right to Jury Trial.  EXCEPT AS PROHIBITED BY APPLICABLE LAW,
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE NOTES, ANY OF THE OTHER LOAN DOCUMENTS OR
ANY TRANSACTIONS EVIDENCED THEREBY.
 
10.21. Additional Provisions Regarding Collection of Accounts and other
Collateral.
 
(a) Each Credit Party hereby designates and constitutes the Collateral Agent or
the Collateral Agent’s designee as such Credit Party’s attorney-in-fact with
power to endorse such Credit Party’s name upon any notes, acceptances, checks,
drafts, money orders or other evidence of payment of any Accounts or any other
Collateral that may come into its possession; to sign or endorse such Credit
Party’s name on any invoice, bill of lading or other title or ownership
documents relating to any Accounts or Inventory, drafts against any customers of
any Credit Party, assignments and verifications of Accounts and notices to
customers of any Credit Party; to send verifications of Accounts; and to notify
the U.S. Postal Service authorities to change the address for delivery of mail
addressed to any Credit Party to such address as the Collateral Agent may
designate.  All acts of said attorney or designee are hereby ratified and
approved by each Credit Party, and said attorneys or designee shall not be
liable for any acts of omission or commission, for any error of judgment or for
any mistake of fact or law, provided that the Agent or its designee shall not be
relieved of liability to the extent it is determined by a final judicial
decision that its act, error or mistake constituted gross negligence or willful
misconduct or willful and knowing breach of any Loan Document.  The power of
attorney granted under this subparagraph is coupled with an interest and is
irrevocable until all of the Obligations are paid in full and this Agreement and
the Term Loan Commitments are terminated.
 
(b) The Collateral Agent, without notice to or consent of any Credit Party, at
any time after the occurrence and during the continuation of an Event of
Default, (i) may sue upon or otherwise collect, extend the time. of payment of,
or compromise or settle for cash, credit or otherwise upon any terms, any of the
Accounts or any instruments or insurance applicable thereto and/or release any
account debtor thereon; (ii) is authorized and empowered to accept or direct
shipments of Inventory and accept the return of the goods represented by any of
the Accounts; and (iii) shall have the right to receive, endorse, assign and/or
deliver in its name or the name of any Credit Party any and all checks, drafts
and other instruments for the payment of money relating to the Accounts, and
each Credit Party hereby waives notice of presentment, protest and non-payment
of any instrument so endorsed.
 
(c) Nothing herein contained shall be construed to constitute any Credit Party
as agent of the Collateral Agent for any purpose whatsoever, and the Collateral
Agent shall not be responsible or liable for any shortage, discrepancy, damage,
loss or destruction of any part of the Collateral wherever the same may be
located and regardless of the cause thereof (except to the extent it is
determined by a final judicial decision that the Collateral Agent’s or a
Lender’s act or omission constituted gross negligence of willful conduct or
willful and knowing breach of any Loan Document).  The Collateral Agent and the
Lenders shall not, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Accounts or any instrument
received in payment thereof or for any damage resulting therefrom (except to the
extent it is determined by a final judicial decision that the Collateral Agent’s
or such Lender’s error, omission or delay constituted gross negligence or
willful misconduct or willful and knowing breach of any Loan Document).  The
Collateral Agent and the Lenders do not, by anything herein or in any assignment
or otherwise, assume any Credit Party’s obligations under any contract or
agreement assigned to the Collateral Agent or the Lender, and the Collateral
Agent and the Lenders shall not be responsible in any way for the performance by
any Credit Party of any of the terms and conditions thereof.
 
(d) Upon the occurrence and during the continuation of any Event of Default: (i)
if any of the Accounts includes a charge for any tax payable to any governmental
tax authority, the Collateral Agent is hereby authorized (but in no event
obligated) in its discretion to pay the amount thereof to the proper taxing
authority for, the account of any Credit Party and to charge or any Credit
Party’s account therefor; and (ii) the Borrower shall notify the Collateral
Agent if any Accounts include any tax due to any such taxing authority and, in
the absence of such notice, the Collateral Agent shall have the right to retain
the full proceeds of such Accounts and shall not be liable for any taxes that
may be due from any Credit Party by reason of the sale and delivery creating
such Accounts.
 
(e) Upon the occurrence and continuation of any Event of Default, the Collateral
Agent may at any time and from time to time employ and maintain in the premises
of any Credit Party a custodian selected by the Collateral Agent who shall have
full authority to do all acts necessary to protect the Collateral Agent’s and
Lenders’ interests and to report to the Collateral Agent thereon.  Each Credit
Party hereby agrees to cooperate with any such custodian and to do so whatever
the Collateral Agent may reasonably request to preserve the Collateral.  All
costs and expenses incurred by the Collateral Agent by reason of the employment
of the custodian shall be charged to the Borrower’s account and added to the
Obligations.
 
10.22. Construction.  Each Credit Party, the Agent and each Lender acknowledge
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the parties hereto.
 
10.23. Joint and Several Obligations.  Notwithstanding anything to the contrary
contained herein or in any other Loan Documents, each Credit Party acknowledges
that it and the other Credit Parties are jointly and severally responsible for
their respective agreements, covenants, representations, warranties and
obligations contained and set forth in this Agreement or in any other Loan
Document to which the applicable Credit Party is a party.
 
10.24. USA Patriot Act.  Each Lender hereby notifies the 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 “Act”), it may be required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the Act.
 
10.25. Confidentiality.  Each Lender agrees to keep confidential information
obtained by it pursuant hereto and the other Loan Documents confidential in
accordance with such Lender’s customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Lender’s employees, representatives,
directors, attorneys, auditors, agents, professional advisors, trustees or
Affiliates who are advised of the confidential nature of such information, (b)
to the extent such information presently is or hereafter becomes available to
such Lender on a non-confidential basis from any source of such information that
is in the public domain at the time of disclosure, (c) to the extent disclosure
is required by law, regulation, subpoena or judicial order or process (provided
that notice of such requirement or order shall be promptly furnished to the
Borrower unless such notice is legally prohibited or such disclosure is made
during an examination of a Lender’s books and records by any state or federal
regulatory agency), (d) to any rating agency to the extent required in
connection with any rating to be assigned to such Lender, (e) to assignees or
participants or prospective assignees or participants, (f) to the extent
required in connection with any litigation between any Credit Party and any
Lender with respect to the Loans or this Agreement and the other Loan Documents,
or (g) with the Borrower’s prior written consent
 
[Remainder of Page Left Blank Intentionally]

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
 
WELLS FARGO BANK, NATIONALASSOCIATION,
as Agent and as a Lender
 
By: /s/ Shailesh H. Patel
Name: Shailesh H. Patel
Title:  Senior Vice President
 
 
WALCO INTERNATIONAL, INC.,
a Delaware corporation, as Borrower
 
By: /s/ William F. Lacey
Name: William F. Lacey
Title: Sr. V.P. and CFO
 
 
WALCO HOLDINGS, INC.,
a Delaware corporation, as a Guarantor
 
By: /s/ William F. Lacey
Name: William F. Lacey
Title: Sr. V.P. and CFO
 
 
STEER INTERMEDIATE CORPORATION,
a Delaware corporation, as a Guarantor
 
By: /s/ William F. Lacey
Name: William F. Lacey
Title: Sr. V.P. and CFO
 
 
ANIMAL HEALTH INTERNATIONAL, INC.,
a Delaware corporation, as a Guarantor
 
By: /s/ William F. Lacey
Name: William F. Lacey
Title: Vice President
 

 
 

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WALCO INTERMEDIATE, INC.,
a Delaware corporation, as a Guarantor
 
By: /s/ William F. Lacey
Name: William F. Lacey
Title: Sr. V.P. and CFO
 
 
AMERICAN LIVESTOCK SUPPLY, INC.,
a Delaware corporation, as a Guarantor
 
By: /s/ Jon Kuehl
Name: Jon Kuehl
Title: President
 
 
WALCO TEXAS ANIMAL HEALTH, LLC,
a Texas limited liability company, as a Guarantor
 
By:  /s/ William F. Lacey
Name: William F. Lacey
Title: Sr. V.P. and CFO
 

HAWAII MEGA-COR., INC.,
a Hawaii corporation, as a Guarantor
 
By: /s/ Damian Olthoff
Name: Damian Olthoff
Title: Secretary
 
 
PROVINCE LIVESTOCK SUPPLY LTD.,
an Alberta corporation, as a Guarantor
 
By: /s/ Allen Carmichael
Name: Allen Carmichael
Title: Secretary and Treasurer
 
 
WESTERN VETERINARY SUPPLIES LTD.,
an Alberta corporation, as a Guarantor
 
By: /s/ Allen Carmichael
Name: Allen Carmichael
Title: Secretary and Treasurer
 
 
WALCO CANADA ANIMAL HEALTH LTD.,
an Alberta corporation, as a Guarantor
 
By: /s/ Allen Carmichael
Name: Allen Carmichael
Title: Secretary and Treasurer