Exhibit 10.1
    

EXECUTION COPY

$180,000,000
CREDIT AGREEMENT
among
ROTECH HEALTHCARE INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
CREDIT SUISSE SECURITIES (USA) LLC,
as Sole Lead Arranger
and Sole Bookrunner,
CREDIT SUISSE,
as Administrative Agent and Collateral Agent

Dated as of March 30, 2007
    

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TABLE OF CONTENTS
                                                    
 
 
 
Page

Section 1. DEFINITIONS
1

 
Section 1.01
Defined Terms
1

 
Section 1.02
Other Definitional Provisions
20

 
 
 
20

Section 2. AMOUNT AND TERMS OF COMMITMENTS    
20

 
Section 2.01
Commitments
20

 
Section 2.02
Procedure for Long Term Loan Borrowing
20

 
Section 2.03
Repayment of Term Loans
21

 
Section 2.04
Evidence of Debt.
21

 
Section 2.05
Optional Prepayments.
21

 
Section 2.06
Mandatory Prepayments
22

 
Section 2.07
Conversion and Continuation Options
23

 
Section 2.08
Interest Rates and Payment Dates
23

 
Section 2.09
Computation of Interest and Fees
24

 
Section 2.10
Inability to Determine Interest Rate
24

 
Section 2.11
Pro Rata Treatment and Payments
25

 
Section 2.12
Requirements of Law
27

 
Section 2.13
Taxes
28

 
Section 2.14
Indemnity
30

 
Section 2.15
Illegality
30

 
Section 2.16
Change of Lending Office
30

 
 
 
 
Section 3. RESERVED
31

 
 
 
 
Section 4. REPRESENTATIONS AND WARRANTIES
31

 
Section 4.01
Financial Condition
31

 
Section 4.02
No Change
31

 
Section 4.03
Corporate Existence; Compliance with Law
31

 
Section 4.04
Corporate Power; Authorization; Enforceable Obligations
32

 
Section 4.05
No Legal Bar
32

 
Section 4.06
No Material Litigation
32

 
Section 4.07
No Default
32

 
Section 4.08
Ownership of Property; Liens
33

 
Section 4.09
Intellectual Property
33

 
Section 4.10
Taxes
33

 
Section 4.11
Federal Regulations
33

 
Section 4.12
Labor Matters
33

 
Section 4.13
ERISA
33

 
Section 4.14
Investment Company Act; Other Regulations
34

 
Section 4.15
Subsidiaries
34

 
Section 4.16
Use of Proceeds
35

 
Section 4.17
Environmental Matters
35

 
Section 4.18
Accuracy of Information, etc.
36

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Section 4.19
Security Documents
36

 
Section 4.20
Solvency
36

 
Section 4.21
Senior Indebtedness
37

 
Section 4.22
Compounding
37

 
Section 4.23
Location of Material Inventory, Equipment and Other Property
37

 
Section 4.24
Evidence of Debt.
37

 
 
 
 
Section 5. CONDITIONS PRECEDENT
37

 
Section 5.01
Conditions to Extension of Credit on the Closing Date
37

 
 
 
 
Section 6. AFFIRMATIVE COVENANTS
40

 
Section 6.01
Financial Statements
40

 
Section 6.02
Certificates; Other Information
41

 
Section 6.03
Collateral Reports
42

 
Section 6.04
Payment of Obligations
43

 
Section 6.05
Conduct of Business and Maintenance of Existence, etc.
43

 
Section 6.06
Maintenance of Property; Insurance
43

 
Section 6.07
Inspection of Property; Books and Records; Discussions
43

 
Section 6.08
Notices
44

 
Section 6.09
Environmental Laws
44

 
Section 6.10
Additional Collateral, etc.
45

 
Section 6.11
Unrestricted Subsidiaries
46

 
Section 6.12
Further Assurances
47

 
Section 6.13
Use of Proceeds
47

 
 
 
 
Section 7. NEGATIVE COVENANTS
47

 
Section 7.01
Consolidated EBITDA
47

 
Section 7.02
Indebtedness
47

 
Section 7.03
Liens
49

 
Section 7.04
Fundamental Changes
51

 
Section 7.05
Disposition of Property
51

 
Section 7.06
Restricted Payments
52

 
Section 7.07
Capital Expenditures
52

 
Section 7.08
Investments
53

 
Section 7.09
Optional Payments and Modifications of Certain Debt Instruments
55

 
Section 7.10
Accuracy of Information, etc.
55

 
Section 7.11
Changes to Fiscal Periods
55

 
Section 7.12
Negative Pledge Clauses
55

 
Section 7.13
Clauses Restricting Subsidiary Distributions
56

 
Section 7.14
Liens of Business
57

 
Section 7.15
Designation of Unrestricted Subsidiaries
57

 
 
 
 
Section 8. EVENTS OF DEFAULT
58

 
 
 
 
Section 9. THE AGENTS    
61

 
Section 9.01
Appointment
61

 
Section 9.02
Delegation of Duties
61

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Section 9.03
Exculpatory Provisions
61

 
Section 9.04
Reliance by Agents
61

 
Section 9.05
Notice of Default
62

 
Section 9.06
Non-Reliance of Agents and Other Lenders
62

 
Section 9.07
Indemnification
63

 
Section 9.08
Agent in Its Individual Capacity
63

 
Section 9.09
Successor Agents
63

 
Section 9.10
Authorization to Release Liens and Guarantees
64

 
Section 9.11
The Arranger
64

 
 
 
 
Section 10. MISCELLANEOUS
 
 
Section 10.01
Amendments and Waivers
43

 
Section 10.02
Notices
43

 
Section 10.03
No Waiver; Cumulative Remedies
43

 
Section 10.04
Survival 0f Representation and Warranties
44

 
Section 10.05
Payments of Expenses
44

 
Section 10.06
Successors and Assigns; Participants and Assignments
45

 
Section 10.07
Adjustments; Setoff
46

 
Section 10.08
Counterparts
47

 
Section 10.09
Severability
47

 
Section 10.10
Integration
47

 
Section 10.11
GOVERNING LAW
47

 
Section 10.12
Submission To Jurisdiction; Waivers
49

 
Section 10.13
Acknowledgments
51

 
Section 10.14
Confidentiality
51

 
Section 10.15
Platform; Borrower Materials
52

 
Section 10.16
Release of Collateral and Guarantee Obligations
52

 
Section 10.17
WAIVERS OF JURY TRIAL
53

 
Section 10.18
Repricing of Stock Options
55

iii

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SCHEDULES:
l.lA        Commitments
4.15        Subsidiaries
4.19        UCC Filing Jurisdictions
4.23        Locations of Material Inventory
7.2(d)        Existing Indebtedness
7.02(o)        Letters of Credit
7.3(f)        Existing Liens
7.8(j)        Existing Investments
7.10        Affiliate Transactions

EXHIBITS:
A        Form of Guarantee and Collateral Agreement
B        Form of Compliance Certificate
C-1        Form of Secretary's Certificate
C-2        Form of Officer's Certificate
D        Form of Assignment and Acceptance
E-1        Form of Legal Opinion of Kirkland & Ellis LLP
E-2        Form of Legal Opinion of Greenberg Traurig, LLP
F        Form of Term Note
G        Form of Exemption Certificate
H        Form of Borrowing Notice
I        Form of Landlord Agreement
J        Form of Bailee Letter
K        Form of Post-Closing Letter
    

iv

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CREDIT AGREEMENT, dated as of March 30, 2007, among ROTECH HEALTHCARE INC., a
Delaware corporation (together with its successors, the “Borrower”), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the “Lenders”), CREDIT SUISSE SECURITIES (USA) LLC, as sole lead
arranger and sole bookrunner (in such capacity, the “Arranger”), CREDIT SUISSE,
as collateral agent (in such capacity, the “Collateral Agent”) and as
administrative agent (in such capacity, the “Administrative Agent”).
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available term loans
in an aggregate initial principal amount of $180,000,000, the proceeds of which
will be used to refinance the Borrower's indebtedness under the Existing Credit
Facility, to pay transaction costs, to cash collateralize the Borrower's
existing letters of credit and for general working capital purposes; and
WHEREAS, the Lenders are willing to make such term loans available upon and
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS
Section .Defined Terms
. As used in this Agreement, the terms listed in this Section 1.01 shall have
the respective meanings set forth in this Section 1.01.
“Accounts”: all “accounts”, as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York, now owned or
hereafter acquired by any Loan Party, including (a) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper, Documents or Instruments), whether
arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations that may be characterized as an
account under the Uniform Commercial Code as in effect on the date hereof in the
State of New York), (b) all of each Loan Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Loan Party's
rights to any goods represented by any of the foregoing (including unpaid
sellers' rights of rescission, replevin, reclamation and stoppage in transit and
rights to returned, reclaimed or repossessed goods), (d) all monies due or to
become due to any Loan Party, under all purchase orders and contracts for the
sale of goods or the performance of services or both by such Loan Party or in
connection with any other transaction (whether or not yet earned by performance
on the part of such Loan Party), including the right to receive the proceeds of
said purchase orders and contracts, (e) all health care insurance receivables
and (f) all collateral security and guaranties of any kind, given by any Account
Debtor or any other Person with respect to any of the foregoing.
“Account Debtor”: any Person who may become obligated to any Loan Party under,
with respect to, or on account of, an Account.

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“Administrative Agent”: as defined in the preamble hereto.
“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, either to (a) vote 10% or more of the securities having ordinary
voting power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
“Agents”: the collective reference to the Collateral Agent and the
Administrative Agent.
“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to
(a) until the initial funding on the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the aggregate then unpaid
principal amount of such Lender's Term Loans.
“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender's Aggregate Exposure at such
time to the sum of the Aggregate Exposures of all Lenders at such time.
“Agreement”: this Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time.
“Applicable Margin”: with respect to Base Rate Loans means 5.00%, and with
respect to Eurodollar Loans means 6.00%.
“Applicable Prepayment Premium”: means a prepayment fee which shall be due and
payable to the Administrative Agent, for the pro rata benefit of the Lenders, at
the time of each prepayment or repayment of the Term Loans occurring prior to
the Maturity Date (subject to Section 2.06(b)), or acceleration of the Term
Loans upon the occurrence of an Event of Default pursuant to Section 8 of this
Agreement or otherwise, such prepayment fee to be in an amount equal to the
following: from (a) the Closing Date to the first anniversary of the Closing
Date, 4.00% of the aggregate principal amount of such prepayment, (b) the day
immediately preceding the first anniversary of the Closing Date to the second
anniversary of the Closing Date, 3.00% of the aggregate principal amount of such
prepayment, (c) the day immediately preceding the second anniversary of the
Closing Date to the third anniversary of the Closing Date, 2.00% of the
aggregate principal amount of such prepayment, (d) the day immediately preceding
the third anniversary of the Closing Date to the fourth anniversary of the
Closing Date, 1.00% of the aggregate principal amount of such prepayment and (e)
thereafter, a 0.00% prepayment premium.
“Arranger”: as defined in the preamble hereto.
“Asset Sale”: any Disposition of Property or series of related Dispositions of
Property (including the sale by any Subsidiary of its Capital Stock, but
excluding any such Disposition permitted by Section 7.05(a) or clause (i) of
Section 7.04(b).
“Assignee”: as defined in Section 10.06(c).

2

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“Assignor”: as defined in Section 10.06(c).
“Bailee Letter”: a bailee letter, substantially in the form of Exhibit J,
executed by a bailee holding Inventory owned by any Loan Party, delivered by
such Loan Party to the Collateral Agent.
“Bankruptcy Code”: The Bankruptcy Reform Act of 1978, as heretofore and
hereafter amended, and codified as 11 U.S.C. §§ 101 et seq.
“Base Rate”: for any day, a floating rate equal to the higher of (i) the rate of
interest per annum determined from time to time by Credit Suisse as its prime
rate in effect at its principle office in New York City, and (ii) the Federal
Funds Effective Rate plus 50 basis points per annum. Any change in such interest
rate designated by Credit Suisse shall take effect at the opening of business on
the day specified in the announcement of such change.
“Base Rate Loans”: Loans the rate of interest applicable to which is based upon
the Base Rate.
“Benefited Lender”: as defined in Section 10.07.
“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).
“Borrower”: as defined in the preamble hereto.
“Borrowing Notice”: a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit H, delivered to the
Administrative Agent.
“Business Day”: (a) for all purposes other than as covered by clause (b) below,
a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close and (b) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (a) and which is also a day for trading by and between banks in Dollar
deposits in the interbank Eurodollar market.
“Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that are required to be capitalized in
accordance with GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person in accordance with GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

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“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
“Cash Equivalents”: (a) Dollars held in demand deposits with banks, (b)
marketable direct obligations issued by, or unconditionally guaranteed by, the
United States government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within one year
from the date of acquisition; (c) certificates of deposit, time deposits,
Eurodollar time deposits, term deposit accounts, money market deposit accounts,
bankers' acceptances or overnight bank deposits having maturities of six months
or less from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States or any state thereof having
combined capital and surplus of not less than $500,000,000; (d) commercial paper
of an issuer rated at least “A-1” by Standard & Poor's Ratings Services (“S&P”)
or “P-1” by Moody's Investors Service, Inc. (“Moody's”), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (e)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (c) of this definition, having a term of not more than 30
days, with respect to securities issued or fully guaranteed or insured by the
United States government; (f) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least “A” by S&P or “A” by Moody's; (g) securities with maturities of
six months or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (c) of this definition; or (h) shares of money market, mutual or
similar funds which invest at least 95% of its funds in assets satisfying the
requirements of clauses (a) through (g) of this definition.
“CERCLA”: the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.
“CHAMPUS”: collectively, the Civilian Health and Medical Program of the
Uniformed Services, a program of medical benefits covering former and active
members of the uniformed services and certain of their dependents, which is now
known as TRICARE, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in 10 U.S.C.
§§1071-1107 or elsewhere) affecting such program; and (b) all rules, regulations
(including 32 C.F.R. §§199.1-199.22), manuals, orders and administrative
guidelines of all Governmental Authorities promulgated pursuant to or in
connection with such program (whether or not having the force of law), in each
case as the same may be amended, supplemented or otherwise modified from time to
time.
“CHAMPUS Receivable”: an Account payable pursuant to CHAMPUS.

4

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“CHAMPVA”: collectively, the Civilian Health and Medical Program of the
Department of Veteran Affairs, a program of medical benefits covering retirees
and dependents of former members of the armed services administered by the
United States Department of Veteran Affairs, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in 38 U.S.C. §1713 or elsewhere)
affecting such program; (b) to the extent applicable to CHAMPVA, the CHAMPUS
regulations; and (c) all rules, regulations (including 38 C.F.R.
§§17.270-17.278), manuals, orders and administrative guidelines of all
Governmental Authorities promulgated pursuant to or in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
“CHAMPVA Receivable”: an Account payable pursuant to CHAMPVA.
“Change of Control”: the occurrence of any of the following events: (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become,
or obtain rights (whether by means of warrants or options or other similar
instruments) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 40% of the
outstanding common stock of the Borrower; (b) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; or (c) a
Specified Change of Control.
“Chattel Paper”: all “chattel paper”, as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York, now
owned or hereafter acquired by any Loan Party.
“CLO” shall mean any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
“Closing Date”: the date on which the conditions precedent set forth in
Section 5.01 shall have been satisfied and the initial Loans are made.
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Collateral”: all Property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Document.
“Collateral Agent”: Credit Suisse, in its capacity as collateral agent for the
Lenders hereunder or such successor Collateral Agent as may be appointed
pursuant to Section 9.09 hereof.
“Commitment”: as to any Lender, the obligation of such Lender, if any, to make a
Term Loan to the Borrower hereunder in a principal amount not to exceed the
amount set forth under the heading “Commitment” opposite such Lender's name on
Schedule 1.1A, or, as the case may be, in the Assignment and Acceptance pursuant
to which such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof. The aggregate amount of the Commitments on
the Closing Date is $180,000,000.

5

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“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.
“Compliance Certificate”: a certificate duly executed by a Responsible Officer,
substantially in the form of Exhibit B.
“Consolidated EBITDA”: for any period, Consolidated Net Income for such period
plus without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill and any related impairment charges) and organization costs,
and (e) any extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business and non-cash charges relating
to the repricing of any and all of the Borrower's outstanding stock options on
or before September 15, 2007, whether such repricing is effected by exchange,
replacement, amendment or otherwise). For the purposes of calculating
Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a
“Reference Period”) pursuant to any determination of the Consolidated Senior
Leverage Ratio or the minimum required Consolidated EBITDA, (i) if at any time
during such Reference Period the Borrower or any Subsidiary shall have made any
Asset Sale, the Consolidated EBITDA for such Reference Period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
property that is the subject of such Asset Sale for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Acquisition occurred on the first
day of such Reference Period.
“Consolidated Net Income”: for any period, the consolidated net income (or loss)
of the Borrower and its 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 the
Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of the Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.

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“Consolidated Senior Debt”: at any date, the aggregate principal amount of all
senior Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
“Consolidated Senior Leverage Ratio”: as at the last day of any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated Senior Debt on such
day to (b) Consolidated EBITDA for such period.
“Continuing Directors”: the directors of the Borrower on the Closing Date and
each other director of the Borrower, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is recommended
by at least a majority of the directors of the Borrower then still in office who
were either directors on the Closing Date or whose nomination for election was
previously so approved.
“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its Property is bound.
“Control Investment Affiliate”: as to any Person, any other Person that (a)
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (b) is organized by such Person primarily for the
purpose of making equity or debt investments in one or more companies. For
purposes of this definition, “control” of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms “Dispose” and “Disposed of” shall have correlative meanings.
“Documents”: all “documents”, as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York, now owned or
hereafter acquired by any Loan Party.
“Dollars” and “$”: lawful currency of the United States.
“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States.
“Environmental Laws”: any and all laws, rules, orders, regulations, statutes,
ordinances, guidelines, codes, decrees, or other legally enforceable
requirements (including common law) of any international authority, foreign
government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, as has been, is now, or may at any time hereafter be, in effect.

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“Environmental Permits”: any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required under
any Environmental Law.
“Equipment”: as to any Person, all “equipment”, as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
New York, now owned or hereafter acquired by such Person, wherever located and,
in any event, including all such Person's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment with software and peripheral equipment (other than software
constituting part of the Accounts), and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, all whether now owned or hereafter acquired, and wherever
situated, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.
“ERISA Reorganization”: with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
“Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined by the
Administrative 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 Interest Settlement Rates for
deposits in Dollars (as set forth by any service selected by the Administrative
Agent that has been nominated by the British Bankers' Association as an
authorized information vendor for the purpose of displaying such rates) 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 “Eurodollar Base Rate” shall be the interest rate per annum
determined by the Administrative 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
Administrative 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.

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“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.
“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest l/100th of
1%):
Eurodollar Base Rate            
1.00 - Eurocurrency Reserve Requirements
“Event of Default”: any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
“Excluded Foreign Subsidiaries”: any Foreign Subsidiary which is a “controlled
foreign corporation” under Section 957 of the Code.
“Existing Credit Facility”: that certain Credit Agreement dated as of
September 15, 2006 by and among the Borrower, the several banks and other
financial institutions or entities from time to time parties thereto, Highland
Financial Corp. as lead arranger and sole bookrunner, and NexBank, SSB, as
administrative agent and collateral agent, as the same has been modified,
amended and supplemented from time to time.
“Facility”: each of the Commitments and the Term Loans made hereunder.
“Fair Market Value” means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. The Fair Market Value
of property other than cash shall be determined in good faith by the Borrower
and (a) in the event of property with a Fair Market Value of less than
$10,000,000, shall be set forth in an Officer's Certificate and (b) in the event
of property with a Fair Market Value equal to or in excess of $10,000,000, shall
be set forth in an opinion of an Independent Qualified Party.
“Federal Funds Effective Rate”: the 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 on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary,
to a whole multiple of 1/100 of 1%) charged to Credit Suisse on such day on such
transactions as determined by the Administrative Agent.

“Fee Letter”: the fee letter dated March 26, 2007, among the Administrative
Agent, the Arranger and the Borrower.

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“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.
“Funding Office”: the office specified from time to time by the Administrative
Agent as its funding office by notice to the Borrower and the Lenders.
“GAAP”: generally accepted accounting principles in the United States as in
effect as of the date of this Agreement.
“Governmental Authority”: any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
“Government Receivables”: means, collectively, any and all Accounts which are
(a) Medicare Receivables, (b) Medicaid Receivables, (c) TRICARE Receivables, (d)
CHAMPUS Receivables, (e) CHAMPVA Receivables, (f) payable by the Veterans
Administration, and (g) any other Accounts payable by any Governmental
Authority.
“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by the Borrower and each Restricted Subsidiary,
substantially in the form of Exhibit A, as the same may be amended, supplemented
or otherwise modified from time to time.
“Guarantee Letter”: the guarantee letter dated March 26, 2007, among the
Administrative Agent, the Arranger and the Subsidiary Guarantors party thereto.
“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation (without duplication) of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the creation of
which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) 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 (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of

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such Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
“Guarantor”: each guarantor party to the Guarantee and Collateral Agreement.
“Hedge Agreements”: all interest rate swaps, caps or collar agreements or
similar arrangements dealing with interest rates or currency exchange rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies.
“Inactive Subsidiary”: means any Restricted Subsidiary of the Borrower
designated as an “Inactive Subsidiary” on Schedule 4.15, and which has no
continuing business operations or Contractual Obligations (other than those
arising under the Loan Documents) and has less than $50,000 of assets (valued at
fair market value) or liabilities.
“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party or
applicant under or in respect of acceptances, letters of credit, surety bonds or
similar arrangements, (g) the liquidation value of all redeemable preferred
Capital Stock of such Person that is mandatorily redeemable on or prior to any
date that is earlier than one year following the Maturity Date, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation to the extent of the value of the Property subject to such
Lien, and (j) for the purposes of Sections 7.02 and 8(e) only, all obligations
of such Person in respect of Hedge Agreements. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor.
“Indemnified Liabilities”: as defined in Section 10.05.
“Indemnitee”: as defined in Section 10.05.
“Independent Qualified Party” means an investment banking firm, accounting firm
or appraisal firm of national standing; provided, however, that such firm is not
an Affiliate of the Borrower.

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“Information Certificate”: the Information Certificate dated as of March 30,
2007, executed by Borrower and furnished to the Administrative Agent and the
Collateral Agent in connection with this Agreement.
“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.
“Insolvent”: pertaining to a condition of Insolvency.
“Instruments”: all “instruments”, as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York, now
owned or hereafter acquired by any Loan Party.
“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
“Interest Payment Date”: (a) as to any Eurodollar Loan, the last day of each
Interest Period applicable to such Loan, the date of any repayment or prepayment
and the Maturity; provided that if any Interest Period for a Eurodollar Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan the last Business Day of each March, June,
September and December, the date of any repayment or prepayment and the Maturity
Date.
“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
specified by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
specified by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(1)    if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2)    any Interest Period that would otherwise extend beyond the Maturity Date
shall end on such due date; and

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(3)    any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period.
“Investments”: as defined in Section 7.08.
“Inventory”: all “inventory,” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York, now owned or
hereafter acquired by any Loan Party, wherever located, and in any event
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Loan Party for sale or lease or are furnished or are
to be furnished under a contract of service, or that constitute raw materials,
work in process, finished goods, returned goods, or materials or supplies of any
kind, nature or description used or consumed or to be used or consumed in such
Loan Party's business or in the processing, production, packaging, promotion,
delivery or shipping of the same, including all supplies and embedded software.
“Landlord Agreement”: a landlord agreement, substantially in the form of
Exhibit I, executed by a landlord of a location leased by any Person at which
Inventory of any Loan Party is held or stored, delivered by such Loan Party to
the Collateral Agent.
“Lenders”: as defined in the preamble hereto.
“Lien”: any mortgage, pledge, hypothecation, collateral assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing); provided that, in no event shall
an operating lease that is not a Capital Lease Obligation be deemed to
constitute a Lien.
“Loan”: any loan made by any Lender hereunder pursuant to Section 2.01;
provided, however, that other than as set forth in Section 2.01(a), any
references to “Loan” shall mean 100% of the principal amount at maturity of the
Commitments outstanding at such time; provided, further, that any references to
“Loan” shall also include any increases in principal amount of loans as a result
of a payment of interest by capitalizing such interest pursuant to Section 2.08.
“Loan Documents”: this Agreement, the Security Documents and the Notes.
“Loan Parties”: the Borrower and each Restricted Subsidiary of the Borrower.
“Material Acquisition”: any acquisition of property or series of related
acquisition of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by the Borrower and its Subsidiaries in excess of $2,000,000.
“Material Adverse Effect”: a material adverse effect on (a) the business,
assets, liabilities, operations, condition (financial or otherwise) or operating
results of the Borrower and

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its Subsidiaries, taken as a whole, (b) the prospects of the Borrower and its
Subsidiaries taken as a whole, or (c) the validity or enforceability of this
Agreement or any other Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder; provided that
solely for purposes of Section 4.02, clauses (b) and (c) of this definition
shall not be applicable.
“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity,
and any other substances or forces of any kind, whether or not any such
substance or force is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liability under any
Environmental Law.
“Maturity Date”: September 26, 2011.
“Medicaid”: collectively, the healthcare assistance program established by
Title XIX of the Social Security Act (42 U.S.C. §§1396 et seq.), as amended, and
all laws, rules, regulations, manuals, orders, guidelines or requirements
pertaining to such program including (a) all federal statutes (whether set forth
in Title XIX of the Social Security Act or elsewhere) affecting such program and
all federal rules and regulations promulgated in connection with such program;
(b) all state statutes and regulations promulgated thereunder in connection with
individual state programs, as well as state plans submitted to and approved by
the Centers for Medicare and Medicaid Services; and (c) all federal and state
manuals, orders and administrative guidelines and requirements issued in
connection with Medicaid programs (whether or not having the force of law), in
each case as the same may be amended, supplemented or otherwise modified from
time to time.
“Medicaid Receivable”: an Account payable pursuant to a claim filed under a
valid Medicaid provider or supplier number.
“Medicare”: collectively, the health insurance program for the qualified aged,
disabled, and persons with end stage renal disease established by Title XVIII of
the Social Security Act (42 U.S.C. §§1395 et seq.), as amended, and all laws,
rules, regulations, manuals, orders or guidelines pertaining to such program
including (a) all federal statutes (whether set forth in Title XVIII of the
Social Security Act or elsewhere) affecting such program; and (b) all applicable
provisions of all rules, regulations, manuals, orders and administrative
guidelines and requirements issued in connected with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
“Medicare Receivable”: an Account payable pursuant to a claim filed under a
valid Medicare provider or supplier number.
“Mortgaged Properties”: the real properties which the Collateral Agent for the
benefit of the Lenders shall be granted a Lien pursuant to one or more
Mortgages.
“Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Lenders, in form and substance reasonably satisfactory to the Collateral Agent.

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“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of reasonable and customary attorneys' fees, accountants' fees, investment
banking fees, brokers' fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in connection
with any issuance or sale of Capital Stock or any incurrence of Indebtedness,
the cash proceeds received from such issuance or incurrence, net of reasonable
and customary attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
“Non-Excluded Taxes”: as defined in Section 2.13(a).
“Non-U.S. Lender”: as defined in Section 2.13(d).
“Notes”: the collective reference to all promissory notes evidencing Loans.
“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
and any Applicable Prepayment Premium due on the Loans and all other obligations
and liabilities of the Borrower to the Administrative Agent or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
“Other Taxes”: any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
“Participant”: as defined in Section 10.06(b).
“Patient List Acquisition”: with respect to the Borrower or any Restricted
Subsidiary, any transaction or series of related transactions that result in the
Borrower or a Restricted Subsidiary acquiring, directly or indirectly, a list of
patients with whom it has the right to

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conduct or solicit business, together with all ancillary prescriptions,
agreements and such other forms or documents related thereto, but that does not
result in the acquisition of a material amount of other tangible assets or in
the assumption of any material liabilities.
“Patient Receivables”: with respect to any Subsidiary, the patient accounts of
such Subsidiary existing or hereinafter created, any and all rights to receive
payments due on such accounts from any obligor or other third-party payor under
or in respect of such accounts (including all insurance companies, Blue
Cross/Blue Shield, Medicare, Medicaid and health maintenance organizations), and
all proceeds of, or in any way derived, whether directly or indirectly, from any
of the foregoing (including all interest, finance charges and other amounts
payable by an obligor in respect thereof).
“PATRIOT Act”: the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001).
“Payment Office”: the office specified from time to time by the Administrative
Agent as its payment office by notice to the Borrower and the Lenders.
“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Plan of Reorganization”: the Plan of Reorganization as defined in the Existing
Credit Facility.
“Private Accounts”: means, collectively, any and all Accounts that are not
Government Receivables.
“Projections”: as defined in Section 6.02(c).
“Property”: any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including
Capital Stock.
“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
the Borrower or any of its Restricted Subsidiaries that yields gross proceeds to
the Borrower or any of its Restricted Subsidiaries in excess of $1,000,000.
“Register”: as defined in Section 10.06(d).

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“Regulation U”: Regulation U of the Board as in effect from time to time.
“Related Fund”: with respect to any Lender, any fund that (a) invests in
commercial loans and (b) is managed or advised by the same investment advisor as
such Lender, by such Lender or an Affiliate of such Lender or such investment
advisor, including any CLO.
“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. §4043.
“Required Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments and (b) thereafter, the sum of the aggregate
unpaid principal amount of the Term Loans then outstanding.
“Requirement of Law”: as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.
“Responsible Officer”: the chief executive officer, president, the chief legal
officer, the chief operating officer or chief financial officer of the Borrower,
but in any event, with respect to financial matters, the chief financial officer
of the Borrower.
“Restricted Payments”: as defined in Section 7.06.
“Restricted Subsidiary”: (a) any Subsidiary other than an Unrestricted
Subsidiary and (b) each Subsidiary guaranteeing the Senior Subordinated Notes.
“Retained Rights”: with respect to any Patient Receivable owing from any
Governmental Authority, the right of any Subsidiary, to the extent mandated by
applicable law, to have unfettered control over such Patient Receivable,
including the collection thereof and discretion over the transfer thereof to any
party (including the Collateral Agent) and to enforce the claim giving rise to
such Patient Receivable against such Governmental Authority, in the absence of a
court order in the manner expressly contemplated under 42 U.S.C. §1395 and
applicable state law.
“Sale and Leaseback Transaction”: any arrangement with any Person providing for
the leasing by the Borrower or any of its Restricted Subsidiaries of real or
personal property that has been or is to be sold or transferred by the Borrower
or such Restricted Subsidiaries to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or such Restricted Subsidiaries.
“SEC”: the Securities and Exchange Commission (or successors thereto or an
analogous Governmental Authority).

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“Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Mortgages and all other security documents hereafter delivered to
the Collateral Agent granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
“Senior Subordinated Note Indenture”: the Indenture, dated as of March 26, 2002,
entered into by the Borrower and certain of its Subsidiaries with The Bank of
New York, as trustee, in connection with the issuance of the Senior Subordinated
Notes, together with all instruments and other agreements entered into by the
Borrower or such Subsidiaries in connection therewith, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
Section 7.09.
“Senior Subordinated Notes”: the senior subordinated notes of the Borrower, in
the aggregate outstanding principal amount of $287,000,000, issued pursuant to
the Senior Subordinated Note Indenture and any exchange notes issued in respect
thereof.
“Series A Convertible Preferred Stock”: the Series A Convertible Preferred Stock
of the Borrower, par value $.000l per share, issued pursuant to the Plan of
Reorganization and in accordance with the terms of the Borrower's Certificate of
Incorporation and distributed to the New Rotech Profit Sharing Plan (as defined
in the Plan of Reorganization).
“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which
is not a Multiemployer Plan.
“Solvent”: with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of this
definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
“Specified Change of Control”: a “Change of Control”, or like event, as defined
in the Senior Subordinated Note Indenture.
“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of

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such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
“Term Loan Lender”: each Lender that has a Term Loan Commitment or is the holder
of a Term Loan.
“Term Loan Percentage”: as to any Term Loan Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Term Loan then outstanding constitutes of the
aggregate principal amount of the Term Loans then outstanding).
“Term Loans”: as defined in Section 2.01.
“Term Note”: as defined in Section 2.04.
“Third Party Payor”: any governmental entity, insurance company, health
maintenance organization, professional provider organization or similar entity
that is obligated to make payments on any Account.
“Transferee”: as defined in Section 10.14.
“TRICARE”: means, collectively, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, which program was formerly known as
CHAMPUS, and all laws, rules, regulations, manuals, orders and administrative
guidelines of all Governmental Authorities promulgated pursuant to or in
connection with such program (whether or not having the force of law), in each
case as the same may be amended, supplemented or otherwise modified from time to
time.
“TRICARE Receivable”: an Account payable pursuant to TRICARE.
“Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.
“United States”: the United States of America.
“Unrestricted Subsidiary”: each of (a) any Subsidiary designated as an
Unrestricted Subsidiary by the Borrower by written notice to the Administrative
Agent so long as such designation does not violate Section 7.15, (b) any
Subsidiary of an Unrestricted Subsidiary and (c) the Wind Down Subsidiaries.
“Wind Down Subsidiaries”: Best Care Medical Supply, Inc., Premier Medical, Inc.
and Signature Home Care of Kansas, Inc., which entities shall be deemed third
parties for purposes of Section 7.

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Section 1.02    Other Definitional Provisions.
(a)    Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.
(b)    As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.01 and
accounting terms partly defined in Section 1.01, to the extent not defined,
shall have the respective meanings given to them under GAAP.
(c)    The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d)    Any references to “principal” in this Agreement shall also include any
interest capitalized and added to the principal of the Loans pursuant to
Section 2.08(d). Any references to amounts “due” or “payable” under this
Agreement shall also include the Applicable Prepayment Premium on such amounts,
if any.
(e)    The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
(f)    The words “including”, “include” and “includes” means including, include
and includes in each case without limitation.
SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS

Section 2.01    Commitments. Subject to the terms and conditions hereof, the
Term Loan Lenders severally agree to make term loans (each, a “Term Loan”) to
the Borrower on the Closing Date in an amount for each Term Loan Lender equal to
the amount of the Commitment of such Lender; provided that such Loan shall
result in aggregate proceeds to the Borrower equal to 99.00% of such Term Loan
Lender's Commitment. The Term Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with this Section 2.
Section 2.02    Procedure for Term Loan Borrowing. The Borrower shall deliver to
the Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time,
one Business Day prior to the anticipated Closing Date) requesting that the Term
Loan Lenders make the Term Loans on the Closing Date. The Term Loans made on the
Closing Date will be Eurodollar Loans with an initial Interest Period of one
month. Upon receipt of such Borrowing Notice the Administrative Agent shall
promptly notify each Term Loan Lender thereof. Not later than 12:00 noon, New
York City time, on the Closing Date each Term Loan Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan to be made by such Lender. The
Administrative Agent shall make available to

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the Borrower the aggregate of the amounts made available to the Administrative
Agent by the Term Loan Lenders, in like funds as received by the Administrative
Agent.
Section 2.03    Repayment of Term Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Loan Lenders on the
Maturity Date, the aggregate principal amount of all Term Loans outstanding on
such date.
Section 2.04    Evidence of Debt.
(a)    Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(b)    The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 10.06(d), and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder and any
Note evidencing such Loan, the Type of such Loan and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(c)    The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.04(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(d)    The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loan of such Lender,
substantially in the form of Exhibit F (a “Term Note”), with appropriate
insertions as to date and principal amount; provided that delivery of Notes
shall not be a condition precedent to the occurrence of the Closing Date or the
making of the Loans on the Closing Date.
Section 2.05    Optional Prepayments. Subject to this Section 2.05, the Borrower
may, upon notice to the Administrative Agent, at any time after the six-month
anniversary of the Closing Date voluntarily prepay Loans in whole or in part;
provided that (1) such notice must be received by the Administrative Agent not
later than 12:00 p.m. (New York City time) (A) three (3) Business Days prior to
any date of prepayment of Eurodollar Loans and (B) on the date of prepayment of
Base Rate Loans; and (2) any prepayment of Eurodollar Loans shall be in a
principal amount of (x) $1,000,000 or a whole multiple of $1,000,000 in excess
thereof or, if less, the entire principal amount thereof then outstanding. Each
such notice shall specify the date and amount of such prepayment, the amount of
the Applicable Prepayment Premium due thereon (provided that if a Eurodollar
Loan is prepaid on any day other than the last day of the Interest

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Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.14) and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's pro rata share of such
prepayment. If such notice is given by the Borrower, it shall be irrevocable,
the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with the
Applicable Prepayment Premium and accrued interest to such date on the amount
prepaid. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by any
additional amounts required pursuant to Section 2.14. Each prepayment of the
Loans pursuant to this Section 2.05(a) shall be paid to the Lenders in
accordance with their respective pro rata shares.
Optional prepayments of Loans made pursuant to this Section 2.05 shall be
accompanied by payment of the Applicable Prepayment Premium and all accrued
interest on such Loans.
Section 2.06    Mandatory Prepayments.
(a)    If any Capital Stock shall be issued by the Borrower or any of its
Restricted Subsidiaries (other than in the case of any Restricted Subsidiary, an
issuance to the Borrower or any other Restricted Subsidiary), (i) if the
Borrower's Consolidated Senior Leverage ratio is equal to or greater than 1.50
to 1.00 on the date of such issuance, 100% of the Net Cash Proceeds of such
issuance shall be applied on the date of such issuance to the prepayment of the
Loans, and (ii) if the Borrower's Consolidated Senior Leverage Ratio is less
than 1.50 to 1.00 on the date of such issuance, 50% of the Net Cash Proceeds of
such issuance shall be applied on the date of such issuance to the prepayment of
the Loans.
(b)    If on any date the Borrower or any of its Restricted Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, within 180
days of such date of receipt of such Net Cash Proceeds, an amount equal to 100%
of such Net Cash Proceeds shall be applied at the Borrower's option to any one
or more of the following: (i) the prepayment of the Loans, or (ii) to purchase
assets or property constituting Collateral. The provisions of this
Section 2.06(b) do not constitute a consent to an Asset Sale not otherwise
permitted under this Agreement.
(c)    In the event that any Loan Party shall receive Net Cash Proceeds from the
issuance, incurrence or placement of Indebtedness of any Loan Party, the
Borrower shall on such date, apply an amount equal to 100% of such Net Cash
Proceeds to prepay outstanding Loans.
(d)    All prepayments of Loans made pursuant to this Section 2.06 shall be
accompanied by payment of the Applicable Prepayment Premium and all accrued
interest on such Loans.
(e)    Prior to the date that is 181 days after the Closing Date, each Lender
shall have ten days to accept or reject its pro rata share of any mandatory
prepayments described in this Section 2.06. In the event any Lender does not
accept its pro rata share within such ten day period, the amounts so rejected
shall be offered to each non-rejecting

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Lender thereunder. Any mandatory prepayments remaining after being reoffered to
such non-rejecting Lenders shall be returned by the Administrative Agent to the
Borrower and used for general working capital purposes, including voluntary
prepayments of the Loans.
Section 2.07     Conversion and Continuation Options.
(a)    The Borrower may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify the
length of the initial Interest Period therefor), provided that no Base Rate Loan
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Required
Lenders have, determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the Maturity Date.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof.
(b)    The Borrower may elect to continue any Eurodollar Loan as such upon the
expiration of the then current Interest Period with respect thereto by giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.01,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has, or the
Required Lenders have, determined in its or their sole discretion not to permit
such continuations or (ii) after the date that is one month prior to the
Maturity Date, and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso, such Loans shall be
converted automatically to Base Rate Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
Section 2.08    Interest Rates and Payment Dates.
(a)    Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such Interest Period plus the Applicable Margin. For
avoidance of doubt, it is understood that interest payable on a Eurodollar Loan
for any Interest Period shall accrue from and including the first day of such
Interest Period to but excluding the last day of such Interest Period.
(b)    Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin.
(c)    Upon the occurrence and during the continuance of an Event of Default
described in Section 8(a), at the election of either the Administrative Agent or
the Required Lenders, all amounts payable under this Agreement (to the extent
legally permitted) shall bear interest at a rate per annum that is equal to the
rate that would

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otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.08 plus 2.00%.
(d)    Accrued interest on each Loan shall be capitalized as of and added to
principal of the Loans on each Interest Payment Date; provided that the Borrower
may, at its election, pay any such accrued interest in cash on such date;
provided, however, that such interest payment is made either entirely in cash or
50% in cash. The Borrower may make such election five Business Days prior to the
beginning of the Interest Period and shall deliver to the Administrative Agent
at least five Business Days prior to the beginning of the Interest Period, a
written notice setting forth the portion of such interest payment to be made in
the form of cash. Interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand and capitalized as of and added to
the principal of the Loans on each Interest Payment Date.
Section 2.09    Computation of Interest and Fees.
(a)    Interest, fees and commissions payable pursuant hereto shall be
calculated on the basis of a 360-day year (or 365 or 366 days, as the case may
be, in the case of Base Rate Loans that are based on Credit Suisse's prime
rate). The Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b)    Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate.
Section 2.10    Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a)    the Administrative Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b)    the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the relevant Lenders
as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest

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Period shall be made as Base Rate Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then current Interest Period with respect
thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
Section 2.11    Pro Rata Treatment and Payments.
(a)    Each payment (including each prepayment) of the Term Loans shall be
allocated among the Term Loan Lenders holding such Term Loans pro rata based on
the principal amount of such Term Loans held by such Term Loan Lenders. Amounts
prepaid on account of the Term Loans may not be reborrowed.
(b)    The application of any payment of Loans (including optional and mandatory
prepayments) shall be made, first, to Base Rate Loans and second to Eurodollar
Loans. Each payment of the Loans shall be accompanied by accrued interest to the
date of such payment on the amount paid. Except as otherwise expressly provided
in this Agreement:
(i)    Upon the occurrence and during the continuance of an Event of Default,
Borrower irrevocably waives the right to direct the application of any and all
payments at any time or times received by Administrative Agent from or on behalf
of Borrower or any Loan Party of all or any part of the Obligations in
accordance to Section 2.11(d)(iii) below, and the Administrative Agent shall
have the continuing and exclusive right to apply and to reapply any and all such
payments received at any time or times against the Obligations in such manner as
the Administrative Agent may deem advisable notwithstanding any previous
application by the Administrative Agent or the Lenders;
(ii)    so long as no Event of Default exists, subject to Section 2.06, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and all payments and distributions made by any Loan Party with
respect to the Obligations, shall be applied: first, to all fees, costs,
indemnities and expenses incurred by or owing to Administrative Agent, with
respect to this Agreement, the other Loan Documents or the Collateral; second,
to all fees, costs, indemnities and expenses incurred by or owing to any Lender
with respect to this Agreement, the other Loan Documents, or the Collateral;
third, to accrued and unpaid interest on the Term Loans; fourth, to the
outstanding principal amount of the Term Loans; and fifth, to any other
indebtedness or obligations of Borrower or other Loan Party owing to
Administrative Agent or any Lender, including fees, costs, indemnities and
expenses thereunder; and
(iii)    following the occurrence and during the continuance of an Event of
Default, all payments and proceeds of Collateral shall be applied: first, to all
fees, costs, indemnities and expenses incurred by or owing to Administrative

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Agent, with respect to this Agreement, the other Loan Documents or the
Collateral; second, to all fees, costs, indemnities and expenses incurred by or
owing to any Lender with respect to this Agreement, the other Loan Documents, or
the Collateral; third, to accrued and unpaid interest on the Term Loans; fourth,
to the outstanding principal amount of the Term Loans; and fifth, to any other
indebtedness or obligations of Borrower or other Loan Party owing to
Administrative Agent or any Lender, including fees, costs, indemnities and
expenses thereunder. Any balance remaining shall be delivered to whomever may be
lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct.
(d)    All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 2:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the relevant Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 2:00 P.M.,
New York City time, on any Business Day shall be deemed to have been on the next
following Business Day. The Administrative Agent shall distribute such payments
to the Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e)    Unless the Administrative 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 its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Closing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. With respect to $20,000,000 of Loans, if such
Lender's share of such borrowing is not made available to the Administrative
Agent by such Lender within three Business Days after such Closing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Base Rate Loans, on demand in cash,
from the Borrower.

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(f)    Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment due to be made by the Borrower
hereunder (other than capitalized interest pursuant to Section 2.08(d)), that
the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days after such due date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
Section 2.12    Requirements of Law.
(a)    If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i)    shall subject any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.13 and changes in the rate of tax on the overall net
income of such Lender);
(ii)    shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii)    shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans, or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled.

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(b)    If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount reasonably deemed by such Lender to be material, then from time to
time, after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation for such reduction, provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than three months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and provided
further that, if the circumstances giving rise to such claim have a retroactive
effect, then such three-month period shall be extended to include the period of
such retroactive effect.
(c)    A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
Section 2.13    Taxes.
(a)    All payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on any Agent or any Lender as a result of a present or former connection between
such Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Agent's or such
Lender's having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-

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Excluded Taxes (i) that are attributable to such Lender's failure to comply with
the requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph (a).
(b)    In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c)    Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(d)    Each Lender (or Transferee) that is not a citizen or resident of the
United States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States (or any jurisdiction
thereof), or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a “Non-U.S. Lender”) shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 88l(c) of the Code with respect to
payments of “portfolio interest”, as defined by the Code, a statement
substantially in the form of Exhibit G and a Form W-8BEN, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.

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(e)    A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
Section 2.14    Indemnity. The Borrower agrees to indemnify each Lender for, and
to hold each Lender harmless from, any loss or expense (but without duplication
of any amounts payable as default interest) that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of Eurodollar
Loans after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
Section 2.15    Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.14.
Section 2.16    Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.12, 2.13(a) or
2.15 with respect

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to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to
Section 2.12, 2.13(a) or 2.15.
SECTION 3. RESERVED
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans, the Borrower hereby represents and warrants to each Agent and each
Lender that:
Section 4.01    Financial Condition.
The audited consolidated balance sheets of Borrower and its Subsidiaries as at
December 31, 2004, December 31, 2005 and December 31, 2006 and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Deloitte & Touche, LLP, present fairly in all material respects the consolidated
financial condition of Borrower and its Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved. The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 2006 to and
including the date hereof there has been no Disposition by the Borrower and its
Subsidiaries of any material part of its business or Property other than as
permitted by Section 7.05.
Section 4.02    No Change. Except as described in the Borrower's filings with
the Securities and Exchange Commission (excluding any disclosure in any “Risk
Factor”, “Forward-Looking Statement” or similar section) from December 31, 2006
through the Closing Date, since December 31, 2006 there has been no development
or event that has had or would reasonably be expected to have a Material Adverse
Effect. From December 31, 2006 through the Closing Date, there has been no
development or event that has had or would reasonably be expected to have a
material adverse effect on the prospects of the Borrower and its Subsidiaries,
taken as a whole.
Section 4.03    Corporate Existence; Compliance with Law. Each of the Borrower
and its Restricted Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign

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corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 4.04    Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents, except (i) consents, authorizations, filings and notices that
have been obtained or made and are in full force and effect and (ii) the
filings, if any, referred to in Section 4.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
Section 4.05    No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any material
Contractual Obligation of the Borrower or any of its Restricted Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created by the Security
Documents).
Section 4.06    No Material Litigation. The Borrower has disclosed to the
Administrative Agent and the Lenders that certain litigation, investigations and
proceedings exist and are ongoing as more particularly described in the
Borrower's filings with the Securities and Exchange Commission (excluding any
disclosure in any “Risk Factor”, “Forward-Looking Statement” or similar section)
from December 31, 2006 through the Closing Date. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) that could reasonably be expected to have
a Material Adverse Effect.
Section 4.07    No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect that could, individually

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or in the aggregate for all such defaults, reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
Section 4.08    Ownership of Property; Liens. Each of the Borrower and its
Restricted Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its material real property, and good title to, or a valid
leasehold interest in, all its other material Property, and none of such
Property is subject to any Lien except as permitted by Section 7.03.
Section 4.09    Intellectual Property. The Borrower and each of its Restricted
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property that could reasonably be expected to have a Material
Adverse Effect, nor does the Borrower know of any valid basis for any such
claim. To the best knowledge of the Borrower, the use of such Intellectual
Property by the Borrower and its Restricted Subsidiaries does not infringe on
the rights of any Person in a manner that could reasonably be expected to have a
Material Adverse Effect.
Section 4.10    Taxes. Each of the Borrower and each of its Restricted
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be);
and no tax Lien has been filed, and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such tax, fee or other charge.
Section 4.11    Federal Regulations. No part of the proceeds of any Loans will
be used for “purchasing” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board.
Section 4.12    Labor Matters. There are no strikes or other labor disputes
against the Borrower or any of its Subsidiaries pending or, to the knowledge of
the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
Section 4.13    ERISA. Neither a Reportable Event (other than a Reportable Event
that is waived by regulation) nor an “accumulated funding deficiency” (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior

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to the date on which this representation is made or deemed made with respect to
any Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code. No termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Borrower
nor any Commonly Controlled Entity would become subject to any material
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. To the knowledge of the Borrower and any Commonly Controlled
Entity, no such Multiemployer Plan is in ERISA Reorganization or Insolvent.
Section 4.14    Investment Company Act; Other Regulations. No Loan Party is an
“investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness of the
type it will incur hereunder and under the other Loan Documents.
Section 4.15    Subsidiaries.
(a)    The Subsidiaries listed on Schedule 4.15 constitute all the Subsidiaries
of the Borrower at the date hereof. Schedule 4.15 sets forth as of the Closing
Date the name and jurisdiction of incorporation of each Subsidiary and, as to
each Subsidiary, the percentage of each class of Capital Stock owned by each
Loan Party and whether such Subsidiary is a Restricted Subsidiary or an
Unrestricted Subsidiary.
(b)    There are no outstanding subscriptions, options, warrants, calls, rights
or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of any Restricted Subsidiary (other than any Restricted
Subsidiary which is a joint venture and for which the Borrower has delivered
notice to the Administrative Agent of any outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments with respect to the
Capital Stock of such joint venture).

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Section 4.16    Use of Proceeds. The proceeds of the Term Loans shall be used to
satisfy the indebtedness and other obligations of the Borrower and certain of
its Subsidiaries under the Existing Credit Facility, to pay transaction costs,
to cash collateralize or otherwise support the Borrower's obligations in respect
of its existing letters of credit and for general working capital purposes.
Section 4.17    Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a)    The Borrower and its Subsidiaries: (i) are, and within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all Environmental Permits (each of which is in
full force and effect) required for any of their current or intended operations
or for any property owned, leased, or otherwise operated by any of them; (iii)
are, and within the period of all applicable statutes of limitation have been,
in compliance with all of their Environmental Permits; and (iv) reasonably
believe that: each of their Environmental Permits will be timely renewed and
complied with, without material expense; any additional Environmental Permits
that may be required of any of them will be timely obtained and complied with,
without material expense; and compliance with any Environmental Law that is or
is expected to become applicable to any of them will be timely attained and
maintained, without material expense.
(b)    Materials of Environmental Concern are not present at, on, under, in, or
about any real property now or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries, or at any other location (including any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in costs
to the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower's or any of its Subsidiaries' continued operations, or (iii) impair the
fair saleable value of any real property owned or leased by the Borrower or any
of its Subsidiaries.
(c)    There is no judicial, administrative, or arbitral proceeding (including
any notice of violation or alleged violation) under or relating to any
Environmental Law to which the Borrower or any of its Subsidiaries is, or to the
knowledge of the Borrower or any of its Subsidiaries will be, named as a party
that is pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened.
(d)    Neither the Borrower nor any of its Subsidiaries has received any written
request for information, or been notified that it is a potentially responsible
party under or relating to CERCLA or any similar Environmental Law, or with
respect to any Materials of Environmental Concern.
(e)    Neither the Borrower nor any of its Subsidiaries has entered into or
agreed to any consent decree, order, or settlement or other agreement, or is
subject to any

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judgment, decree, or order or other agreement, in any judicial, administrative,
arbitral, or other forum for dispute resolution, relating to compliance with or
liability under any Environmental Law.
(f)    Neither the Borrower nor any of its Subsidiaries has assumed or retained,
by contract or operation of law, any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with respect to any
Material of Environmental Concern.
Section 4.18    Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Information
Certificate or any other document, certificate or statement furnished to the
Agents or the Lenders or any of them, by or on behalf of any Loan Party for use
in connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. There is no fact known to any Loan Party that could reasonably
be expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents, the Information Certificate, or
in any other documents, certificates and statements furnished to the Agents and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
Section 4.19    Security Documents. The Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the Collateral Agent, and in
the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19 (which financing statements have been duly
completed and delivered to the Collateral Agent) and such other filings as are
specified on Schedule 3 to the Guarantee and Collateral Agreement have been
completed, the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.03).
Section 4.20    Solvency. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith, after taking into account the use of proceeds on the
Closing Date, will be and will continue to be, Solvent.

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Section 4.21    Senior Indebtedness. The Obligations constitute “Senior Debt” of
the Borrower under and as defined in the Senior Subordinated Note Indenture. The
obligations of each Restricted Subsidiary under the Guarantee and Collateral
Agreement constitute “Senior Debt” of such Restricted Subsidiary under and as
defined in the Senior Subordinated Note Indenture.
Section 4.22    Compounding. Since May 1, 2006, the Borrower and its
Subsidiaries have not engaged in compounding of products or other Inventory
(other than Supplies or Budesonide) with an aggregate fair market value in
excess of $50,000 during any calendar year.
Section 4.23    Location of Material Inventory, Equipment and Other Property.
Schedule 4.23 sets forth all locations in the United States where the aggregate
value of Inventory, Equipment or other tangible Property owned by the Loan
Parties exceeds $250,000.
Section 4.24    Sanctioned Persons. Neither the Borrower nor any Subsidiary nor,
to the knowledge of the Borrower, any director, officer, agent, employee or
Affiliate of the Borrower or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Borrower will not directly or indirectly
use the proceeds of the Loans or otherwise make available such proceeds to any
person, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
SECTION 5. CONDITIONS PRECEDENT
Section 5.01    Conditions to Extension of Credit on the Closing Date. The
agreement of each Lender to make the initial extension of credit requested to be
made by it hereunder is subject to the satisfaction, prior to or concurrently
with the making of such extension of credit on the Closing Date, of the
following conditions precedent on or prior to March 30, 2007:
(a)    Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
(ii) the Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Restricted Subsidiary and (iii) an
Acknowledgement and Consent in the form attached to the Guarantee and Collateral
Agreement, executed and delivered by each Issuer (as defined therein), if any,
that is not a Loan Party.
(b)    Termination of Borrower's Obligations under the Existing Credit Facility.
The Agents shall have received reasonably satisfactory evidence that the
Borrower's obligations with respect to the Existing Credit Facility have been
terminated and released (other than those obligations which expressly survive
termination of the Existing Credit Facility) and arrangements satisfactory to
the Administrative Agent and the Collateral Agent shall have been made for the
termination of all guarantees, Liens and security interests granted in
connection therewith.
(c)    Financial Statements. The Agent shall have received (a) U.S. GAAP audited
consolidated balance sheets and related statements of income, stockholders'
equity and cash flows of the Borrower for the 2004, 2005 and 2006 fiscal years
and (b) U.S. GAAP unaudited consolidated balance sheets and related statements
of income,

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stockholders' equity and cash flows of the Borrower for each subsequent fiscal
quarter ended 40 days before the Closing Date.
(d)    Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary or reasonably advisable in connection
with the continuing operations of the Borrower and its Restricted Subsidiaries
and the transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the financing
contemplated hereby.
(e)    Related Agreements. The Administrative Agent shall have received (in a
form reasonably satisfactory to the Administrative Agent), true and correct
copies, certified as to authenticity by the Borrower, of (i) the Senior
Subordinated Note Indenture and (ii) such other documents or instruments as may
be reasonably requested by the Administrative Agent, including a copy of any
debt instrument, security agreement or other material contract to which the Loan
Parties may be a party.
(f)    Fees. The Lenders, the Administrative Agent, the Collateral Agent and the
Arranger shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including reasonable fees, disbursements and
other charges of counsel to the Agents), on or before the Closing Date. To the
extent that any such amounts will be paid with proceeds of Loans made on the
Closing Date, such amounts will be reflected in the funding instructions given
by the Borrower to the Administrative Agent on or before the Closing Date.
(g)    Closing Certificates. The Administrative Agent shall have received
certificates of each Loan Party, dated the Closing Date, substantially in the
form of Exhibits C-1 and C-2, with appropriate insertions and attachments.
(h)    Legal Opinions. The Administrative Agent and the Collateral Agent shall
have received the following executed legal opinions:
(i)    the legal opinion of Kirkland & Ellis LLP, counsel to the Borrower and
its Subsidiaries, substantially in the form of Exhibit E-1; and
(ii)    the legal opinion of Greenberg Traurig, LLP, substantially in the form
of Exhibit E-2.
Such legal opinions shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent and the Collateral
Agent may reasonably require.
(i)    Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes.
The Collateral Agent shall have received (i) the certificates representing the
shares of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof, (ii) an
Acknowledgment and Consent,

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substantially in the form of Annex II to the Guarantee and Collateral Agreement,
duly executed by any issuer of Capital Stock pledged pursuant to the Guarantee
and Collateral Agreement that is not itself a party to the Guarantee and
Collateral Agreement and (iii) each promissory note pledged pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank reasonably satisfactory to the
Collateral Agent) by the pledgor thereof.
(j)    Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Security Documents
or under law or reasonably requested by the Collateral Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent, for
the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 7.03), shall have been filed,
registered or recorded or shall have been delivered to the Collateral Agent in
proper form for filing, registration or recordation.
(k)    Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and
Collateral Agreement.
(l)    Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date
(except that any representation or warranty which by its terms is made as of
another specific date shall be true and correct in all material respects as of
such date).
(m)    No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
(n)    Borrowing Notice. Borrower shall have furnished to Administrative Agent a
duly completed Borrowing Notice with respect to such extension of credit.
(o)    Solvency Certificate. The Agent shall have received a certificate from
the chief financial officer of the Borrower certifying that the Borrower and its
Subsidiaries, on a consolidated basis after giving effect to the transactions
contemplated hereby, after taking into account the use of proceeds on the
Closing Date, are Solvent.
(p)    PATRIOT Act Compliance. The Lenders shall have received at least five
business days prior to the Closing Date, all documentation and other information
required by applicable regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the PATRIOT
Act.
(q)    Post-Closing Letter.    The Lenders shall have received a letter,
substantially in the form of Exhibit K concerning certain obligations to be
fulfilled by the Borrower promptly following the Closing Date.

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SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in effect or
any Loan or other amount is owing to any Lender or any Agent hereunder, the
Borrower shall and shall cause each of its Restricted Subsidiaries to:
Section6.01    Financial Statements.
Provide the Administrative Agent:
(a)    as soon as available, but in any event within the earlier of (i) 90 days
after the end of each fiscal year of the Borrower and (ii) the date such
financial information would be required to be contained in a filing with the SEC
on Form 10-K if the Borrower were required to file such form, a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures as of the end of and for the previous year,
reported on without a “going concern” or like qualification or exception, or
qualification arising out of the scope of the audit, by Deloitte & Touche, LLP
or other independent certified public accountants of nationally recognized
standing; and
(b)    as soon as available, but in any event not later than the earlier of (i)
45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower and (ii) the date such financial information would
be required to be contained in a filing with the SEC on Form 10-Q if the
Borrower were required to file such form, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures as of
the end of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes);
(c)    promptly after the occurrence of an event required to be therein reported
(and in any event within the time period specified in the SEC's rules and
regulations), the information that would be required to be included in a report
on Form 8-K (or any successor or comparable form);
(d)    all such financial statements and reports to be complete and correct in
all material respects and such financial statements to be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such accountants
or officer, as the case may be, and disclosed therein).

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Section 6.02    Certificates; Other Information. Furnish to the Administrative
Agent or, in the case of clause (g), to the relevant Lender:
(a)    concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate (it being understood that such
certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b)    concurrently with the delivery of any financial statements pursuant to
Section 6.01, (i) a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer's knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by the Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be, (y) to the extent not previously disclosed to
the Administrative Agent, a listing of any county or state within the United
States where any Loan Party keeps inventory or equipment and of any Intellectual
Property acquired by any Loan Party since the date of the most recent list
delivered pursuant to this clause (y) (or, in the case of the first such list so
delivered, since the Closing Date) and (z) any UCC financing statements or other
filings specified in such Compliance Certificate as being required to be
delivered therewith;
(c)    as soon as available, and in any event no later than 45 days after the
end of each fiscal year of the Borrower, consistent with past practices, a
detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income), and, as soon as available, significant revisions, if any, of such
budget and projections with respect to such fiscal year (collectively, the
“Projections”), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d)    copies of any amendment, supplement, waiver or other modification with
respect to the Senior Subordinated Note Indenture;
(e)    within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends generally to the holders of any
class of its debt securities or public equity securities and, within five days
after the same are filed, copies

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of all financial statements and reports that the Borrower may make to, or file
with, the SEC;
(f)    promptly, such additional financial and other information as any Lender
may from time to time reasonably request; and
(g)    promptly after the request by any Lender, all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the PATRIOT Act.
Section 6.03    Collateral Reports. The Borrower shall deliver or cause to be
delivered (at the expense of the Borrower) to the Collateral Agent and the
Administrative Agent the following:
(a)    upon request by the Collateral Agent, and in no event less frequently
than 30 days after the end of each fiscal quarter, (i) a trial balance as of the
last day of such fiscal quarter showing Accounts outstanding aged from statement
date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as shall be requested by
the Collateral Agent in its reasonable discretion, (ii) a list of locations
where any license related to any Government Receivable has been revoked since
the date of the prior such report; and (iii) a summary of Inventory, Equipment
and other tangible Property of the Loan Parties by location and type as of the
last day of such fiscal quarter, accompanied by such supporting detail and
documentation as shall be requested by the Collateral Agent in its reasonable
discretion;
(b)    at the time of delivery of each of the financial statements delivered
pursuant to Sections 6.01(a) and (b):
(i)    a reconciliation of the Accounts trial balance and quarter-end Inventory
and Equipment reports of the Loan Parties to the general ledger of the Loan
Parties, in each case, accompanied by such supporting detail and documentation
as shall be requested by the Collateral Agent in its reasonable discretion,
(ii)    a general description of assets owned by the Loan Parties which have
been Disposed during the most recent period covered by the associated financial
statements and the aggregate book value thereof, and
(iii)    a list of any applications for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency which any Loan
Party thereof has filed in the prior fiscal quarter; and
(c)    such other reports, statements and reconciliations with respect to the
Collateral of any or all Loan Parties as the Collateral Agent shall from time to
time request in its reasonable discretion.

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The delivery of each certificate and report or any other information delivered
pursuant to this Section 6.03 shall constitute a representation and warranty by
the Borrower that the statements and information contained therein are true and
correct in all material respects on and as of such date.
Section 6.04    Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature (other than Indebtedness), including all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits in respect of its property, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be or
to the extent the failure to discharge or satisfy such obligations could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 6.05    Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate or other
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 7.04 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law, except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
Section 6.06    Maintenance of Property; Insurance. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent that failure to
comply with this clause (a) could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect, (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business and (c) within 30 days after the Closing Date, deliver to the
Collateral Agent a loss payee endorsement in form and substance reasonably
satisfactory to the Collateral Agent.
Section 6.07    Inspection of Property; Books and Records: Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants; provided that, any
meetings or discussions with any such public accountants shall be scheduled
through the Borrower and a Responsible Officer of the Borrower shall have the
right to be present at any such meeting or during such discussion.

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Section 6.08    Notices. Promptly give notice to the Administrative Agent, the
Collateral Agent and each Lender of:
(a)    the occurrence of any Default or Event of Default;
(b)    any (i) default or event of default under any Contractual Obligation of
the Borrower or any of its Restricted Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Restricted Subsidiaries and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c)    any litigation or proceeding affecting the Borrower or any of its
Restricted Subsidiaries in which the amount involved is $l,000,000 or more and
not covered by insurance or in which injunctive or similar relief is sought;
(d)    the following events, as soon as possible and in any event within 30 days
after the Borrower knows or has reason to know thereof (i) the occurrence of any
Reportable Event with respect to any Plan (except for Reportable Events for
which notice requirements were waived by regulation), a failure to make any
required contribution to a Plan (unless such contribution has been made in
full), the creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, ERISA Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the termination,
ERISA Reorganization or Insolvency of, any Plan; and
(e)    any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
Section 6.09    Environmental Laws.
(a)    Comply in all material respects with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, in each case, unless the failure to do so would not reasonably be expected
to have a Material Adverse Effect.
(b)    Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all material respects with all lawful orders and
directives of all

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Governmental Authorities regarding Environmental Laws, in each case, unless the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.
Section 6.10    Additional Collateral, etc.
(a)    With respect to any Property acquired after the Closing Date by the
Borrower or any of its Restricted Subsidiaries (other than (x) any Property
described in paragraph (b) or paragraph (c) of this Section, (y) any Property
subject to a Lien expressly permitted by Section 7.03(g) and (z) Property
acquired by an Excluded Foreign Subsidiary) as to which the Collateral Agent,
for the benefit of the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Collateral Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Collateral Agent reasonably
deems necessary or advisable to grant to the Collateral Agent, for the benefit
of the Lenders, a security interest in such Property and (ii) take all actions
necessary or advisable to grant to the Collateral Agent, for the benefit of the
Lenders, a perfected first priority security interest in such Property,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Collateral Agent.
(b)    With respect to any fee interest in any real property having a value
(together with improvements thereof) of at least $500,000 acquired after the
Closing Date by the Borrower or any of its Restricted Subsidiaries (other than
any such real property owned by an Excluded Foreign Subsidiary or subject to a
Lien expressly permitted by Section 7.03(g)), promptly (i) execute and deliver a
first priority Mortgage in favor of the Collateral Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Collateral Agent,
provide the Lenders with (x) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Collateral Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Collateral Agent in connection with such Mortgage,
each of the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Collateral Agent, deliver to
the Collateral Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(c)    With respect to any new Restricted Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary and any Unrestricted Subsidiary that is
redesignated as a Restricted Subsidiary pursuant to Section 6.11(l)), by the
Borrower or any of its Restricted Subsidiaries, promptly (i) execute and deliver
to the Collateral Agent such amendments to the Guarantee and Collateral
Agreement as the Collateral Agent reasonably deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Restricted
Subsidiary that is owned by the Borrower or any of its Restricted Subsidiaries,
(ii) deliver

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to the Collateral Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, (iii)
cause such new Restricted Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Collateral Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement (subject to Liens permitted by Section 7.02) with respect
to such new Restricted Subsidiary, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Collateral Agent, and (iv) if requested by the Collateral Agent, deliver
to the Collateral Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(d)    With respect to any new Excluded Foreign Subsidiary created or acquired
after the Closing Date by the Borrower or any of its Restricted Subsidiaries
(other than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver
to the Collateral Agent such amendments to the Guarantee and Collateral
Agreement or such other documents as the Collateral Agent reasonably deems
necessary or advisable in order to grant to the Collateral Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Restricted Subsidiary that is owned by the Borrower or
any of its Subsidiaries (other than any Excluded Foreign Subsidiaries),
(provided that in no event shall more than 65% of the total outstanding Capital
Stock of any such new Excluded Foreign Subsidiary be required to be so pledged),
(ii) deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Restricted Subsidiary, as the
case may be, and take such other action as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the Lien of the
Collateral Agent thereon, and (iii) if requested by the Collateral Agent,
deliver to the Collateral Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.
(e)    Promptly upon the request of the Collateral Agent, Borrower shall
establish a cash management system subject to a depositary agreement
satisfactory to the Collateral Agent whereby lock boxes, lock box accounts, and
concentration accounts are established and maintained under the sole dominion
and control of the Collateral Agent, into which all payments on and proceeds of
(i) Private Accounts, and (ii) to the extent permitted and in a manner
consistent with all applicable laws and regulations, Government Receivables,
shall be deposited and from which all collected funds will be transferred.
Section 6.11    Unrestricted Subsidiaries. At the time of delivery of each of
the financial statements delivered pursuant to Section 6.01(a) and (b), in the
event that either (i) the Consolidated EBITDA of all Unrestricted Subsidiaries
for the period of four consecutive fiscal quarters then ending is greater than
5% of the Consolidated EBITDA of the Borrower and its Subsidiaries for such
period or (ii) the aggregate consolidated assets of all Unrestricted

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Subsidiaries as at the last day of the fiscal quarter then ending would
constitute more than 5% of the consolidated assets of the Borrower and its
Subsidiaries as at the last date of such fiscal quarter, the Borrower shall
re-designate sufficient Unrestricted Subsidiaries as Restricted Subsidiaries,
and cause such Restricted Subsidiary to comply with Section 6.10(c), in order to
be in compliance with each of clauses (i) and (ii) above and such re-designation
shall be effective beginning on the date after the date of such designation.
Section 6.12    Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take such actions, as the Collateral Agent may reasonably request
for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Collateral Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
thereof or with respect to any other property or assets hereafter acquired by
the Borrower or any Restricted Subsidiary which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the Collateral
Agent or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Collateral Agent or such Lender may be required to obtain from the
Borrower or any of its Restricted Subsidiaries for such governmental consent,
approval, recording, qualification or authorization.
Section 6.13    Use of Proceeds. The Borrower shall use the proceeds of the
Loans as described in Section 4.16.
Section 6.14    Wind Down Subsidiaries. The Borrower shall not permit the Wind
Down Subsidiaries to conduct any business or operations, own any assets or incur
any liabilities.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Loan or other amount is owing to
any Lender or the Administrative Agent hereunder, the Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
Section 7.01    Consolidated EBITDA. Permit the Consolidated EBITDA of the
Borrower for any period of four consecutive fiscal quarters beginning with the
four fiscal quarter period ending March 31, 2007, to be less than $40,000,000.
Section 7.02    Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a)    Indebtedness of any Loan Party pursuant to any Loan Document;
(b)    Indebtedness of the Borrower to any Restricted Subsidiary that is a
Guarantor and of any Restricted Subsidiary to the Borrower or any other
Restricted Subsidiary;

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(c)    Guarantee Obligations incurred by the Borrower or any of its Restricted
Subsidiaries that are Guarantors of obligations of any Restricted Subsidiary
that is a Guarantor otherwise permitted hereunder;
(d)    Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d)
and any refinancings, refundings, renewals or extensions thereof (without
increasing, or shortening the maturity of, the principal amount thereof plus
premiums, accrued interest and costs of refinancing);
(e)    Indebtedness, including Capital Lease Obligations or purchase money
obligations, in any case secured by Liens permitted by Section 7.03(g), in an
aggregate principal amount not to exceed $3,000,000 during the term of this
Agreement;
(f)    (i) Indebtedness of the Borrower in respect of the Senior Subordinated
Notes in an aggregate principal amount not to exceed $287,000,000 and (ii)
Guarantee Obligations of any Restricted Subsidiary that is a Guarantor in
respect of such Indebtedness, provided that such Guarantee Obligations are
subordinated to the same extent as the obligations of the Borrower in respect of
the Senior Subordinated Notes;
(g)    Hedge Agreements in respect of Indebtedness otherwise permitted hereby,
so long as such agreements are not entered into for speculative purposes;
(h)    Indebtedness of the Borrower in respect of the Series A Convertible
Preferred Stock of the Borrower;
(i)    Indebtedness consisting of the accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on redeemable preferred Capital Stock in the form of
additional shares of the same class of Capital Stock;
(j)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five business days of incurrence;
(k)    Indebtedness consisting of surety and performance bonds and similar
obligations arising in the ordinary course of business that are reasonably
required to comply either with applicable federal and state laws and regulations
or with Contractual Obligations;
(l)    Indebtedness of the Borrower (i) in the amount of $1,600,000 in
connection with the acquisition in December, 2006 of certain computer equipment
from International Business Machines Corp, (ii) evidenced by a $1,200,000
promissory note, dated June 16, 2005, made by Rotech Healthcare Inc., in favor
of Florida Medical Equipment Services LLC, and (iii) consisting of the financing
of insurance premiums in the ordinary course of business;

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(m)    additional Indebtedness of the Borrower or any of its Restricted
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $1,000,000 at any one time outstanding during the
term of this Agreement;
(n)    Indebtedness of the Borrower in the form of letters of credit in an
aggregate amount that, when taken together with all other Indebtedness
constituting letters of credit issued after the date of this Agreement (other
than pursuant to clause (o)), does not exceed $7,000,000 in the aggregate during
the term of this Agreement; and
(o)    Indebtedness of the Borrower in the form of letters of credit existing on
the date of this Agreement and set forth on Schedule 7.02(o) in an aggregate
amount that does not exceed $13,000,000 at any time outstanding (determined by
reference to the face amount of such letters of credit), as replaced from time
to time.
Section 7.03    Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except:
(a)    Liens for taxes, assessments or governmental charges or claims not yet
due or that are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on the books
of the Borrower or its Subsidiaries, as the case may be, in accordance with
GAAP;
(b)    carriers', warehousemen's, landlord's (whether statutory or otherwise),
mechanics', materialmen's, supplier's, repairmen's or other like Liens arising
in the ordinary course of business in respect of obligations that are not
overdue for a period of more than 45 days or that are being contested in good
faith by appropriate proceedings;
(c)    pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d)    deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e)    easements, rights-of-way, restrictions, covenants, licenses and other
similar encumbrances incurred in the ordinary course of business that do not
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower and its
Subsidiaries, taken as a whole;
(f)    Liens in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.02(d), provided that no such Lien is
extended to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased (except as permitted by
Section 7.02(d));
(g)    Liens securing Indebtedness of the Borrower or any Restricted Subsidiary
incurred pursuant to Section 7.02(e) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber

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any property other than the property financed by such Indebtedness and (iii) the
amount of Indebtedness secured thereby is not increased (except in connection
with refinancing premiums and related costs);
(h)    Liens created pursuant to the Security Documents;
(i)    any interest or title of a lessor under, and Liens arising from Uniform
Commercial Code financing statements relating to, any lease (other than a
capital lease or a financing lease) entered into by the Borrower or any other
Subsidiary in the ordinary course of its business and covering only the assets
so leased;
(j)    Liens incurred to secure Indebtedness permitted to be incurred (and so
incurred) pursuant to Section 7.02(l)(i) and (iii); provided that such liens do
not at any time encumber any property or assets other than the property or
assets financed by such Indebtedness;
(k)    judgment Liens not giving rise to an Event of Default;
(1)    Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;
(m)    rights of setoff imposed by law upon deposit of cash in favor of banks or
other depository institutions incurred in the ordinary course of business in
deposit accounts maintained with such bank and Cash Equivalents in such account;
(n)    Liens of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;
(o)    Liens of sellers of goods to the Borrower or any Subsidiary arising under
Article 2 of the Uniform Commercial Code or similar provisions of applicable law
in the ordinary course of business, covering only the goods sold or securing
only the unpaid purchase price for such goods and related expenses;
(p)    Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 7.08;
(q)    Liens in favor of any Loan Party to secure intercompany Indebtedness and
Guaranty Obligations permitted under Section 7.08;
(r)    Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Borrower or any such Restricted Subsidiary
of the Borrower; provided that such Liens were not incurred in connection with
or in contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Borrower or such Restricted Subsidiary;

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(s)    Liens on property existing at the time of acquisition of the property by
the Borrower or any such Restricted Subsidiary of the Borrower, provided that
such Liens were not incurred in connection with or in contemplation of such
acquisition;
(t)    Retained Rights; and
(u)    Liens on cash collateral of up to 105% of the face amount of letters of
credit constituting Indebtedness permitted to be incurred (and so incurred)
pursuant to Sections 7.02(n) and (o) pledged to secure the Borrower's or its
Restricted Subsidiaries' obligations under such letters of credit.
Section 7.04    Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a)    any Restricted Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any other Restricted Subsidiary;
(b)    any Restricted Subsidiary of the Borrower may Dispose of any or all of
its assets (i) to the Borrower or any Restricted Subsidiary (upon voluntary
liquidation or otherwise) or (ii) pursuant to a Disposition permitted by
Section 7.05 (other than Section 7.05(a)(iii));
(c)    any Investment expressly permitted by Section 7.08 may be structured as a
merger, consolidation or amalgamation into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or any Subsidiary;
and
(d)    any Unrestricted Subsidiary, Wind Down Subsidiary or any Inactive
Subsidiary of the Borrower may be dissolved or liquidated.
Section 7.05    Disposition of Property. (a) Dispose of any of its property,
whether now owned or hereafter acquired, and, in the case of any Restricted
Subsidiary, issue or sell any shares of such Restricted Subsidiary's Capital
Stock to any Person, except:
(i)    the Disposition of obsolete or worn out property in the ordinary course
of business and Dispositions of Equipment required to comply with applicable
laws;
(ii)    the Disposition of Inventory or Equipment held for sale or lease in the
ordinary course of business consistent with past practices;
(iii)    Dispositions permitted by clause (i) of Section 7.04(b);
(iv)    the sale or issuance of any Subsidiary's Capital Stock to the Borrower
or any wholly-owned Restricted Subsidiary;
(v)    Dispositions set forth on Schedule 7.05(a)(v);

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(vi)    the sale, leasing or licensing of computer software or other
Intellectual Property developed by the Borrower or any of its Subsidiaries
related to the health care industry to third parties for fair value in the
ordinary course of business consistent with past practices; and
(vii)    the Disposition of other property not otherwise permitted by this
Section having a fair market value not to exceed $3,000,000 in the aggregate.
(b)    Section 7.05(a) shall not prohibit any Disposition of any property of the
Borrower or any Restricted Subsidiary (including in the case of any Restricted
Subsidiary, the issuance or sale of shares of such Restricted Subsidiaries'
Capital Stock to any Person); provided, however, that (i) the Borrower or such
Restricted Subsidiary receives consideration at the time of such Disposition at
least equal to the Fair Market Value of the assets or property Disposed of, (ii)
at least 85% of the consideration therefor received by the Borrower or such
Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents
and (iii) the Disposition is not prohibited by Section 7.04 (other than Section
7.04(b)(ii)).
Section 7.06    Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any of its Subsidiaries,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any of its Subsidiaries (collectively,
“Restricted Payments”), except that (a) any Subsidiary may make Restricted
Payments to the Borrower or any wholly-owned Restricted Subsidiary or, in the
case of a Subsidiary which is not wholly-owned, to all holders of Capital Stock
of such Subsidiary on a pro rata basis, and (b) the Borrower may pay dividends
on its Series A Convertible Preferred Stock in an aggregate amount not to exceed
$500,000 during any Fiscal Year.
Section 7.07    Capital Expenditures. Make or commit to make any Capital
Expenditure, except Capital Expenditures of the Borrower and its Restricted
Subsidiaries in the ordinary course of business not exceeding (a) $15,000,000
during any fiscal quarter ending on or before December 31, 2008 and (b)
$16,000,000 during any fiscal quarter ending after December 31, 2008; provided
that (i) up to $5,000,000 of any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made pursuant to this Section during any fiscal year shall be deemed made,
first, in respect of amounts permitted for such fiscal year as provided above
and, second, in respect of amounts carried over from the prior fiscal year
pursuant to clause (i) above. During the period of four fiscal quarters ending
on or before December 31, 2007, the Borrower may make or commit to make Capital
Expenditures in addition to those set forth in clause (a) above in an aggregate
amount of up to $5,000,000, provided that such additional amount shall not be
considered for purposes of the proviso to the first sentence of this Section
7.07.

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Section 7.08    Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, “Investments”), except:
(a)    extensions of trade credit in the ordinary course of business;
(b)    investments in Cash Equivalents;
(c)    Guarantee Obligations permitted by Section 7.02;
(d)    loans and advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for the Borrower
and its Subsidiaries not to exceed $500,000 at any one time outstanding;
(e)    Investments by the Borrower or any of its Restricted Subsidiaries in the
Borrower or any Person that, prior to such investment, is a wholly owned
Restricted Subsidiary that is a Guarantor;
(f)    the Borrower or any Restricted Subsidiary may acquire all or
substantially all the assets of a person or line of business of such person, or
not less than 100% of the Capital Stock (other than directors' qualifying
shares) of a person (referred to herein as the “Acquired Entity”); provided that
(i) no Default or Event of Default shall have occurred and be continuing on the
date of any such Investment or after giving effect to such Investment, (ii) such
acquisition was not preceded by an unsolicited tender offer for such Capital
Stock by, or proxy contest initiated by the Borrower or any Subsidiary; (iii)
the Acquired Entity shall be in a similar line of business as that of the
Borrower and the Subsidiaries as conducted during the current and most recent
calendar year; and (iv) at the time of such transaction (A) the Borrower would
be in compliance with the covenants set forth in Section 7.01 as of the most
recently completed period of four consecutive fiscal quarters ending prior to
such transaction for which the financial statements and certificates required by
Section 6.01(a) or 6.01(b), as the case may be, and 6.02 have been delivered or
for which comparable financial statements have been filed with the SEC, after
giving pro forma effect to such transaction and to any other event occurring
after such period as to which pro forma recalculation is appropriate (including
any other transaction described in this Section occurring after such period) as
if such transaction had occurred as of the first day of such period; (B) the
total consideration paid in connection with such acquisition and any other
acquisitions pursuant to this Section 7.08(f) (including any Indebtedness of the
Acquired Entity that is assumed by the Borrower or any Restricted Subsidiary
following such acquisition and any payments following such acquisition pursuant
to earn-out provisions or similar obligations) shall not in the aggregate exceed
$5,000,000 in any fiscal year; (C) the Borrower shall have delivered a
certificate of a Responsible Officer, certifying as to the foregoing and
containing reasonably detailed calculations in support thereof, in form and
substance satisfactory to the Administrative Agent and (D) the Borrower shall
comply, and shall cause the Acquired Entity to comply, with the applicable
provisions of Section 6.12 and

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the Security Documents; provided that (1) up to $1,000,000 of any such amount
referred to in (B) above, if not so invested in the fiscal year for which it is
permitted, may be carried over for Investments in the next succeeding fiscal
year and (2) Investments made pursuant to this paragraph (f) during any fiscal
year shall be deemed made, first in respect of amounts permitted for such fiscal
year as provided above and, second, in respect of amounts carried over from the
prior fiscal year pursuant to the immediately preceding clause (1) above;
(g)    Investments consisting of accounts receivable created or made by the
Borrower or any Restricted Subsidiary in the ordinary course of business;
(h)    Investments consisting of Capital Stock, obligations, securities or other
property received by the Borrower or any Subsidiary in settlement in the
ordinary course of business of doubtful accounts receivable;
(i)    Investments made prior to and existing as of the Closing Date described
on Schedule 7.8(j);
(j)    any Investments received in compromise of obligations of trade creditors
or customers that were incurred in the ordinary course of business, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer;
(k)    Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers compensation, performance and similar
deposits entered into as a result of the operations of the business in the
ordinary course of business;
(l)    Investments consisting of Capital Expenditures permitted under
Section 7.07 of this Agreement;
(m)    Notwithstanding the limitation of Section 7.08(f), Investments (in
addition to those permitted by Section 7.08(f)), involving aggregate
consideration (including assumed Indebtedness) of less than $2,000,000 per annum
for the direct or indirect (a) acquisition of all or substantially all of the
property of any other Person, or of any business or division of any other Person
(b) acquisition of in excess of 50% of the equity interests of any other Person,
or otherwise causing any other Person to become a Subsidiary of such Person or
(c) merger or consolidation or any other combination with any other Person; and
(n)    in addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries in an aggregate amount
(valued at cost) not to exceed $1,000,000 during the term of this Agreement.
Notwithstanding anything in this Section 7.08 to the contrary, the Borrower and
its Restricted Subsidiaries shall not make any Investments pursuant to
Section 7.08(f) unless and until the Borrower has delivered a Compliance
Certificate pursuant to Section 6.02(b) that reflects

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compliance with each of the covenants set forth in Section 7.01 as of the end of
the relevant fiscal period.
Section 7.09    Optional Payments and Modifications of Certain Debt Instruments.
(a) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Senior Subordinated Notes; (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior
Subordinated Notes or the Senior Subordinated Note Indenture (other than any
such amendment, modification, waiver or other change that (i) (x) would extend
the maturity or reduce the amount of any payment of principal thereof, reduce
the rate or extend any date for payment of interest thereon or to add a
subsidiary guarantor, provided that such subsidiary guarantor shall
simultaneously become a Guarantor hereunder and (y) does not involve the payment
of a consent fee and (ii) does not involve the consent of any of the holders of
the Senior Subordinated Notes); (c) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of the Borrower's preferred stock (other than any such amendment,
modification, waiver or other change that (i) would extend the scheduled
redemption date or reduce the amount of any scheduled redemption payment or
reduce the rate or extend any date for payment of dividends thereon and (ii)
does not involve the payment of a consent fee); or (d) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as “Designated Senior Indebtedness” (or any other defined term having
a similar purpose) for the purposes of the Senior Subordinated Note Indenture.
Section 7.10    Transactions with Affiliates. Except as set forth on
Schedule 7.10 (and any renewals or replacements thereof on terms and conditions,
in each case, taken as a whole, not more disadvantageous to the Borrower or the
relevant Restricted Subsidiary) enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Restricted Subsidiary that is Guarantor) unless
such transaction is (a) otherwise permitted under this Agreement, and (b) upon
fair and reasonable terms no less favorable to the Borrower or any of its
Subsidiaries than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate. With respect to any Person who is an
Affiliate pursuant to clause (b) of the definition thereof in Section 1.01, the
Borrower may compensate (and adjust such compensation) such Person for his
services to the Borrower on such terms as are approved in the ordinary course of
business by the Borrower's board of directors or the duly appointed and acting
Compensation Committee thereof.
Section 7.11    Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
Section 7.12    Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or
any of its Restricted Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party other than:

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(a)    this Agreement and the other Loan Documents;
(b)    any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby);
(c)    in connection with any Lien permitted under Section 7.03 or any document
or instrument governing any such Lien, provided that such prohibition or
limitation shall only be effective against the assets subject to such Lien;
(d)    pursuant to customary restrictions and conditions contained in any
agreement related to the sale of any property permitted under Section 7.05,
pending the consummation of such sale, provided that such prohibition or
limitation shall only be effective against the assets to be sold;
(e)    customary non-assignment provisions in leases, licenses or other
contracts entered into in the ordinary course of business, provided that such
prohibition or limitation shall only be effective against the property which is
the subject of such lease, license or other contract;
(f)    in connection with any Indebtedness outstanding on the date of
acquisition of a Subsidiary by the Borrower or any of its Restricted
Subsidiaries, so long as such agreement was not entered into in contemplation of
such Subsidiary being acquired and solely to the extent such prohibition or
limitation relates to the assets of such Subsidiary being acquired; and
(g)    pursuant to any joint venture agreements, limited liability company
operating agreements, partnership agreements or stockholders agreements to the
extent that the Borrower or any of its Restricted Subsidiary was permitted by
the Loan Documents to enter into such agreement and solely to the extent of the
assets held in the joint venture or other entity that is the subject of such
agreement.
Section 7.13    Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Borrower to (a) make Restricted
Payments in respect of any Capital Stock of such Restricted Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the Borrower
or any other Restricted Subsidiary of the Borrower or (c) transfer any of its
assets to the Borrower or any other Restricted Subsidiary of the Borrower,
except for such encumbrances or restrictions existing under or by reason of
(i)    any restrictions existing under the Loan Documents;
(ii)    any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary otherwise permitted hereunder;

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(iii)    agreements governing Indebtedness outstanding on the date hereof and
listed on Schedule 7.2(d) and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
those agreements, provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or refinancings are no
more restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such agreements on the date hereof;
(iv)    the Senior Subordinated Note Indenture, the Senior Subordinated Notes
and the Guarantee Obligations relating thereto;
(v)    purchase money obligations for property acquired in the ordinary course
of business that impose restrictions on that property of the nature described in
clause (c) above;
(vi)    Liens securing Indebtedness otherwise permitted to be incurred under
Section 7.03 that limit the right of the Borrower or any of its Subsidiaries to
dispose of the assets subject to such Liens;
(vii)    provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, limited liability company operating
agreements, partnership agreements, stockholders agreements, assets sale
agreements, stock sale agreements and other similar agreements entered into in
the ordinary course of business, provided that such encumbrance or restriction
shall only be effective against the assets or property to be sold; and
(viii)    any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Borrower or any of its Restricted Subsidiaries as in effect at
the time of such acquisition, which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than the Person,
or the properties or assets of such Person, so acquired.
Section 7.14    Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Restricted Subsidiaries are engaged on the date of this Agreement and
businesses that, in the good faith judgment of the board of directors of the
Borrower, are reasonably related thereto.
Section 7.15    Designation of Unrestricted Subsidiaries. Designate any
Subsidiary as an Unrestricted Subsidiary on any date if after giving pro forma
effect to such designation as if it had occurred on the first day of the period
of four fiscal quarters most recently ended prior to such date, (a) the
aggregate Consolidated EBITDA of all Unrestricted Subsidiaries of the Borrower
for the period of four consecutive fiscal quarters most recently ended prior to
such date would constitute more than 5% of the Consolidated EBITDA of the
Borrower and its Subsidiaries for such period or (b) the aggregate consolidated
assets of all Unrestricted Subsidiaries as at the last day of the fiscal quarter
most recently ended prior to such date would constitute more than 5% of the
consolidated assets of the Borrower and its Subsidiaries as at the last day of
such fiscal quarter.

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SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a)    The Borrower shall fail to pay any principal or premium of any Loan when
due in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder or under any other
Loan Document, within three days after any such interest or other amount becomes
due in accordance with the terms hereof or thereof; or
(b)    Any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made or furnished; or
(c)    (i) Any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) or (ii) of Section 6.05(a) (with respect to
the Borrower only), Section 6.08(a) or Section 7, or in Section 5 of the
Guarantee and Collateral Agreement or (ii) an “Event of Default” under and as
defined in any Mortgage shall have occurred and be continuing; or
(d)    Any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days; or
(e)    The Borrower or any of its Restricted Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or to
become subject to a mandatory offer to purchase by the obligor thereunder or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided that a default, event or condition described in clause (i),
(ii) or (iii) of this subsection (e) shall not at any time constitute an Event
of Default unless, at such time, one or more defaults, events or conditions of
the type described in clauses (i), (ii) and (iii) of this subsection (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $2,000,000; or

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(f)    (i) The Borrower or any of its Restricted Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Restricted Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Borrower or any of its Restricted Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Restricted Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 30 days from the entry thereof; or (iv) the Borrower or
any of its Restricted Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Restricted Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g)    (i) Any Person shall engage in any “prohibited transaction” (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any “accumulated funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, or any Lien in
favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders shall be likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or ERISA Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected to
have a Material Adverse Effect; or
(h)    One or more judgments or decrees shall be entered against the Borrower or
any of its Restricted Subsidiaries involving for the Borrower and its Restricted
Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance) of

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$2,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i)    Any of the Loan Documents shall cease, for any reason (other than by
reason of the express release thereof pursuant to Section 10.15), to be in full
force and effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Loan Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or
(j)    The guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 10.15), to be in full force and effect or
any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k)    Any Change of Control shall occur; or
(l)    The Senior Subordinated Notes or the guarantees thereof shall cease, for
any reason, to be validly subordinated to the Obligations or the obligations of
the Restricted Subsidiaries under the Guarantee and Collateral Agreement, as the
case may be, as provided in the Senior Subordinated Note Indenture, or any Loan
Party or any Affiliate of any Loan Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in subsection (k) or in clause (i) or (ii) of subsection (f) above with respect
to the Borrower, automatically the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable, (B) if such event is an
Event of Default specified in subsection (c)(i) (solely with respect to a
default under Section 7.01) any of the following actions may be taken: (i) the
Administrative Agent may by notice to the Borrower, declare the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
and the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable or (iii) with the consent of the
Required Lenders, the Administrative Agent and/or the Collateral Agent may
exercise any rights and remedies provided to the Administrative Agent and the
Collateral Agent, respectively, under the Loan Documents or at law or in equity,
including all remedies provided under the Uniform Commercial Code, and (C) if
such event is any other Event of Default, any of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable or (ii) with the consent of the Required
Lenders, the Administrative Agent and/or the Collateral Agent may exercise any
rights and remedies provided to the Administrative Agent and the Collateral
Agent, respectively, under the Loan Documents or at law or in equity, including
all remedies provided under the Uniform Commercial Code.

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SECTION 9. THE AGENTS
Section 9.01    Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Lenders with respect thereto, as contemplated by and in accordance with the
provisions of this Agreement and the Security Documents. Notwithstanding any
provision to the contrary elsewhere in this Agreement, no Agent shall have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
Section 9.02    Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.03    Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final decision of
a court of competent jurisdiction to have resulted from its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by any Loan Party or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of any Loan Party to perform its
obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
Section 9.04    Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
the Loan Parties), independent accountants and other experts selected by such
Agent. The

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Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless such Note shall have been transferred in accordance with
Section 10.06 and all actions required by such Section in connection with such
transfer shall have been taken. Each Agent shall be fully justified in failing
or refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders or any other instructing
group of Lenders specified by this Agreement) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
Section 9.05    Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent shall have received notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that the Administrative Agent
shall receive such a notice, the Administrative Agent shall give notice thereof
to the Collateral Agent and Lenders. Each Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement); provided that
unless and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
Section 9.06    Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any of the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information

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concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
Section 9.07    Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), for, and to save each Agent
harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including at any time following the
payment of the Loans) be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
Section 9.08    Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans each Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.
Section 9.09    Successor Agents. The Administrative Agent or the Collateral
Agent may resign upon 60 days' notice to the Lenders and the Borrower. If the
Administrative Agent or the Collateral Agent shall resign under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall
(unless an Event of Default under Section 8(a) or Section 8(f) with respect to
the Borrower shall have occurred and be continuing) be subject to approval by
the Borrower (which approval shall not be unreasonably withheld or delayed),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent or the Collateral Agent, as the case may be, and the
term “Administrative Agent” or “Collateral Agent,” as applicable, shall mean
such successor agent effective upon such appointment and approval, and the
former Administrative Agent's or the former Collateral Agent's, as applicable,
rights, powers and duties as Administrative Agent or Collateral Agent, as the
case may be, shall be terminated, without any other or further act or deed on
the part of such former Administrative Agent or former Collateral Agent or any
of the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that

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is 60 days following a retiring Administrative Agent's notice of resignation,
the retiring Administrative Agent's resignation shall nevertheless thereupon
become effective, and the Lenders shall assume and perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above. If no successor agent
has accepted appointment as Collateral Agent by the date that is 60 days
following a retiring Collateral Agent's notice of resignation, the retiring
Collateral Agent's resignation shall nevertheless thereupon become effective,
and the Administrative Agent shall assume and perform all of the duties of the
Collateral Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. In any event the retiring
Collateral Agent shall transfer all its rights as Collateral Agent in respect of
the Loan Documents and the Collateral to its successor. After any retiring
Agent's resignation as Agent, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
Section 9.10    Authorization to Release Liens and Guarantees. The
Administrative Agent and the Collateral Agent are hereby irrevocably authorized
by each of the Lenders to effect any release of Liens or guarantee obligations
contemplated by Section 10.15.
Section 9.11    The Arranger. The Arranger, in its capacity as such, shall have
no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
Section 10.01    Amendments and Waivers. (a) Neither this Agreement or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.01.
(b)    The Borrower and the Administrative Agent may amend this Agreement
without notice to or consent of any Lender:
(i)to cure any ambiguity, omission, defect or inconsistency;
(ii)to add guarantees and Collateral with respect to the Loans or to secure the
Loans;
(iii)to add to the covenants of the Borrower for the benefit of the Lenders or
to surrender any right or power herein conferred upon the Borrower; or
(iv)to make any change that does not adversely affect the rights of any Lender.
Each Lender hereunder (x) consents to the amendment of this Agreement in the
manner and for the purposes set forth in this Section 10.01(b), (y) agrees that
it will be bound by and will take no actions contrary to the provisions of any
amendment to this Agreement pursuant to Section 10.01(b) and (z) authorizes and
instructs the Administrative Agent to enter into any amendment to this Agreement
pursuant to this Section 10.01(b) on behalf of such Lender. After an amendment
under this Section 10.01(b) becomes effective, the Borrower shall provide the

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Administrative Agent with, who shall promptly notify the Lenders of, a brief
description of such amendment. The failure to give such notice to the
Administrative Agent, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 10.01(b).
(c)    The Required Lenders and each Loan Party party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i)    forgive the principal amount or extend the final scheduled date of
maturity of any Loan, reduce the stated rate of any interest, premium or fee
payable hereunder or extend the scheduled date of any payment thereof, increase
the amount or extend the expiration date of any Commitment of any Lender, in
each case without the consent of each Lender directly affected thereby;
(ii)    amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Restricted
Subsidiaries from their guarantee obligations under the Guarantee and Collateral
Agreement, in each case without the consent of all Lenders;
(iii)    reduce the percentage specified in the definition of Required Lenders
without the written consent of all Lenders;
(iv)    amend, modify or waive any provision of Section 9 without the consent of
any Agent directly affected thereby; or
(vi)    amend, modify or waive any provision of Section 2.11 without the consent
of each Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided that delivery of an executed

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signature page of any such instrument by facsimile transmission or by electronic
mail in portable document format (.pdf) shall be effective as delivery of a
manually executed counterpart thereof.
(d)    If, in connection with any proposed amendment, supplement, modification
or waiver to any of the provisions of this Agreement as contemplated by
clause (ii) of the proviso to paragraph (c) above, the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then the Borrower shall have the right,
following the date that is 181 days after the Closing Date, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in either clauses (x) or (y) below, to either (x) replace each such
non-consenting Lender or Lenders with one or more replacement Lenders (each a
“Replacement Lender”) so long as at the time of such replacement, (i) each such
Replacement Lender consents to the proposed amendment, supplement, modification
or waiver, (ii) no Event of Default shall have occurred and be continuing at the
time of such replacement, (iii) the Replacement Lenders as a group shall
purchase, at par, all Loans and other amounts owing to such replaced Lenders as
a group on or prior to the date of replacement, (iv) the Replacement Lender, if
not already a Lender, shall be reasonably satisfactory to the Administrative
Agent, (v) the replaced Lender shall be obligated to make such replacement in
accordance with Section 10.06 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein) and (vi) any such
replacement shall not be deemed a waiver of any rights that the Borrower, the
Administrative Agent, the Collateral Agent or any other Lender shall have
against the replaced Lender, or (y) repay any such non-consenting Lender's Term
Loans, provided that, unless such non-consenting Lender's Commitments terminated
and Loans repaid pursuant to the preceding clause (x) are immediately replaced
in full at such time through the addition of Replacement Lenders or the increase
of Commitments and/or outstanding Loans of the remaining Lenders (in each case,
which must specifically consent thereto), then in the case of any action
pursuant to the preceding clause (x), the Required Lenders (as determined prior
to giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event, the Borrower shall not have the right to
replace a Lender or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to any clause (other than clause (ii)) of the proviso to subsection (c)
above. All prepayments of Loans made pursuant to this Section 10.01(d) shall be
accompanied by payment of the Applicable Prepayment Premium and all accrued
interest on such Loans.
Section 10.02    Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be given by
overnight delivery service, by telecopy, by hand or by certified mail, return
receipt requested, and shall be effective upon receipt or refusal of such notice
and shall be sent addressed (a) in the case of the Borrower and the Agents, as
follows and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:

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The Borrower:                        Rotech Healthcare Inc.
2600 Technology Drive
Suite 300
Orlando, Florida 32804
Attention: Chief Financial Officer
Telecopy: (407) 297-1906
Telephone: (407) 822-4600
With a copy to:
Rotech Healthcare Inc.
2600 Technology Drive
Suite 300
Orlando, Florida 32804
Attention: Chief Legal Officer
    

The Administrative Agent                Credit Suisse
or Collateral Agent:                    Americas Operations Loans Service
7200 Kit Creek Road - Bldg 11
PO Box 110047
Raleigh/RTP, NC 27709
Attention: Matthew Carter
Telecopy: 212-743-1842
Telephone: 919-994-5751

provided that any notice, request or demand to or upon the any Agent, or any
Lender shall not be effective until received.
Section 10.03    No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
Section 10.04    Survival of Representations and Warranties. All representations
and warranties made herein, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
Section 10.05    Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Arranger and the Agents for all their reasonable documented
out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities (other than fees payable to syndicate members) and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable documented fees and

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disbursements and other charges of counsel to the Administrative Agent and the
charges of Syndtrak, following the presentation of a summary statement, (b) to
pay or reimburse each Lender and the Agents for all their costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, including the fees and disbursements of
counsel (including the allocated fees and disbursements and other charges of
in-house counsel) to each Lender and of counsel to the Agents, (c) to pay,
indemnify, or reimburse each Lender and the Agents for, and hold each Lender and
the Agents harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify or reimburse each Lender, each Agent, the Arranger, their
respective affiliates, and their respective officers, directors, trustees,
employees, advisors, agents, controlling persons and members of each of the
foregoing (each, an “Indemnitee”) for, and hold each Indemnitee harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses (including
reasonable fees, disbursements and other charges of a single counsel and, to the
extent reasonably necessary, a single local counsel in each applicable
jurisdiction and single specialty counsel) or disbursements of any kind or
nature whatsoever arising out of or relating to any claim or any litigation or
other proceeding (regardless of whether such Indemnitee is a party thereto and
regardless of whether such matter is initiated by a third party or by the
Borrower or its subsidiaries or any of their respective shareholders) that
relates to the transactions contemplated hereby or the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Properties, (all the foregoing
in this clause (d), collectively, the “Indemnified Liabilities”), provided that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities (i) to the extent such Indemnified Liabilities are
found by a final judgment of a court of competent jurisdiction to have resulted
primarily from the gross negligence or willful misconduct of such Indemnitee,
(ii) any claim by an Indemnitee against another Indemnitee that (x) did not
arise out of any action or inaction on the part of the Borrower or any of its
Affiliates and (y) do not involve an Agent or Arranger or any of its affiliates
acting in its capacity as Agent or Arranger (or in any similar capacity), or
(iii) material breach of this Agreement by an Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by unauthorized persons of
Information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons or
for any special, indirect, consequential or punitive damages in connection with
the Facilities. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, including CERCLA or similar state law that any of them might have by
statute or otherwise

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against any Indemnitee. All amounts due under this Section shall be payable not
later than 10 days after written demand therefor. Statements payable by the
Borrower pursuant to this Section shall be submitted to the Chief Financial
Officer (Telephone No. (407) 822-4600) (Fax No. (407) 297- 1906), at the address
of the Borrower set forth in Section 10.02, or to such other Person or address
as may be hereafter designated by the Borrower in a notice to the Administrative
Agent. The agreements in this Section shall survive repayment of the Loans and
all other amounts payable hereunder.
Section 10.06    Successors and Assigns; Participations and Assignments.
(a)    This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b)    Any Lender may, without the consent of the Borrower or the Administrative
Agent, in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a “Participant”) participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to
Section 10.01. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.07(a) as fully as if such Participant
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.12, 2.13 and 2.14 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if such Participant were a Lender; provided that, in the case of Section 2.13,
such Participant shall have complied with the requirements of said Section, and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of

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the participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
(c)    Any Lender (an “Assignor”) may, in accordance with applicable law and
upon written notice to the Administrative Agent, at any time and from time to
time assign to any Lender or any Affiliate, Related Fund or Control Investment
Affiliate thereof or with the consent of the Borrower (which consent (1) shall
not be unreasonably withheld or delayed and (2) shall be deemed given in the
event the Borrower does not respond to a request for such consent within five
business days) and the Administrative Agent (provided (x) that no such consent
need be obtained by any Agent and (y) the consent of the Borrower need not be
obtained upon the occurrence and during the continuation of a Default or an
Event of Default), to an additional bank, financial institution or other entity
(an “Assignee”) all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit D, executed by such Assignee and such Assignor (and, where the consent
of the Borrower or the Administrative Agent is required pursuant to the
foregoing provisions, by the Borrower and such other Persons) and delivered to
the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
Affiliate, Related Fund or Control Investment Affiliate thereof) shall be in an
aggregate principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. An Assignor shall
use commercially reasonable efforts to assure that any Assignee to which it
assigns its Commitments and/or Loans that is a Non-U.S. Lender shall be able to
deliver the applicable forms and certificates required under Section 2.13(d)
claiming full exemption from U.S. federal withholding taxes as of the date of
such assignment. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) 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 with Commitments and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto, except as to Section 2.12, 2.13 and 10.05 in respect of the period
prior to such effective date). Notwithstanding any provision of this Section,
the consent of the Borrower shall not be required for any assignment that occurs
at any time when any Event of Default shall have occurred and be continuing. For
purposes of the minimum assignment amounts set forth in this paragraph, multiple
assignments by two or more Related Funds shall be aggregated.
(d)    The Administrative Agent shall, on behalf of the Borrower, maintain at
its address referred to in Section 10.02 a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans 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, each Agent and the Lenders shall treat each Person

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whose name is recorded in the Register as the owner of the Loans and any Notes
evidencing such Loans recorded therein for all purposes of this Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance; thereupon one or
more new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked “canceled”. The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e)    Upon its receipt of an Assignment and Acceptance executed by an Assignor
and an Assignee (and, in any case where the consent of any other Person is
required by Section 10.06(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(treating multiple, simultaneous assignments by or to two or more Related Funds
as a single assignment) (except that no such registration and processing fee
shall be payable (y) in connection with an assignment by or to any Agent or (z)
in the case of an Assignee which is already a Lender or is an affiliate or
Related Fund or Control Investment Affiliate of a Lender or a Person under
common management with a Lender), the Administrative Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Term Note
of the assigning Lender, if such Lender has received a Term Note) a new Term
Note to the order of such Assignee in an amount equal to the Term Loan assumed
or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Term Loan upon request, a new Term Note to the order of
the Assignor in an amount equal to the Term Loan retained by it hereunder. Such
new Note or Notes, if any, shall be dated the Closing Date and shall otherwise
be in the form of the Note or Notes replaced thereby.
(f)    For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in Loans and Notes, including any pledge
or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law; provided that, the Borrower may replace any
assignee or pledgee that becomes a Lender pursuant to an assignment or pledge
permitted by this Section 10.06(f) in accordance with clause (x) or (y) of
Section 10.01(b).
(g)    Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the

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Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any state thereof. In addition,
notwithstanding anything to the contrary in this Section 10.06(g), any SPC may
(A) with notice to, but without the prior written consent of, the Borrower and
the Administrative Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans to the Granting Lender, or with
the prior written consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld) to any financial institutions
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans, and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC; provided that non-public information with
respect to the Borrower may be disclosed only with the Borrower's consent which
will not be unreasonably withheld. This paragraph (g) may not be amended without
the written consent of any SPC with Loans outstanding at the time of such
proposed amendment.
Section 10.07    Adjustments; Setoff.
(a)    Except to the extent that this Agreement provides for payments to be
allocated to a particular Lender, if any Lender (a “Benefited Lender”) shall at
any time receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Obligations, such Benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.

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(b)    In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
Section 10.08    Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission or by electronic mail in portable document format (.pdf)
shall be effective as delivery of a manually executed counterpart hereof. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
Section 10.09    Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.10    Integration. This Agreement, the Fee Letter, the Guarantee
Letter and the other Loan Documents represent the entire agreement of the
Borrower, the Agents, the Arranger and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Arranger, any Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein, in the
Fee Letter, the Guarantee Letter or the other Loan Documents.
Section 10.11    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 10.12    Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a)    submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive

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general jurisdiction of the courts of the State of New York, the courts of the
United States for the Southern District of New York, and appellate courts from
any thereof;
(b)    consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c)    agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.02 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d)    agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
(e)    waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
Section 10.13    Acknowledgments. The Borrower hereby acknowledges that:
(a)    it has been advised by counsel in the negotiation, execution and delivery
of this Agreement and the other Loan Documents;
(b)    (i) no fiduciary, advisory or agency relationship between it and any
Arranger, Agent or Lender is intended to be or has been created in respect of
this Agreement or any of the other Loan Documents or the transactions
contemplated hereby or thereby, irrespective of whether such Arranger, Agent or
Lender is advising the Borrower on other matters, (ii) such parties, on the one
hand, and the Borrower, on the other hand, have an arms' length business
relationship that does not directly or indirectly give rise to, nor does the
Borrower rely on, any fiduciary duty on the part of such parties, (iii) the
Borrower is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement, (iv) the Borrower has been advised that such parties are engaged
in a broad range of transactions that may involve interests that differ from the
Borrower's interests and that such parties have no obligation to disclose such
interests and transactions to the Borrower by virtue of any fiduciary, advisory
or agency relationship, and (v) the Borrower waives, to the fullest extent
permitted by law, any claims it may have against such parties for breach of
fiduciary duty or alleged breach of fiduciary duty and agrees that such parties
shall have no liability (whether direct or indirect) to the Borrower in respect
of such a fiduciary duty claim or to any person asserting a fiduciary duty claim
on behalf of or in right of the Borrower, including the Borrower's stockholders,
employees or creditors;

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(c)    None of the Arranger, Agent or Lenders is advising the Borrower as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Borrower has consulted with its own advisors concerning such matters and is
responsible for making its own independent investigation and appraisal of the
transactions contemplated by this Agreement, and such parties shall have no
responsibility or liability to the Borrower with respect thereto. Any review by
such parties of the transactions contemplated by this Agreement or other matters
relating to such transactions will be performed solely for the benefit of such
parties and shall not be on behalf of the Borrower or any of its Affiliates; and
(d)    no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Arranger, the Agents and the Lenders or among the Borrower and the Lenders.
Section 10.14    Confidentiality. Each of the Agents and the Lenders agrees to
keep confidential in accordance with its customary procedures all non-public
information provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing herein
shall prevent any Agent or any Lender from disclosing any such information (a)
to the Arranger, any Agent, any other Lender or any affiliate of any thereof who
have been advised of or understand the confidential nature of the information,
(b) subject to an agreement containing provisions substantially the same as
those of this Section 10.14, to any actual or prospective Participant or
Assignee, (c) to any of its employees, directors, agents, attorneys,
accountants, investment advisors and other professional advisors who have been
advised of or understand the confidential nature of the information, (d) to any
financial institution that is a direct or indirect contractual counterparty in
swap agreements or such contractual counterparty's professional advisor (so long
as such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding to which it is a party relating to the
transactions contemplated by the Loan Documents, (h) that has been publicly
disclosed other than in breach of this Section, (i) to the National Association
of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender or (j) in connection with the exercise of any remedy hereunder or under
any other Loan Document.
Section 10.15    Platform; Borrower Materials. The Borrower hereby acknowledges
that (a) the Administrative Agent and/or the Arranger will make available to the
Lenders materials and/or information provided by or on behalf of the Borrower
hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”), and (b)
certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not
wish to receive material non-public information with respect to the Borrower or
its securities) (each, a “Public Lender”). The Borrower hereby agrees that it
will use commercially reasonable efforts to identify that portion of the
Borrower Material that may be distributed to the Public Lenders and that (i) all
such Borrower Materials shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof, (ii) by marking Borrower Materials

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“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as either
publicly available information or not material information (although it may be
sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws, (iii) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor” and (iv) the Administrative Agent
and the Joint Lead Arrangers shall be entitled to treat any Borrower Materials
that are not marked “PUBLIC” as being suitable only for posting on a portion of
the Platform not designated “Public Investor”.
Section 10.16    Release of Collateral and Guarantee Obligations. (a)
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, upon request of the Borrower in connection with any Disposition of
Property permitted by the Loan Documents, the Collateral Agent shall take such
actions as shall be required to release its security interest in any Collateral
being Disposed of in such Disposition, and to release any guarantee obligations
under any Loan Document of any Person being Disposed of in such Disposition, to
the extent necessary to permit consummation of such Disposition in accordance
with the Loan Documents.
(b)    Notwithstanding anything to the contrary contained herein or any other
Loan Document, when all Obligations have been paid in full and all Commitments
have terminated or expired, upon request of the Borrower, the Collateral Agent
shall take such actions as shall be required to release its security interest in
all Collateral, and to release all guarantee obligations under any Loan
Document. Any such release of guarantee obligations shall be deemed subject to
the provision that such guarantee obligations shall be reinstated if after such
release any portion of any payment in respect of the Obligations guaranteed
thereby shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Restricted Subsidiary, or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for,
the Borrower or any Restricted Subsidiary or any substantial part of its
property, or otherwise, all as though such payment had not been made.
Section 10.17    WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Section 10.18    Repricing of Stock Options. Nothing contained in this Agreement
shall limit or restrict the Borrower from exchanging, replacing and/or amending
the terms and provisions of any and all options currently outstanding pursuant
to the Rotech Healthcare Inc. Common Stock Option Plan in order to effect a
repricing of such options.

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

By:    /s/ Steven P.
Alsene_______________________________________                        
Name:    Steven P. Alsene
Title:     Chief Financial Officer    

[Signature Page to Credit Agreement ]

--------------------------------------------------------------------------------

CREDIT SUISSE SECURITIES (USA) LLC, as Sole Lead Arranger and Sole Bookrunner

By:    /s/ SoVonna
Day-Goins___________________________________                        
Name: SoVonna Day-Goins
Title: Managing Director

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, individually and as Administrative Agent,
Collateral Agent and as a Lender

By:    /s/ SoVonna Day-Goins____________________________________
Name: SoVonna Day-Goins
Title: Managing Director

By:    /s/ Alexis F.
Maged_______________________________________                        
Name: Alexis F. Maged
Title: Managing Director

[Signature Page to Credit Agreement ]

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SCHEDULE 1.1A

COMMITMENTS
 
 
Credit Suisse
180,000,000.00
 
 
Total
$180,000,000.00

Page 1 of Schedule 1.1A to Credit Agreement

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Schedule 4.15
Subsidiaries

 
Subsidiary of
Rotech Healthcare Inc.
State of
Incorporation
 
A-1 Medical Equipment, Inc.
Florida
 
Abba Medical Equipment, Inc.
Florida
 
Acadia Home Care
Maine
 
Allied Medical Supply, Inc.
Arizona
 
Always Medical Equipment, Inc.
Florida
 
Andy Boyd's InHome Medical Inc., West
West Virginia
 
Andy Boyd's InHome Medical/InHome Medical Inc.
West Virginia
 
Anniston Health & Sickroom Supplies, Inc.
Alabama
 
Berkeley Medical Equipment, Inc.
Florida
 
Best Care Medical Supply, Inc.*
Michigan
 
Beta Medical Equipment, Inc.
Florida
 
Cambria Medical Supply, Inc.
Florida
 
Camden Medical Supply, Inc.
Florida
 
Care Medical Supplies, Inc.
Illinois
 
Centennial Medical Equipment, Inc.
Florida
 
Charlotte Medical Supply, Inc.
Florida
 
Collins Rentals, Inc.
Missouri
 
Community Home Oxygen, Inc.
Montana
 
Contour Medical Supply, Inc.
Florida
 
Corley Home Health Care, Inc.
Georgia
 
CPO 2, Inc.
Pennsylvania
 
Cynthiana Home Medical Equipment, Inc.
Florida
 
Daniel Medical Systems, Inc.
Oklahoma
 
Distinct Home Health Care, Inc.
Florida
 
Don Paul Respiratory Services, Inc.
Colorado
 
DuMed, Inc.
Iowa
 
East Tennessee Infusion & Respiratory, Inc.
Florida
 
Encore Home Health Care, Inc.
Florida
 
Epsilon Home Health Care, Inc.
Florida
 
Excel Medical of Fort Dodge, Inc.
Iowa
 
Excel Medical of Marshalltown, Inc.
Iowa
 
First Community Care of Niagara, Inc.
New York

Page 1 of Schedule 4.15 to Credit Agreement

--------------------------------------------------------------------------------

 
Firstcare, Inc.
Kansas
 
Fischer Medical Equipment, Inc.
Idaho
 
Four Rivers Home Health Care, Inc.
Missouri
 
G&G Medical, Inc.
Colorado
 
Gate City Medical Equipment, Inc.
Florida
 
Georgia Medical Resources, Inc.
Georgia
 
Gladwin Area Home Care, Inc.
Michigan
 
Hamilton Medical Equipment Service, Inc.
Iowa
 
Health Care Services of Mississippi, Incorporated
Florida
 
Holland Medical Services, Inc.
Florida
 
Home Care Oxygen Service, Inc.
Minnesota
 
Home Medical Systems, Inc.
South Carolina
 
IHS Acquisition XXVII, Inc.
Delaware
 
Integrated Health Services at Jefferson Hospital, Inc.
Delaware
 
Integrated of Garden Terrace, Inc.
Delaware
 
Intensive Home Care Services, Inc.
Texas
 
IOTA Medical Equipment, Inc.
Florida
 
LAMBDA Medical Equipment, Inc.
Florida
 
LAMS, Inc.
Texas
 
Lawrence Medical Equipment, Inc.
Kansas
 
Liberty Home Health Care, Inc.
Florida
 
Lovejoy Medical, Inc.
Kentucky
 
Major Medical Supply, Inc.
Texas
 
Medco Professional Services, Corp.
Colorado
 
MedCorp International, Inc.
Arizona
 
Medic-Aire Medical Equipment, Inc.
Florida
 
Medical Electro-Therapeutics, Inc.
Florida
 
Medicare Rental Supply, Inc.
West Virginia
 
Michigan Medical Supply, Inc.
Michigan
 
National Medical Equipment Centers, Inc.
Florida
 
Neumann's Home Medical Equipment, Inc.
Illinois
 
Nightingale Home Health Care, Inc.
Florida
 
North Central Washington Respiratory Care Services, Inc.
Washington
 
Northeast Medical Equipment, Inc.
Florida
 
Northwest Home Medical, Inc.
Idaho
 
Omega Medical Equipment, Inc.
Florida

Page 2 of Schedule 4.15 to Credit Agreement

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OMICRON Medical Equipment, Inc.
Florida
 
Oxygen of Oklahoma, Inc.
Oklahoma
 
Oxygen Plus Medical Equipment, Inc.
Florida
 
Oxygen PIus, Inc.
Colorado
 
Oxygen Therapy Associates, Inc.
Texas
 
Peterson's Home Care, Inc.
California
 
PHI Medical Equipment, Inc.
Florida
 
Pioneer Medical Services, Inc.
West Virginia
 
Preferential Home Health Care, Inc.
Florida
 
Premier Medical, Inc.*
New Mexico
 
Principal Medical Equipment, Inc.
Florida
 
Professional Breathing Associates, Inc.
Michigan
 
Professional Respiratory Home Healthcare, Inc.
Florida
 
PSI Health Care, Inc.
South Dakota
 
Pulmo-Dose, Inc.
Florida
 
Pulmonary Home Care, Inc.
New Jersey
 
Quality Home Health Care, Inc.
Florida
 
R.C.P.S., Inc.
California
 
RCG Information Services Corporation
Florida
 
RCI Medical Corp.
New Jersey
 
Regency Medical Equipment, Inc.
Florida
 
Resp-A-Care, Inc.
Kentucky
 
Respiracare Medical-Equipment, Inc.
Florida
 
Respiratory Medical Equipment of GA., Inc.
Florida
 
Respitech Home Health Care, Inc.
Wyoming
 
Responsive Home Health Care, Inc.
Florida
 
Rhema, Inc.
Texas
 
Ritt Medical Group, Inc.
Arizona
 
R N Home C are Medical Equipment Company, Inc.
Florida
 
Roswell Home Medical, Inc.
Florida
 
Rotech Employee Benefit Corporation
Florida
 
Rotech Home Medical Care, Inc.
Florida
 
Rotech Oxygen and Medical Equipment, Inc.
Florida
 
Roth Medical, Inc.
Colorado

Page 3 of Schedule 4.15 to Credit Agreement

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Rothert's Hospital Equipment, Inc.
Kentucky
 
Sampson Convalescent Medical Supply, Inc.
North Carolina
 
Select Home Health Care, Inc.
Florida
 
SIGMA Medical Equipment, Inc.
Florida
 
Signature Home Care of Kansas, Inc.*
Kansas
 
Southeastern Home Health, Inc.
Florida
 
Stat Medical Equipment, Inc.
Florida
 
Sun Medical Supply, Inc.
North Carolina
 
Sunshine Home Health Care, Inc.
Florida
 
The Kilroy Company
North Carolina
 
Theta Home Health Care, Inc.
Florida
 
Tupelo Home Health, Inc.
Florida
 
Valley Medical Equipment, Inc.
Utah
 
Value Care, Inc.
Florida
 
VitalCare Health Services, Inc.
Florida
 
VitalCare of Pennsylvania, Inc.
Pennsylvania
 
VitalCare of Texas, Inc.
Texas
 
White's Medical Rentals, Inc.
South Carolina
 
Wichita Medical Care, Inc.
Kansas
 
Zeta Home Health Care, Inc.
Florida

Page 4 of Schedule 4.15 to Credit Agreement

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Schedule 4.19

UCC FILING JURISDICTIONS

 
Debtor Name
UCC Filing Location
 
Borrower:
 
 
Rotech Healthcare Inc.
Delaware, Department of State
 
Subsidiaries:
 
 
A-1 Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Abba Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Acadia Home Care, a Maine corporation
Maine, Secretary of State
  
Allied Medical Supply, Inc., an Arizona corporation
Arizona, Secretary of State
  
Always Medical Equipment, Inc., a Florida Corporation
Florida, Secured Transaction Registry
  
Andy Boyd's InHome Medical, Inc., West, a West Virginia corporation
West Virginia, Secretary of State
  
Andy Boyd's InHome Medical/InHome Medical Inc., a West Virginia corporation
West Virginia, Secretary of State
  
Anniston Health & Sickroom Supplies, Inc., an Alabama corporation
Alabama, Secretary of State
  
Berkeley Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Best Care Medical Supply, Inc., a Michigan corporation
Michigan, Department of State
 
Beta Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Cambria Medical Supply, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Camden Medical Supply, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Care Medical Supplies, Inc., an Illinois corporation
Illinois, Secretary of State
  
Centennial Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Charlotte Medical Supply, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Collins Rentals, Inc., a Missouri corporation
Missouri, Secretary of State
  
Community Home Oxygen, Inc., a Montana corporation
Montana, Secretary of State
 

Page 1 of Schedule 4.19 to Credit Agreement

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Contour Medical Supply, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Corley Home Health Care, Inc., a Georgia corporation
Georgia, Central UCC Indexing System
  
CPO 2, Inc., a Pennsylvania corporation
Pennsylvania Department of State
  
Cynthiana Home Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Daniel Medical Systems, Inc., an Oklahoma corporation
Oklahoma, County Clerk's Office
  
Distinct Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Don Paul Respiratory Services, Inc., a Colorado corporation
Colorado, Secretary of State
  
DuMed, Inc., an Iowa corporation
Iowa, Secretary of State
  
East Tennessee Infusion & Respiratory, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Encore Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Epsilon Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Excel Medical of Fort Dodge, Inc., an Iowa corporation
Iowa, Secretary of State
  
Excel Medical of Marshalltown, Inc., an Iowa corporation
Iowa, Secretary of State
  
First Community Care of Niagara, Inc., a New York corporation
New York, Department of State
  
Firstcare, Inc., a Kansas corporation
Kansas, Secretary of State
  
Fischer Medical Equipment, Inc., an Idaho corporation
Idaho, Secretary of State
  
Four Rivers Home Health Care, Inc., a Missouri corporation
Missouri, Secretary of State
  
G&G Medical, Inc., a Colorado corporation
Colorado, Secretary of State
  
Gate City Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Georgia Medical Resources, Inc., a Georgia corporation
Georgia, Central UCC Indexing System
  
Gladwin Area Home Care, Inc., a Michigan corporation
Michigan, Department of State
 

Page 2 of Schedule 4.19 to Credit Agreement

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Hamilton Medical Equipment Service, Inc., an Iowa corporation
Iowa, Secretary of State
  
Health Care Services of Mississippi, Incorporated, a Florida corporation
Florida, Secured Transaction Registry
  
Holland Medical Services, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Home Care Oxygen Service, Inc., a Minnesota corporation
Minnesota, Secretary of State
  
Home Medical Systems, Inc., a South Carolina corporation
South Carolina, Secretary of State
  
IHS Acquisition XXVII, Inc., a Delaware corporation
Delaware, Department of State
  
Integrated Health Services at Jefferson Hospital, Inc., a Delaware corporation
Delaware, Department of State
  
Integrated of Garden Terrace, Inc., a Delaware corporation
Delaware, Department of State
  
Intensive Home Care Services, Inc., a Texas corporation
Texas, Secretary of State
  
IOTA Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
LAMBDA Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
LAMS, Inc., a Texas corporation
Texas, Secretary of State
  
Lawrence Medical Equipment, Inc., a Kansas corporation
Kansas, Secretary of State
  
Liberty Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Lovejoy Medical, Inc., a Kentucky corporation
Kentucky, Secretary of State
  
Major Medical Supply, Inc., a Texas corporation
Texas, Secretary of State
  
Medco Professional Services, Corp., a Colorado corporation
Colorado, Secretary of State
  
MedCorp International, Inc., an Arizona corporation
Arizona, Secretary of State
  
Medic-Aire Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Medical Electro-Therapeutics, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Medicare Rental Supply, Inc., a West Virginia corporation
West Virginia, Secretary of State
 

Page 3 of Schedule 4.19 to Credit Agreement

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Michigan Medical Supply, Inc., a Michigan corporation
Michigan, Department of State
  
National Medical Equipment Centers, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Neumann's Home Medical Equipment, Inc., an Illinois corporation
Illinois, Secretary of State
  
Nightingale Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
North Central Washington Respiratory Care Services, Inc., a Washington
corporation
Washington, Department of Licensing
  
Northeast Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Northwest Home Medical, Inc., an Idaho corporation
Idaho, Secretary of State
  
Omega Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
OMICRON Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Oxygen of Oklahoma, Inc., an Oklahoma corporation
Oklahoma, Secretary of State
  
Oxygen Plus Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Oxygen Plus, Inc., a Colorado corporation
Colorado, Secretary of State
  
Oxygen Therapy Associates, Inc., a Texas corporation
Texas, Secretary of State
  
Premier Medical, Inc., a New Mexico corporation
New Mexico, Secretary of State
 
Peterson's Home Care, Inc., a California corporation
California, Secretary of State
  
PHI Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Pioneer Medical Services, Inc., a West Virginia corporation
West Virginia, Secretary of State
  
Preferential Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Principal Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Professional Breathing Associates, Inc., a Michigan corporation
Michigan, Department of State
 

Page 4 of Schedule 4.19 to Credit Agreement

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Professional Respiratory Home Healthcare, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
PSI Health Care, Inc., a South Dakota corporation
South Dakota, Secretary of State
  
Pulmo-Dose, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Pulmonary Home Care, Inc., a New Jersey corporation
New Jersey, Department of Revenue
  
Quality Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
R.C.P.S., Inc., a California corporation
California, Secretary of State
  
RCG Information Services Corporation, a Florida corporation
Florida, Secured Transaction Registry
  
RCI Medical Corp., a New Jersey corporation
New Jersey, Department of Revenue
  
Regency Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Resp-A-Care, Inc., a Kentucky corporation
Kentucky, Secretary of State
  
Respiracare Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Respiratory Medical Equipment of GA., Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Respitech Home Health Care, Inc., a Wyoming corporation
Wyoming, Secretary of State
  
Responsive Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Rhema, Inc., a Texas corporation
Texas, Secretary o f State
  
Ritt Medical Group, Inc., an Arizona corporation
Arizona, Secretary of State
  
R N Home Care Medical Equipment Company, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Roswell Home Medical, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Rotech Employee Benefits Corporation, a Florida corporation
Florida, Secured Transaction Registry
  
Rotech Home Medical Care, Inc., a Florida corporation
Delaware, Department of State
  
Rotech Oxygen and Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
 

Page 5 of Schedule 4.19 to Credit Agreement

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Roth Medical, Inc., a Colorado corporation
Colorado, Secretary of State
  
Rothert's Hospital Equipment, Inc., a Kentucky corporation
Kentucky, Secretary of State
  
Sampson Convalescent Medical Supply, Inc., a North Carolina corporation
North Carolina, Secretary of State
  
Select Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
SIGMA Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Signature Home Care of Kansas, Inc., a Kansas corporation
Kansas, Secretary of State
 
Southeastern Home Health, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Stat Medical Equipment, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Sun Medical Supply, Inc., a North Carolina corporation
North Carolina, Secretary of State
  
Sunshine Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
The Kilroy Company, a North Carolina corporation
North Carolina, Secretary of State
  
Theta Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Tupelo Home Health, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
Valley Medical Equipment, Inc., an Utah corporation
Utah, Division of Corporations and Commercial Code
  
Value Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
VitalCare Health Services, Inc., a Florida corporation
Florida, Secured Transaction Registry
  
VitalCare of Pennsylvania, Inc., a Pennsylvania corporation
Pennsylvania, Department of State
  
VitalCare of Texas, Inc., a Texas corporation
Texas, Secretary
of State
  
White's Medical Rentals, Inc., a South Carolina corporation
South Carolina, Secretary of State
  
Wichita Medical Care, Inc., a Kansas corporation
Kansas, Secretary of State
  
Zeta Home Health Care, Inc., a Florida corporation
Florida, Secured Transaction Registry
 

Page 6 of Schedule 4.19 to Credit Agreement

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Schedule 4.23

LOCATIONS OF INVENTORY AND EQUIPMENT

 
Name
Address
1
ROSWELL HOME MEDICAL, INC.
4201 YALE BLVD. N.E. SUITE D P.O. BOX 14973, ALBUQUERQUE, NM 87107
2
PULMO-DOSE, INC.
104 MAX HURT DRIVE , MURRAY, KY 42071
3
ROTECH OXYGEN AND MEDICAL EQUIPMENT
9770 16TH STREET NORTH , SAINT PETERSBURG, FL 33716
4
VALLEY MEDICAL EQUIPMENT, INC.
6973 SOUTH 300 WEST , MIDVALE, UT 84047
5
HOME CARE OXYGEN SERVICE, INC.
810 EAST 4TH STREET , DULUTH, MN 55805
6
CONTOUR MEDICAL SUPPLY, INC.
1810 COUNTY LINE ROAD STE. 408, HUNTINGDON VALLEY, PA 19006
7
INTENSIVE HOME CARE SERVICES, INC.
12025 ROJAS STREET SUITE C & D, EL PASO, TX 79936
8
HOLLAND MEDICAL SERVICES, INC.
104 MAX HURT DRIVE , MURRAY, KY 42071
9
PROFESSIONAL RESPIRATORY HOME HEALT
5210 NORTH LAMAR , AUSTIN, TX 78751
10
HOME MEDICAL SYSTEMS, INC.
1446 E. GASTON ST. SUITE 202, LINCOLNTON, NC 28092
11
CARE MEDICAL SUPPLIES, INC.
333 WEST HINTZ ROAD , WHEELING, IL 60090
12
ROTH MEDICAL, INC.
7045 S FULTON STREET SUITE 200, CENTENNIAL, CO 80112
13
HOLLAND MEDICAL SERVICES, INC.
3907 W. ERNESTINE DRIVE , MARION, IL 62959
14
ROTHERT'S HOSPITAL EQUIPMENT, INC.
1850 AUGUSTINE AVE SUITES A & B, COVINGTON, KY 41014
15
RHEMA, INC.
2845 W. AIRPORT FREEWAY #120 , IRVING, TX 75062
16
ROSWELL HOME MEDICAL, INC.
1549 6TH STREET SUITE C, SANTA FE, NM 87505
17
ROTECH OXYGEN AND MEDICAL EQUIPMENT
8300 US HWY 19 SUITE A, PORT RICHEY, FL 34668
18
NORTHEAST MEDICAL EQUIPMENT, INC.
532 ALPHA DRIVE , PITTSBURGH, PA 15238
19
RESPONSIVE HOME HEALTH CARE, INC.
826 COOKSON AVENUE, S.E. , NEW PHILADELPHIA, OH 44663
20
CAMDEN MEDICAL SUPPLY, INC.
1120 S LEWIS AVE , TULSA, OK 74104
21
CARE MEDICAL SUPPLIES, INC.
4201 ILBERRY ROAD , MT. VERNON, IL 62864
22
ROTECH OXYGEN AND MEDICAL EQUIPMENT
5315 GREAT OAK DR. , LAKELAND, FL 33815
23
HOLLAND MEDICAL SERVICES, INC.
1914 BROADWAY , PADUCAH, KY 42001
24
FIRST COMMUNITY CARE OF NIAGARA INC
15 D SCOTLAND BLVD , BRIDGEWATER, MA 2324
25
CENTENNIAL MEDICAL EQUIPMENT, INC.
10150 SW NUMBUS AVENUE SUITE E6 & E7, PORTLAND, OR 97223
26
LOVEJOY MEDICAL, INC.
132 VENTURE COURT SUITE 12 AND 13, LEXINGTON, KY 40511
27
ANNISTON HEALTH & SICKROOM SUPPLIES
5502 MCCLELLAN BLVD. , ANNISTON, AL 36206
28
A-1 MEDICAL EQUIPMENT, INC.
938 MAIN STREET , HAMILTON, OH 45013
29
ROTH MEDICAL, INC.
729-C FORTINO BLVD. , PUEBLO, CO 81008
30
NIGHTINGALE HOME HEALTH CARE, INC.
11913 STARCREST , SAN ANTONIO, TX 78247
31
G&G MEDICAL, INC.
799 B TECH CENTER DRIVE SUITE 1, DURANGO, CO 81301
32
CAMBRIA MEDICAL SUPPLY, INC.
1081 GREENTREE ROAD , PITTSBURGH, PA 15220
33
PSI HEALTH CARE, INC.
8656 F. STREET , OMAHA, NE 68127

Page 1 of Schedule 4.23 to Credit Agreement

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34
VITALCARE HEALTH SERVICES, INC.
1360 GREG STREET SUITE 103-104, SPARKS, NV 89431
35
RITT MEDICAL GROUP, INC.
18434 N. 99TH AVENUE #3 , SUN CITY, AZ 85373
36
RESP-A-CARE, INC.
956 COMMERCIAL DRIVE , RICHMOND, KY 40475
37
ALLIED MEDICAL SUPPLY, INC.
611 WEST DESMOND STREET , WINSLOW, AZ 86047
38
PREFERENTIAL HOME HEALTH CARE, INC.
705 INDEPENDENCE AVENUE , KENNETT, MO 63857
39
PSI HEALTH CARE, INC.
9555 JAMES AVENUE SOUTH SUITE 253, BLOOMINGTON, MN 55431
40
REGENCY MEDICAL EQUIPMENT, INC.
1340 E. 20TH STREET P.O. BOX 26130, 85726, TUCSON, AZ 85719
41
REGENCY MEDICAL EQIPMENT, INC.
2430 WEST MISSION LANE SUITES 5-7, PHOENIX, AZ 85021
42
VALLEY MEDICAL EQUIPMENT, INC.
731 NORTH MCCORMICK WAY #1 , LAYTON, UT 84041
43
ENCORE HOME HEALTH CARE, INC.
1006 LINN STREET , SIKESTON, MO 63801
44
R.C.P.S. INC.
7364 CONVOY COURT , SAN DIEGO, CA 92111
45
TUPELO HOME HEALTH, INC.
611 GARFIELD STREET , TUPELO, MS 38801
46
DANIEL MEDICAL SYSTEMS, INC.
400 HUDIBURG CIRCLE SUITE C, OKLAHOMA CITY, OK 73108
47
RHEMA, INC.
2550 BECKLEYMEADE AVENUE SUITE 105, DALLAS, TX 75237
48
LOVEJOY MEDICAL, INC.
106 DIAGNOSTIC DRIVE SUITE B, FRANKFORT, KY 40601
49
NORTHWEST HOME MEDICAL, INC.
2329 WHEATON WAY , BREMERTON, WA 98310
50
RHEMA, INC.
9665 CAMP BOWIE WEST , FORT WORTH, TX 76116
51
NORTHEAST MEDICAL EQUIPMENT, INC.
625 DAY HILL ROAD , WINDSOR, CT 6095
52
CENTENNIAL MEDICAL EQUIPMENT, INC.
4284 W. 7TH AVE. UNIT D, EUGENE, OR 97402
53
PROFESSIONAL RESPIRATORY HOME HEALT
2801 OAKMONT DRIVE SUITE 1400, ROUND ROCK, TX 78664
54
PRINCIPAL MEDICAL EQUIPMENT, INC.
3125-3127 WEST POST ROAD , LAS VEGAS, NV 89118
55
CARE MEDICAL SUPPLIES, INC.
219 SOUTH ILLINOIS STREET , BELLEVILLE, IL 62220
56
DISTINCT HOME HEALTH CARE, INC.
1328 HERITAGE BLVD. , LONGVIEW, TX 75605
57
SELECT HOME HEALTH CARE, INC.
59 HAYWOOD OFFICEPARK BLDG D. SUITE 109, WAYNESVILLE, NC 28785
58
RESPONSIVE HOME HEALTH CARE, INC.
8858 LOUISIANA STREET , MERRILLVILLE, IN 46410
59
REGENCY MEDICAL EQUIPMENT, INC.
6901 E 1ST STREET SUITE A, PRESCOTT VALLEY, AZ 86314
60
RHEMA, INC.
1201 N. PLANO ROAD , RICHARDSON, TX 75081
61
G&G MEDICAL, INC.
815 WEST BROADWAY SUITE B, FARMINGTON, NM 87401
62
OXYGEN THERAPY ASSOCIATES, INC.
4102 BUFFALO GAP ROAD SUITE J, ABILENE, TX 79605
63
RESPONSIVE HOME HEALTH CARE, INC.
6573 E. LIVINGSTON AVE. , REYNOLDSBURG, OH 43068
64
MEDICAL-ELECTRO THERAPEUTICS, INC.
6214 HWY 58 , HARRISON, TN 37341
65
HOME MEDICAL SYSTEMS, INC.
224 ROLLING HILLS ROAD SUITE 6A, MOORESVILLE, NC 28117
66
PSI HEALTH CARE, INC.
20 S.W. 2ND STREET SUITE 139, ROCHESTER, MN 55902
67
HOME MEDICAL SYSTEMS, INC.
4214-D DOMINO AVE. SUITE D, N. CHARLESTON, SC 29405
68
ROSWELL HOME MEDICAL, INC.
2596 N. SILVER STREET , SILVER CITY, NM 88061
69
SIGMA MEDICAL EQUIPMENT, INC.
748 LIBERTY STREET , FRANKLIN, PA 16323

Page 2 of Schedule 4.23 to Credit Agreement

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70
RESPONSIVE HOME HEATLH CARE, INC.
1056 S DIXON RD , KOKOMO, IN 46902
71
LOVEJOY MEDICAL, INC.
1707 CUMBERLAND FALLS HWY , CORBIN, KY 40701
72
G&G MEDICAL, INC.
622 WEST GUNNISON AVENUE , GRAND JUNCTION, CO 81501
73
ROTECH OXYGEN AND MEDICAL EQUIPMENT
10901D ROOSEVELT SUITE 600, ST. PETERSBURG, FL 33716
74
PROFESSIONAL RESPIRATORY HOME HEALT
2209 N PADRE ISLAND DRIVE SUITE D, CORPUS CHRISTI, TX 78408
75
HOME MEDICAL SYSTEMS, INC.
301 10TH STREET N.W. SUITE D-104, CONOVER, NC 28613
76
DUMED, INC.
3250 JFK CIRCLE SUITE 4, DUBUQUE, IA 52002
77
SAMPSON CONVALESCENT MEDICAL SUPPLY
357 NORTH BLVD , CLINTON, NC 28328
78
OXYGEN PLUS MEDICAL EQUIPMENT, INC.
5828 ASHLEYANNE CIRCLE SUITE 500, WICHITA FALLS, TX 76310
79
HOME MEDICAL SYSTEMS, INC.
1228 COLONIAL COMMONS SUITE 205, LANCASTER, SC 29720
80
CPO2, INC.
2880 POTTSVILLE MINERSVILLE HWY SUITE 100, MINERSVILLE, PA 17954
81
HOME MEDICAL SYSTEMS, INC.
600 E. CHATHAM STREET SUITE D, CARY, NC 27511
82
ACADIA HOME CARE
21 WHITE PINE RD SUITE 7, HERMON, ME 4401
83
NATIONAL MEDICAL EQUIPMENT CTRS INC
3448 HAVENDALE BLVD , WINTER HAVEN, FL 33881
84
RHEMA, INC.
1108 DALLAS DRIVE SUITE 333, DENTON, TX 76205
85
HOLLAND MEDICAL SERVICES, INC.
905 ARCADIA CIRCLE , MURRAY, KY 42071
86
CP02, INC
150 E. CHESTNUT ST. P.O. BOX 266, MIFFLINBURG, PA 17844
87
ROSWELL HOME MEDICAL, INC.
107 SOUTH UNION , ROSWELL, NM 88203
88
RESP-A-CARE, INC.
6919-A ENTERPRISE DRIVE , LOUISVILLE, KY 40214
89
ROTH MEDICAL, INC.
4715 TOWN CENTER DR. SUITE A & B, COLORADO SPRINGS, CO 80916
90
HOME MEDICAL SYSEMS, INC.
127 GATEWAY BLVD , ROCKY MOUNT, NC 27804
91
HOME CARE OXYGEN SERVICE, INC.
7938 COLLEGE ROAD SUITE 100, BAXTER, MN 56425
92
PULMO DOSE, INC.
120 MAX HURT DRIVE P.O. BOX 1600, MURRAY, KY 42071
93
ROTECH OXYGEN AND MEDICAL EQUIP INC
2886-C JEFFERSON STREET , MARIANNA, FL 32446
94
INTEGRATED OF GARDEN TERRACE, INC.
11022 FOREST PLACE , SANTA FE SPRINGS, CA 90670
95
RHEMA, INC.
314 S. MORGAN , GRANBURY, TX 76048
96
SELECT HOME HEALTH CARE, INC.
613 HIGHLANDS ROAD SUITE #2, FRANKLIN, NC 28734
97
RESPIRATORY MEDICAL EQUIPMENT OF GA
631 NORTH COBB STREET , MILLEDGEVILLE, GA 31061
98
OXYGEN THERAPY ASSOCIATES, INC.
6102 45TH STREET - SUITE D , LUBBOCK, TX 79407
99
PROFESSIONAL RESPIRATORY HOME HEALT
1218 HIGHWAY 123 , SAN MARCOS, TX 78666
100
VALUE CARE, INC.
1804 N. BALTIMORE P.O. BOX 747, KIRKSVILLE, MO 63501
101
VALLEY MEDICAL EQUIPMENT, INC.
395 S. VERNAL AVENUE , VERNAL, UT 84078
102
CENTENNIAL MEDICAL EQUIPMENT, INC.
4138-4140 148TH AVE NE , REDMOND, WA 98052
103
IHS ACQUISITION XXVII, INC.
420 WEST MORRIS BLVD. SUITE 230, MORRISTOWN, TN 37813
104
RESPONSIVE HOME HEALTH CARE, INC.
1093 UPPER VALLEY PIKE , SPRINGFIELD, OH 45504
105
WHITE'S MEDICAL RENTALS, INC.
1891 SAINT MATHEWS ROAD , ORANGEBURG, SC 29118

Page 3 of Schedule 4.23 to Credit Agreement

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106
RESP-A-CARE, INC.
79 N. GARDNER ST , SCOTTSBURG, IN 47170
107
ROTECH OXYGEN AND MEDICAL EQUIP INC
3640 WEST CYPRESS STREET , TAMPA, FL 33607
108
BETA MEDICAL EQUIPMENT, INC.
453 CUMBERLAND STREET , CHATTANOOGA, TN 37404
109
LOVEJOY MEDICAL, INC.
142 BAIRD AVENUE SUITE 104, PIKEVILLE, KY 41501
110
R.C.P.S. INC
1240 PALMYRITA AVE SUITE E-K, RIVERSIDE, CA 92507
111
PRINCIPAL MEDICAL EQUIPMENT, INC.
707 CANYON ROAD SUITE 103B, BOULDER CITY, NV 89005
112
RHEMA, INC.
401 NORTH RIDGEWAY , CLEBURNE, TX 76033
113
HEALTH CARE SERVICES OF MISSISSIPPI
934 BROADWAY DRIVE SUITE 20, HATTIESBURG, MS 39401
114
SELECT HOME HEALTH CARE, INC.
4472 EAST US 64 , MURPHY, NC 28906
115
RESP-A-CARE, INC
1609 NORTH DIXIE HIGHWAY SUITE I, ELIZABETHTOWN, KY 42701
116
MEDICAL ELECTRO-THERAPEUTIC, INC.
1520 MEMORIAL BLD. SUITE 106, MURFREESBORO, TN 37129
117
RHEMA, INC.
15031 WOODHAM DRIVE SUITE 360, HOUSTON, TX 77073
118
CENTENNIAL MEDICAL EQUIPMENT, INC
3181 CLEVELAND AVE. SUITE F, SANTA ROSA, CA 95403
119
CENTENNIAL MEDICAL EQUIPMENT, INC.
888 NORTH FAIR OAKS AVE , PASADENA, CA 91103
120
CAMBRIA MEDICAL SUPPLY, INC.
214 PITTSBURGH STREET SUITE A, UNIONTOWN, PA 15401
121
RESPONSIVE HOME HEALTH CARE, INC.
901 WEST MORTON AVE. STE 16 , JACKSONVILLE, IL 62650
122
RHEMA, INC.
2700 MOCKINGBIRD LANE SUITE 104, GREENVILLE, TX 75402
123
NORTHEAST MEDICAL EQUIPMENT, INC.
210 JOHN GLENN DRIVE SUITE 10, AMHERST, NY 14228
124
SELECT HOME HEALTH CARE, INC.
391 JACKSON PLAZA , SYLVA, NC 28779
125
ANDY BOYD'S INHOME MEDICAL,INC,WEST
15 26TH STREET SUITE 1, HUNTINGTON, WV 25703
126
IOTA MEDICAL EQUIPMENT, INC.
5503 WEST 9TH , AMARILLO, TX 79106
127
HOME MEDICAL SYSTEMS INC
720 OLD CLEMSON RD SUITE C, COLUMBIA, SC 29229
128
CENTENNIAL MEDICAL EQUIPMENT, INC.
9400 LURLINE AVE. UNIT D, CHATSWORTH, CA 91311
129
ABBA MEDICAL EQUIPMENT, INC.
8300 CENTRAL PARK DRIVE SUITE E, WACO, TX 76712

Page 4 of Schedule 4.23 to Credit Agreement

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Schedule 7.2(d)
Existing Indebtedness
1.
Indebtedness related to liens listed on 7.3(f).

2.
Capital leases between Borrower and IBM Credit LLC., as amended, for computer
equipment and software in the amount of $1,552,525.32 as of February 28,
2007.    

3.
Judgment was entered for approximately $282,000 in connection with the Heng vs.
Rotech Medical Corporation and PSI Healthcare Inc. matter, index number
20050311. Rotech plans to appeal this judgment based on its claim that the
matter was discharged in its Bankruptcy proceeding.

4.
Priority Tax Claim - All priority tax claims concerning various County, State
and Federal jurisdictions (as reflected on the financial statement balances).

5.
Indebtedness related to Surety Bonds in favor of Florida Medicaid Contract
Management.

Page 1 of Schedule 7.2(d) to Credit Agreement

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Schedule 7.2(o)

Letters of Credit

1.
$8,765,486 Irrevocable Standby Letter of Credit No. 586069 issued to beneficiary
Pacific Employers Insurance Company by Wells Fargo Bank, N.A.

2.
$833,000 Irrevocable Standby Letter of Credit No. 589633 issued to beneficiary
Hartford Fire Insurance Company by Wells Fargo Bank, N.A. (to secure surety
bonds Hartford issues for Borrower to governmental agencies).

3.
$2,300,000 Irrevocable Standby Letter of Credit No. 589632 issued to beneficiary
GE Fleet Services by Wells Fargo Bank, N.A.

Page 1 of Schedule 7.2(o) to Credit Agreement

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Schedule 7.3(f)
Existing Liens
No.
Debtor Name
Secured Party
Name
Collateral
(Collateral descriptions below are summarized. For complete description of
collateral, see Financing Statement)
Debtor's Jurisdiction of Organization
UCC Filing Date
1
Northeast Medical Equipment, Inc.
Cummings Properties, LLC
Office equipment, furniture, inventory and other property located at all
premises leased by Secured Party to Debtor
Florida
1/11/2002
3
Rhema, Inc.
Teachers Insurance and Annuity Association
All Assets/Personal Property related to use of premises at 2729 West Airport
Freeway, Irving, Texas 75062
Texas
12/16/2005
4
Rotech Healthcare Inc.

Add'l Debtor: Roth Medical, Inc.
AMS Financial
Warehouse Related Equipment/Assets
Delaware

Colorado
9/7/2004
5
VitalCare of America, Inc.1 
Citibank, N.A.
All assets/personal property related to Integrated Health Services, Inc., as
well as all cash, proceeds, rent, issues, profits, additions, parts,
appurtenances, accessions, replacements and substitutions of or for the
foregoing collateral
Texas
1/29/1998
6
VitalCare of America, Inc.
Citibank, N.A.
UCC filed to continue the effectiveness of financing statement filed in Maryland
on 1/29/98
Texas
12/20/2002

1 Terminated by UCC Financing Statement dated 8/20/02; but appears to have been
incorrectly continued by UCC
Financing Statement, dated 12/20/02. Borrower plans to dissolve this entity on a
post-closing basis, as
indicated on Schedule 4.15. No Loan Party, other than VitalCare of America,
Inc., has any obligation with
respect to indebtedness related to this lien.

Page 1 of Schedule 7.3(f) to Credit Agreement

--------------------------------------------------------------------------------

·    Judgment was entered for approximately $282,000 in connection with the Heng
vs. Rotech Medical Corporation and PSI Healthcare Inc. matter, index number
20050311. Rotech plans to appeal this judgment based on its claim that the
matter was discharged in its Bankruptcy proceeding.

Page 2 of Schedule 7.3(f) to Credit Agreement

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Schedule 7.8(j)
Existing Investments
None.

Page 1 of Schedule 7.8(j) to Credit Agreement

--------------------------------------------------------------------------------

Schedule 7.10
Affiliate Transactions
1.
First Amended and Restated Employment Agreement, dated January 31, 2005, by and
between Rotech Healthcare Inc. and Philip L. Carter.

2.
First Amended and Restated Employment Agreement, dated January 31, 2005, by and
between Rotech Healthcare Inc. and Michael R. Dobbs.

3.
Letter Agreement with Steven P. Alsene with Respect to Rights upon Termination
of Employment dated November 8, 2006.

4.
Except for directors who are also executive employees, each member of the Board
of Directors (the “Board”) receives fees in the ordinary course including, an
annual retainer fee, an attendance fee per board meeting and a participation fee
per telephonic board meeting; in addition, the chairmen of the various Board
committees receive additional annual fees, and each of the committee members
receives additional attendance fees, all in the ordinary course. The amounts of
such fees are reviewed and revised from time to time in the ordinary course
based upon the recommendation of the Borrower's compensation committee.

5.
Effective as of August 1, 2004, the Borrower established the Rotech Healthcare
Inc. Nonemployee Director Restricted Stock Plan. The Borrower's non-employee
directors receive restricted stock awards in accordance with the terms of the
plan.

6.
From time to time, stock options are granted to the Borrower's directors and
officers (including, options granted under the Rotech Healthcare Inc. Common
Stock Option Plan), as approved by the Borrower's compensation committee. The
terms of such options may be subject to amendment, including, repricing.

7.
The Borrower's Compensation Committee adopted the Rotech Healthcare Inc.
Performance Bonus Plan.

8.
Rotech Healthcare Inc. Senior Management Incentive Plan (2005-2007).

9.
Rotech Healthcare Inc. Employees Plan

10.
Amended and Restated Registration Rights Agreement concerning the registration
of shares of common stock, dated June 21, 2002, between Rotech Healthcare Inc.,
Oaktree Capital Management, LLC and General Electric Corporation.

11.
Borrower enters into indemnification agreements with its officers and directors
in the ordinary course, and which are entered into substantially in form filed
with the Securities and Exchange Commission.

--------------------------------------------------------------------------------

EXHIBIT A

GUARANTEE AND COLLATERAL AGREEMENT

made by

ROTECH HEALTHCARE INC.,

and certain of its Subsidiaries

in favor of

CREDIT SUISSE
as Administrative Agent and Collateral Agent,

Dated as of March 30, 2007

--------------------------------------------------------------------------------

EXHIBIT A
TABLE OF CONTENTS

Page
SECTION 1. DEFINED
TERMS.............................................................................................................
1
1.1 Definitions
............................................................................................................................
1
1.2 Other Definitional Provisions
...............................................................................................
6
SECTION 2.
GUARANTEE....................................................................................................................
6
2.1 Guarantee
..............................................................................................................................
6
2.2 Right of
Contribution.............................................................................................................
7
2.3 No
Subrogation......................................................................................................................
7
2.4 Amendments, etc. with respect to the Borrower Obligations
............................................... 7
2.5 Guarantee Absolute and Unconditional
................................................................................
8
2.6
Reinstatement........................................................................................................................
8
2.7
Payments...............................................................................................................................
8
2.8
Subordination........................................................................................................................
8
SECTION 3. GRANT OF SECURITY INTEREST
...............................................................................
9
SECTION 4. REPRESENTATIONS AND
WARRANTIES....................................................................10
4.1 Representations in Credit Agreement
...................................................................................10
4.2 Title; No Other
Liens.............................................................................................................11
4.3 Perfected First Priority Liens
................................................................................................11
4.4 Power and
Authority...............................................................................................................11
4.5 Third Party Approval
.............................................................................................................11
4.6 Jurisdiction of Organization; Chief Executive
Office............................................................11
4.7 Farm Products
........................................................................................................................11
4.8 Investment
Property................................................................................................................12
4.9 Receivables
............................................................................................................................13
4.10 Intellectual
Property..............................................................................................................13
4.11 Inventory and
Equipment......................................................................................................13
4.12 Deposit Accounts; Securities Accounts; Commodity Accounts;
Commercial Tort Claims
..............................................................................................................13
4.13 Letter-of-Credit Rights
.........................................................................................................14
SECTION 5. COVENANTS
.....................................................................................................................14
5.1 Covenants in Credit
Agreement...............................................................................................14
5.2 Delivery of Instruments and Chattel Paper
.............................................................................14
5.3 Maintenance of
Insurance........................................................................................................14
5.4 Payment of Obligations
...........................................................................................................14
5.5 Maintenance of Perfected Security Interest; Further Documentation and
Information ..........15
5.6 Changes in Locations, Name,
etc.............................................................................................15
5.7 Investment
Property..................................................................................................................16
5.8 Receivables
..............................................................................................................................17
5.9 Intellectual
Property..................................................................................................................17
5.10 Notices.
..................................................................................................................................18
5.11 Certificates of Title
.................................................................................................................19
5.12 Impairment of
Collateral.........................................................................................................19
5.13 Pledged Notes
.........................................................................................................................19
5.14 Schedules
................................................................................................................................19
5.15 Commercial Tort Claims
.........................................................................................................19

i

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EXHIBIT A

Page

5.16 Landlord Lien Waivers and Warehouseman
Letters......................................................... 19
5.17
Encumbrances...................................................................................................................
20
5.18 Fixtures
.............................................................................................................................
20
5.19 Warehouse Receipts Non-Negotiable
...............................................................................
20
5.20 Limitations on Dispositions of Collateral
......................................................................... 20
5.21 Letter of Credit Rights
......................................................................................................
20
SECTION 6. REMEDIAL PROVISIONS
.............................................................................................
20
6.1 Certain Matters Relating to
Receivables...........................................................................
20
6.2 Communications with Obligors; Grantors Remain Liable
............................................... 21
6.3 Pledged
Securities.............................................................................................................
22
6.4 Proceeds to be Turned Over To Collateral
Agent............................................................. 22
6.5 Application of
Proceeds....................................................................................................
23
6.6 NY UCC and Other
Remedies..........................................................................................
23
6.7 Registration Rights
...........................................................................................................
24
6.8
Deficiency........................................................................................................................
25
6.9 Sales on Credit
..................................................................................................................
25
6.10 Intellectual
Property..........................................................................................................
25
SECTION 7. THE COLLATERAL
AGENT.........................................................................................
25
7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc.
............................................... 25
7.2 Duty of Collateral
Agent...................................................................................................
26
7.3 Financing
Statements........................................................................................................
27
7.4 Authority of Collateral Agent
...........................................................................................
27
SECTION 8.
MISCELLANEOUS.........................................................................................................
27
8.1 Amendments in
Writing....................................................................................................
27
8.2 Notices
..............................................................................................................................
27
8.3 No Waiver by Course of Conduct; Cumulative Remedies
............................................... 27
8.4 Enforcement Expenses; Indemnification
.......................................................................... 28
8.5
Subrogation......................................................................................................................
28
8.6 Successors and Assigns
....................................................................................................
28
8.7
Setoff................................................................................................................................
28
8.8
Counterparts.....................................................................................................................
29
8.9 Severability
.......................................................................................................................
29
8.10 Section Headings
..............................................................................................................
29
8.11
Integration........................................................................................................................
29
8.12 GOVERNING
LAW.........................................................................................................
29
8.13 Submission To Jurisdiction; Waivers
...............................................................................
29
8.14 Acknowledgments. Each Grantor hereby acknowledges
that:......................................... 30
8.15 Additional Grantors
..........................................................................................................
30
8.16 Releases
............................................................................................................................
30
8.17 WAIVER OF JURY
TRIAL.............................................................................................
31
8.18
Reinstatement...................................................................................................................
31

ii

--------------------------------------------------------------------------------

EXHIBIT A

Schedules
Schedule 1     Notice Addresses of Guarantors
Schedule 2     Description of Pledged Securities
Schedule 3     Filings and Other Actions Required to Perfect Security Interest
Schedule 3.1     Commercial Tort Claims
Schedule 4     Jurisdiction of Organization and Identification Number
Schedule 4.9     Locations of Inventory and Equipment
Schedule 4.10     Deposit Accounts
Schedule 4.11     Letters of Credit
Schedule 5     Intellectual Property

Annexes
Annex I     Assumption Agreement
Annex II     Acknowledgment and Consent
Annex III     Copyright Security Agreement
Annex IV     Patent Security Agreement
Annex V     Trademark Security Agreement
Annex VI     Deposit Account Control Agreement
Annex VII     Acknowledgment of Pledge

iii

--------------------------------------------------------------------------------

EXHIBIT A

GUARANTEE AND COLLATERAL AGREEMENT, dated as of March 30, 2007, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of CREDIT SUISSE, as
administrative agent (in such capacity, the “Administrative Agent”) and as
collateral agent (in such capacity, the “Collateral Agent”) for the ratable
benefit of the banks and other financial institutions (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of March 30, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among ROTECH HEALTHCARE INC., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to the Credit Agreement (the “Lenders”), Credit Suisse Securities (USA)
LLC, as sole lead arranger and bookrunner (in such capacity, the “Arranger”),
the Collateral Agent and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the Collateral
Agent, the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the
Collateral Agent and the Administrative Agent, for the ratable benefit of the
Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (i) Unless otherwise defined herein, or the context hereof
otherwise requires, each term defined in either of the Credit Agreement or in
the New York UCC is used in this Agreement with the same meaning; provided that,
if the definition given to such term in the Credit Agreement conflicts with the
definition given to such term in the New York UCC, the Credit Agreement
definition shall control to the extent legally allowable; and if any definition
given to such term in Chapter 9 of the New York UCC conflicts with the
definition given to such term in any other chapter of the New York UCC, the
Chapter 9 definition shall prevail. The following terms are used herein as
defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Commodity Accounts, Commodity Intermediary, Control,
Documents, Equipment, Farm Products, Financial Assets, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights, Payment
Intangibles, Securities Accounts, Securities Intermediary, Security Entitlement,
and Supporting Obligations.

--------------------------------------------------------------------------------

EXHIBIT A: 2

(a) The following terms shall have the following meanings:
“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
“Bailee Letter”: a bailee letter, substantially in the form of Exhibit J to the
Credit Agreement, executed by a bailee holding Inventory or Equipment owned by
any Grantor, delivered by such Grantor to the Collateral Agent.
“Borrower Credit Agreement Obligations”: the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the Loans
and interest accruing at the then applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Administrative Agent, the Collateral Agent or any
Lender, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, or the other Loan
Documents, or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent,
the Collateral Agent or the Lenders that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements).
“Borrower Obligations”: the collective reference to (i) the Borrower Credit
Agreement Obligations, but only to the extent that, and only so long as, the
Borrower Credit Agreement Obligations are secured and guaranteed pursuant
hereto, and (ii) all other obligations and liabilities of the Borrower, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent, the Collateral Agent or the Lenders that
are required to be paid by the Borrower pursuant to the terms of this
Agreement).
“Collateral”: as defined in Section 3.
“Collateral Account”: any collateral account established by the Collateral Agent
as provided in Section 6.1 or 6.4.
“Copyrights”: (i) All copyrights (whether arising under statutory or common law,
registered or unregistered), works protectable by copyright, copyright
registrations, Copyright Licenses, and copyright applications of any Grantor,
including, without limitation, all of any Grantor’s right, title, and interest
in and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including, without limitation, the
copyrights set forth on Schedule 5; (ii) all renewals, extensions, and
modifications thereof; (iii) all income, licenses, royalties, damages, profits,
and payments relating to or payable under any of the foregoing; (iv) the right
to sue for past, present, or future infringements of any of the foregoing; and
(v) all other rights and benefits relating to any of the foregoing throughout
the world; in each case, whether now owned or hereafter acquired by any Grantor.
“Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee

--------------------------------------------------------------------------------

EXHIBIT A: 3

(including, without limitation, those listed in Schedule 5), granting any right
under any Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell materials derived from any Copyright.
“Deposit Account”: any and all deposit accounts (as defined in Chapter 9 of the
New York UCC), bank accounts, investment accounts, or Securities Accounts, now
owned or hereafter acquired or opened by any Grantor, including, without
limitation, any such accounts set forth on Schedule 4.10, and any account which
is a replacement or substitute for any of such accounts, together with all
monies, instruments, certificates, checks, drafts, wire transfer receipts, and
other property deposited therein and all balances therein.
“Excluded Assets”: (i) any contract, General Intangible, Copyright License,
Patent License or Trademark License (“Intangible Assets”) or any Retained
Rights, in each case, to the extent the grant by the relevant Grantor of a
security interest pursuant to this Agreement in such Grantor’s right, title and
interest in such Intangible Asset or Retained Right, as the case may be, (a) is
prohibited by any contract, agreement, instrument or indenture governing such
Intangible Asset or Retained Right, as applicable, provided that such Intangible
Asset or Retained Right shall cease to be an Excluded Asset immediately at such
time as the condition causing such prohibition shall be remedied, (b) would
terminate such contract, agreement, instrument or indenture or give any other
party to such contract, agreement, instrument or indenture the right to
terminate its obligations thereunder or (c) is permitted only with the consent
of another party, if such consent has not been obtained; provided that any
Receivable or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture shall not be Excluded Assets; and
provided that, to the extent severable, any portion of such contract, agreement,
instrument or indenture that does not result in any of the consequences
specified in (a), (b) or (c) of this paragraph shall not be an Excluded Asset;
and (ii) the asset described in Schedule 7.05(a)(v) of the Credit Agreement, or
any Receivable or any money from its sale.
“Foreign Subsidiary”: any Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Code.
“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.
“Guarantor Obligations”: with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this
Agreement (including, without limitation, Section 2) or any other Loan Document
to which such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent, the Collateral Agent or the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this Agreement or
any other Loan Document).
“Guarantors”: the collective reference to each Grantor other than the Borrower.
“Hedge Agreements”: as to any Person, all interest rate swaps, currency exchange
agreements, commodity swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against fluctuations in
interest rates, currency exchange rates or commodity prices or the exchange of
nominal interest obligations, either generally or under specific contingencies.
“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign

--------------------------------------------------------------------------------

EXHIBIT A: 4

laws or otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark
Licenses and trade secrets, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
“Intercompany Note”: any promissory note evidencing loans made by any Grantor to
the Borrower or any of its Subsidiaries.
“Investment Property” means all (i) “investment property”, as such term is
defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign
Subsidiary Voting Stock excluded from the definition of “Pledged Stock”), now
owned or hereafter acquired by any Grantor, and, in any event, shall include,
without limitation, each of the following, whether now owned or hereafter
acquired by any Grantor: (a) any security, whether certificated or
uncertificated; (b) any Security Entitlement; (c) any Securities Account; (d)
any commodity contract; and (e) any Commodity Account and (ii) whether or not
constituting “investment property” as so defined, all Pledged Notes and all
Pledged Equity.
“Issuers”: the collective reference to each issuer of any Investment Property.
“Landlord Agreement”: a landlord agreement, substantially in the form of Exhibit
I to the Credit Agreement, executed by a landlord of a location leased by any
Person at which Inventory or Equipment of any Grantor is held or stored,
delivered by such Grantor to the Collateral Agent.
“New York UCC”: the Uniform Commercial Code as from time to time in effect in
the State of New York.
“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Guarantor, its Guarantor Obligations.
“Other Collateral”: means any personal and fixture property of any Grantor not
included within the defined terms Accounts, Chattel Paper, Collateral Accounts,
Documents, Equipment, General Intangibles, Goods, Financial Assets, Intellectual
Property, Instruments, Letter-of-Credit Rights, Commercial Tort Claims,
Inventory, Investment Property, Vehicles, and Deposit Accounts, it being
intended that the Collateral include all property of any Grantor other than real
estate.
“Patents”: (i) All patents, patent applications, Patent Licenses, and patentable
inventions of any Grantor, including, without limitation, registrations,
recordings, and applications thereof in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, including,
without limitation, those set forth on Schedule 5, and all of the inventions and
improvements described and claimed therein; (ii) all continuations, divisions,
renewals, extensions, modifications, substitutions, reexaminations,
continuations-in-part, or reissues of any of the foregoing; (iii) all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing; (iv) the right to sue for past, present, and future
infringements of any of the foregoing; and (v) all other rights and benefits
relating to any of the foregoing throughout the world; in each case, whether now
owned or hereafter acquired by any Grantor.
“Patent License”: all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 5.

--------------------------------------------------------------------------------

EXHIBIT A: 5

“Pledged Equity”: means, collectively, the Pledged Stock, the Pledged
Partnership Interests, and the Pledged LLC Interests.
“Pledged LLC Interests”: means all of any Grantor’s right, title and interest as
a member of any limited liability company and all of such Grantor’s right, title
and interest in, to and under any LLC Agreement to which it is a party,
including those set forth on Schedule 2.
“Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor, all other promissory notes issued to or
held by any Grantor, and all rights, titles, interests, and liens any Grantor
may have, be, or become entitled to under all present and future loan
agreements, security agreements, pledge agreements, deeds of trust, mortgages,
guarantees, or other documents assuring or securing payment of or otherwise
evidencing the Pledged Notes (other than promissory notes issued in connection
with extensions of trade credit by any Grantor in the ordinary course of
business).
“Pledged Partnership Interests”: shall mean all right, title and interest of any
Grantor in any partnership or joint venture and all right, title and interest of
any Grantor in, to and under any partnership or joint venture agreements to
which it is a party, including those set forth on Schedule 2.
“Pledged Securities”: the collective reference to the Pledged Notes and the
Pledged Equity.
“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options or rights of any nature whatsoever
in respect of the Capital Stock of any Subsidiary that may be issued or granted
to, or held by, any Grantor while this Agreement is in effect; provided that in
no event shall more than sixty-five percent (65%) of the total outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.
“Proceeds” means any and all “proceeds”, as such term is defined in Section
9-102(a)(64) of the New York UCC and, in any event, including, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
“Receivable”: any right to payment for goods, merchandise or inventory sold or
leased or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
“Securities Act”: the Securities Act of 1933, as amended.
“Trademarks”: (i) all trademarks, Trademark Licenses, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, certification marks, collective marks, logos, other business
identifiers, all registrations, recordings, and applications thereof, including,
without limitation, registrations, recordings, and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, including, without limitation, those set forth on Schedule
5; (ii) all reissues, extensions, and renewals thereof; (iii) all income,
royalties, damages, and payments now or hereafter relating to or payable under
any of the foregoing, including, without limitation, damages or payments for

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past or future infringements of any of the foregoing; (iv) the right to sue for
past, present, and future infringements of any of the foregoing; (v) all rights
corresponding to any of the foregoing throughout the world; and (vi) all
goodwill associated with and symbolized by any of the foregoing, in each case,
whether now owned or hereafter acquired by any Grantor.
“Trademark License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in Schedule 5.
“Vehicles”: means all vehicles covered by a certificate of title law of any
state.
1.3 Other Definitional Provisions. (a) The words “hereof”, “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each Guarantor hereby unconditionally and irrevocably
guarantees jointly with the other Guarantors, and severally, as a primary
obligor and not merely as a surety, to the Administrative Agent, for the ratable
benefit of the Administrative Agent, the Collateral Agent and the Lenders and
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations (including all such
amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a), and the
operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C. §502(b) and §506(b)).
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to,
fraudulent conveyance, fraudulent transfer, or the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section shall remain in full force and
effect until all the Borrower Obligations and the obligations of each Guarantor
under the guarantee contained in this Section shall have been satisfied by
payment in full, notwithstanding that from time to time during the term of the
Credit Agreement the Borrower may be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other guarantor
or

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any other Person or received or collected by the Administrative Agent, the
Collateral Agent, or any Lender from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that
a Guarantor shall have paid more than its proportionate share of any payment
made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any setoff or application of funds of any Guarantor by the Administrative
Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of
the rights of the Administrative Agent or any Lender against the Borrower or any
other Guarantor or any collateral security or guarantee or right of offset held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent, the Collateral Agent, and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all
of the Borrower Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Credit Agreement
shall prescribe.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Borrower Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders or all Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. None of the Administrative Agent,
the Collateral Agent, or any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the

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EXHIBIT A: 8

guarantee contained in this Section or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent, the
Collateral Agent, or any Lender upon the guarantee contained in this Section or
acceptance of the guarantee contained in this Section; the Borrower Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Administrative Agent, the
Collateral Agent, and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section. Each Guarantor waives promptness,
diligence, presentment, protest, demand for payment and notice of default,
nonpayment, acceptance, or other notice to or upon the Borrower or any of the
Guarantors with respect to the Borrower Obligations. Each Guarantor understands
and agrees that the guarantee contained in this Section shall be construed as a
continuing, absolute, unconditional, and irrevocable guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any other collateral
security therefore or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Lender, (b)
any defense, setoff or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent, the Collateral
Agent, or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Borrower Obligations, or of such Guarantor under the guarantee
contained in this Section, in bankruptcy or in any other instance. When making
any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof demand shall include the commencement and continuance of any legal
proceedings.
2.6 Reinstatement. The guarantee contained in this Section shall continue to be
effective, or be reinstated, as the case may be, if, at any time, payment, or
any part thereof, of any of the Borrower Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without setoff or counterclaim in Dollars at
the Payment Office of the Administrative Agent specified in the Credit
Agreement.
2.8 Subordination. Each Guarantor hereby subordinates and makes inferior to the

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EXHIBIT A: 9

Obligations any and all indebtedness now or at any time hereafter owed by the
Borrower to such Guarantor. Each Guarantor agrees that after the occurrence of
any Default or Event of Default under the Credit Agreement, it will not permit
the Borrower to repay such indebtedness or any part thereof and it will not
accept payment from the Borrower of such indebtedness or any part thereof
without the prior written consent of the Required Lenders as defined in the
Credit Agreement. If any Guarantor receives any such payment without the prior
required written consent, the amount so paid shall be held in trust for the
benefit of the Lenders, shall be segregated from the other funds of such
Guarantor, and shall forthwith be paid over to the Administrative Agent to be
held by the Administrative Agent as collateral for, or then or at any time
thereafter applied in whole or in part by the Administrative Agent against, all
or any portions of the Obligations, whether matured or unmatured, in such order
as the Administrative Agent shall elect.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby collaterally assigns and transfers to the Collateral Agent,
and hereby grants to the Collateral Agent, for the ratable benefit of the
Administrative Agent, the Collateral Agent and the Lenders, a security interest
in all of the following property now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Collateral”), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Commercial Tort Claims, including those listed on Schedule 3.1;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles, including all Payment Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Letter-of-Credit Rights;
(m) All Goods;
(n) Collateral Accounts;
(o) Vehicles;

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EXHIBIT A: 10

(p) all property of any Grantor held by the Administrative Agent, the Collateral
Agent, or Lender, including all property of every description, in the possession
or custody of or in transit to Administrative Agent, the Collateral Agent, or
Lender for any purpose, including safekeeping, collection or pledge, for the
account of such Grantor, or as to which such Grantor may have any right or
power;
(q) all Other Collateral;
(r) all books and records pertaining to the Collateral; and
(s) to the extent not otherwise included, (i) all Proceeds and products of any
and all of the foregoing, all Supporting Obligations in respect of any of the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing; (ii) all present and future distributions,
income, increases, profits, combinations, reclassifications, improvements, and
products of, accessions, attachments, and other additions to, tools, parts, and
equipment used in connection with, and substitutes and replacements for, all or
part of the Collateral described above; and (iii) all present and future
accounts, contract rights, general intangibles, chattel paper, documents,
instruments, cash and noncash proceeds, and other rights arising from or by
virtue of, or from the voluntary or involuntary sale or other disposition of, or
collections with respect to, or insurance proceeds payable with respect to, or
proceeds payable by virtue of warranty or other claims against the manufacturer
of, or claims against any other Person with respect to, all or any part of the
Collateral heretofore described in this clause or otherwise;
provided that the Collateral shall not include the Excluded Assets.
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to any contract, agreement, instrument or
indenture to which a Grantor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest shall
constitute or result in (i) the unenforceability of any right of the Grantor
therein or (ii) in a breach or termination pursuant to the terms of, or a
default under, any such contract or agreement (other than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408
or 9-409 of the New York UCC or any other applicable law or principles of
equity), provided, however, that such security interest shall attach immediately
at such time as the condition causing such unenforceability shall be remedied
and, to the extent severable, shall attach immediately to any portion of such
contract or agreement that does not result in any of the consequences specified
in (i) or (ii) including, without limitation, any proceeds of such contract,
agreement, instrument or indenture.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Collateral Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, each Grantor hereby
represents and warrants to the Administrative Agent, the Collateral Agent and
each Lender that:
4.1 Representations in Credit Agreement. In the case of each Guarantor, the

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EXHIBIT A: 11
representations and warranties set forth in Section 4 of the Credit Agreement as
they relate to such Guarantor to the Loan Documents to which such Guarantor is a
party, each of which is hereby incorporated herein by reference, are true and
correct in all material respects, and the Administrative Agent, the Collateral
Agent and each Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Borrower’s knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor’s knowledge.
4.2 Title; No Other Liens. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Lenders pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Collateral Agent,
for the ratable benefit of the Lenders, pursuant to this Agreement or as are
permitted by the Credit Agreement. For the avoidance of doubt, it is understood
and agreed that any Grantor may, as part of its business, grant licenses to
third parties to use Intellectual Property owned or developed by a Grantor. For
purposes of this Agreement and the other Loan Documents, such licensing activity
shall not constitute a “Lien” on such Intellectual Property. Each of the
Administrative Agent, the Collateral Agent and each Lender understands that any
such licenses may be exclusive to the applicable licensees, and such exclusivity
provisions may limit the ability of the Collateral Agent to utilize, sell, Lease
or transfer the related Intellectual Property or otherwise realize value from
such Intellectual Property pursuant hereto.
4.3 Perfected First Priority Liens. The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions specified on
Schedule 3, (which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Collateral Agent in completed and,
if and to the extent applicable, duly executed form) will constitute valid and
continuing perfected security interests in all of the Collateral in favor of the
Collateral Agent, for the ratable benefit of the Lenders, as collateral security
for such Grantor’s Obligations, enforceable in accordance with the terms hereof
against all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Liens permitted by the
Credit Agreement which have priority over the Liens on the Collateral by
operation of law.
4.4 Power and Authority. Each Grantor (i) has the power and authority to pledge
the Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated and (ii) will defend its title or interest thereto or therein
against any and all Liens (other than any Lien created or permitted by the Loan
Documents), however arising, of all persons whomsoever.
4.5 Third Party Approval. No consent or approval of any Governmental Authority,
any securities exchange or any other person was or is necessary to the validity
of the pledge effected hereby (other than such as have been obtained by such
Grantor and are in full force and effect).
4.6 Jurisdiction of Organization; Chief Executive Office. On the date hereof,
such Grantor’s exact legal name, jurisdiction of organization and identification
number from the jurisdiction of organization (if any) are specified on Schedule
4. Such Grantor has furnished to the Collateral Agent a charter, certificate of
incorporation or other organizational document certified by the corporate
secretary of such Grantor and a long-form good standing certificate as of a date
which is recent to the date hereof.
4.7 Farm Products. None of the Collateral constitutes, or is the Proceeds of,
Farm Products.

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EXHIBIT A: 12
4.8 Investment Property. (a) The Pledged Stock, Pledged LLC Interests, and
Pledged Partnership Interests pledged by such Grantor hereunder are set forth on
Schedule 2 and constitute (i) all the issued and outstanding shares of all
classes of the Capital Stock or other equity interest of each Issuer owned by
such Grantor or, (ii) in the case of Foreign Subsidiary Voting Stock, if less,
sixty-five percent (65%) of the outstanding Foreign Subsidiary Voting Stock of
each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued and
are fully paid and nonassessable and are not subject to any restrictions other
than restrictions imposed by applicable securities and corporate laws. Each
Grantor has delivered to the Collateral Agent (i) all stock certificates, or
other instruments representing or evidencing the Pledged Equity together with
corresponding assignment or transfer powers duly executed in blank by the
relevant Grantor, and such powers have been duly and validly executed and are
binding and enforceable against each such Grantor in accordance with their terms
or (ii) to the extent such Pledged Equity is uncertificated and held by a
Securities Intermediary in a Securities Account, an executed control agreement
in the form of Annex VI hereto with appropriate insertions or in form and
substance satisfactory to the Collateral Agent with respect to such Pledged
Stock.
(c) Each partnership, joint venture, and limited liability company issuing the
Pledged Partnership Interests and Pledged LLC Interests is duly organized,
currently existing, and in good standing under all applicable laws; there have
been no amendments, modifications, or supplements to any agreement or
certificate creating any partnership, joint venture, or limited liability
company or any material contract relating to the partnerships, joint ventures,
or limited liability companies, of which Collateral Agent has not been advised
in writing; no default or breach or potential default or breach has occurred and
is continuing under any partnership, joint venture, or limited liability company
agreement and no approval or consent of the partners, joint venturers, or
members, as the case may be, of any partnership, joint venture, or limited
liability company is required as a condition to the validity and enforceability
of the security interest created hereby or the consummation of the transactions
contemplated hereby which has not been duly obtained by the relevant Grantor.
All capital contributions required to be made by the terms of the partnership,
joint venture, and limited liability company agreements for each partnership,
joint venture, and limited liability company have been made.
(d) Each partnership, joint venture, or limited liability company agreement
governing any Pledged Partnership Interests or Pledged LLC Interests provides
that (or any amendment or supplement thereof or other agreement having a similar
effect provides that), upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall be entitled to exercise all of the
rights of the Grantor granting the security interest therein, and that a
transferee or assignee of a partnership, joint venture, or limited liability
company interest, as the case may be, of such partnership, joint venture, or
limited liability company, as the case may be, shall become a partner, joint
venturer, or member, as the case may be, of such partnership, joint venture, or
limited liability company, as the case may be, entitled to participate in the
management thereof and, upon the transfer of the entire interest of such
Grantor, such Grantor ceases to be a partner, joint venturer, or member, as the
case may be.
(e) Each of the Pledged Notes are set forth on Schedule 2 and (i) constitutes
the legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and (ii)
have been delivered to the Collateral Agent together with corresponding
endorsements duly executed by the relevant Grantor in favor of Collateral Agent,
and such endorsements have been duly and validly executed and are binding and
enforceable against the relevant Grantor in accordance with their terms. Each of
the Pledged Notes and the

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EXHIBIT A: 13

documents evidencing the Pledged Notes are in full force and effect; there have
been no renewals or extensions of, or amendments, modifications, or supplements
to, any thereof about which the Collateral Agent has not been advised in
writing; and no “default” or “potential default” has occurred and is continuing
under any such Pledged Note or documents evidencing the Pledged Note. Grantor
has good title to the Pledged Notes, and such Pledged Notes are free from any
claim for credit, deduction, or allowance and free from any defense, condition,
dispute, setoff, or counterclaim, and there is no extension or indulgence with
respect thereto.
(f) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement and other Liens permitted by the
Credit Agreement. No Person other than the Collateral Agent has Control over any
Investment Property of such Grantor.
4.9 Receivables. No amount payable to such Grantor under or in connection with
any Receivable is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Collateral Agent to the extent required by Section 5.2.
All Collateral that is Accounts, contract rights, Chattel Paper, Instruments,
Payment Intangibles, or General Intangibles is free from any claim for credit,
deduction, or allowance of an obligor and free from any defense, condition,
dispute, setoff, or counterclaim, and there is no extension or indulgence with
respect thereto.
4.10 Intellectual Property.
(a) Schedule 5 lists all Intellectual Property owned by such Grantor in its own
name on the date hereof.
(b) On the date hereof, such Grantor owns, or is licensed to use, all
Intellectual Property described on Schedule 5 necessary for the conduct of its
business as currently conducted.
(c) No material claim has been asserted and is pending by any Person challenging
or questioning such Grantor’s use of any Intellectual Property or the validity
or effectiveness of any of such Grantor’s Intellectual Property that could
reasonably be expected to have a Material Adverse Effect, nor does such Grantor
know of any basis for any such claim.
(d) To the best knowledge of such Grantor, the use of such Intellectual Property
by such Grantor does not infringe on the rights of any Person in a manner that
could reasonably be expected to have a Material Adverse Effect.
(e) Grantors have performed and will continue to perform all acts and have paid
and will continue to pay all required fees and Taxes to maintain each and every
item of the Intellectual Property in full force and effect throughout the world,
as applicable.
4.11Inventory and Equipment. On the date hereof, Schedule 4.9 sets forth all
locations in the United States where the aggregate value of Inventory and
Equipment of the Grantors exceeds $250,000.
4.12 Deposit Accounts; Securities Accounts; Commodity Accounts; Commercial Tort
Claims. The only Deposit Accounts, Collateral Accounts, Securities Accounts or
Commodity Accounts maintained by any Grantor on the Closing Date are those
listed on Schedule 4.10, which sets forth such information separately for each
Grantor. On the Closing Date, no Grantor holds any Commercial Tort Claims having
a face value individually or in the aggregate in excess of $500,000 except as
specified on

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EXHIBIT A: 14
Schedule 3.1.
4.13 Letter-of-Credit Rights. Such Grantor is not a beneficiary or assignee
under any letter of credit as of the Closing Date other than the letters of
credit described on Schedule 4.11. Each letter of credit listed on Schedule 4.11
constitutes a Supporting Obligation for another item of the Collateral.
The foregoing representations and warranties will be true and correct in all
respects with respect to any additional Collateral or additional specific
descriptions of certain Collateral delivered to the Collateral Agent in the
future by any Grantor. The failure of any of these representations or warranties
or any description of Collateral therein to be accurate or complete shall not
impair the security interest in any such Collateral.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent, the Collateral
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full:
5.1 Covenants in Credit Agreement. Each Grantor shall comply with, perform, and
be bound by all covenants and agreements in the Credit Agreement that are
applicable to it, its assets, or its operations, each of which is hereby
ratified and confirmed (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION AND
RELATED PROVISIONS IN SECTION 10.05 OF THE CREDIT AGREEMENT).
5.2 Delivery of Instruments and Chattel Paper. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument, Certificated Security or Chattel Paper, such Instrument,
Certificated Security or Chattel Paper shall be immediately delivered to the
Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent
and accompanied by undated stock powers duly executed in blank or other undated
instruments of transfer satisfactory to the Collateral Agent and duly executed
in blank and by such other instruments and documents as the Collateral Agent may
reasonably request, to be held as Collateral pursuant to this Agreement;
provided that the Grantors shall not be obligated to deliver to the Collateral
Agent any Instruments or Chattel Paper held by any Grantor at any time to the
extent that the aggregate face amount of all such Instruments and Chattel Paper
held by all Grantors at such time does not exceed $100,000.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Inventory and
Equipment against loss by fire, explosion, theft and such other casualties as is
customary for similarly situated businesses and (ii) insuring such Grantor, the
Administrative Agent, the Collateral Agent and the Lenders against liability for
personal injury and property damage relating to such Inventory and Equipment,
such policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Collateral Agent.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days (10 days in the case of nonpayment of premiums) after
receipt by the Collateral Agent of written notice thereof, (ii) name the
Collateral Agent as insured party or additional loss payee and (iii) be
reasonably satisfactory in all other respects to the Collateral Agent.
5.4 Payment of Obligations. Such Grantor will pay and discharge or otherwise
satisfy at

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EXHIBIT A: 15
or before maturity or before they become delinquent, as the case may be, all
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all claims
of any kind (including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that no such charge
need be paid if the amount or validity thereof is currently being contested in
good faith by appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor or to the extent
that the failure to discharge or satisfy such obligations could not, in the
aggregate, reasonably be expected to result in a material adverse effect on the
Collateral.
5.5 Maintenance of Perfected Security Interest; Further Documentation and
Information. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest (except as provided in Section
4.3) having at least the priority described in Section 4.3 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection with the
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, and any other
relevant Collateral, delivering a deposit account control agreement
substantially in the form attached hereto as Annex VI or such other form as may
be reasonably satisfactory to Collateral Agent, and taking any other actions
necessary to enable the Collateral Agent to obtain Control with respect thereto,
except for Deposit Accounts into which Government Receivables are deposited by
payors to the extent applicable law and regulations prohibit the Collateral
Agent from obtaining Control over such Deposit Accounts.
(d) Maintain, at the place where each Grantor is entitled to receive notices
under the Loan Documents, a current record of where all its Collateral is
located, permit representatives of Collateral Agent at any time during normal
business hours to inspect and make abstracts from such records, and furnish to
the Collateral Agent, at such intervals as the Collateral Agent may reasonably
request, such documents, lists, descriptions, certificates, and other
information as may be reasonably necessary or proper to keep the Collateral
Agent informed with respect to the identity, location, status, condition, and
value of the Collateral. In addition, from time to time at the request of the
Collateral Agent deliver to the Collateral Agent such information regarding each
such Grantor as the Collateral Agent may reasonably request.
5.6 Changes in Locations, Name, etc. Such Grantor will not, except upon 10 days’
prior written notice to the Collateral Agent and delivery to the Collateral
Agent of all additional financing statements and other documents reasonably
requested by the Collateral Agent to maintain the validity, perfection and
priority of the security interests provided for herein:
(i) change its jurisdiction of organization from that referred to in Section
4.3; or

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EXHIBIT A: 16
(ii) change its name.
5.7 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
Investment Property of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any shares of the Pledged Equity, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Collateral Agent and the Lenders, hold the same in trust for the
Administrative Agent, the Collateral Agent and the Lenders and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed by
such Grantor to the Collateral Agent, if required, together with an undated
stock power or other undated instruments of transfer reasonably satisfactory to
the Collateral Agent, covering such certificate duly executed in blank by such
Grantor and with, if the Collateral Agent so requests, signature guaranteed, to
be held by the Collateral Agent, subject to the terms hereof, as additional
collateral security for the Obligations, provided that in no event shall more
than sixty five percent 65% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary be pledged as collateral security hereunder. Any
sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the
Investment Property, or any property shall be distributed upon or with respect
to the Investment Property pursuant to the recapitalization or reclassification
of the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent, be delivered to the Collateral Agent
to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Lenders, segregated from
other funds of such Grantor, as additional collateral security for the
Obligations. Notwithstanding the foregoing, the Grantors shall not be required
to pay over to the Collateral Agent or deliver to the Collateral Agent as
Collateral any proceeds of any liquidation or dissolution of any Issuer, or any
distribution of capital or property in respect of any Investment Property, to
the extent that (i) such liquidation, dissolution or distribution, if treated as
a Disposition of the relevant Issuer, would be permitted by the Credit Agreement
and (ii) the proceeds thereof are applied toward prepayment of Loans to the
extent required by the Credit Agreement.
(b) Without the prior written consent of the Collateral Agent, such Grantor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, unless such
securities are delivered to the Collateral Agent, concurrently with the issuance
thereof, to be held by the Collateral Agent as Collateral (except in the case of
any Issuer which is a joint venture, provided that (x) the percentage of such
joint venture owned by such Grantor remains the same after giving effect to such
issuance and (y) any such securities are delivered to the Collateral Agent,
currently with the issuance thereof, to be held by the Collateral Agent as
Collateral), (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Investment Property or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or permitted by the Credit Agreement or (iv) except as otherwise
permitted under the Credit Agreement, enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.

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EXHIBIT A: 17

(c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i)
it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Pledged Securities issued by it.
(d) Each Issuer that is a partnership, joint venture, or a limited liability
company (i) confirms that none of the terms of any equity interest issued by it
provides that such equity interest is a “security” within the meaning of
Sections 8-102 and 8-103 of the New York UCC (a “Security”), (ii) agrees that it
will take no action to cause or permit any such equity interest to become a
Security, (iii) agrees that it will not issue any certificate representing any
such equity interest without the prior written consent of the Collateral Agent
(iv) agrees that if, notwithstanding the foregoing, any such equity interest
shall be or become a Security, such Issuer will (and the Grantor that holds such
equity interest hereby instructs such Issuer to) comply with instructions
originated by the Collateral Agent without further consent by such Grantor, and
(v) shall deliver to the Collateral Agent a fully-executed Acknowledgment of
Pledge, substantially in the form of Annex VII for each Pledged Partnership
Interest and Pledged LLC Interest.
5.8 Receivables. (a) Other than in the ordinary course of business consistent
with its past practice, such Grantor will not (i) grant any extension of the
time of payment of any Receivable, (ii) compromise or settle any Receivable for
less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Receivable, (iv) allow any credit or
discount whatsoever on any Receivable or (v) amend, supplement or modify any
Receivable in any manner that could adversely affect the value thereof, except
where such grant, compromise, release, credit, discount, settlement, allowance,
amendment, supplement or modification in the aggregate could not be reasonably
expected to have a material adverse effect on the value of the Receivables.
(b) Such Grantor will deliver to the Collateral Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
5.9 Intellectual Property. To the extent the failure to do so would be
reasonably likely to result in a material adverse effect on the value of the
Collateral:
(a) such Grantor (either itself or through licensees) will (i) continue to use
each Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark unless the
Collateral Agent, for the ratable benefit of the Lenders, shall obtain a
perfected security interest in such mark pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way;
(b) such Grantor (either itself or through licensees) will not do any act, or
omit to do any act, whereby any Patent may become forfeited, abandoned or
dedicated to the public;
(c) such Grantor (either itself or through licensees) (i) will employ each
Copyright and

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EXHIBIT A: 18

(ii) will not (and will not permit any licensee or sublicensee thereof to) do
any act or knowingly omit to do any act whereby any portion of the Copyrights
may become invalidated or otherwise impaired. Such Grantor will not (either
itself or through licensees) do any act whereby any portion of the Copyrights
may fall into the public domain;
(d) such Grantor (either itself or through licensees) will not do any act that
knowingly uses any Intellectual Property to infringe the intellectual property
rights of any other Person;
(e) such Grantor will notify the Collateral Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
or such Grantor’s right to register the same or to own and maintain the same;
(f) whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Unless otherwise agreed to by
the Collateral Agent, such Grantor will execute and deliver to the Collateral
Agent for filing in (i) the United States Copyright Office a short-form
copyright security agreement substantially in the form attached hereto as Annex
III, (ii) the United States Patent and Trademark Office a short-form patent
security agreement substantially in the form attached hereto as Annex IV and
(iii) the United States Patent and Trademark Office a short-form trademark
security agreement substantially in the form attached hereto as Annex V (in each
case with such changes as may be agreed to by the Collateral Agent). Upon
request of the Collateral Agent, such Grantor shall execute and deliver, and
have recorded, any and all additional agreements, instruments, documents, and
papers as the Collateral Agent may request to evidence the Collateral Agent’s
and the Lenders’ security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;
(g) such Grantor will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application relating to any Intellectual Property (and to obtain
the relevant registration) and to maintain each registration of the Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability; and
(h) in the event that any Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) promptly notify the Collateral Agent after
it learns thereof and sue for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution.
5.10 Notices. (a) Except as may be otherwise expressly permitted under the terms
of the Credit Agreement, each relevant Grantor shall promptly notify the
Collateral Agent of (i) any change in any fact or circumstances represented or
warranted by such Grantor with respect to any of the Collateral or Obligations,
(ii) any claim, action, or proceeding affecting title to all or any of the
Collateral or the

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EXHIBIT A: 19

security interest created hereunder and, at the request of the Collateral Agent,
appear in and defend, at the Grantors’ expense, any such action or proceeding,
(iii) any material change in the nature of the Collateral, (iv) any material
damage to or loss of Collateral, and (v) the occurrence of any other event or
condition (including, without limitation, matters as to Lien priority) that
could have a material adverse effect on the Collateral (taken as a whole) or the
security interest created hereunder; and (b) give Collateral Agent thirty (30)
days written notice before any proposed (i) relocation of its principal place of
business or chief executive office, (ii) relocation of the place where its books
and records concerning its accounts are kept, and (iii) relocation of any
Collateral (other than delivery of Inventory or Equipment in the ordinary course
of business to third parties or as permitted by the Credit Agreement) to a
location not described on the attached Schedule 4.9. Prior to making any of the
changes contemplated in clause (ii) preceding, such Grantor shall execute and
deliver all such additional documents and, subject to the terms of Section 5.16,
perform all additional acts as the Collateral Agent, in its sole discretion, may
reasonably request in order to continue or maintain the existence and priority
of the security interests in all of the Collateral.
5.11 Certificates of Title. Upon the request of the Collateral Agent, if
certificates of title are issued or outstanding with respect to any of the
vehicles or other Collateral which are not subject to a Lien permitted under
Section 7.03 of the Credit Agreement, cause the security interest of the
Collateral Agent to be properly noted thereon.
5.12 Impairment of Collateral. Not use any of the Collateral, or permit the same
to be used, for any unlawful purpose, in any manner that is reasonably likely to
adversely impair the value or usefulness of the Collateral, or in any manner
inconsistent with the provisions or requirements of any policy of insurance
thereon nor affix or install any accessories, equipment, or device on the
Collateral or on any component thereof if such addition will impair the original
intended function or use of the Collateral or such component.
5.13 Pledged Notes. Without the prior written consent of the Collateral Agent
not materially modify, or permit the material modification of, any Pledged Note
or release any collateral with respect to any Pledged Note unless specifically
required by the terms thereof.
5.14 Schedules. Promptly update all schedules hereto if any information therein
shall become inaccurate or incomplete in any material respect. Notwithstanding
any other provision herein, any Grantor’s failure to describe any Collateral
required to be listed on any schedule hereto shall not impair the security
interest in the Collateral
5.15 Commercial Tort Claims. If such Grantor shall at any time hold or acquire a
Commercial Tort Claim other than or in addition to those set forth on Schedule
3.1 relating to any of the Collateral and having a face value individually or in
the aggregate in excess of $500,000 (each such Commercial Tort Claim, an
“Additional Commercial Tort Claim”), such Grantor shall promptly notify the
Collateral Agent in a writing authenticated by such Grantor of the brief details
of such Additional Commercial Tort Claim. Such Grantor shall grant to the
Collateral Agent in such writing a security interest in such Additional
Commercial Tort Claim and in the Proceeds thereof, all in accordance with and
subject to the terms of this Agreement and such writing shall be in form and
substance reasonably satisfactory to the Collateral Agent. Each Grantor hereby
agrees to execute and deliver any additional documents or instruments, including
any financing statements or amendments to any then existing financing
statements, that the Collateral Agent reasonably deems necessary to create,
perfect and protect the Collateral Agent’s Lien on and security interest in such
Additional Commercial Tort Claim.
5.16 Landlord Lien Waivers and Warehouseman Letters. Upon the request of the
Collateral Agent with respect to locations where the aggregate value of
Inventory, Equipment or other tangible personal property of the Grantors on hand
exceeds $250,000, Grantors shall use their

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EXHIBIT A: 20

commercially reasonable efforts to deliver to Collateral Agent: (i) Landlord
Waivers for leased locations, (ii) acknowledged Bailee Letters for locations
where Inventory or Equipment is stored with a bailee, and (iii) mortgagee
waivers for locations subject to a mortgage in favor of a lender other than the
Collateral Agent, in each case in form and substance reasonably satisfactory to
the Collateral Agent.
5.17 Encumbrances. No Grantor shall create, permit, or suffer to exist, and
shall defend the Collateral against, any lien or other encumbrance on the
Collateral, and shall defend such Grantor’s rights in the Collateral and the
Collateral Agent’s security interest in, the Collateral against the claims and
demands of all Persons except those holding or claiming Liens permitted under
Section 7.03 of the Credit Agreement. Such Grantor shall do nothing to impair
the rights of the Collateral Agent in the Collateral.
5.18 Fixtures. No Grantor shall permit any material portion of the Collateral to
be or become a fixture.
5.19 Warehouse Receipts Non-Negotiable. If any warehouse receipt or receipt in
the nature of a warehouse receipt is issued in respect of any of the Collateral,
each Grantor agrees that such warehouse receipt or receipt in the nature thereof
shall not be “negotiable” (as such term is use in Section 7-104 of the New York
UCC) unless such warehouse receipt or receipt in the nature thereof is delivered
to the Collateral Agent.
5.20 Limitations on Dispositions of Collateral. Such Grantor shall not sell,
transfer, lease or otherwise dispose of the Collateral, or attempt, offer or
contract to do so except as expressly permitted pursuant to the Credit
Agreement.
5.21 Letter of Credit Rights. If any Grantor is at any time a beneficiary of a
letter of credit that has a face amount individually or in the aggregate in
excess of $100,000 now or hereafter issued in favor of such Grantor, such
Grantor shall promptly notify the Administrative Agent in a writing
authenticated by such Grantor. Such Grantor shall, pursuant to an agreement in
form and substance reasonably satisfactory to the Administrative Agent, either
(i) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to the Administrative Agent of the proceeds of any drawing
under the letter of credit or (ii) arrange for the Administrative Agent to
become the transferee beneficiary of the letter of credit, with the
Administrative Agent agreeing, in each case, that the proceeds of any drawing
under the letter of credit are to be paid to the applicable Grantor unless an
Event of Default has occurred and is continuing.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Collateral Agent shall have
the right, at any time after the occurrence and during the continuance of an
Event of Default, to make test verifications of the Receivables in any manner
and through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Collateral Agent may
reasonably require in connection with such test verifications. At any time and
from time to time after the occurrence and during the continuance of an Event of
Default, upon the Collateral Agent’s request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, subject to the Collateral Agent’s direction and control
after the occurrence and during the continuance of an Event of Default, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default. If required by the

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EXHIBIT A: 21

Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within two Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Lenders only as provided in Section 6.5,
and (ii) until so turned over, shall be held by such Grantor in trust for the
Collateral Agent and the Lenders, segregated from other funds of such Grantor;
provided however that insofar as the foregoing applies to Government
Receivables, such actions shall be required only to the extent permitted by law
and in a manner consistent with applicable law and regulations. Each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit.
(c) At the Collateral Agent’s reasonable request, each Grantor shall deliver to
the Collateral Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to the Receivables (except
for any such original documents of which it is necessary or advisable for such
Grantor to maintain possession in compliance with any Requirement of Law, in
which case, a copy of such document shall be delivered), including, without
limitation, all original orders, invoices and shipping receipts.
(d) Upon the request of the Collateral Agent, Grantors shall establish a cash
management system subject to one or more depositary and other agreements
satisfactory to the Collateral Agent whereby lock boxes, lock box accounts,
concentration accounts and such other accounts as may be required by the
Collateral Agent are established under the sole dominion and control of the
Collateral Agent, into which all Receivables shall be paid and from which all
collected funds will be transferred; provided however that insofar as the
foregoing applies to Government Receivables, such actions shall be required only
to the extent permitted by law and in a manner consistent with applicable law
and regulations.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The Collateral
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Collateral Agent’s
satisfaction the existence, amount and terms of any Receivables.
(b) Upon the request of the Collateral Agent at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Collateral Agent for the ratable benefit of the Lenders and that payments in
respect thereof shall be made directly to the Collateral Agent; provided however
that insofar as the foregoing applies to Government Receivables, such actions
shall be required only to the extent permitted by law and in a manner consistent
with applicable law and regulations.
(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables (or any agreement giving rise thereto) to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Collateral Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any Lender of any payment relating thereto, nor shall the
Collateral Agent or any Lender be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto), to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been

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EXHIBIT A: 22

assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Securities. (a) Unless an Event of Default shall have occurred and
be continuing and the Collateral Agent shall have given written notice to the
relevant Grantor of the Collateral Agent’s intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Equity and all payments made
in respect of the Pledged Notes and to exercise all voting and corporate rights
with respect to the Pledged Securities; provided however that no vote shall be
cast or corporate right exercised or other action taken which could reasonably
be expected to impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and make application thereof to the Obligations in the order
set forth in Section 6.5, and (ii) any or all of the Pledged Securities shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Securities pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Collateral Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) pay any dividends or other payments
with respect to the Pledged Securities directly to the Collateral Agent, to the
extent such dividend or payment to the relevant Grantor is prohibited under this
Agreement or the Credit Agreement.
6.4 Proceeds to be Turned Over To Collateral Agent. In addition to the rights of
the Collateral Agent and the Lenders specified in Section 6.1 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
at the written request of the Collateral Agent and the Administrative Agent, all
Proceeds received by any Grantor consisting of cash, checks and Instruments
shall be held by such Grantor in trust for the Collateral Agent and the Lenders,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral Agent,
if required); provided however that insofar as the foregoing applies to
Government Receivables, such actions shall be required only to the extent
permitted by law and in a manner consistent with applicable law and regulations.
All Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its sole dominion and
control. All Proceeds

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while held by the Collateral Agent in a Collateral Account (or by such Grantor
in trust for the Collateral Agent and the Lenders) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon by the
Borrower and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent’s election, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, and any proceeds of the guarantee
set forth in Section 2, in payment of the Obligations in the following order:
First, to pay incurred and unpaid fees and expenses of the Collateral Agent and
the Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Lenders according to the amounts of the Obligations then due
and owing and remaining unpaid to the Lenders;
Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations, pro rata among the Lenders according to the amounts of the
Obligations then held by the Lenders; and
Fourth, any balance of such Proceeds remaining after the Obligations shall have
been paid in full, shall be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive the same.
6.6 NY UCC and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith enter upon the premises of any
Grantor where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving such Grantor or any
other Person notice and opportunity for a hearing on Collateral Agent’s claim or
action and may collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
the Collateral Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Collateral Agent or any Lender shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in any Grantor, which right or equity is hereby waived
and released. Each Grantor further agrees, at the Collateral Agent’s request, to
assemble the Collateral and make it available to the Collateral Agent at places
which the Collateral Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Collateral Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the

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Collateral or the rights of the Collateral Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as the
Collateral Agent may elect, and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the New York UCC,
need the Collateral Agent account for the surplus, if any, to any Grantor. To
the extent permitted by applicable law, each Grantor waives all claims, damages
and demands it may acquire against the Collateral Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
6.7 Registration Rights. (a) If the Collateral Agent shall determine to exercise
its right to sell any or all of the Pledged Equity pursuant to Section 6.6, and
if in the opinion of the Collateral Agent it is necessary or advisable to have
the Pledged Equity, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will cause the Issuer
thereof (to the extent the Issuer thereof is a Subsidiary of the Grantor) to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Collateral Agent,
necessary or advisable to register the Pledged Equity, or that portion thereof
to be sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to become effective
and to remain effective for a period of one year from the date of the first
public offering of the Pledged Equity, or that portion thereof to be sold, and
(iii) make all amendments thereto and/or to the related prospectus which, in the
opinion of the Collateral Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or “Blue Sky”
laws of any and all jurisdictions which the Collateral Agent shall designate and
to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all the Pledged Equity, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Pledged Equity for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Equity pursuant to this Section 6.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Collateral Agent and the
Lenders, that the Collateral Agent and the Lenders have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 6.7 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under the Credit Agreement.

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6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent or any Lender to collect such deficiency.
6.9 Sales on Credit. If the Collateral Agent sells any of the Collateral upon
credit, Grantors will be credited only with payments actually made by the
purchaser, received by the Collateral Agent, and applied to the indebtedness of
the purchaser. In the event the purchaser fails to pay for the Collateral, the
Collateral Agent may resell the Collateral and the Grantors shall be credited
with the proceeds of the sale.
6.10Intellectual Property. For purposes of enabling the Collateral Agent to
exercise its rights and remedies under this Agreement and enabling the
Collateral Agent and its successors and assigns to enjoy the full benefits of
the Collateral, each Grantor hereby grants to the Collateral Agent an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor) to use, license, or sublicense any of the
Intellectual Property. Each Grantor shall provide the Collateral Agent with
reasonable access to all media in which any of the Intellectual Property may be
recorded or stored and all computer programs used for the completion or printout
thereof. This license shall also inure to the benefit of all successors,
assigns, and transferees of the Collateral Agent. Upon the occurrence of a
Default, the Collateral Agent may require that each Grantor assign all of its
right, title, and interest in and to the Intellectual Property or any part
thereof to the Collateral Agent or such other Person as the Collateral Agent may
designate pursuant to documents satisfactory to the Collateral Agent. If no
Default or Potential Default exists, each Grantor shall have the exclusive,
non-transferable right and license to use its Intellectual Property in the
ordinary course of business and the exclusive right to grant to other Persons
licenses and sublicenses with respect to the Intellectual Property for full and
fair consideration.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Collateral Agent and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Collateral Agent for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may request to evidence the Collateral Agent’s and the Lenders’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;

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(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any insurance called for by the terms of
this Agreement and pay all or any part of the premiums therefor and the costs
thereof;
(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any indorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand
for, collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or arising out
of any Collateral; (3) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate; (7) assign
any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Collateral Agent’s and
the Lenders’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the Collateral
Agent agrees that it will not be entitled to exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the rate per annum at which interest would then be
payable on past due Term Loans that are Base Rate Loans under the Credit
Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to
the

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custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Administrative Agent, the Collateral
Agent, any Lender nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative
Agent, the Collateral Agent and the Lenders hereunder are solely to protect the
Collateral Agent’s and the Lenders’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent, the Collateral Agent or any
Lender to exercise any such powers. The Administrative Agent, the Collateral
Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
7.3 Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Collateral Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
Collateral Agent determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement. Each Grantor authorizes the Collateral
Agent to use the collateral description “all assets now or hereafter owned by
Debtor and all proceeds thereof” or similar collateral description in any such
financing statements.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non-exercise by the
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement
shall, as between the Collateral Agent and the Lenders, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Collateral Agent and the
Grantors, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the Collateral Agent
or any Grantor hereunder shall be effected in the manner provided for in Section
10.2 of the Credit Agreement; provided that any such notice, request or demand
to or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Section 8.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the

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Collateral Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Collateral Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay, or
reimburse each Lender and the Collateral Agent for, all its costs and expenses
incurred in collecting against such Guarantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Guarantor is a party, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to the Collateral Agent.
(b) Except to the extent otherwise provided in the Credit Agreement, each
Guarantor agrees to pay, and to save the Administrative Agent, the Collateral
Agent and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent, the
Collateral Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive repayment of the Obligations
and all other amounts payable under the Credit Agreement and the other Loan
Documents.
8.5 Subrogation. If any Obligation is given in renewal or extension or applied
toward the payment of indebtedness secured by any Lien, the Collateral Agent
shall be, and is hereby, subrogated to all of the rights, titles, interests, and
Liens securing the indebtedness so renewed, extended, or paid.
8.6 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Administrative
Agent, the Collateral Agent and the Lenders and their permitted successors and
assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Agent.
8.7 Setoff. Each Grantor hereby irrevocably authorizes the Administrative Agent,
the Collateral Agent and each Lender at any time and from time to time, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent, the Collateral Agent or such Lender
to or for the credit or the account of such Grantor, or any part thereof in such
amounts as the Administrative Agent, the Collateral Agent or such Lender may
elect, against and on account of the obligations and liabilities of such Grantor
to the Administrative Agent, the Collateral Agent or such Lender hereunder and
claims of every nature and description of the Administrative Agent, the
Collateral Agent or such Lender against such Grantor, in any currency, whether
arising hereunder, under the Credit Agreement, any other Loan Document or
otherwise, as the Administrative Agent, the Collateral Agent or such Lender may
elect, whether or not the Administrative Agent, the Collateral Agent or any
Lender has made any demand for payment and although such obligations,
liabilities and claims

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may be contingent or unmatured. The Administrative Agent, the Collateral Agent
and each Lender shall notify such Grantor promptly of any such setoff and the
application made by the Administrative Agent, the Collateral Agent or such
Lender of the proceeds thereof, provided that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of the
Administrative Agent, the Collateral Agent and each Lender under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which the Administrative Agent, the Collateral Agent or
such Lender may have.
8.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.10 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
8.11 Integration. This Agreement, the Fee Letter, the Guarantee Letter and the
other Loan Documents represent the agreement of the Grantors, the Administrative
Agent, the Collateral Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent, the Collateral Agent or any Lender
relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the Fee Letter, the Guarantee Letter or the other Loan
Documents.
8.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.13 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;

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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
8.14Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;
(b) neither the Administrative Agent, the Collateral Agent nor any Lender in
their respective capacities as such has any fiduciary relationship with or duty
to any Grantor arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Grantors, on the one
hand, and the Administrative Agent, the Collateral Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
8.15 Additional Grantors. Each Subsidiary of the Borrower that is required to
become a party to this Agreement pursuant to Section 6.10 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans and the other Obligations shall
have been paid in full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent, the Collateral
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Collateral Agent shall deliver to
such Grantor any Collateral held by the Collateral Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise disposed of
by any Grantor in a transaction permitted by the Credit Agreement, then the
Collateral Agent, at the request and sole expense of such Grantor, shall execute
and deliver to such Grantor all releases or other documents reasonably necessary
or desirable for the release of the Liens created hereby on such Collateral. At
the request and sole expense of the Borrower, a Guarantor shall be released from
its obligations hereunder in the event that all the Capital Stock of such
Guarantor shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement; provided that the Borrower shall have
delivered to the Collateral Agent, at least five Business Days prior to the date
of the proposed release, a written request for release identifying the relevant
Subsidiary Guarantor and a summary of the terms of the sale or other disposition
in reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
(c) Upon certification by any Grantor to the Collateral Agent that the maker of
any Pledged Note has satisfied such maker’s obligations under such Pledged Note
in full, the Collateral Agent

--------------------------------------------------------------------------------

EXHIBIT A: 31

shall promptly return such Pledged Note to the address specified by such Grantor
for return.
8.17 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, EACH AGENT AND EACH LENDER, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.18 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor
for liquidation or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Grantor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Obligations, or any part thereof is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable
preference”, “fraudulent conveyance”, or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
[Signatures begin on the Following Page]

--------------------------------------------------------------------------------

EXHIBIT A

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
ROTECH HEALTHCARE, INC.
By: _______________________________
Name:
Title:

A-1 Medical Equipment, Inc.
Abba Medical Equipment, Inc.
Acadia Home Care,
Allied Medical Supply, Inc.
Always Medical Equipment, Inc.
American Medical Rental, Inc.
Andy Boyd’s InHome Medical, Inc.
Andy Boyd’s InHome Medical/InHome Medical Inc.
Anniston Health & Sickroom Supplies, Inc.
Baumann Pharmaceutical Services, Inc.
Berkeley Medical Equipment, Inc.
Best Care Medical Supply, Inc.
Beta Medical Equipment, Inc.
Cambria Medical Supply, Inc.
Camden Medical Supply, Inc.
Canyon State Medical Supply, Inc.
Care Medical Supplies, Inc.
Centennial Medical Equipment, Inc.
Charlotte Medical Supply, Inc.
Collins Rentals, Inc.
Community Home Oxygen, Inc.
Contour Medical Supply, Inc.
Corley Home Health Care, Inc.
CPO 2, Inc.
Cynthiana Home Medical Equipment, Inc.
Daniel Medical Systems, Inc.
Distinct Home Health Care, Inc.
Don Paul Respiratory Services, Inc.
DuMed, Inc.
East Tennessee Infusion & Respiratory, Inc.
Encore Home Health Care, Inc.
Epsilon Home Health Care, Inc.
Excel Medical of Ames, Inc.
Excel Medical of Fort Dodge, Inc.
Excel Medical of Marshalltown, Inc.
First Community Care of Niagara, Inc.
Firstcare, Inc.

[SIGNATURE PAGE TO
GUARANTEE AND COLLATERAL AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT A: 2

Fischer Medical Equipment, Inc.
Four Rivers Home Health Care, Inc.
G&G Medical, Inc.
Gate City Medical Equipment, Inc.
Georgia Medical Resources, Inc.
Gladwin Area Home Care, Inc.
Hamilton Medical Equipment Service, Inc.
Health at Home, Inc.
Health Care Services of Mississippi, Incorporated,
Health-Med Inc.
Holland Medical Services, Inc.
Home Care Oxygen Service, Inc.
Home Health Services Company
Home Medical Systems, Inc.
IHS Acquisition XXVII, Inc.
Infusion Services, Inc.
Integrated Health Services at Jefferson Hospital, Inc.
Integrated of Garden Terrace, Inc.
Intensive Home Care Services, Inc.
IOTA Medical Equipment, Inc.
LAMBDA Medical Equipment, Inc.
LAMS, Inc.
Lawrence Medical Equipment, Inc.
Liberty Home Health Care, Inc.
Lovejoy Medical, Inc.
Major Medical Supply, Inc.
Medco Professional Services, Corp.
MedCorp International, Inc.
Medic-Aire Medical Equipment, Inc.
Medical Electro-Therapeutics, Inc.
Medicare Rental Supply, Inc.
Michigan Medical Supply, Inc.
National Medical Equipment Centers, Inc.
Neumann’s Home Medical Equipment, Inc.
Nightingale Home Health Care, Inc.
North Central Washington Respiratory Care Services,
Inc.
Northeast Medical Equipment, Inc.
Northwest Home Medical, Inc.
Omega Medical Equipment, Inc.
OMICRON Medical Equipment, Inc.
Oxygen of Oklahoma, Inc.
Oxygen Plus Medical Equipment, Inc.
Oxygen Plus, Inc.
Oxygen Therapy Associates, Inc.
Peterson’s Home Care, Inc.
PHI Medical Equipment, Inc.
Pioneer Medical Services, Inc.
Preferential Home Health Care, Inc.
Premier Medical, Inc.
Principal Medical Equipment, Inc.

--------------------------------------------------------------------------------

EXHIBIT A: 2

Professional Breathing Associates, Inc.
Professional Respiratory Home Healthcare, Inc.
PSI Health Care, Inc.
Pulmo-Dose, Inc.
Pulmonary Home Care, Inc.
Quality Home Health Care, Inc.
R.C.P.S., Inc.
RCG Information Services Corporation
RCI Medical Corp.
Regency Medical Equipment, Inc.
Resp-A-Care, Inc.
Respiracare Medical Equipment, Inc.
Respiratory Medical Equipment of GA., Inc.
Respitech Home Health Care, Inc.
Responsive Home Health Care, Inc.
Rhema, Inc.
Ritt Medical Group, Inc.
R N Home Care Medical Equipment Company, Inc.
Roswell Home Medical, Inc.
Rotech Employee Benefits Corporation,
Rotech Home Medical Care, Inc.
Rotech Oxygen and Medical Equipment, Inc.
Roth Medical, Inc.
Rothert’s Hospital Equipment, Inc.
Sampson Convalescent Medical Supply, Inc.
Select Home Health Care, Inc.
SIGMA Medical Equipment, Inc.
Signature Home Care of Kansas, Inc.
Signature Home Care of New Jersey, Inc.
Southeastern Home Health, Inc.
Southern IV Therapy, Inc.
Stat Medical Equipment, Inc.
Sun Medical Supply, Inc.
Sunshine Home Health Care, Inc.
The Kilroy Company
The Towne Pharmacy, Inc.
Theta Home Health Care, Inc.
Tupelo Home Health, Inc.
UPSILON Medical Equipment, Inc.
Valley Medical Equipment, Inc.
Value Care, Inc.
VitalCare Health Services, Inc.
VitalCare of America, Inc.
VitalCare of Pennsylvania, Inc.
VitalCare of Texas, Inc.
Vitech Medical, Inc.
White’s Medical Rentals, Inc.
Wichita Medical Care, Inc.
Wofford Pharmaceutical Services, Inc.
Zeta Home Health Care, Inc.

--------------------------------------------------------------------------------

EXHIBIT A: 2

By: _______________________________
Name:
Title:

--------------------------------------------------------------------------------

EXHIBIT A

Acknowledged and agreed:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Administrative Agent and Collateral Agent

By:__________________________
Name:
Title:

By:__________________________
Name:
Title:

[SIGNATURE PAGE TO
GUARANTEE AND COLLATERAL AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 1
NOTICE ADDRESSES OF GUARANTORS

Page 1 to Schedule 1 to
Guarantee and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 2
DESCRIPTION OF PLEDGED SECURITIES

Pledged Stock:

Issuer                 Class of Stock         Stock Certificate No.     No. of
Shares

Pledged LLC Interests:

Issuer                 Class of Stock         Stock Certificate No.     No. of
Shares

Pledged Partnership Interests:

Issuer                 Class of Stock         Stock Certificate No.     No. of
Shares

Page 1 to Schedule 2 to
Guarantee and Collateral Agreement

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EXHIBIT A

Issuer                 Class of Stock         Stock Certificate No.     No. of
Shares

Pledged Notes:

Issuer                         Payee             Principal Amount

Page 2 to Schedule 2 to
Guarantee and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 3

FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTEREST

Uniform Commercial Code Filings

[List each office where a financing statement is to be filed]

Patent and Trademark Filings

[List all filings]

Actions with respect to Pledged Equity

[List actions to be taken with respect to Pledged Equity]

Other Actions

[Describe other actions to be taken]

Page 1 to Schedule 3 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 3.1

COMMERCIAL TORT CLAIMS

Page 1 to Schedule 3.1 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 4

JURISDICTION OF ORGANIZATION AND IDENTIFICATION NUMBER

Grantor’s Legal Name                 Jurisdiction of
                    Identification
Organization                     Number

Page 1 to Schedule 4 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 4.9

LOCATIONS OF INVENTORY AND EQUIPMENT

Page 1 to Schedule 4.9 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 4.10

DEPOSIT ACCOUNTS

Page 1 to Schedule 4.10 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 4.11

LETTERS OF CREDIT

Page 1 to Schedule 4.11 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule 5

INTELLECTUAL PROPERTY

I.     Copyrights and Copyright Licenses:

II.     Patents and Patent Licenses:

III.     Trademarks and Trademark Licenses:

Page 1 to Schedule 5 to
Guaranty and Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex I
to
Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
______________________________, a ______________ corporation (the “Additional
Grantor”), in favor of CREDIT SUISSE, as administrative agent (in such capacity,
the “Administrative Agent”) and as collateral agent (in such capacity, the
“Collateral Agent”) for the banks and other financial institutions (the
“Lenders”) parties to the Credit Agreement referred to below. All capitalized
terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.
W I T N E S S E T H :
WHEREAS, Rotech Healthcare Inc. (the “Borrower”), the Lenders, the Collateral
Agent and the Administrative Agent have entered into a Credit Agreement, dated
as of March 30, 2007 (as amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”);
WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of March 30, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent and the Collateral
Agent for the benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement; and WHEREAS, the Additional Grantor
has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.15 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct in all material respects
on and as the date hereof (after giving effect to this Assumption Agreement) as
if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

Page 1 of Annex I to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

[ADDITIONAL GRANTOR]

By: ___________________________________________
Name:
Title:

Page 2 of Annex I to Guarantee and
Collateral Agreement

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EXHIBIT A

Annex I-A
to
Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

Supplement to Schedule 3.1

Supplement to Schedule 4

Supplement to Schedule 4.9

Supplement to Schedule 4.10

Supplement to Schedule 4.11

Supplement to Schedule 5

Page 1 of Annex I-A to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex II
to
Guarantee and Collateral Agreement

ACKNOWLEDGMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of March 30, 2007 (the “Agreement”), made by the
Grantors parties thereto for the benefit of CREDIT SUISSE, as Administrative
Agent and as Collateral Agent. The undersigned agrees for the benefit of the
Administrative Agent, the Collateral Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will comply
with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Collateral Agent promptly in writing of the
occurrence of any of the events described in Section 5.7(a) of the Agreement.
3. The terms of Sections 5.7, 6.3(a) and 6.7 of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it, or
prohibited, pursuant to Section 5.7, 6.3(a) or 6.7 of the Agreement.

[NAME OF ISSUER]

By: ____________________________________
Name:
Title:

Address for Notices:

________________________________________
________________________________________
________________________________________
Fax: ____________________________________

Page 1 of Annex II to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex III to
Guarantee and Collateral Agreement

[FORM OF]

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT, dated as of _____, ____, by ROTECH HEALTHCARE
INC., a Delaware corporation (the “Borrower”), and each of the other entities
listed on the signature pages hereof or which becomes a party hereto pursuant to
Section 5.09 of the Guarantee and Collateral Agreement referred to below (each a
“Grantor” and, collectively, the “Grantors”), in favor of CREDIT SUISSE, as
collateral agent, for the Lenders (as defined in the Credit Agreement referred
to below) (in such capacity, the “Collateral Agent”).
W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, dated as of March 30, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among the Borrower, CREDIT SUISSE SECURITIES (USA)
LLC, as Sole Lead Arranger and Sole Book-Runner, CREDIT SUISSE, as
Administrative Agent and Collateral Agent and the several banks and other
financial institutions or entities (the “Lenders”) from time to time parties
thereto, the Lenders have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower party to the Guarantee and
Collateral Agreement have guaranteed the Obligations pursuant to the Guarantee
and Collateral Agreement dated of even date herewith by the Grantors in favor of
the Collateral Agent for the ratable benefit of the Lenders (as it may be
amended, restated, or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”); and
WHEREAS, all the Grantors are party to the Guarantee and Collateral Agreement
pursuant to which the Grantors are required to execute and deliver this
Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the
Sole Lead Arranger, the Collateral Agent and Administrative Agent to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Collateral Agent as follows:
Section 1 Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement or in the Guarantee and Collateral Agreement and used herein
have the meaning given to them in the Credit Agreement or the Guarantee and
Collateral Agreement.
Section 2 Grant of Security Interest in Copyright Collateral. Each Grantor, as
collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations of such Grantor, hereby collaterally assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Collateral Agent for the benefit of
the Lenders, and grants to the Collateral Agent for the benefit of the Lenders a
lien on and security interest in, all of its right, title and interest in, to
and under the following Collateral of such Grantor (the “Copyright Collateral”):

Page 1 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

(a) (a) all of its Copyrights and Copyright Licenses to which it is a party,
including those referred to on Schedule I hereto (as such Schedule may be
amended from time to time by the addition of Copyrights and Copyright licenses,
subsequently created or acquired, by execution of a supplement in substantially
the same form of Schedule I attached hereto);
(b) all renewals of the foregoing; and
(b) (c) all Proceeds of the foregoing, including any claim by Grantor against
third parties for past, present, future infringement of any Copyright or
Copyright licensed under any Copyright License.
Section 3 Security Agreement. The security interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interest granted to the Collateral Agent pursuant to the Guarantee and
Collateral Agreement and each Grantor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the security
interest in the Copyright Collateral made and granted hereby are more fully set
forth in the Guarantee and Collateral Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, each Grantor has caused this Copyright Security Agreement to
be executed and delivered by its duly authorized offer as of the date first set
forth above.
Very truly yours,

[GRANTORS]

By: __________________________
Name:
Title:

Accepted and Agreed:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
as Collateral Agent

By: _____________________________________
Name:
Title:

By: _____________________________________
Name:
Title:

Page 2 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Acknowledgement of Grantor

STATE OF ____________________________)

)         ss.

COUNTY OF__________________________ )

On this day of ___________________, ____ before me personally appeared
_______________________, proved to me on the basis of satisfactory evidence to
be the person who executed the foregoing instrument on behalf of ______________,
who being by me duly sworn did depose and say that he is an authorized officer
of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.

_____________________________
Notary Public

Page 3 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Schedule I
to
Copyright Security Agreement
Copyright Registrations

A.     REGISTERED COPYRIGHTS

Copyright Reg. No. Date

B.    COPYRIGHT APPLICATIONS

C.    COPYRIGHT LICENSES

Name of Agreement, Parties, Date of Agreement

Page 4 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex IV to

Guarantee and Collateral Agreement

[FORM OF]

PATENT SECURITY AGREEMENT

PATENT SECURITY AGREEMENT, dated as of ___, 2007 by ROTECH HEALTHCARE INC., a
Delaware corporation (the “Borrower”), and each of the other entities listed on
the signature pages hereof or which becomes a party hereto pursuant to Section
5.09 of the Guarantee and Collateral Agreement referred to below (each a
“Grantor” and, collectively, the “Grantors”), in favor of CREDIT SUISSE, as
collateral agent, for the Lenders (as defined in the Credit Agreement referred
to below) (in such capacity, the “Collateral Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of March 30, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among the Borrower, CREDIT SUISSE SECURITIES (USA)
LLC, as Sole Lead Arranger and Sole Book-Runner, CREDIT SUISSE, as
Administrative Agent and Collateral Agent and the several banks and other
financial institutions or entities (the “Lenders”) from time to time parties
thereto, the Lenders have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower party to the Guarantee and
Collateral Agreement have guaranteed the Obligations pursuant to the Guarantee
and Collateral Agreement dated of even date herewith by the Grantors in favor of
the Collateral Agent for the ratable benefit of the Lenders (as it may be
amended, restated, or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”); and
WHEREAS, all the Grantors are party to the Guarantee and Collateral Agreement
pursuant to which the Grantors are required to execute and deliver this Patent
Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the
Sole Lead Arranger, the Administrative Agent and Collateral Agent to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Collateral Agent as follows:
Section 1 Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement or in the Guarantee and Collateral Agreement and used herein
have the meaning given to them in the Credit Agreement or the Guarantee and
Collateral Agreement.
Section 2 Grant of Security Interest in Patent Collateral. Each Grantor, as
collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations of such Grantor, hereby collaterally assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Collateral Agent for the benefit of
the Lenders, and grants to the Collateral Agent for the benefit of the Lenders a
lien on and security interest in, all of its right, title and interest in, to
and under the following Collateral of such Grantor (the “Patent Collateral”):

Page 5 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

all of its Patents and Patent Licenses to which it is a party, including those
referred to on Schedule I hereto (as such Schedule may be amended from time to
time by the addition of Patents and Patent Licenses, subsequently created or
acquired, by execution of a supplement in substantially the same form of
Schedule I attached hereto);
(c) (b) all reissues, continuations or extensions of the foregoing; and
(c) all Proceeds of the foregoing, including any claim by Grantor against third
parties for past, present or future infringement of any Patent or any Patent
licensed under any Patent License.
Section 3 Security Agreement. The security interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interest
granted to the Collateral Agent pursuant to the Guarantee and Collateral
Agreement and each Grantor hereby acknowledges and affirms that the rights and
remedies of the Collateral Agent with respect to the security interest in the
Patent Collateral made and granted hereby are more fully set forth in the
Guarantee and Collateral Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized offer as of the date first set
forth above.
Very truly yours,

[GRANTORS]

By: __________________________
Name:
Title:

Accepted and Agreed:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
as Collateral Agent

By: ____________________________________
Name:
Title:

By: ____________________________________
Name:
Title:

Page 6 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

ACKNOWLEDGEMENT OF GRANTOR

STATE OF ____________________________)

)     ss.

COUNTY OF _________________________)

On this day of ___________________, ____ before me personally appeared
_______________________, proved to me on the basis of satisfactory evidence to
be the person who executed the foregoing instrument on behalf of ______________,
who being by me duly sworn did depose and say that he is an authorized officer
of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.

_____________________________
Notary Public

Page 7 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A
Schedule I
to
Patent Security Agreement
Patent Registrations

A.    REGISTERED PATENTS

Patent Reg. No. Date

B.    PATENT APPLICATIONS

C.    PATENT LICENSES
    
Name of Agreement, Parties, Date of Agreement

Page 8 of Annex IV to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex V to
Guarantee and Collateral Agreement

[FORM OF]

TRADEMARK SECURITY AGREEMENT

TRADEMARK SECURITY AGREEMENT, dated as of ________ __, ____ by ROTECH HEALTHCARE
INC., a Delaware corporation (the “Borrower”), and each of the other entities
listed on the signature pages hereof or which becomes a party hereto pursuant to
Section 5.09 of the Guarantee and Collateral Security Agreement referred to
below (each a “Grantor” and, collectively, the “Grantors”), in favor of CREDIT
SUISSE, as collateral agent, for the Lenders (as defined in the Credit Agreement
referred to below) (in such capacity, the “Collateral Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of March 30, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among the Borrower, CREDIT SUISSE SECURITIES (USA)
LLC, as Sole Lead Arranger and Sole Book-Runner, CREDIT SUISSE, as
Administrative Agent and Collateral Agent and the several banks and other
financial institutions or entities (the “Lenders”) from time to time parties
thereto, the Lenders have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower party to the Guarantee and
Collateral Agreement have guaranteed the Obligations pursuant to the Guarantee
and Collateral Agreement dated of even date herewith by the Grantors in favor of
the Collateral Agent for the ratable benefit of the Lenders (as it may be
amended, restated, or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”); and
WHEREAS, all the Grantors are party to the Guarantee and Collateral Agreement
pursuant to which the Grantors are required to execute and deliver this
Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the
Sole Lead Arranger, the Collateral Agent and Administrative Agent to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Collateral Agent as follows:
Section 1 Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement or in the Guarantee and Collateral Agreement and used herein
have the meaning given to them in the Credit Agreement or the Guarantee and
Collateral Security Agreement.
Section 2 Grant of Security Interest in Trademark Collateral. Each Grantor, as
collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations of such Grantor, hereby collaterally assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Collateral Agent for the benefit of
the Lenders, and grants to the Collateral Agent for the benefit of the Lenders a
lien on and security interest in, all of its right, title and interest in, to
and under the following Collateral of such Grantor (the “Trademark Collateral”):

Page 1 of Annex V to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

(a) all of its Trademarks and Trademark Licenses to which it is a party,
including those referred to on Schedule I hereto (as such Schedule may be
amended from time to time by the addition of Trademarks and Trademark Licenses,
subsequently created or acquired, by execution of a supplement in substantially
the same form of Schedule I attached hereto);
(b) all renewals of the foregoing;
(c) all goodwill of the business connected with the use of, and symbolized by,
each Trademark and each Trademark License; and
(d) all Proceeds of the foregoing, including any claim by Grantor against third
parties for past, present, future (i) infringement or dilution of any Trademark
or Trademark licensed under any Trademark License or (ii) injury to the goodwill
associated with any Trademark or any Trademark licensed under any Trademark
License.
Section 3 Security Agreement. The security interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interest granted to the Collateral Agent pursuant to the Guarantee and
Collateral Agreement and each Grantor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the security
interest in the Trademark Collateral made and granted hereby are more fully set
forth in the Guarantee and Collateral Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, each Grantor has caused this Trademark Security Agreement to
be executed and delivered by its duly authorized offer as of the date first set
forth above.
Very truly yours,

[GRANTORS]

By: __________________________
Name:
Title:

Accepted and Agreed:
CREDIT SUISSE,
as Collateral Agent

By: ___________________________________
Name:
Title:

Page 2 of Annex VI to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

ACKNOWLEDGEMENT OF GRANTOR

STATE OF_____________________________ )

)     ss.

COUNTY OF__________________________ )

On this day of ___________________, ____ before me personally appeared
_______________________, proved to me on the basis of satisfactory evidence to
be the person who executed the foregoing instrument on behalf of ______________,
who being by me duly sworn did depose and say that he is an authorized officer
of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.

________________________________
Notary Public

Page 3 of Annex VI to Guarantee and
Collateral Agreement

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EXHIBIT A

Schedule I
to
Trademark Security Agreement
Trademark Registrations

A.    REGISTERED TRADEMARKS

MarkReg. No. Date

B.    TRADEMARK APPLICATIONS

C.    TRADEMARK LICENSES

Name of Agreement, Parties, Date of Agreement

Page 4 of Annex VI to Guarantee and
Collateral Agreement

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EXHIBIT A

Annex VI to
Guaranty and Collateral Agreement

DEPOSIT ACCOUNT CONTROL AGREEMENT

____________, 2007

______________________________

Ladies and Gentlemen:

This letter is to notify you (the “Depository Bank”) that, pursuant to that
certain Guarantee and Collateral Agreement dated as of March 30, 2007 (as
amended, modified, supplemented, or restated from time to time, the “Security
Agreement”),______________________, a company organized under the laws of (the
“Pledgor”), has granted to ______________________ (“Pledgee”) a first priority
security interest in and lien upon, (a) Account No.__________(the “Account”)
maintained by Pledgor with you, (b) any extensions or renewals of the Account if
the Account is one which may be extended or renewed, and (c) all of Pledgor’s
right, title, and interest (whether now existing or hereafter created or
arising) in and to the Account, all sums from time to time on deposit therein,
credited thereto, or payable thereon, all instruments, documents, certificates,
and other writings evidencing the Account, and any and all proceeds of any
thereof (the items described in Clauses (a), (b) and (c) being herein
collectively called the “Collateral”).

In connection therewith, the parties hereto agree (which agreement by Pledgor
will be construed as
instructions to the Depository Bank):

1.    The Depository Bank is instructed to register the pledge on its books and
hold the Collateral in a
pledged status account.

2.    The Depository Bank is instructed to deliver to Pledgee copies of monthly
statements on the
account(s) identified below:

3.    The Account will be styled:
“_________________________________”

4.    All dividends, interest, gains, and other profits on the Collateral will
be reported in the name and
tax identification number of Pledgor.

5.    This letter agreement gives Pledgee “control” of the Account and the
Collateral. The Depository
Bank agrees to comply with any order or instruction from Pledgee as to the
withdrawal or
disposition of any funds from time to time credited to the Account, or as to any
other matters
relating to the Collateral, without the further consent of Pledgor. The
Depository Bank shall be
fully entitled to rely upon such instructions from Pledgee even if such
instructions are contrary to
any instructions or demands that Pledgor may give to the Depository Bank.

6.    Pledgee agrees to indemnify and hold the Depository Bank, its officers and
employees, harmless
from and against any and all claims, causes of action, liabilities, lawsuits,
demands, and/or
damages, including, without limitation any and all costs, including court costs
and reasonable

Page 5 of Annex VI to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

attorneys’ fees, that may arise or result from the Depository Bank complying
with the instructions
and orders of Pledgee given in connection with Pledgee’s exercise of its control
over and secured
rights in the Account and the Collateral except to the extent that such claims,
causes of action,
liabilities, lawsuits, demands, and/or damages are found in a final,
non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct
of the Depository Bank.

7.    Pledgor agrees to indemnify and hold the Depository Bank, its officers and
employees, harmless
from and against any and all claims, causes of action, liabilities, lawsuits,
demands, and/or
damages, including, without limitation, any and all costs, including court costs
and reasonable
attorneys’ fees, that may arise or result from the Depository Bank entering into
and performing its
obligations under this letter agreement except to the extent that such claims,
causes of action,
liabilities, lawsuits, demands, and/or damages are found in a final,
non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct
of the Depository Bank.

8.    The Depository Bank represents that it has not received notice regarding
any lien, encumbrance,
or other claim to the Account or the Collateral from any person other than
pursuant to this letter
agreement and has not entered into another agreement with any other party to act
on such party’s
instructions with respect to the Account. The Depository Bank further agrees not
to enter into
any such agreement with any other party.

9.    The Depository Bank subordinates to the security interest of Pledgee any
right of recoupment or
setoff, or to assert any security interest or other lien, that it may at any
time have against or in any
of the Collateral on account of any credit or other obligations owed to the
Depository Bank by
Pledgor or any other person. The Depository Bank may, however, from time to time
debit the
Account for any of its customary charges in maintaining the Account or for
reimbursement for
the reversal of any provisional credits granted by the Depository Bank to the
Account, to the
extent, in each case, that Pledgor has not separately paid or reimbursed
Depository Bank therefor.

10.    To the extent a conflict exists between the terms of this letter
agreement and any account
agreement between Pledgor and the Depository Bank, the terms of this letter
agreement will
control.

11.    The terms of this letter agreement will in no way be modified except by a
writing signed by all
parties hereto.

12.     Each of the parties executing this letter agreement represents that he
has the proper authority to
execute this letter agreement.

[Remainder of page intentionally blank. Signature page follows.]

Page 6 of Annex VI to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

IN WITNESS WHEREOF, Pledgor and Pledgee have agreed to the terms of this letter
agreement as of the date first indicated above.
Pledgor:

[NAME OF ENTITY]

By:    ________________________________________
Name:__________________________________
Title: ___________________________________

Pledgee:

[NAME OF ENTITY]

By:    _________________________________________
Name:____________________________________
Title:_____________________________________

Acknowledged and Agreed on ____________, 200_:

Depository Bank:

[NAME OF ENTITY]

By:    ________________________________________
Name:___________________________________
Title:____________________________________

Page 7 of Annex VI to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

Annex VII to
Guaranty and Collateral Agreement

ACKNOWLEDGMENT OF PLEDGE

PARTNERSHIP: _______________                 INTEREST
OWNER:______________________

BY THIS ACKNOWLEDGMENT OF PLEDGE, dated as of ______________________ , 20__,
__________ (the “Partnership”) hereby acknowledges the pledge in favor of
________________________ (“Pledgee”), in its capacity as Collateral Agent for
the Lenders under that certain Guarantee and Collateral Agreement dated as of
__, 2007 (as amended, modified, supplemented, or restated from time to time, the
“Security Agreement”), against, and a security interest in favor of Pledgee in,
all of ‘s (the “Interest Owner”) rights in connection with any partnership
interest in the Partnership now and hereafter owned by the Interest Owner
(“Partnership Interest”).
A. Pledge Records. The Partnership has identified Pledgee’s interest in all of
the Interest Owner’s right, title, and interest in and to all of the Interest
Owner’s Partnership Interest as subject to a pledge and security interest in
favor of Pledgee in the Partnership records.
B. Partnership Distributions, Accounts, and Correspondence. The Partnership
hereby acknowledges that (i) all proceeds, distributions, and other amounts
payable to the Interest Owner, including, without limitation, upon the
termination, liquidation, and dissolution of the Partnership shall be paid and
remitted to the Pledgee upon demand, (ii) all funds in deposit accounts shall be
held for the benefit of Pledgee, and (iii) all future correspondence,
accountings of distributions, and tax returns of the Partnership shall be
provided to the Pledgee. The Partnership acknowledges and accepts such direction
and hereby agrees that it shall, upon the written demand by the Collateral
Agent, pay directly to the Administrative Agent (as such term is defined in the
Security Agreement) or the Collateral Agent at such address any and all
distributions, income, and cash flow arising from the Partnership Interests
whether payable in cash, property or otherwise, subject to and in accordance
with the terms and conditions of the Partnership. The Pledgee may from time to
time notify the Partnership of any change of address to which such amounts are
to be paid.
Remainder of Page Intentionally Blank.
Signature Page to Follow.

Page 1 of Annex VII to Guarantee and
Collateral Agreement

--------------------------------------------------------------------------------

EXHIBIT A

EXECUTED as of the date first stated in this Acknowledgment of Pledge.

___________________________________________________

By:    ____________________________________________
Name:_______________________________________
Title:________________________________________

[PARTNERSHIP]

By:    ____________________________________________,
as General Partner

By:    ____________________________________________
Name:_______________________________________
Title:________________________________________
8

Page 2 of Annex VII to Guarantee and
Collateral Agreement

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EXHIBIT B

[FORM OF]
COMPLIANCE CERTIFICATE

Financial Statement Date: [l]

To:    The Administrative Agent and the Lenders
parties to the Credit Agreement described below

Reference is made to the Credit Agreement dated as of March 30, 2007 (as
amended, restated, supplemented, waived or otherwise modified from time to time,
the “Credit Agreement”), among Rotech Healthcare Inc., a Delaware corporation
(the “Borrower”), the lenders from time to time party thereto (the “Lenders”),
Credit Suisse, as administrative agent (in such capacity, the “Administrative
Agent”) and as collateral agent and Credit Suisse Securities (USA) LLC, as sole
lead arranger and sole bookrunner. Capitalized terms used and not defined herein
have the meanings set forth in the Credit Agreement. This certificate is being
delivered pursuant to Section 6.02(b) of the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [title of Responsible Officer] of the Borrower.
2. I have reviewed the terms of the Credit Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. To the best of my knowledge, during the accounting period covered by the
attached financial statements, each Loan Party has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
the Credit Agreement and the other Loan Documents to which it is party to be
observed, performed or satisfied by it.
4. [Except as set forth below, the] [The]examinations described in paragraph 2
did not disclose, and I have no knowledge of [(i)] the existence of any
condition or event which constitutes an Event of Default or Default during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Certificate [and (ii) the disclosure set forth below
specifies the details of any such condition or event and any corrective action
taken or proposed to be taken with respect thereto].
4. Borrower to set forth the computations in reasonable detail satisfactory to
the Administrative Agent demonstrating compliance with covenants contained in
Sections 7.01 and 7.07.

--------------------------------------------------------------------------------

2

5. Attached hereto are the financial statements required to be delivered
pursuant to Section 6.01[(a)][(b)]. The attached financial statements are
complete and correct, in all material respects, and have been prepared in
reasonable detail and in accordance with the GAAP.
6. Attached hereto as Annex I is, to the extent not previously disclosed to the
Administrative Agent, a true and complete list of any country or state within
the United States where any Loan Party keeps inventory or equipment and of any
Intellectual Property acquired by any Loan Party since the most recent list
delivered pursuant to Section 6.02(b) of the Credit Agreement.
[7. Attached hereto are the UCC financing statement[s] or other applicable
filing[s] as required to be delivered pursuant to paragraph 6 above.]
The description below sets forth the exceptions, if any, to paragraph 4 by
listing in detail, the nature of the condition or event, the period during which
it has existed and the corrective action which the Borrower has taken, is
taking, or propose to take with respect to each such condition or event:
______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
The foregoing certifications, together with the information set forth [in the
annex attached hereto, the financing statements and] the financial statements
delivered with this Compliance Certificate in support hereof, are made and
delivered this __ day of , 20__.
ROTECH HEALTHCARE INC.,

by
___________________________________
Name:
Title:

--------------------------------------------------------------------------------

EXHIBIT C-1

[FORM OF]
SECRETARY’S CERTIFICATE

March 30, 2007

Reference is made to the Credit Agreement dated as of March 30, 2007 (as
amended, supplemented, waived or otherwise modified from time to time, the
“Credit Agreement”), among Rotech Healthcare Inc., a Delaware corporation (the
“Borrower”), each of the lenders from time to time party thereto (the
“Lenders”), Credit Suisse, as administrative agent and as collateral agent for
the Lenders and Credit Suisse Securities (USA) LLC, as sole lead arranger and
sole bookrunner. Capitalized terms used but not defined herein have the meanings
set forth in the Credit Agreement.
Pursuant to Section 5.01(g) of the Credit Agreement, the undersigned, in
[his][her] capacity as Secretary of [•] (“[•]”), does hereby certify in the name
of and on behalf of [•] as follows:
1. Attached hereto as Annex I is a true and complete copy of the Bylaws of [•]
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in paragraph 2 below.
2. Attached hereto as Annex II are true and complete copies of resolutions duly
adopted by action of the [Board of Directors] of [•] authorizing the execution,
delivery and performance of the Loan Documents to which [•] is a party and any
other document delivered by [•] in connection with the Credit Agreement and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect as of the date hereof.
3. Attached hereto as Annex III is a copy of the [certificate] of incorporation,
including all amendments thereto, of [•] as in effect on the Closing Date,
certified as of recent date by the Secretary of State of [STATE OF
INCORPORATION].
4. Attached hereto as Annex IV is a true and correct copy of a certificate of
good standing of [•] as of a recent date, issued by the Secretary of State of
[STATE OF INCORPORATION].
5. The named individuals set out in Annex V hereto are duly appointed and
qualified officers of [•] and each holds the office set forth opposite such
officer’s name. The signature set forth opposite such officer’s name on Annex V
is such officer’s genuine signature. Each person who, as an officer of [•],
signed any of the Loan Documents (or any other document or agreement delivered
in connection with the Credit Agreements) was, at the time or the respective
times of such execution and delivery of such documents, duly elected, qualified
and acting as such director or officer, and the signature of each such officer
appearing on any such documents is such officer’s genuine signature.

--------------------------------------------------------------------------------

[REMAINDER OF PAGE INTENTIONALLY BLANK]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has duly executed this Secretary’s
Certificate on the date first written above.

_______________________________
[Name]
Secretary

I, [NAME], [TITLE] of [•], do hereby certify that [NAME OF SECRETARY] is the
duly elected, qualified and acting [Secretary] of [•], and that the signature of
[NAME OF SECRETARY] set forth above is [his][her] true and genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name this [ ] day of March, 2007.

_______________________________
[Name]
[Title]

--------------------------------------------------------------------------------

ANNEX V

INCUMBENCY CERTIFICATE

Name                         Office                Signature

[ ]                         [ ]                
_______________________
[ ]                         [ ]                
_______________________
[ ]                         [ ]
_______________________
[ ]                         [ ]
_______________________
[ ]                         [ ]
_______________________
[ ]                         [ ]
_______________________

--------------------------------------------------------------------------------

EXHIBIT C-2

[FORMOF]
OFFICER’S CERTIFICATE

March 30, 2007

Reference is made to the Credit Agreement dated as of March 30, 2007 (as
amended, supplemented, waived or otherwise modified from time to time, the
“Credit Agreement”), among Rotech Healthcare Inc. (the “Borrower”), the lenders
from time to time party thereto (the “Lenders”), Credit Suisse, as
administrative agent and as collateral agent for the Lenders and Credit Suisse
Securities (USA) LLC, as sole lead arranger and sole bookrunner. Capitalized
terms used and not defined herein have the meanings set forth in the Credit
Agreement. This certificate is being delivered pursuant to Section 5.01(g) of
the Credit Agreement.
The undersigned, [title of Responsible Officer] of [ ], hereby certifies that,
with respect to [ ] and those matters within its control, as follows:
(a) All representations and warranties contained in the Loan Document to which
it is a party are true and correct in all material respects on and as of the
date hereof, with the same effect as though made on and as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date.
(b) At the time of and immediately after the making of the Loans, no Default or
Event of Default has occurred or is continuing.

[Remainder of this page left intentionally blank]

--------------------------------------------------------------------------------

2

IN WITNESS WHEREOF, the undersigned has duly executed this Officer’s Certificate
on the date first written above.

[ ],

by

_______________________________________
Name:
Title:

--------------------------------------------------------------------------------

EXHIBIT D

[FORM OF]
ASSIGNMENT AND ACCEPTANCE

Reference is made to the Credit Agreement dated as of March 30, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Rotech Healthcare Inc., a Delaware corporation (the
“Borrower”), the lenders from time to time party thereto (the “Lenders”) and
Credit Suisse, as administrative agent (in such capacity, the “Administrative
Agent”) and as collateral agent for the Lenders. Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Effective Date set forth below (but not prior to the
registration of the information contained herein in the Register pursuant to
Section 10.06(c) of the Credit Agreement), the interests set forth below (the
“Assigned Interest”) in the Assignor’s rights and obligations under the Credit
Agreement and the other Loan Documents, including, without limitation, the
amounts and percentages set forth below of (i) the Commitments of the Assignor
on the Effective Date set forth below (the “Effective Date”) and (ii) the Loans
owing to the Assignor which are outstanding on the Effective Date. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 10.06(c) of the
Credit Agreement, a copy of which has been received by each such party. From and
after the Effective Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement; provided that the obligations of the Assignor under Section 10.14 of
the Credit Agreement shall survive the execution of this Assignment and
Acceptance and the assignment of interests effected hereby.
2. This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction
outside the United States, any forms referred to in Section 2.13(d) of the
Credit Agreement, duly completed and executed by such Assignee and (ii) to the
extent required by the Administrative Agent under Section 10.06(e) of the Credit
Agreement, a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

--------------------------------------------------------------------------------

2

Date of Assignment: ____________________________________________________________

Legal Name of Assignor (“Assignor”):
______________________________________________

Legal Name of Assignee (“Assignee”):
______________________________________________

Effective Date of Assignment (“Effective Date”):
_____________________________________

Principal Amount
Assigned1
Percentage Assigned of
Commitment/Loan1 (set forth, to at
least 8 decimals, as a percentage of the
aggregate Commitments of all Lenders
thereunder)
$
%

[Remainder of page intentionally left blank]

_______________________________
1     Amount of Commitments and/or Loans assigned is governed by Section
10.06(c) of the
Credit Agreement.

--------------------------------------------------------------------------------

The terms set forth above are
hereby agreed to:                     Accepted:

CREDIT SUISSE, CAYMAN
ISLANDS BRANCH, as
Administrative Agent

_________________, as Assignor                by:___________________________
Name:
Title:

by:___________________________                by:___________________________
Name:                                Name:
Title:                                Title:

_________________, as Assignee                [ROTECH HEALTHCARE INC.]1 

by:___________________________                by:___________________________
Name:                                Name:
Title:                                Title:

______________________________
1 To the extent such consents are required under Section 10.06(c) of the Credit
Agreement.

--------------------------------------------------------------------------------

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim, (iii) its
Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth herein, and (iv) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it is an
eligible Assignee and has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the
Credit Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Lender, (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Agent or any other
Lender, and (v) if it is a Foreign Lender, attached to the Assignment and
Acceptance is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, (ii) it appoints and authorizes the Administrative Agent to take such
action on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Administrative Agent, by the terms thereof, together with
such powers as are reasonably incidental thereto, and (iii) it will perform in

--------------------------------------------------------------------------------

3

accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
facsimile shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance. This Assignment and Acceptance shall be
construed in accordance with and governed by the laws of the State of New York.

--------------------------------------------------------------------------------

Exhibit E-1
FORM OF LEGAL OPINION OF KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS LLP
AND AFFILIATED PARTNERSHIPS

200 East Randolph Drive
Chicago, Illinois 60601

312-861-2000                    Facsimile:
312 861-2200
www.kirkland.com

March 30,2007

Credit Suisse Securities (USA) LLC,
as Sole Lead Arranger and Sole Bookrunner,
Credit Suisse,
as Administrative Agent and Collateral Agent, and
Each of the Lenders party to
the Credit Agreement described below

Ladies and Gentlemen:

We are issuing this opinion letter in our capacity as special legal counsel to:
(i) Rotech
Healthcare Inc., a Delaware corporation ("Borrower"), and (ii) each of the
Subsidiaries listed on
the Schedule of Guarantors attached hereto as Schedule E (collectively, the
"Guarantors" and
each a "Guarantor"), in response to the requirement in Section 5.01fh)(i) of the
Credit
Agreement, dated as of even date herewith (the "Credit Agreement"), among
Borrower, Credit
Suisse Securities (USA) LLC, as Sole Lead Arranger and Sole Bookrunner (the
"Arranger").
Credit Suisse, as Administrative Agent (in such capacity, the "Administrative
Agent") and
Collateral Agent (in such capacity, the "Collateral Agent"), and the Lenders
listed on the
signature pages thereto. Borrower and the Guarantors are collectively referred
to herein as the
"Credit Parties" and each as a "Credit Party".

Capitalized terms used and not otherwise defined herein have the meanings
ascribed to
such terms in the Credit Agreement. The Arranger, the Collateral Agent, the
Administrative
Agent and the Lenders are sometimes referred to herein as "you". The term
"Credit Documents"
whenever it is used in this letter means the Credit Agreement and each of the
following
additional agreements, hi each case hi the form executed by the parties thereto
on the date
hereof:

(i)     the Guarantee and Collateral Agreement (the "Collateral Agreement"),
dated the
date hereof, by and among the Collateral Agent, the Borrower and the Guarantors;

London             Los Angeles         New York             San Francisco
        Washington, D.C.

--------------------------------------------------------------------------------

KIRKLAND & ELLIS LLP
March 30,2007
Page 2

(ii)     the Trademark Security Agreement (the "Trademark Security Agreement")
dated
the date hereof, by and among the Collateral Agent, the Borrower and the
Guarantors;

(iii)     the Patent Security Agreement (the "Patent Security Agreement") dated
the date
hereof, by and among the Collateral Agent, the Borrower and the Guarantors;

(iv)     the Copyright Security Agreement (the "Copyright Security Agreement"
and,
together with the Trademark Security Agreement and the Patent Security
Agreement, collectively, the "Intellectual Property Security Agreements") dated
the date hereof, by and among the Collateral Agent, the Borrower and the
Guarantors.

References herein to the "Financing Statements" mean the Form UCC-1 financing
statements
delivered on this date by Borrower and each Guarantor (other than the Florida
Credit Parties), as
debtors, in favor of the Collateral Agent for the benefit of the Lenders, in
each case, as attached
hereto as Annex I. The term "Organization Documents" whenever it is used hi this
letter means
the certificate of incorporation and the bylaws of the relevant entity, in each
case, as amended
through the date hereof. Each of the terms "South Carolina UCC," "New Mexico
UCC," 'Texas
UCC," "Colorado UCC," "Delaware UCC," "Kentucky UCC," "South Dakota UCC,"
''Michigan
UCC," "Pennsylvania UCC," "Montana UCC," "Iowa UCC," "Illinois UCC," "Utah UCC,"
"Idaho UCC," "West Virginia UCC," "Minnesota UCC," "Kansas UCC," "Arizona UCC,"
"Maine UCC," "Alabama UCC," "North Carolina UCC," "Oklahoma UCC," "Wyoming UCC,"
"California UCC," "New York UCC," "Washington UCC," "Missouri UCC," "Georgia
UCC,"
"New Jersey UCC" whenever it is used herein means the Uniform Commercial Code as
presently in effect in the State of South Carolina, State of New Mexico, State
of Texas, State of
Colorado, State of Delaware, State of Kentucky, State of South Dakota State of
Michigan, State
of Pennsylvania, State of Montana, State of Iowa, State of Illinois, State of
Utah, State of Idaho,
State of West Virginia, State of Minnesota, State of Kansas, State of Arizona,
State of Maine,
State of Alabama, State of North Carolina, State of Oklahoma, State of Wyoming,
State of
California, State of New York, State of Washington, State of Missouri, State of
Georgia, State of
New Jersey, respectively. References herein to the "South Carolina Credit
Parties," the "New
Mexico Credit Parties", the "Texas Credit Parties," the "Colorado Credit
Parties," the "Delaware
Credit Parties," the "Kentucky Credit Parties," the "South Dakota Credit
Parties," the "Michigan
Credit Parties," the "Pennsylvania Credit Parties," the "Montana Credit
Parties," the "Iowa
Credit Parties," the "Illinois Credit Parties," the "Utah Credit Parties," the
"Idaho Credit Parties,"
the "West Virginia Credit Parties," the "Minnesota Credit Parties," the "Kansas
Credit Parties,"
the "Arizona Credit Parties," the "Maine Credit Parties," the "Alabama Credit
Parties" the
"North Carolina Credit Parties," the "Oklahoma Credit Parties," the "Wyoming
Credit Parties,"
the "California Credit Parties," the "New York Credit Parties," the "Washington
Credit Parties,"
the "Missouri Credit Parties," the "Georgia Credit Parties," the "Florida Credit
Parties" and the
"New Jersey Credit Parties" mean collectively each of the Credit Parties set
forth on Schedule G

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Page 3

that is organized under the laws of the State of South Carolina, State of New
Mexico, State of
Texas, State of Colorado, State of Delaware, State of Kentucky, State of South
Dakota State of
Michigan, State of Pennsylvania, State of Montana, State of Iowa, State of
Illinois, State of Utah,
State of Idaho, State of West Virginia, State of Minnesota, State of Kansas,
State of Arizona,
State of Maine, State of Alabama, State of North Carolina, State of Oklahoma,
State of
Wyoming, State of California, State of New York, State of Washington, State of
Missouri, State
of Georgia, State of Florida and State of New Jersey, respectively.

Subject to the assumptions, qualifications, exclusions and other limitations
that are
identified in this letter and in the schedules attached to this letter, we
advise you, and, with
respect to each legal issue addressed in this letter, it is our opinion, that:

1.    (i) Each of the South Carolina Credit Parties is a corporation existing
and in good
standing under the South Carolina Business Corporation Act, as in effect on the
date
hereof (the "SCBCA"); (ii) each of the Texas Credit Parties is a corporation
existing and
in good standing under the Texas Business Corporation Act, as in effect on the
date
hereof (the "TBCA"); (iii) each of the Colorado Credit Parties is an entity in
existence
under the Colorado Business Corporation Act, as in effect on the date hereof
(the
"CBCA"); (iv) each of the Delaware Credit Parties is a corporation validly
existing and in
good standing under the General Corporation Law of the State of Delaware as in
effect
on the date hereof (the "DGCL"); (v) each of the Kentucky Credit Parties is an
entity in
existence under the Kentucky Business Corporation Act, as in effect on the date
hereof
(the "KBCA"); (vi) each of the South Dakota Credit Parties is an entity in
existence
under the South Dakota Business Corporation Act, as in effect on the date hereof
(the
"SDBCA"); (vii) each of the Michigan Credit Parties is an entity in existence
under the
Business Corporation Act, as in effect on the date hereof (the "MBCA"); (viii)
each of
the Pennsylvania Credit Parties is an entity in existence under the Pennsylvania
Business
Corporation Law of 1988, as in effect on the date hereof (the "PBCL"); (ix) each
of the
Montana Credit Parties is an entity in existence under the Montana Business
Corporation
Act, as in effect on the date hereof (the "MontBCA"); (x) each of the Iowa
Credit Parties
is an entity in existence under the Iowa Business Corporation Act, as in effect
on the date
hereof (the "IBCA"); (xi) each of the Illinois Credit Parties is an entity in
existence under
the Business Corporation Act of 1983, as in effect on the date hereof (the
"IIBCA"); (xii)
each of the Utah Credit Parties is an entity in existence under the Utah Revised
Business
Corporation Act, as in effect on the date hereof (the "URBCA"); (xiii) each of
the Idaho
Credit Parties is an entity in existence under the Idaho Business Corporation
Act, as in
effect on the date hereof (the "IdBCA"); (xiv) each of the West Virginia Credit
Parties is
an entity hi existence under the West Virginia Business Corporation Act, as in
effect on
the date hereof (the "WVBCA"); (xv) each of the Minnesota Credit Parties is an
entity in
existence under the Minnesota Business Corporation Act, as in effect on the date
hereof
(the "MinBCA"); (xvi) each of the Kansas Credit Parties is an entity in
existence under

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the Kansas General Corporation Code, as in effect on the date hereof (the
"KGCC");
(xvii) each of the Arizona Credit Parties is an entity in existence under the
Arizona
Business Corporation Act, as in effect on the date hereof (the "ABCA"); (xvii)
each of
the Maine Credit Parties is an entity in existence under the Maine Business
Corporation
Act, as in effect on the date hereof (the "MaBCA"); (xviii) each of the Alabama
Credit
Parties is an entity in existence under the Alabama Business Corporation Act, as
in effect
on the date hereof (the "ALBCA"); (xix) each of the North Carolina Credit
Parties is an
entity in existence under the North Carolina Business Corporation Act, as in
effect on the
date hereof (the "NCBCA"); (xx) each of the Oklahoma Credit Parties is an entity
in
existence under the Oklahoma General Corporation Act, as in effect on the date
hereof
(the "OGCA"); (xxi) each of the Wyoming Credit Parties is an entity in existence
under
the Wyoming Business Corporation Act, as in effect on the date hereof (the
"WBCA");
(xxii) each of the California Credit Parties is an entity in existence under the
General
Corporation Law, as in effect on the date hereof (the "CGCL"); (xxiii) each of
the New
York Credit Parties is a subsisting entity under the Business Corporation Law,
as in effect
on the date hereof (the "NYBCL"); (xxiv) each of the Washington Credit Parties
is an
entity in existence under the Washington Business Corporation Act, as in effect
on the
date hereof (the "WaBCA"); (xxv) each of the Missouri Credit Parties is an
entity in
existence under The General and Business Corporation Law of Missouri, as in
effect on
the date hereof (the "MGBCL"); (xxvi) each of the Georgia Credit Parties is an
entity in
existence under the Georgia Business Corporation Code, as in effect on the date
hereof
(the "GBCC"); (xxvii) each of the New Jersey Credit Parties is an entity in
existence
under the New Jersey Business Corporation Act, as in effect on the date hereof
(the
"NJBCA") and (xxviii) each of the New Mexico Credit Parties is an entity in
existence
under the New Mexico Business Corporation Act, as in effect on the date hereof
(the
"NMBCA").

2.    Each of the Credit Parties (other than the Florida Credit Parties) has the
corporate power
to enter into and perform its respective obligations under the Credit Documents
to which
it is a party.

3.    Each of the boards of directors of each Credit Party (other than the
Florida Credit Parties)
has adopted by requisite vote or action, in accordance with the applicable
provisions of
its Organization Documents granting such authority to the board of directors,
the
resolutions necessary to authorize such Credit Party's execution and delivery
of, and the
performance of.such Credit Party's obligations under, the Credit Documents to
which it is
a party, or in the case of the Financing Statements on which it is named as
debtor, the
delivery of such Financing Statements.

4.    Each Credit Party (other than the Florida Credit Parties) has duly
executed and delivered
the Credit Documents to which it is a party.

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5.    Each of the Credit Documents executed by each Credit Party is a legal,
valid and binding
obligation of each such Credit Party that is a party thereto, and is enforceable
against
such Credit Party in accordance with its terms.

6.    The execution and delivery by each Credit Party of the Credit Documents to
which it is a
party, and the consummation by it of the lending transactions contemplated by
each
Credit Document to which it is a party to occur on the date hereof in accordance
with the
terms thereof and the performance of its obligations under each such Credit
Document,
will not (a) except for the Florida Credit Parties with respect to their
respective
Organizational Documents, violate any existing provisions of the Organization
Documents of such Credit Party, (b) based on existing facts of which we are
aware,
constitute a violation by such Credit Party of any applicable provision of
existing Laws of
the State of New York or United States federal statutory law or governmental
regulation
covered by this letter, (c) violate any existing order, writ, injunction,
judgment,
determination, award or decree of any court or governmental instrumentality
applicable
to such Credit Party of which we are aware or (d) violate the terms or
provisions of the
Senior Subordinated Note Indenture (provided that in each case we express no
opinion as
to compliance with any financial covenant or test or the effect of any
cross-default
provision in any such agreement). The term "Laws" means laws not excluded from
the
coverage of this opinion.

7.    To our knowledge, no Credit Party is presently required to obtain any
consent, approval,
authorization or order of any State of New York or United States federal court
or
governmental agency in order to obtain the right to execute and deliver any of
the Credit
Documents to which it is a party or to take any of the actions taken by it in
connection
with the consummation of the lending transactions contemplated by such Credit
Documents to occur on the date hereof in accordance with the terms thereof,
except for:
(a) those obtained or made on or prior to the Closing Date, (b) any actions or
filings
necessary to perfect the liens and security interests granted under the
Collateral
Agreement, (c). actions or filings required in connection with ordinary course
conduct by
such Credit Party of its respective businesses and ownership or operation by
such Credit
Parties of its assets and (d) any actions or filings that may be required by any
banking,
insurance or other regulatory statute to which you may be subject (as to which
matters we
express no opinion).

8.    With respect to each Credit Party, the Collateral Agreement creates a
valid security
interest in favor of the Administrative Agent for the benefit of the Lenders in
such Credit
Party's collateral therein described with respect to which such Credit Party has
rights or
has the power to transfer rights (the "Collateral") and which constitutes
property in which
a security interest can be granted under Article 9 of the New York UCC. Such
Collateral
is referred to herein as the "Code Collateral."

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9.    (a) Under the New York UCC, the perfection of the Administrative Agent's
security
interest in the Code Collateral (i) will, as a general matter and except as
otherwise
provided in Sections 9-301 through 9-307 of the New York UCC, be governed by the
local law of the jurisdiction in which the applicable grantor is located (which
in the case
of (A) a registered organization (as defined in the New York UCC) such as a
corporation
or a limited liability company that is organized under the laws of a State (as
defined in
the New York UCC) is the State under whose laws such registered organization is
organized, or (B) an organization that is not a registered organization, at its
place of
business if it has only one place of business or at its chief executive office
if it has more
than one place of business), (ii) will, in the case of a possessory security
interest,
generally be governed by the local law of the jurisdiction in which the
collateral is
located, (iii) that constitutes certificated securities will be governed by the
local law of
the jurisdiction in which the security certificates are located (other than
perfection by
filing, which is governed by the local law of the jurisdiction in which the
applicable
grantor is located) as specified in Section 9-305(a)(l) of the New York UCC,
(iv) that
constitutes uncertificated securities will be governed by the local law of the
issuer's
jurisdiction as specified hi Section 8-110(d) of the New York UCC pursuant to
Section 9-
305(a)(2) of the New York UCC (other than perfection by filing, which is
governed by
the local law of the jurisdiction in which the applicable grantor is located),
(v) that
constitutes a security entitlement or a securities account will be governed by
the local law
of the securities intermediary's jurisdiction as specified in Section 8-110(e)
of the New
York UCC pursuant to Section 9-305(a)(3) of the New York UCC (other than
perfection
by filing, which is governed by the local law of the jurisdiction in which the
applicable
grantor is located), (vi) that constitutes goods covered by a certificate of
title will be
governed by the local law of the jurisdiction under whose certificate of title
the goods are
covered as specified in Section 9-303 of the New York UCC, (vii) that
constitutes deposit
accounts will be governed by the local law of the depositary bank's jurisdiction
as
specified hi Section 9-304 of the New York UCC, (viii) that constitutes
letter-of-credit
rights will generally be governed by the local law of the issuer's or nominated
person's
jurisdiction as specified in Section 9-306 of the New York UCC, and (ix) that
constitutes
other categories will be governed by the laws of the jurisdiction or
jurisdictions specified
in Sections 9-301 through 9-307 of the New York UCC.

(b) Under the principles described in the preceding subparagraph (a)(i) and,
with
respect to perfection by filing, in the preceding subparagraphs (a)(iii),
(a)(iv), and (a)(v)
of this paragraph 9, except as otherwise set forth in subparagraph (c), the
perfection of
the Administrative Agent's security interest in certain of the Code Collateral
except any
property subject to a statute, regulation or treaty of the United States whose
requirements
for a security interest's obtaining priority over the rights of a lien creditor
with respect to
the property preempt Section 9-310(a) of the New York UCC (the "Filing Code
Collateral") is governed by the laws of the jurisdiction of organization of the
relevant

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Credit Parties, to wit: (i) with respect to each of the South Carolina Credit
Parties, the
State of South Carolina; (ii) with respect to each of the Texas Credit Parties,
the State of
Texas; (iii) with respect to each of the Colorado Credit Parties, the State of
Colorado; (iv)
with respect to the Delaware Credit Parties, the State of Delaware; (v) with
respect to
each of the Kentucky Credit Parties, the State of Kentucky; (vi) with respect to
each of
the South Dakota Credit Parties, the State of South Dakota; (vii) with respect
to each of
the Michigan Credit Parties, the State of Michigan; (viii) with respect to each
of the
Pennsylvania Credit Parties, the State of Pennsylvania; (ix) with respect to
each of the
Montana Credit Parties, the State of Montana; (x) with respect to each of the
Iowa Credit
Parties, the State of Iowa; (xi) with respect to each of the Illinois Credit
Parties, the State
of Illinois; (xi) with respect to each of the Utah Credit Parties, the State of
Utah; (xii)
with respect to each of the Idaho Credit Parties, the State of Idaho; (xiii)
with respect to
each of the West Virginia Credit Parties, the State of West Virginia; (xiv) with
respect to
each of the Minnesota Credit Parties, the State of Minnesota; (xv) with respect
to each of
the Kansas Credit Parties, the State of Kansas; (xvi) with respect to each of
the Arizona
Credit Parties, the State of Arizona; (xvii) with respect to each of the Maine
Credit
Parties, the State of Maine; (xviii) with respect to each of the Alabama Credit
Parties, the
State of Alabama; (xix) with respect to each of the North Carolina Credit
Parties, the
State of North Carolina; (xx) with respect to each of the Oklahoma Credit
Parties, the
State of Oklahoma; (xxi) with respect to each of the Wyoming Credit Parties, the
State of
Wyoming; (xxii) with respect to each of the California Credit Parties, the State
of
California; (xxiii) with respect to each of the New York Credit Parties, the
State of New
York; (xxiv) with respect to each of the Washington Credit Parties, the State of
Washington; (xxv) with respect to each of the Missouri Credit Parties, the State
of
Missouri; (xxvi) with respect to each of the Georgia Credit Parties, the State
of Georgia;
(xxvii) with respect to each of the New Jersey Credit Parties, the State of New
Jersey and
(xxviii) with respect to each of the New Mexico Credit Parties, the State of New
Mexico.
When the Financing Statements naming the applicable Credit Party as debtor are
duly
filed in the filing offices set forth with respect to each Credit Party (other
than the Florida
Credit Parties) on the Schedule F -Schedule of Filing Offices, the Collateral
Agent's
security interest under the Collateral Agreement in the Filing Code Collateral
of such
Credit Party will be perfected to the extent such security interests can be
perfected by the
filing of Uniform Commercial Code financing statements in such filing offices
with
respect to each such jurisdiction. Such Financing Statements are in proper form
for filing
in such filing offices.

10.    Assuming (in addition to all other assumptions upon which this letter is
based) that the
Administrative Agent has taken possession of and is retaining in the State of
New York
the certificates representing the securities (within the meaning of Article 8 of
the UCC),
that are certificated and pledged by the Credit Parties pursuant to the
Collateral
Agreement, as applicable, as identified on the Schedule of Pledged Securities
attached

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Page 8

hereto as Schedule H (the "Pledged Securities"), duly endorsed to the
Administrative
Agent or in blank, the security interest in favor of the Administrative Agent in
such
Pledged Securities is perfected under the New York UCC, and assuming further (in
addition to all other assumptions upon which this letter is based) that the
Administrative
Agent has taken possession of such Pledged Securities and such accompanying
endorsements without notice (actual or constructive), at or prior to the time of
delivery of
such Pledged Securities and endorsements to the Administrative Agent, of any
adverse
claim within the meaning of Section 8-102(a)(l) of the New York UCC, the
Administrative Agent has acquired its security interest in such Pledged
Securities free of
any such adverse claims.

11.    Upon the due filing and recordation of the Intellectual Property Security
Agreements, as
applicable, in the United States Patent and Trademark Office or the Copyright
Office, and
the payment of all filing and recordation fees associated therewith, and the
filing of the
Financing Statements in the filing offices set forth in the Schedule of Filing
Offices, the
security interest created thereunder in, as applicable, the United States
registered Patents
and Trademarks (but excluding any "intent to use applications") or the
Copyrights owned
by such Credit Parties, in each case, as set forth in the schedules of the
applicable
Intellectual Property Security Agreement as so registered, will be perfected to
the extent a
security interest in such Collateral can be perfected by such filing and
recordation.

12.    None of the Credit Parties is required to register as an "investment
company" under the
Investment Company Act of 1940, as amended.

13.    Assuming application of the proceeds of the Loans as contemplated by the
Credit
Agreement, the borrowings under the Credit Agreement will not, in and of
themselves,
result in a violation of Regulation U or X of the Board of Governors of the
Federal
Reserve System.

14.     To our actual knowledge (based solely upon inquiries of officers of the
Credit Parties and
the certificate delivered to us by officers of the Credit Parties) (i) there are
no actions,
suits or proceedings pending or threatened against any Credit Party with respect
to any of
the Credit Documents and (ii) there does not exist any judgment, order or
injunction
prohibiting the consummation of the transactions contemplated by the Credit
Documents.

In preparing this letter, we have relied without any independent verification
upon the
assumptions recited in Schedule B to this letter and upon: (i) information
contained in certificates
obtained from governmental authorities; (ii) factual information (but not legal
conclusions)
represented to be true hi the Credit Agreement and the other Credit Documents;
(iii) factual
information (but not legal conclusions) provided to us in a support certificate
executed by one or
more of the Credit Parties; and (iv) factual information (but not legal
conclusions) we have
obtained from such other sources as we have deemed reasonable. We have assumed
without

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investigation that there has been no relevant change or development between the
dates as of
which the information cited in the preceding sentence was given and the date of
this letter and
that the information upon which we have relied is accurate and does not omit
disclosures
necessary to prevent such information from being misleading.

While we have not conducted any independent investigation to determine facts
upon
which our opinions are based or to obtain factual information about which this
letter advises you,
we confirm that we do not have any actual knowledge that has caused us to
conclude that our
reliance and assumptions cited in the preceding paragraph are unwarranted or
that any
information supplied to us in connection with the preparation of this letter is
wrong. Whenever
this letter provides advice about (or based upon) our knowledge of any
particular information or
about any information- which has or has not come to our attention such advice is
based entirely
on the actual knowledge at the time this letter is delivered on the date it
bears by the lawyers
with Kirkland & Ellis LLP at that time who spent time representing the Company
in connection
with the transactions contemplated by the Credit Agreement after consultation
with other lawyers
in our firm who spent time representing the Company on other matters (herein
called "our
Designated Transaction Lawyers").

Except as set forth in the following sentences of this paragraph, our opinion on
every
legal issue addressed in this letter (collectively, "our opinions") is based
exclusively on such
internal law of the State of New York, the General Corporation Law of the State
of Delaware,
State of Illinois or such federal law of the United States, which, in each case,
is in our experience
normally applicable to general business entities not engaged in regulated
business activities and
to transactions of the type contemplated between the Credit Parties, on the one
hand, and you, on
the other hand, in the Credit Documents, but without our having made any special
investigation
as to any other laws. We express no opinion or advice as to any law (a) to which
the Credit
Parties may be subject as a result of your legal or regulatory status, your sale
or transfer of any
Loans or other obligations or interests therein or your (as opposed to any other
lender's)
involvement in the transactions contemplated by the Credit Documents, (b)
identified on
Schedule C, or (c) which might be violated by any misrepresentation or omission
or a fraudulent
act. Our opinions in paragraph 9(b) are based on the South Carolina UCC, Texas
UCC,
Colorado UCC, Delaware UCC, Kentucky UCC, South Dakota UCC, Michigan UCC,
Pennsylvania UCC, Montana UCC, Iowa UCC, Illinois UCC, Utah UCC, Idaho UCC, West
Virginia UCC, Minnesota UCC, Kansas UCC, Arizona UCC, Maine UCC, Alabama UCC,
North
Carolina UCC, Oklahoma UCC, Wyoming UCC, California UCC, New York UCC,
Washington
UCC, Missouri UCC, Georgia UCC, New Jersey UCC and New Mexico UCC. We advise you
that we are not South Carolina, Texas, Colorado, Delaware, Kentucky, South
Dakota, Michigan,
Pennsylvania, Montana, Iowa, Utah, Idaho, West Virginia, Minnesota, Kansas,
Arizona, Maine,
Alabama, North Carolina, Oklahoma, Wyoming, California, Washington, Missouri,
Georgia,
New Jersey and New Mexico attorneys, and do not practice the law of such states.
The opinions
in paragraph 9, to the extent based on South Carolina UCC, Texas UCC, Colorado
UCC,
Delaware UCC, Kentucky UCC, South Dakota UCC, Michigan UCC, Pennsylvania UCC,

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Montana UCC, Iowa UCC, Illinois UCC, Utah UCC, Idaho UCC, West Virginia UCC,
Minnesota UCC, Kansas UCC, Arizona UCC, Maine UCC, Alabama UCC, North Carolina
UCC, Oklahoma UCC, Wyoming UCC, California UCC, New York UCC, Washington UCC,
Missouri UCC, Georgia UCC, New Jersey UCC and New Mexico UCC are based solely
upon
the review by one of our Designated Transaction Lawyers of the provisions of the
Uniform
Commercial Code in effect in the State of South Carolina, State of Texas, State
of Colorado,
State of Delaware, State of Kentucky, State of South Dakota State of Michigan,
State of
Pennsylvania, State of Montana, State of Iowa, State of Illinois, State of Utah,
State of Idaho,
State of West Virginia, State of Minnesota, State of Kansas, State of Arizona,
State of Maine,
State of Alabama, State of North Carolina, State of Oklahoma, State of Wyoming,
State of
California, State of New York, State of Washington, State of Missouri, State of
Georgia, State of
New Jersey and State of New Mexico, respectively, as set forth in the Commerce
Clearing
House, Inc. Secured Transactions Guide, as supplemented through March 21, 2007,
without
regard to any regulations promulgated thereunder or any judicial or
administrative interpretations
thereof. For purposes of each opinion in paragraph 1, as to existence and good
standing, we have
relied exclusively upon certificates issued by a governmental authority in each
relevant
jurisdiction and such opinion is not intended to provide any conclusion or
assurance beyond that
conveyed by such certificates. With respect to our opinions in paragraphs 2
through 4, such
opinions are based on the SCBCA, TBCA, CBCA, DGCL, KBCA, SDBCA, MBCA, PBCL,
MontBCA, IBCA, URBCA, IdBCA, WVBCA, MinBCA, KGCC, ABCA, MaBCA, ALBCA,
NCBCA, OGCA, WBCA, CGCL, WaBCA, MGBCL, GBCC, NJBCA and NMBCA, and with
your permission, we have rendered such opinions based exclusively on our review
of the
statutory provisions of such statutes as published by Aspen Law & Business, as
supplemented
through March 15, 2007, without regard to any regulations promulgated thereunder
or any
judicial or administrative interpretations thereof.

We advise you that issues addressed by this letter may be governed in whole or
in part by
other laws, but we express no opinion as to whether any relevant difference
exists between the
laws upon which our opinions are based and any other laws which may actually
govern. Our
opinions are subject to all qualifications in Schedule A and do not cover or
otherwise address any
law or legal issue that is identified in the attached Schedule C or any
provision in the Credit
Agreement or any of the other Credit Documents of any type identified in
Schedule D,
Provisions in the Credit Documents that are not excluded by Schedule D or any
other part of this
letter or its attachments are called the "Relevant Agreement Terms."

Except to the extent set forth in the preceding paragraph, each of our opinions
on each
legal issue addressed in this letter represents our opinion as to how the issue
addressed in such
opinion would be resolved were it to be considered by the highest court of the
jurisdiction upon
whose law our opinion on that issue is based. The manner in which any particular
issue would
be treated in any actual court case would depend in part on facts and
circumstances particular to
the case, and this letter is not intended to guarantee the outcome of any legal
dispute that may
arise in the future. It is possible that some Relevant Agreement Terms may not
prove

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Page 11

enforceable for reasons other than those cited in this letter should an actual
enforcement action
be brought, but (subject to all the exceptions, qualifications, exclusions and
other limitations
contained in this letter) such unenforceability would not in our opinion prevent
you from
realizing the principal benefits purported to be provided by the Relevant
Agreement Terms of a
remedial nature contained in the Credit Documents.

This letter speaks as of the time of its delivery on the date it bears. We do
not assume
any obligation to provide you with any subsequent opinion or advice by reason of
any fact about
which our Designated Transaction Lawyers did not have actual knowledge at such
time, by
reason of any change subsequent to such time in any law covered by any of our
opinions, or for
any other reason. The attached schedules are an integral part of this letter,
and any term defined
in this letter or any schedule has that defined meaning wherever it is used in
this letter or in any
schedule to this letter.

You may rely upon this letter only for the purposes served by the provisions in
the Credit
Agreement cited in the initial paragraph of this letter in response to which it
has been delivered.
Without our written consent: (i) no person other than you may rely on this
letter for any purpose;
(ii) this letter may not be cited or quoted in any financial statement,
prospectus, private
placement memorandum or other similar document; (iii) this letter may not be
cited or quoted in
any other document or communication that might encourage reliance upon this
letter by any
person or for any purpose excluded by the restrictions in this paragraph; and
(iv) copies of this
letter or any portion hereof may not be furnished to anyone for purposes of
encouraging or in a
manner that might encourage such reliance; provided, however, that financial
institutions that
subsequently become Lenders under the Credit Agreement in accordance with the
assignment
provisions thereof may rely on this letter as of the date hereof as if this
letter were addressed to
them.

Sincerely,

KIRKLAND & ELLIS LLP

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Schedule A
General Qualifications

The opinions in the letter to which this Schedule is attached ("our letter") are
subject to
the qualifications as set forth in this Schedule A.

1.    Bankruptcy and Insolvency Exception. Each of our opinions of our letter is
subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other
similar laws. This exception includes:

(a)     the Federal Bankruptcy Code and thus comprehends, among others, matters
of
turn-over, automatic stay, avoiding powers, fraudulent transfer, preference,
discharge, conversion of a non-recourse obligation into a recourse claim,
limitations on ipso facto and anti-assignment clauses and the coverage of pre-
petition    security agreements applicable to property acquired after a petition
is
filed;

(b)     all other Federal and state bankruptcy, insolvency, reorganization,
receivership,
moratorium, arrangement and assignment for the benefit of creditors laws that
affect the rights of creditors generally or that have reference to or affect
only
creditors of specific types of debtors;

(c)     state fraudulent transfer and conveyance laws; and

(d)     judicially developed doctrines in this area, such as substantive
consolidation of
entities and equitable subordination.

2.    Equitable Principles Limitation. Each of our opinions is subject to the
effect of general
principles of equity, whether applied by a court of law or equity. This
limitation includes
principles:

(a)     governing the availability of specific performance, injunctive relief or
other
equitable remedies, which generally place the award of such remedies, subject to
certain guidelines, in the discretion of the court to which application for such
relief is made;

(b)     affording equitable defenses (e.g., waiver, laches, and estoppel)
against a party
seeking enforcement;

(c)     requiring good faith and fair dealing in the performance and enforcement
of a
contract by the party seeking its enforcement;

(d)     requiring reasonableness in the performance and enforcement of an
agreement by
the party seeking enforcement of the contract;

(e)     requiring consideration of the materiality of (i) a breach and (ii) the
consequences
of the breach to the party seeking enforcement;

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(i)     requiring consideration of the impracticability or impossibility of
performance at
the time of attempted enforcement; and

(g)     affording defenses based upon the unconscionability of the enforcing
party's
conduct after the parties have entered into the contract.

3.     Other Common Qualifications. Each of our opinions of our letter is
subject to the effect
of rules of law that:

(a)     limit or affect the enforcement of provisions of a contract that purport
to waive, or
to require waiver of, the obligations of good faith, fair dealing, diligence and
reasonableness;

(b)     provide that forum selection (and not choice of law) clauses in
contracts are not
necessarily binding on the court(s) in the forum selected (except to the extent
provided in Section 5-1402 of the New York General Obligations Law);

(c)     limit the availability of a remedy under certain circumstances where
another
remedy has been elected;

(d)     provide a time limitation after which a remedy may not be enforced;

(e)     limit the right of a creditor to use force or cause a breach of the
peace in enforcing
rights;

(f)     relate to the sale or disposition of collateral by a secured creditor or
the
requirements of a commercially reasonable sale;

(g)    limit the enforceability of provisions releasing, exculpating or
exempting a party
from, or requiring indemnification of a party for, liability for its own action
or
inaction, to the extent the action or inaction involves negligence,
recklessness,
willful misconduct, unlawful conduct, violation of public policy, or for strict
product liability or litigation against another party determined adversely to
such
party or for liabilities arising under the securities laws, or which limit the
enforceability of provisions requiring indemnification of a party with respect
to
litigation between such party and another party from whom indemnification is
sought which is determined adversely to the party seeking indemnification;
    
(h)     may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in which the
unenforceable portion is not an essential part of the agreed exchange;

(i)     govern and afford judicial discretion regarding the determination of
damages and
entitlement to attorneys' fees and other costs;

(j)     may permit a party that has materially failed to render or offer
performance
required by the contract to cure that failure unless (i) permitting a cure would
unreasonably hinder the aggrieved party from making substitute arrangements for

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performance or (ii) it was important in the circumstances to the aggrieved party
that performance occur by the date stated in the contract;

(k)     may render guarantees or similar instruments or agreements unenforceable
under
circumstances where your actions, failures to act or waivers, amendments or
replacement of the Credit Documents (i) so radically change the essential nature
of the terms and conditions of the guaranteed obligations and the related
transactions that, in effect, a new relationship has arisen between the
beneficiary
and the Credit Parties that is substantially and materially different from that
presently contemplated by the Credit Documents, (ii) release a primary obligor,
or
(iii) impair a guarantor's recourse against the primary obligor; and

(1)    render unenforceable requirements in the Credit Documents that provisions
therein may only be waived or amended in writing, to the extent that an oral
agreement or an implied agreement by trade practice or course of conduct has
been created modifying any such provision.

4.     Referenced Provision Qualification. Each opinion regarding the validity,
binding effect,
or enforceability of a provision (the "First Provision") in any of the Credit
Documents
requiring any party to perform its obligations under, or to cause any other
person to
perform its obligations under, any other provision (the "Second Provision") of
any Credit
Document, or stating that any action will be taken as provided in or in
accordance with
any such Second Provision, are subject to the same qualifications as the
corresponding
opinion in this letter relating to the validity, binding effect, and
enforceability of such
Second Provision.

5.     Collateral Qualifications. The opinions and advice contained in our
letter are subject to
the following advice (terms used herein that are defined in the New York UCC or
any
other applicable UCC having the meanings for purposes hereof are used herein in
accordance with the meanings given to them therein):

(a)     rights of debtors and obligors and duties of secured parties referred to
in Sections
1-102(3) and 9-602 of the New York UCC (and the corresponding sections of any
other applicable Uniform Commercial Code) may not be waived, released, varied,
or disclaimed by agreement, and our opinions regarding any such waivers,
releases, variations, and disclaimers are limited accordingly,

(b)     our opinions regarding the creation and perfection of security interests
are subject
to the effect of (i) the limitations on the existence and perfection of security
interests in proceeds resulting from the operation of Section 9-3IS of any
applicable Uniform Commercial Code; (ii) the limitations in favor of buyers,
licensees and lessees imposed by Sections 9-320, 9-321, and 9-323 of any
applicable Uniform Commercial Code; (iii) the limitations with respect to
documents, instruments and securities imposed by Section 9-331 and 8-303 of any
applicable Uniform Commercial Code; (iv) other rights of persons in possession
of money, instruments and proceeds constituting certificated or uncertificated
securities; and (v) Section 547 of the Bankruptcy Code with respect to
preferential

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transfers and Section 552 of the Bankruptcy Code with respect to any Collateral
acquired by any Credit Party subsequent to the commencement of a case against
or by such Credit Party under the Bankruptcy Code;

(c)     Article 9 of each applicable Uniform Commercial Code requires the filing
of
continuation statements within specified periods in order to maintain the
effectiveness of the filings referred to in our letter;

(d)    additional filings or actions may be necessary if any Credit Party
changes its
name, identity or corporate or organization structure, any of its places of
business,
its chief executive office or the jurisdiction in which it is organized; or hi
or in
which any Collateral referred to hi opinion paragraph 10 is located;

(e)     we express no opinion regarding the perfection of any lien or security
interest in
any property (whether real, personal or mixed, and whether such perfection be
accomplished or purport to be accomplished by filing, by possession, by control
or otherwise) except as specifically set forth in our letter or regarding the
continued perfection of any possessory security interest in any Collateral (or
other
security interest the perfection of which depends upon the location of such
Collateral) upon or following the removal of such Collateral to another
jurisdiction; we express no opinion regarding the perfection of any security
interest in deposit accounts, money or letter-of-credit rights or regarding the
perfection of any possessory security interest in the Collateral hi possession
of a
person other than the secured party; we express no opinion with respect to the
perfection by filing of any security interest with respect to the Collateral as
to
which the filing of a Financing Statement has not been authorized by the debtor
either in an authenticated record or pursuant to Section 9-509(b) or (c) of the
New
York UCC; and except as expressly set forth in opinion paragraph 10 (regarding
certain security interests being acquired free of adverse claims), we express no
opinion regarding the priority of any lien or security interest;

(f)     the assignment of or creation of a security interest hi any contract,
lease, license,
permit, healthcare insurance receivable or other general intangible or account,
chattel paper or promissory note may require the approval of the issuer thereof
or
the other parties thereto, except to the extent that restrictions on the
creation,
attachment, perfection or enforcement of a security interest therein are
unenforceable under Sections 9-406 and 9-408 of the New York UCC;
    
(g)     we express no opinion with respect to any self-help remedies with
respect to the
Collateral to the extent they vary from those available under the New York UCC
or other applicable Uniform Commercial Code or with respect to any remedies
otherwise inconsistent with the New York UCC (to the extent that the New York
UCC is applicable thereto) or other applicable law (including, without
limitation,
any other applicable Uniform Commercial Code);

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(h)     a substantial body of case law treats guarantors as "debtors" under the
New York
UCC, thereby according guarantors rights and remedies of debtors established by
the New York UCC:

(i)     we express no opinion with respect to (1) the creation, perfection or
enforceability
of agricultural liens or (2) the creation, perfection or enforceability of
security
interests in: (i) property in which it is illegal or violative of governmental
rules or
regulations to grant a security interest (such as, for example, governmental
permits and licenses); (ii) subject to Section 9-406 and 9-408 of the applicable
UCC, general intangibles that terminate or become terminable if a security
interest is granted therein; (iii) subject to Section 9-406 and 9-408 of the
applicable UCC, property subject to negative pledge clauses of which you have
actual or constructive knowledge; (iv) vehicles, ships, vessels, barges, boats,
railroad cars, locomotives and other rolling stock, aircraft, aircraft engines,
propellers and related parts, and other property for which a state or federal
statute
or treaty (including without limitation any applicable Uniform Commercial Code)
provides for registration or certification of title or specifies a place of
filing
different from that specified in Section 9-501 of any applicable Uniform
Commercial Code (except to the extent of our opinion set forth in opinion
paragraph 11 hereof); (v) commercial tort claims; (vi) crops, farm products,
equipment used in fanning operations and accounts or general intangibles arising
from or relating to the sale of farm products by a farmer; (vii) timber to be
cut;
(viii) fixtures; (ix) "as-extracted collateral" (including, without limitation,
oil, gas
or other minerals, and accounts arising out of the sale at the wellhead or
minehead
of oil, gas or other minerals); (x) consumer goods; (xi) property identified to
a
contract with, or in the possession of, the United States of America or any
state,
county, city, municipality, or other governmental body or agency; (xii) goods
for
which a negotiable document of title has been issued; and (xv) (except to the
extent of our opinion set forth in opinion paragraph 11 hereof) copyrights,
patents,
trademarks, other literary property rights, service marks, know-how, processes,
trade secrets, undocumented computer software, unrecorded and unwritten data
and information, and rights and licenses thereunder;

(j)     we note that your remedies under the Collateral Agreement with regard to
the sale
or after the sale of (i) any securities subject to any security interest are
subject to
compliance with state and federal securities law or (ii) any interest in a
limited
liability company or partnership interest is subject to compliance with
applicable
law;

(k)     we express no opinion with respect to the enforceability of any security
interest in
any accounts, chattel paper, documents, instruments or general intangibles with
respect to which the account debtor or obligor is the United States of America,
any state, county, city, municipality or other governmental body, or any
department, agency or instrumentality thereof;

(1) w    e express no opinion with respect to the enforceability of any
provision of any
Credit Document that purports to authorize you to purchase at a private sale the

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Collateral, which is not subject to widely distributed standard price quotations
or
sold on a recognized market;

(m)     we express no opinion regarding any Credit Party's rights in or title
to, or power
to transfer any of its rights in or title to its properties, including, without
limitation, any of the Collateral;

(n)     we express no opinion regarding the characterization of a transaction as
one
involving the creation of a lien on real property, the characterization of a
contract
as one in a form sufficient to create a lien or a security interest in real
property,
the creation, perfection, priority or enforcement of a lien on real property or
matters involving ownership or title to any real property;

(o)    we note that the perfection of any security interest may be terminated as
to the
Collateral otherwise disposed of by any Credit Party if such disposition is
authorized in the Credit Documents or otherwise by the Administrative Agent, or
by any Lender;

(p)     we express no opinion regarding the enforceability of any pre-default
waiver of
notification of disposition of the Collateral, mandatory disposition of the
Collateral or redemption rights;

(q)     we express no opinion regarding the enforceability of any provisions
asserting
that the Collateral is owned by or is property of a secured party prior to such
secured party's foreclosure of such Collateral in accordance with the applicable
Uniform Commercial Code or, in the case of cash Collateral, the application of
such cash Collateral in payment of the secured obligations;

(r)     we note that our opinions as to the validity, binding effect or
enforceability of any
Credit Document do not constitute opinions as to the creation, perfection,
effect of
perfection or priority of any lien or security interest purported to be granted
thereunder; opinions as to the creation, perfection, effect of perfection or
priority
of any lien or security interest are given to the extent provided, if at all,
only in
opinion paragraphs 8, 9, 10 and 11 and are subject to the assumptions,
qualifications and limitations applicable to such opinions set forth in this
letter
and the accompanying attachments;

(s)     we express no opinion as to the enforceability of cumulative remedies to
the
extent such cumulative remedies purport to or would have the effect of
compensating the party entitled to the benefits thereof in amounts in excess of
the
actual loss suffered by such party or would violate applicable laws concerning
real estate or mixed collateral foreclosures or elections of remedies;
    
(t)     we express no opinion regarding the creation, attachment, perfection,
effect of
perfection or enforceability of any security interest created in Collateral
described
in the Collateral Agreement and the Intellectual Property Security Agreements as

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"any property or assets whatsoever", "all other tangible and intangible personal
property", "all assets", "all personal property" or words of similar import.

6.     Lender's Regulatory Qualification. We express no opinion with respect to,
and all our
opinions are subject to, the effect of the compliance or noncompliance of each
of you
with any state or federal laws or regulations applicable to you because of your
legal or
regulatory status or the nature of your business or requiring you to qualify to
conduct
business in any jurisdiction.

7.     Usury Qualification. We express no opinion with regard to usury or other
laws limiting
or regulating the maximum amount of interest that may be charged, collected,
received or
contracted for other than the internal laws of the State of New York, and,
without limiting
the foregoing, we expressly disclaim any opinion as to the usury or other such
laws of
any other jurisdiction (including laws of other states made applicable through
principles
of federal preemption or otherwise) that may be applicable to the transactions
contemplated by the Credit Documents.

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Schedule B
Assumptions

For purposes of our letter, we have relied, without investigation, upon each of
the
following assumptions:

1.     Each of the Credit Parties (i) has the requisite title and rights to any
property involved in
the transactions effected under the Credit Documents (herein called the
"Transactions")
including without limiting the generality of the foregoing, each item of
Collateral existing
on the date hereof and (ii) will have the requisite title and rights to each
item of Collateral
arising after the date hereof;

2.     You are existing and in good standing in your jurisdiction of
organization;

3.     You have the corporate power or, if you are not a corporation, other
requisite power
(including, without limitation, under the laws of your jurisdiction of
organization) to
execute, deliver and to perform your obligations under each of the Credit
Documents, and
each of the Credit Documents to which you are a party has been duly authorized
by all
necessary action on your part and, to the extent you are a party, has been duly
executed
and duly delivered by you;

4.     The Credit Documents to which you are a party constitute valid and
binding obligations
of yours and are enforceable against you in accordance with their terms (subject
to
qualifications, exclusions, and other limitations similar to those applicable to
our letter);

5.     You have satisfied those legal requirements that are applicable to you to
the extent
necessary to make the Credit Documents enforceable against you;

6.     You have complied with all legal requirements pertaining to your status
as such status
relates to your rights to enforce the Credit Documents against the Credit
Parties;

7.     Each document submitted to us for review is accurate and complete, each
such document
that is an original is authentic, each such document that is a copy conforms to
an
authentic original, and all signatures on each such document are genuine;

8.     Each Public Authority Document is accurate, complete and authentic and
all official
public records (including their proper indexing and filing) are accurate and
complete.
The term ("Public Authority Documents") means a certificate issued by any
secretary of
state of any other government official, office or agency concerning a person's
property or
status, such as a certificate of corporate or partnership existence or good
standing, a
certificate concerning tax status, a certificate concerning Uniform Commercial
Code
filings or a certificate concerning title registration or ownership.

9.     There has not been any mutual mistake of fact or misunderstanding, fraud,
duress or
undue influence;

10.     The conduct of the parties to the Credit Documents has complied with any
requirement of
good faith, fair dealing, and conscionability;

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11.     You have acted in good faith and without notice of any defense against
the enforcement
of any rights created by, or adverse claim to any property or security interest
transferred
or created as part of, the Transactions;

12.     There are no agreements or understandings among the parties, written or
oral (other than
the Credit Documents), and there is no usage of trade or course or prior dealing
among
the parties that would, in either case, define, supplement or qualify the terms
of the Credit
Agreement or any of the other Credit Documents;

13.     The constitutionality or validity of a relevant statute, rule,
regulation or agency action is
not in issue;

14.     All parties to the Transactions will act in accordance with, and will
refrain from taking
any actions that are forbidden by, the terms and conditions of the Credit
Documents;

15.     All agreements other than the Credit Documents (if any) with respect to
which we have
provided advice in our letter or reviewed in connection with our letter would be
enforced
as written;

16.     None of the Credit Parties will in the future take any discretionary
action (including a
decision not to act) permitted under the Credit Documents that would result in a
violation
of law or constitute a breach or default under any other agreements or court
orders to
which such entity may be subject;

17.     The Credit Parties will in the future obtain all permits and
governmental approvals
required, and will in the future take all actions required, relevant to the
consummation of
the Transactions or performance of the Credit Documents;

18.     The representations made by each Credit Party in the Credit Documents to
which it is a
party with respect to its jurisdiction or organization, chief executive office
and location of
equipment and inventory are and will remain true and correct.

19.     Each natural person who is executing any Credit Document on behalf of
any Credit Party
has sufficient legal capacity to enter into such Credit Document, and we have no
actual
knowledge of any such incapacity,

20.     No Lender is subject to Regulation T of the Board of Governors of the
Federal Reserve
System; and no proceeds of the Loans will be used for any purpose which would
violate
or be inconsistent with terms of the Credit Agreement;

21.     All information required to be disclosed in connection with any consent
or approval by
the Credit Parties' respective board of directors, board of managers, or
manager, as
applicable, or their stockholders (or equivalent governing or ownership group)
and all
other information required to be disclosed in connection with any issue relevant
to our
opinions or any matter relevant to any legal issue covered by our opinions has
been fully
and fairly disclosed to all persons to whom it is required to be disclosed and
no such
disclosure contained any relevant error or omission;

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22.     Each person who has taken any action relevant to any of our opinions in
the capacity of
director, management committee member, or officer was duly elected to that
director,
management committee member, or officer position and held that position when
such
action was taken (except that this assumption is limited to those of the
preceding items
with respect to the adoption of which we did not have involvement and we note
that we
were involved in the drafting of the resolutions approving the execution and
delivery of
the Credit Documents);

23.     Each of the Credit Parties' Organization Documents, all amendments to
each such
Organization Document, all resolutions adopted establishing classes or series of
stock or
other equity interests under such Organization Documents have been adopted in
accordance with all applicable legal requirements (except that this assumption
is limited
to those of the preceding items with respect to the adoption of which we did not
have
involvement);

24.     The transactions contemplated by the Credit Documents are directly or
indirectly related
to the business interests of each Credit Party party thereto and the
transactions were fair
and reasonable to each such entity at the time each such transaction was
authorized by
such Credit Party, and the transactions were necessary or convenient to the
conduct,
promotion, or attainment of the business of the Credit Parties;

25.     Collateral Assumptions. The opinions and advice contained in our letter
are subject to
the following assumptions:

(a)     each of the Credit Parties that grants or purports to grant any lien or
security
interest in any property or the Collateral (i) has the requisite title and
rights to any
property involved in the Transactions, including, without limiting the
generality
of the foregoing, each item of the Collateral existing on the date hereof and
(ii)
will have the requisite title and rights to each item of the Collateral arising
after
the date, hereof;

(b)     value (as defined in Section 1-201(44) of the New York UCC) has been
given by
you to the Credit Parties for the security interests and other rights in and
assignments of the Collateral described in or contemplated by the Credit
Documents;

(c)     the descriptions of the Collateral in the Credit Documents and the
Financing
Statements reasonably describe the property intended to be described as the
Collateral; and

(d)     all information regarding the secured party on the Financing Statements
is
accurate and complete in all respects.

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Schedule C
Excluded Law and Legal Issues

None of the opinions or advice contained in our letter covers or otherwise
addresses any
of the following laws, regulations or other governmental requirements or legal
issues:

1.     Except with respect to the Investment Company Act of 1940, as amended, to
the extent of
our opinion in opinion paragraph 12, federal securities laws and regulations
(including all
other laws and regulations administered by the United States Securities and
Exchange
Commission), state "Blue Sky" laws and regulations, and laws and regulations
relating to
commodity (and other) futures and indices and other similar instruments;

2.     Pension and employee benefit laws and regulations (e.g., ERISA);

3.     Federal and state antitrust and unfair competition laws and regulations;

4.     Other than as set forth in opinion paragraphs 9 and 11, Federal and state
laws and
regulations concerning filing and notice requirements (such as the
Hart-Scott-Rodino
Antitrust Improvements Act of 1986, as amended, and the Exon-Florio Act, as
amended)
other than requirements applicable to charter-related documents such as a
certificate of
merger;

5.     Compliance with fiduciary duty requirements;

6.     The statutes and ordinances, the administrative decisions and the rules
and regulations of
counties, towns, municipalities and special political subdivisions and judicial
decisions to
the extent that they deal with any of the foregoing;

7.     Fraudulent transfer and fraudulent conveyance laws;

8.     Federal and state environmental, land use and subdivision, tax,
racketeering (e.g., RICO),
health and safety and labor laws and regulations;

9.     To the extent not otherwise specified in this Schedule C, applicable
zoning and building
laws, ordinances, code, rules or regulations (e.g., OSHA);

10.     Other than to the extent of our opinions in opinion paragraph 11,
federal patent,
trademark and copyright, state trademark, and other federal and state
intellectual property
laws and regulations;

11.     Federal and state laws, regulations and policies concerning (i) national
and local
emergency, (ii) possible judicial deference to acts of sovereign states, and
(iii) criminal
and civil forfeiture laws;

12.     Other federal and state statutes of general application to the extent
they provide for
criminal prosecution (e.g., mail fraud and wire fraud statutes);

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13.     Any laws, regulations, directives and executive orders that prohibit or
limit the
enforceability of obligations based on attributes of the party seeking
enforcement (e.g.,
the Trading with the Enemy Act and the International Emergency Economic Powers
Act);

14.     the Anti-Terrorism Order, including Executive Order No. 13224 on
Terrorism Financing,
effective September 24, 2001 and the United and Strengthening America by
Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(together,
the "Anti-Terrorism Order") as amended, all rules and regulations promulgated
thereunder and all federal, state and local laws, statutes, ordinances, orders,
governmental
rules, regulations, licensing requirements and policies relating to the
Anti-Terrorism
Order, the foreign assets control regulations of the United States Treasury
Department,
and to the extent the following relate to any Anti-Terrorism Law such
anti-terrorism law
or regulation (including without limitation the Executive order of September 23,
2001
Blocking Property and Prohibiting Transactions and Persons Who Commit and
Threaten
to Commit or Support Terrorism) or the Anti-Terrorism Order: the ownership and
operation of, or otherwise regulation of, companies which conduct, operate or
otherwise
pursue the business or businesses now and in the future conducted, operated or
otherwise
pursued by any of the Credit Parties including, without limitation, the
importation,
transportation, manufacturing, dealing, purchase, use or storage of explosive
materials;

15.     The Federal Power Act, as amended, and the regulations implementing the
Federal Power
Act, all rules and regulations promulgated under any of the foregoing statutes,
the rules,
regulations and policies of the Federal Energy Regulatory Commission and any
other
federal or any state or local regulatory authority, and all other federal state
and local laws,
orders, regulations, licensing requirements and policies regulating, public
utilities,
electric utilities or energy facilities or services (and including without
limitation any
requirement under any such federal, state or local law or regulation that any
Credit Party
obtain any consent, approval, authorization or order in order to enter into the
Credit
Documents and perform the transactions contemplated thereby or the effect of any
failure
to obtain any such consent, approval, authorization or order);

16.     The Fair Packaging and Labeling Act, as amended, the Food, Drug and
Cosmetic Act, as
amended, the Food Security Act of 1985, as amended, the Perishable Agricultural
Commodities Act, as amended, the Food, Agriculture, Conservation and Trade Act
of
1990, as amended, the Nutritional Labeling and Education Act, as amended, all
rules,
policies and regulations promulgated under any of the foregoing statutes, and
all other
federal, state and local laws, orders, regulations, licensing requirements and
policies
relating to the ownership, operation, processing, production, distribution,
purchase or
provisions of, or otherwise regulating, food or farm products or animals.

17.     Federal, state and local liquor licensing laws and regulations;

18.     Title to any property;

19.     Except as specifically provided in opinion paragraph 13, the Federal
Reserve Board
margin regulations; and

C-2

--------------------------------------------------------------------------------

20.     The effect of any law, regulation or order which becomes effective after
the date hereof.

We have not undertaken any research for purposes of determining whether any of
the
Credit Parties or any of the Transactions that may occur in connection with the
Credit Agreement
or any of the other Credit Documents is subject to any law or other governmental
requirement
other than to those laws and requirements that in our experience would generally
be recognized
as applicable to the general business corporations which are engaged in
transactions of the type
contemplated by the Credit Documents and which are not engaged in regulated
business
activities in the absence of research by lawyers in the State of New York, and
none of our
opinions covers any such law or other requirement unless (i) one of our
Designated Transaction
Lawyers had actual knowledge of its applicability at the time our letter is or
was delivered on the
date it bears and (ii) it is not excluded from coverage by other provisions in
our letter or in any
Schedule to our letter.

C-3

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Schedule D
Excluded Provisions

None of the opinions in the letter to which this Schedule is attached covers or
otherwise
addresses any of the following types of provisions which may be contained in the
Credit
Documents:

1.     Covenants not to compete, including without limitation covenants not to
interfere with
business or employee relations, covenants not to solicit customers, and
covenants not to
solicit or hire employees.

2.     Indemnification for negligence, bad faith, willful misconduct or
wrongdoing or strict
product liability or any indemnification for liabilities arising under
securities laws;

3.     Provisions mandating contribution towards judgments or settlements among
various
parties;

4.     Waivers of (i) legal or equitable defenses, (ii) rights to damages, (iii)
rights to counter
claim or set off, (iv) statutes of limitations, (v) rights to notice, (vi) the
benefits of
statutory, regulatory, or constitutional rights, unless and to the extent the
statute,
regulation, or constitution explicitly allows waiver, (vii) broadly or vaguely
stated rights,
and (viii) other benefits to the extent they cannot be waived under applicable
law;

5.     Provisions providing for forfeitures or the recovery of amounts deemed to
constitute
penalties, or for liquidated damages, acceleration of future amounts due (other
than
principal) without appropriate discount to present value, late charges,
prepayment
charges, interest upon interest, and increased interest rates upon default;

6.     Time-is-of-the-essence clauses;

7.     Provisions that provide a time limitation after which a remedy may not be
enforced;

8.     Confession of judgment clauses;

9.     Agreements to submit to the jurisdiction of any particular court or other
governmental
authority (either as to personal jurisdiction or subject matter jurisdiction);
provisions
restricting access to courts; waiver of the right to jury trial; waiver of
service of process
requirements which would otherwise be applicable; and provisions otherwise
purporting
to affect the jurisdiction and venue of courts;

10.     Provisions that, attempt to change or waive rules of evidence or fix the
method or
quantum of proof to be applied in litigation or similar proceedings;

11.     Provisions appointing one party as an attorney-in-fact for an adverse
party or providing
that the decision of any particular person will be conclusive or binding on
others;

12.     Provisions purporting to limit rights of third parties who have not
consented thereto or
purporting to grant rights to third parties;

D-l

--------------------------------------------------------------------------------

13.     Provisions that purport to award attorneys' fees solely to one party;

14.     Arbitration agreements;

15.     Provisions purporting to create a trust or constructive trust without
compliance with
applicable trust law;

16.     Provisions relating to the application of insurance proceeds and
condemnation awards;

17.     Provisions that provide for the appointment of a receiver or the taking
of possession by
the Administrative Agent;

18.     Provisions or agreements regarding proxies, shareholders agreements,
shareholder voting
rights, voting trusts, and the like;

19.     Confidentiality agreements;

20.     Provisions, if any, which are contrary to the public policy of
jurisdictions covered by our
opinions;

21.     Choice of law provisions, other than, under New York statutory
choice-of-law rules,
those provisions in the Credit Documents that provide that the laws of the State
of New
York shall govern;

22.     Provisions in any of the Credit Documents requiring any Credit Party to
perform its
obligations under, or cause any other person to perform its obligations under,
or stating
that any action will be taken as provided in or in accordance with, any
agreement or other
document that is not a Credit Document;

23.     Provisions of the Credit Documents insofar as they authorize you or your
affiliates to
setoff and apply deposits at any time held, and any other indebtedness at
anytime owing
by you to or for the account of any Credit Party;

24.     California laws and regulations governing restrictions and distributions
(e.g., Cal. Corp.
Code 9500 et seq.); and

25.     California Corporations Code Section 2115.

26.     Section 9.16 and 9.17 of the Credit Agreement.

D-2

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Schedule E
Schedule of Guarantors
Legal Name                                        State of Inc.    
1. A-1 MEDICAL EQUIPMENT, INC.                                Florida
2. ABBA MEDICAL EQUIPMENT, INC.                            Florida
3. ACADIA HOME CARE                                    Maine
4. ALLIED MEDICAL SUPPLY, INC.                                Arizona
5. ALWAYS MEDICAL EQUIPMENT, INC.                            Florida
6. Andy Boyd's InHome Medical, Inc., West                            West
Virginia
7. Andy Boyd's InHome Medical/lnHome Medical Inc.                        West
Virginia
8. Anniston Health & Sickroom Supplies, Inc.                            Alabama
9. BERKELEY MEDICAL EQUIPMENT, INC.                            Florida
10. Best Care Medical Supply, Inc.                                Michigan
11. BETA MEDICAL EQUIPMENT, INC.                            Florida
12. Cambria Medical Supply, Inc.                                Florida
13. Camden Medical Supply, Inc.                                Florida
14. CARE MEDICAL SUPPLIES. INC.                            Illinois
15. CENTENNIAL MEDICAL EQUIPMENT, INC.                        Florida
16. Charlotte Medical Supply, Inc.                                Florida    
17. COLLINS RENTALS, INC.                                Missouri
18. Community Home Oxygen, Inc.                                Montana
19. CONTOUR MEDICAL SUPPLY, INC.                            Florida
20. Corley Home Health Care, Inc.                                Georgia    
21. CPO 2, Inc.                                        Pennsylvania
22. Cynthiana Home Medical Equipment, Inc.                        Florida
23. DANIEL MEDICAL SYSTEMS, INC.                            Oklahoma
24. DISTINCT HOME HEALTH CARE, INC.                            Florida
25. DON PAUL RESPIRATORY SERVICES, INC.                        Colorado
26. DUMED, INC.                                        Iowa
27. East Tennessee Infusion & Respiratory, Inc.                        Florida
28. ENCORE HOME HEALTH CARE, INC.                            Florida
29. Epsilon Home Health Care, Inc.                                Florida
30. EXCEL MEDICAL OF FORT DODGE. INC.                        Iowa
31. EXCEL MEDICAL OF MARSHALLTOWN, INC.                        Iowa
32. First Community Care of Niagara, Inc.                            New York
33. FIRSTCARE, INC.                                    Kansas
34. FISCHER MEDICAL EQUIPMENT. INC.                            Idaho
35. FOUR RIVERS HOME HEALTH CARE, INC.                        Missouri
36. G&G MEDICAL, INC.                                    Colorado
37. GATE CITY MEDICAL EQUIPMENT, INC.                        Florida
38. Georgia Medical Resources, Inc.                            Georgia
39. GLADWIN AREA HOME CARE, INC.                            Michigan
40. Hamilton Medical Equipment Service, Inc.                        Iowa
41. Health Care Services of Mississippi,
Incorporated                        Florida
42. HOLLAND MEDICAL SERVICES, INC.                            Florida

E-l

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43. HOME CARE OXYGEN SERVICE, INC.                            Minnesota
44. HOME MEDICAL SYSTEMS, INC.                            South
Carolina                            
45. IHS ACQUISITION XXVII,
INC.                                Delaware                            
46. Integrated Health Services at Jefferson Hospital,
Inc.                    Delaware
47. INTEGRATED OF GARDEN TERRACE, INC.                        Delaware
48. INTENSIVE HOME CARE SERVICES. INC.                        Texas
49. IOTA MEDICAL EQUIPMENT, INC.                            Florida
50. LAMBDA MEDICAL EQUIPMENT, INC.                            Florida
51. LAMS, INC.                                        Texas
52. LAWRENCE MEDICAL EQUIPMENT, INC.                        Kansas
53. LIBERTY HOME HEALTH CARE, INC.                            Florida
54. LOVEJOY MEDICAL, INC.                                Kentucky
55. MAJOR MEDICAL SUPPLY, INC.                            Texas
56. MEDCO PROFESSIONAL SERVICES, CORP.                        Colorado
57. MEDCORP INTERNATIONAL, INC.                            Arizona
58. MEDIC-AIRE MEDICAL EQUIPMENT, INC.                        Florida
59. Medical Electro-Therapeutics, Inc.                            Florida
60. MEDICARE RENTAL SUPPLY, INC.                            West Virginia
61. MICHIGAN MEDICAL SUPPLY, INC.                            Michigan
62. National Medical Equipment Centers, Inc.                        Florida
63. Neumann's Home Medical Equipment, Inc.                        Illinois
64. NIGHTINGALE HOME HEALTH CARE, INC.                        Florida
65. North Central Washington Respiratory Care Services,
Inc.                    Washington
66. NORTHEAST MEDICAL EQUIPMENT, INC.                        Florida
67. NORTHWEST HOME MEDICAL, INC.                            Idaho
68. Omega Medical Equipment, Inc.                                Florida
69. OMICRON MEDICAL EQUIPMENT, INC.                            Florida
70. OXYGEN OF OKLAHOMA, INC.                            Oklahoma
71. OXYGEN PLUS MEDICAL EQUIPMENT, INC.                        Florida
72. OXYGEN PLUS, INC.                                    Colorado
73. OXYGEN THERAPY ASSOCIATES, INC.                        Texas
74. Peterson's Home Care, Inc.                                California
75. PHI MEDICAL EQUIPMENT, INC.                            Florida
76. PIONEER MEDICAL SERVICES, INC.                            West Virginia
77. PREFERENTIAL HOME HEALTH CARE, INC.                        Florida
78. Premier Medical, Inc.                                    New Mexico
79. PRINCIPAL MEDICAL EQUIPMENT. INC.                        Florida
80. Professional Breathing Associates, Inc.                            Michigan
81. Professional Respiratory Home Healthcare,
Inc.                        Florida
82. PSI HEALTH CARE, INC.                                South Dakota
83. Pulmo-Dose, Inc.                                    Florida
84. PULMONARY HOME CARE, INC.                            New Jersey
85. QUALITY HOME HEALTH CARE. INC.                            Florida
86. R N Home Care Medical Equipment Company, Inc.                    Florida
87. R.C.P.S., Inc.                                        California
88. RCI Medical Corp.                                    New Jersey
89. REGENCY MEDICAL EQUIPMENT, INC.                            Florida

E-2

--------------------------------------------------------------------------------

90. RESP-A-CARE, INC.                                    Kentucky
91. RESPIRACARE MEDICAL EQUIPMENT, INC.                        Florida
92. Respiratory Medical Equipment of GA., Inc.                        Florida
93. RESPITECH HOME HEALTH CARE, INC.                        Wyoming
94. RESPONSIVE HOME HEALTH CARE, INC.                        Florida
95. RHEMA.INC.                                        Texas
96. RITT MEDICAL GROUP, INC.                                Arizona
97. R N Home Care Medical Equipment Company, Inc.                    Florida
98. ROSWELL HOME MEDICAL, INC.                            Florida
99. Rotech Employee Benefits Corporation                            Florida
100.ROTECH HOME MEDICAL CARE, INC.                            Florida
101.Rotech Oxygen and Medical Equipment, Inc.                        Florida
102.ROTH MEDICAL, INC.                                Colorado
103.Rothert's Hospital Equipment, Inc.                            Kentucky
104.Sampson Convalescent Medical Supply, Inc.                        North
Carolina
105.SELECT HOME HEALTH CARE, INC.                            Florida
106.SIGMA MEDICAL EQUIPMENT, INC.                            Florida
107. Signature Home Care of Kansas, Inc.                            Kansas
108.SOUTHEASTERN HOME HEALTH, INC.                        Florida
109.Stat Medical Equipment, Inc.                                Florida
110.SUN MEDICAL SUPPLY, INC.                                North Carolina
111.SUNSHINE HOME HEALTH CARE, INC.                        Florida
112.THE KILROY COMPANY                                North Carolina
113.THETA HOME HEALTH CARE, INC.                            Florida
114.TUPELO HOME HEALTH, INC.                                Florida
115.VALLEY MEDICAL EQUIPMENT, INC.                            Utah
116.VALUE CARE, INC.                                    Florida
117.VITALCARE HEALTH SERVICES, INC.                            Florida
118.VITALCARE OF PENNSYLVANIA, INC.                            Pennsylvania
119.VITALCARE OF TEXAS, INC.                                Texas
120.WHITE'S MEDICAL RENTALS, INC.                            South Carolina
121.WICHITA MEDICAL CARE, INC.                            Kansas
122.ZETA HOME HEALTH CARE, INC.                            Florida

E-3

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Schedule F
Schedule of Filing Offices

Entity
Filing Office
 
 
South Carolina Credit Parties
Secretary of State
 
 
North Carolina Credit Parties
Secretary of State
 
 
New Mexico
Secretary of State
 
 
Texas Credit Parties
Secretary of State
 
 
Colorado Credit Parties
Secretary of State
 
 
Delaware Credit Parties
Department of State
 
 
Kentucky Credit Parties
Secretary of State
 
 
South Dakota Credit Parties
Secretary of State
 
 
Michigan Credit Parties
Department of State
 
 
Pennsylvania Credit Parties
Department of State
 
 
Montana Credit Parties
Secretary of State
 
 
Iowa Credit Parties
Secretary of State
 
 
Illinois Credit Parties
Secretary of State
 
 
Utah Credit Parties
Secretary of State
 
 
Idaho Credit Parties
Secretary of State
 
 
West Virginia Credit Parties
Secretary of State
 
 
Minnesota Credit Parties
Secretary of State
 
 
Kansas Credit Parties
Secretary of State
 
 
Arizona Credit Parties
Secretary of State
 
 
Maine Credit Parties
Secretary of State
 
 
Alabama Credit Parties
Secretary of State
 
 
Oklahoma Credit Parties
County Clerk's Office
 
 
Wyoming Credit Parties
Secretary of State
 
 
California Credit Parties
Secretary of State
 
 
New York Credit Parties
Secretary of State
 
 
Washington Credit Parties
Department of Licensing
 
 
Missouri Credit Parties
Secretary of State
 
 
Georgia Credit Parties
Central UCC Indexing System
 
 
New Jersey Credit Parties
Department of Revenue
 
 

F-l

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Schedule G
South Carolina Credit Parties
HOME MEDICAL SYSTEMS, INC.
WHITE'S MEDICAL RENTALS, INC.
North Carolina Credit Parties
Sampson Convalescent Medical Supply, Inc.
SUN MEDICAL SUPPLY, INC.
THE KILROY COMPANY
New Mexico Credit Parties
Premier Medical, Inc.
Texas Credit Parties
INTENSIVE HOME CARE SERVICES, INC.
LAMS, INC.
MAJOR MEDICAL SUPPLY, INC.
OXYGEN THERAPY ASSOCIATES, INC.
RHEMA, INC.
VITALCARE OF TEXAS, INC.
Colorado Credit Parties
DON PAUL RESPIRATORY SERVICES, INC.
G&G MEDICAL, INC.
MEDCO PROFESSIONAL SERVICES, CORP.
OXYGEN PLUS, INC.
ROTH MEDICAL, INC.
Delaware Credit Parties
IHS ACQUISITION XXVH, INC.
Integrated Health Services at Jefferson Hospital, Inc.
INTEGRATED OF GARDEN TERRACE, INC.
ROTECH HEALTHCARE INC
Kentucky Credit Parties
LOVEJOY MEDICAL, INC.
RESP-A-CARE, INC.
Rothert's Hospital Equipment, Inc.
South Dakota Credit Parties
PSI HEALTH CARE, INC.
Michigan Credit Parties
GLADWIN AREA HOME CARE, INC.
MICHIGAN MEDICAL SUPPLY, INC.
Professional Breathing Associates, Inc.
Best Care Medical Supply, Inc.
Pennsylvania Credit Parties
CPO 2, Inc.
VITALCARE OF PENNSYLVANIA, INC.
Montana Credit Parties
Community Home Oxygen, Inc.
Iowa Credit Parties
DUMED, INC.
EXCEL MEDICAL OF FORT DODGE, INC.
EXCEL MEDICAL OF MARSHALLTOWN, INC.
Hamilton Medical Equipment Service, Inc.
Illinois Credit Parties
CARE MEDICAL SUPPLIES, INC.
Neumann's Home Medical Equipment, Inc.
Utah Credit Parties
VALLEY MEDICAL EQUIPMENT, INC.
Idaho Credit Parties
FISCHER MEDICAL EQUIPMENT, INC.
NORTHWEST HOME MEDICAL, INC.
West Virginia Credit Parties
Andy Boyd's InHome Medical, Inc., West
Andy Boyd's InHome Medical/InHome Medical Inc.
MEDICARE RENTAL SUPPLY, INC.

G-l

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PIONEER MEDICAL SERVICES, INC.
Minnesota Credit Parties
HOME CARE OXYGEN SERVICE, INC.
Kansas Credit Parties
FIRSTCARE, INC.
LAWRENCE MEDICAL EQUIPMENT, INC.
WICHITA MEDICAL CARE, INC.
Signature Home Care of Kansas, Inc.
Arizona Credit Parties
ALLIED MEDICAL SUPPLY, INC.
MEDCORP INTERNATIONAL, INC.
RTTT MEDICAL GROUP, INC.
Maine Credit Parties
ACADIA HOME CARE
Alabama Credit Parties
Anniston Health & Sickroom Supplies, Inc.
Oklahoma Credit Parties
DANIEL MEDICAL SYSTEMS, INC.
OXYGEN OF OKLAHOMA, INC.
Wyoming Credit Parties
RESPITECH HOME HEALTH CARE, INC.
California Credit Parties
Peterson's Home Care, Inc.
R.C.P.S., Inc.
New York Credit Parties
First Community Care of Niagara, Inc.
Washington Credit Parties
North Central Washington Respiratory Care Services, Inc.
Missouri Credit Parties
COLLINS RENTALS, INC.
FOUR RIVERS HOME HEALTH CARE, INC.
Georgia Credit Parties
Corley Home Health Care, Inc.
Georgia Medical Resources, Inc.
New Jersey Credit Parties
PULMONARY HOME CARE, INC.
RCI Medical Corp.
Florida Credit Parties
A-l MEDICAL EQUIPMENT, INC.
ABBA MEDICAL EQUIPMENT, INC.
ALWAYS MEDICAL EQUIPMENT, INC.
BERKELEY MEDICAL EQUIPMENT, INC.
BETA MEDICAL EQUIPMENT, INC.
Cambria Medical Supply, Inc.
Camden Medical Supply, Inc.
CENTENNIAL MEDICAL EQUIPMENT, INC.
Charlotte Medical Supply, Inc.
CONTOUR MEDICAL SUPPLY, INC.
Cynthiana Home Medical Equipment, Inc.
DISTINCT HOME HEALTH CARE, INC.
East Tennessee Infusion & Respiratory, Inc.
ENCORE HOME HEALTH CARE, INC.
GATE CITY MEDICAL EQUIPMENT, INC.
Health Care Services of Mississippi, Incorporated
HOLLAND MEDICAL SERVICES, INC.
IOTA MEDICAL EQUIPMENT, INC.
LAMBDA MEDICAL EQUIPMENT, INC.
LIBERTY HOME HEALTH CARE, INC.
MEDIC-AIRE MEDICAL EQUIPMENT, INC.
Medical Electro-Therapeutics, Inc.

I-2

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National Medical Equipment Centers, Inc.
NIGHTINGALE HOME HEALTH CARE, INC.
NORTHEAST MEDICAL EQUIPMENT, INC.
Omega Medical Equipment, Inc.
OMICRON MEDICAL EQUIPMENT, INC.
OXYGEN PLUS MEDICAL EQUIPMENT, INC.
PHI MEDICAL EQUIPMENT, INC.
PREFERENTIAL HOME HEALTH CARE, INC.
PRINCIPAL MEDICAL EQUIPMENT, INC.
Professional Respiratory Home Healthcare, Inc.
Pulmo-Dose, Inc.
QUALITY HOME HEALTH CARE, INC.
R N Home Care Medical Equipment Company, Inc.
REGENCY MEDICAL EQUIPMENT, INC.
RESPIRACARE MEDICAL EQUIPMENT, INC.
Respiratory Medical Equipment of GA., Inc.
RESPONSIVE HOME HEALTH CARE, INC.
ROSWELL HOME MEDICAL, INC.
ROTECH HOME MEDICAL CARE, INC.
Rotech Oxygen and Medical Equipment, Inc.
SELECT HOME HEALTH CARE, INC.
SIGMA MEDICAL EQUIPMENT, INC.
SOUTHEASTERN HOME HEALTH, INC.
SUNSHINE HOME HEALTH CARE, INC.
THETA HOME HEALTH CARE, INC.
TUPELO HOME HEALTH, INC.
VALUE CARE, INC.
VITALCARE HEALTH SERVICES, INC.
ZETA HOME HEALTH CARE, INC.
Epsilon Home Health Care, Inc.
R N Home Care Medical Equipment Company, Inc.
Rotech Employee Benefits Corporation
Stat Medical Equipment, Inc.

I-3

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Schedule H
Schedule of Securities

Pledged Stock each of which is held by the Borrower:
 
ISSUER
CLASS
OF
STOCK
STOCK
CERT #
NO. OF
SHARES
1.
A-l Medical Equipment, Inc.
Common
4
500
2.
Abba Medical Equipment, Inc.
Common
4
500
3.
Acadia Home Care
Common
53
10
4.
Allied Medical Supply, Inc.
Common
7
6,000
5.
Always Medical Equipment, Inc.
Common
4
500
6.
Andy Boyd's InHome Medical, Inc., West
Common
53
10
7.
Andy Boyd's InHome Medical/InHome Medical Inc.
Common
53
10
8.
Anniston Health & Sickroom Supplies, Inc.
Common
103
100
9.
Berkeley Medical Equipment, Inc.
Common
4
500
10.
Best Care Medical Supply, Inc.
Common
53
10
11.
Beta Medical Equipment, Inc.
Common
4
500
12.
Cambria Medical Supply, Inc.
Common
4
500
13.
Camden Medical Supply, Inc.
Common
4
500
14.
Care Medical Supplies, Inc.
Common
6
1,000
15.
Centennial Medical Equipment, Inc.
Common
4
500
16.
Charlotte Medical Supply, Inc.
Common
4
500
17.
Collins Rentals, Inc.
Common
12
52,000
18.
Community Home Oxygen, Inc.
Common
4
500
19.
Contour Medical Supply, Inc.
Common
4
500
20.
Corley Home Health Care, Inc.
Common
8
4,000
21.
CPO 2, Inc.
Common
6
1,000
22.
Cynthiana Home Medical Equipment, Inc.
Common
5
500
23.
Daniel Medical Systems, Inc.
Common
103
12,000
24.
Distinct Home Health Care, Inc.
Common
4
500
25.
Don Paul Respiratory Services, Inc.
Common
5
500
26.
DuMed,Inc.
Common
7
30,200
27.
East Tennessee Infusion & Respiratory, Inc.
Common
4
500
28.
Encore Home Health Care, Inc.
Common
4
500
29.
Epsilon Home Health Care, Inc.
Common
5
500
30.
Excel Medical of Fort Dodge, Inc.
Common
7
200
31.
Excel Medical of Marshalltown, Inc.
Common
10
536
32.
First Community Care of Niagara, Inc.
Common
53
10
33.
Firstcare, Inc.
Common
39
2,000,000
34.
Fischer Medical Equipment, Inc.
Common
12
667
35.
Four Rivers Home Health Care, Inc.
Common
8
6
36.
G&G Medical, Inc.
Common
6
8,000
37.
Gate City Medical Equipment, Inc.
Common
4
500
38.
Georgia Medical Resources, Inc.
Common
5
100
39.
Gladwin Area Home Care, Inc.
Common
8
110
40.
Hamilton Medical Equipment Service, Inc.
Common
24
31,044
41.
Health Care Services of Mississippi, Incorporated
Common
4
500
42.
Holland Medical Services, Inc.
Common
4
500
43.
Home Care Oxygen Service, Inc.
Common
53
10

H-1

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ISSUER
CLASS
OF
STOCK
STOCK
CERT #
NO. OF
SHARES
44.
Home Medical Systems, Inc.
Common
4
500
45.
IHS Acquisition XXVII, Inc.
Common
5
100
46.
Integrated Health Services at Jefferson Hospital, Inc.
Common
5
180
47.
Integrated of Garden Terrace, Inc.
Common
5
100
48.
Intensive Home Care Services, Inc.
Common
6
10,000
49.
IOTA Medical Equipment, Inc.
Common
4
500
50.
LAMBDA Medical Equipment, Inc.
Common
4
500
51.
LAMS, Inc.
Common
7
1,000
52.
Lawrence Medical Equipment, Inc.
Common
5
500
53.
Liberty Home Health Care, Inc.
Common
4
500
54.
Lovejoy Medical, Inc.
Common
5
500
55.
Major Medical Supply, Inc.
Common
7
1,000
56.
Medco Professional Services, Corp.
Common
6
20,000
57.
MedCorp International, Inc.
Common
5
13,000
58.
Medic- Aire Medical Equipment, Inc.
Common
4
500
59.
Medical Electro-Therapeutics, Inc.
Common
4
500
60.
Medicare Rental Supply, Inc.
Common
53
10
61.
Michigan Medical Supply, Inc.
Common
12
1,367.48
62.
National Medical Equipment Centers, Inc.
Common
10
1,000
63.
Neumann's Home Medical Equipment, Inc.
Common
103
2,400
64.
Nightingale Home Health Care, Inc.
Common
4
500
65.
North Central Washington Respiratory Care Services, Inc.
Common
103
5,500
66.
Northeast Medical Equipment, Inc.
Common
4
500
67.
Northwest Home Medical, Inc.
Common
12
300
68.
Omega Medical Equipment, Inc.
Common
4
500
69.
OMICRON Medical Equipment, Inc.
Common
4
500
70.
Oxygen of Oklahoma, Inc.
Common
103
500
71.
Oxygen Plus, Inc.
Common
7
3,000
72.
Oxygen Plus Medical Equipment, Inc.
Common
4
500
73.
Oxygen Therapy Associates, Inc.
Common
5
100
74.
Peterson's Home Care, Inc.
Common
8
2,000
75.
PHI Medical Equipment, Inc.
Common
4
500
76.
Pioneer Medical Services, Inc.
Common
9
500
77.
Preferential Home Health Care, Inc.
Common
4
500
78.
Premier Medical, Inc.
Common
53
10
79.
Principal Medical Equipment, Inc.
Common
4
500
80.
Professional Breathing Associates, Inc.
Common
103
45,000
 
Preferred
103
10,000
81.
Professional Respiratory Home Healthcare, Inc.
Common
4
500
82.
PSI Health Care, Inc.
Common
7
250
83.
Pulxno-Dose, Inc.
Common
4
500
84.
Pulmonary Home Caroline.
Common
10
100
85.
Quality Home Health Care, Inc.
Common
4
500
86.
RC.P.S., Inc.
Common
16
13,500
87.
RCG Information Services Corporation
Common
4
500
88.
RCI Medical Corp.
Common
11
1,200
89.
Regency Medical Equipment, Inc.
Common
4
500
90.
Resp-A-Care, Inc.
Common
11
300
91.
Respiracare Medical Equipment, Inc.
Common
4
500
92.
Respiratory Medical Equipment of GA, Inc.
Common
5
500

--------------------------------------------------------------------------------

 
ISSUER
CLASS
OF
STOCK
STOCK
CERT #
NO. OF
SHARES
93.
Respitech Home Health Care, Inc.
Common
4
500
94.
Responsive Home Health Care, Inc.
Common
4
500
95.
Rhema, Inc.
Common
4
500
96.
Ritt Medical Group, Inc.
Common
13
32,847
97.
R N Home Care Medical Equipment Company, Inc.
Common
4
500
98.
Roswell Home Medical, Inc.
Common
4
500
99.
Rotech Employee Benefits Corporation
Common
4
500
100.
Rotech Home Medical Care, Inc.
Common
4
500
101.
Rotech Oxygen and Medical Equipment, Inc.
Common
4
500
102.
Roth Medical, Inc.
Common
13
10,000
103.
Rothert's Hospital Equipment, Inc.
Common
4
500
104.
Sampson Convalescent Medical Supply, Inc.
Common
53
10
105.
Select Home Health Care, Inc.
Common
4
500
106.
SIGMA Medical Equipment, Inc.
Common
4
500
107.
Signature Home Care of Kansas, Inc.
Common
6
100
108.
Southeastern Home Health, Inc.
Common
4
500
109.
Stat Medical Equipment, Inc.
Common
4
500
110.
Sun Medical Supply, Inc.
Common
5
2,000
111.
Sunshine Home Health Care, Inc.
Common
4
500
112.
The Kilroy Company
Common
5
1,000
113.
Theta Home Health Care, Inc.
Common
5
500
114.
Tupelo Home Health, Inc.
Common
4
500
115.
Valley Medical Equipment, Inc.
Common
4
500
116.
Value Care, Inc.
Common
6
500
117.
VitalCare Health Services, Inc.
Common
4
500
118.
VitalCare of Pennsylvania, Inc.
Common
4
1,000
119.
VitalCare of Texas, Inc.
Common
4
1,000
120.
White's Medical Rentals, Inc.
Common
9
666 2/3
121.
Wichita Medical Care, Inc.
Common
5
500
122.
Zeta Home Health Care, Inc.
Common
4
500

I-3

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Annex 1

Financing Statements

See attached.

1

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EXHIBIT F
LENDER: [•]    
PRINCIPAL AMOUNT: [•]    

[FORM OF]
TERM NOTE
New York, New York
[DATE]
FOR VALUE RECEIVED, the undersigned, Rotech Healthcare Inc., a Delaware
corporation (together with its successors and assigns, the “Borrower”), hereby
promises to pay to the order of the Lender set forth above (the “Lender”) or its
registered assigns, at the office of Credit Suisse, Cayman Islands Branch (the
“Administrative Agent”) at Eleven Madison Avenue, New York, New York 10010,
$[•], together with any pay-in-kind interest that shall have been added thereto
pursuant to Section 2.08 of the Credit Agreement (as defined below), on the
terms and conditions set forth in the Credit Agreement dated as of March 30,
2007 (as amended, restated, supplemented and/or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the several Lenders from time
to time parties thereto, Credit Suisse Securities (USA) LLC, as Sole Lead
Arranger and Sole Bookrunner, and Credit Suisse, as Administrative Agent and
Collateral Agent, in lawful money of the United States of America in immediately
available funds. The Borrower further agrees to pay interest on the unpaid
principal amount thereof, in like funds, at said office, at the rate or rates
per annum and payable on the dates provided in the Credit Agreement.
Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Credit Agreement. The submission to jurisdiction and consent to
service of process provisions set forth in Section 10.12 of the Credit Agreement
are hereby incorporated by reference in their entirety.
This note is one of the Term Notes referred to in Section 10.06(e) of the Credit
Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
principal of and premium and accrued interest on this note may become or be
declared to be due and payable as provided in the Credit Agreement; provided
that the principal amount shall be as provided on Schedule A hereto.

The Borrower hereby waives diligence, presentment, demand, protest or notice of
any kind in connection with this note. The nonexercise by the holder hereof of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
All borrowings evidenced by this note, the maturity thereof, all payments,
repayments and prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be recorded by the Lender and, prior to any
transfer hereof, endorsed by the Lender on Schedule A attached hereto, or on a
continuation of such Schedule attached to and made a part hereof; provided that
the failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower under this note or under the Credit
Agreement.

--------------------------------------------------------------------------------

This note is one of the notes referred to in the Credit Agreement that, among
other things, contains provisions for the acceleration of the maturity hereof
upon the happening of certain events, for optional and mandatory prepayment of
the principal hereof prior to the maturity hereof and for the amendment or
waiver of certain provisions of the Credit Agreement, all upon the terms and
conditions therein specified.
This note and the loans evidenced hereby may be transferred in whole or in part
only by registration of such transfer on the Register maintained for such
purpose by or on behalf of the undersigned as provided in Section 10.06 of the
Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
ROTECH HEALTHCARE, INC.
by:
 
 
 
Name:
 
Title:

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Schedule A to Note

LOANS and PAYMENTS

Date
Amount of Loans
Amount of Principal
Amount of Cash Interest
Payment-in-kind Interest
Unpaid Principal Balance of Note
Notation Made By
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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EXHIBIT G

FORM OF EXEMPTION CERTIFICATE

Reference is made to the Credit Agreement, dated as of March 30, 2007
(as amended, supplemented, waived or otherwise modified from time to time, the
“Credit
Agreement”) among Rotech Healtcare Inc., a Delaware corporation (the
“Borrower”),
the Lenders parties thereto (the “Lenders”), Credit Suisse, as administrative
agent and as
collateral agent for the Lenders and Credit Suisse Securities (USA) LLC, as sole
lead
arranger and sole bookrunner. Capitalized terms used and not defined herein have
the
meanings set forth in the Credit Agreement.

_______________________ (the “Non-U.S. Lender”) is providing this certificate
pursuant to Section 2.13(d) of the Credit Agreement. The Non-U.S. Lender hereby
represents and warrants that:

1.     The Non-U.S. Lender is the sole record and beneficial owner of the
Loans or the obligations evidenced by Note(s) in respect of which it is
providing this
certificate.

2.     The Non-U.S. Lender is not a “bank” for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the
“Code”). In
this regard, the Non-U.S. Lender further represents and warrants that:

(a)     the Non-U.S. Lender is not subject to regulatory or other
legal requirements as a bank in any jurisdiction; and

(b)     the Non-U.S. Lender has not been treated as a bank for
purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any
application made to a rating agency or qualification for any
exemption from tax, securities law or other legal
requirements.

3.     The Non-U.S. Lender is not a 10-percent shareholder of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code; and

4.     The Non-U.S. Lender is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the
Code.

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IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the date set forth below.

[NAME OF NON-U.S. LENDER],
    
by
________________________
Name:
Title:

Date: ______________ , 200_

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EXHIBIT H
[FORM OF]
BORROWING REQUEST
Credit Suisse, as Administrative Agent
Eleven Madison Avenue
New York, New York 10010
ATTN: Agency Group
[DATE]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March 30, 2007 (as
amended, restated, supplemented, waived or otherwise modified from time to time,
the “Credit Agreement”), among Rotech Healthcare Inc., a Delaware corporation
(the “Borrower”), the lenders from time to time party thereto (the “Lenders”),
Credit Suisse, as administrative agent and as collateral agent for the Lenders
and Credit Suisse Securities (USA) LLC, as sole lead arranger and sole
bookrunner. Capitalized terms used but not defined herein have the meanings set
forth in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.02 of the Credit
Agreement that it requests a Term Loan under the Credit Agreement, and in that
connection sets forth below the terms on which such Term Loan is requested to be
made:
(A)    Type of Borrowing:            ______________________
(B)    Date of Borrowing:            ______________________
(C)    Account Number and Location:        ______________________
(D)    Principal Amount of Borrowing:        ______________________
(F)    Interest Period:                ______________________

ROTECH HEALTHCARE INC.,
 
 
by
 
 
 
 
 
Name:
Title:

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EXHIBIT I
[FORM OF]
LANDLORD'S WAIVER AND CONSENT
LANDLORD'S WAIVER AND CONSENT dated as of [        ], 20[  ], from [        ]
(“Landlord”), in favor of Credit Suisse, as adminstrative agent and collateral
agent (collectively, in such capacity, the “Agent”) for the lenders (the
“Lenders”) party to the Credit Agreement dated as of March 30, 2007 (as the same
may be amended, renewed, extended, modified, refinanced or replaced from time to
time, the “Credit Agreement”), among Rotech Healthcare Inc., a Delaware
corporation (the “Borrower”), the Lenders, the Agent and Credit Suisse
Securities (USA) LLC, as sole lead arranger and sole bookrunner (the Lenders and
the Agent are hereinafter to collectively as the “Secured Parties”).
WHEREAS, the Secured Parties have made and/or may make, pursuant to the Credit
Agreement or otherwise, one or more loans, advances, and/or other financial
accommodations to the Borrower, to be guaranteed by certain affiliates of the
Borrower and secured in whole or in part pursuant to one or more agreements,
instruments and other documents (the “Security Agreements”) granting security
interests in and liens on, among other things, all presently owned and
hereinafter acquired personal property (hereinafter called the “Collateral”) of
the Borrower and certain of its affiliates (the Borrower and such affiliates are
referred to herein collectively as “Debtors” and each is referred to herein as a
“Debtor”); and
WHEREAS, any or all of the Collateral is or may be installed or kept at the
premises known as [        ], more particularly described in Schedule A attached
hereto and made a part hereof, which premises are owned by Landlord and leased
to a Debtor (the “Premises”).
NOW, THEREFORE, Landlord, in consideration of the sum of $1.00 and other good
and valuable consideration, the receipt and sufficiency of which consideration
is hereby acknowledged by Landlord, hereby agrees as follows:
1. Landlord consents to the installation or location of the Collateral in or on
the Premises, and agrees that any right, claim, title, interest or lien in
respect of any of the Collateral (including without limitation any right of
distraint, levy, execution or sale) that Landlord may have or acquire for any
reason or in any manner (including by reason of the Collateral being installed
in or on, attached to or located in or on the Premises, or otherwise), whether
arising under any agreement, instrument or law now or hereafter in effect, is
hereby made fully subordinate, subject and inferior to every right, claim,
title, interest and lien in respect of the Collateral in favor of the Secured
Parties or any of them to the full extent that the same secures or may hereafter
secure any and all obligations and indebtedness of every kind, now existing or
hereafter arising, of Debtors to the Secured Parties or any of them. Landlord
further agrees that the Collateral will remain personal property and will not
become a fixture or part of the Premises.

--------------------------------------------------------------------------------

2
2. Landlord hereby agrees that so long as this Landlord's Waiver and Consent is
in effect, Landlord shall not exercise any right, assert any claim, title or
interest in or lien upon, or take any action or institute any proceedings with
respect to, the Collateral. Landlord agrees to use all reasonable efforts to
give the Collateral Agent written notice of any event which, with the giving of
notice or passage of time or both, could result in the creation of the right of
Landlord to terminate any lease covering all or any part of the Premises or to
accelerate any rent due thereunder. Notices to the Collateral Agent shall be
sent to its address, Eleven Madison Avenue, New York, New York, 10010 to the
attention of [        ].
3. The Secured Parties and their agents, representatives and designees may, at
any time and from time to time upon reasonable prior notice to Landlord, enter
the Premises without the consent of Landlord and remove and take possession of
the Collateral free of any right, claim, title, interest or lien of Landlord,
provided the Secured Parties restore any parts of the Premises physically
damaged by them in the course of removal to the condition such parts were in
prior to such entry and removal of the Collateral (but the foregoing shall not
impose any liability upon any Secured Party for any damage by fire or other
insurable casualty).
4. The provisions hereof shall be irrevocable and remain in full force and
effect until each Debtor has fully paid and performed all of its obligations to
the Secured Parties under and in accordance with the terms of all present and
future agreements, instruments and documents evidencing such obligations and all
present and future Security Agreements (in each case including any extensions,
modifications and renewals thereof or substitutions therefor at any time made).
5. This Landlord's Waiver and Consent shall be binding upon Landlord and its
successors and assigns and shall inure to the benefit of the Secured Parties and
their respective successors, assigns and designees. Landlord agrees to make this
Landlord's Waiver and Consent known to any transferee of the Premises and any
person who may have an interest or right in the Premises. Landlord acknowledges
and agrees that the provisions set forth in this Landlord's Waiver and Consent
are, and are intended to be, an inducement and consideration to each Secured
Party to make, or to permit to remain outstanding, loans, advances and/or
financial accommodations to the Borrower, and each Secured Party shall be deemed
conclusively to have relied upon such provisions in making, or permitting to
remain outstanding, such loans, advances and/or financial accommodations, and
each Secured Party is made an obligee hereunder and may enforce directly the
provisions hereof.

--------------------------------------------------------------------------------

3
IN WITNESS WHEREOF, the undersigned has duly executed this Landlord's Waiver and
Consent as of the date and year first above written.
WITNESS:                    LANDLORD:
By:
                                                           
Name:
Title:

--------------------------------------------------------------------------------

STATE OF NEW YORK1    )
) ss.:
COUNTY OF            )
On the         day of                      in the year 20[  ], before me, the
undersigned, personally appeared                               , personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

Signature and Office of individual taking acknowledgment

__________________________
1 The notary block is required only if this Landlord's Waiver and Consent will
be recorded in the real property records. Recordation is advisable to place
successor Landlords on notice of the Secured Parties' rights hereunder.

--------------------------------------------------------------------------------

Exhibit A
Description of Lease

--------------------------------------------------------------------------------

EXHIBIT J
[FORM OF]
BAILEE LETTER

[ ] [ ], 200[]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[NAME AND ADDRESS OF BAILEE]
Re: Rotech Healthcare Inc.
Ladies and Gentlemen:
The undersigned, Credit Suisse (“Credit Suisse”), has been informed by Rotech
Healthcare, Inc. (together with its subsidiaries, “Grantors”) that from time to
time [Rotech Healthcare Inc.] [[•], a subsidiary guarantor to Rotech Healthcare
Inc. under the Credit Agreement as defined below] (the “Company”) delivers
certain merchandise to you for processing or warehouse storaging (such
merchandise heretofore or hereafter delivered to you being referred to as the
“Bailed Inventory”) at your address set forth above (the “Premises”).
This letter is to advise you that Rotech Healthcare Inc. has entered into
certain financing arrangements with Credit Suisse acting as agent (the “Agent”)
for a group of financial institutions pursuant to a Credit Agreement (the
“Credit Agreement”) dated as of March 30, 2007, among Rotech Healthcare Inc.,
the several banks and other financial institutions or entities from time to time
parties to the Credit Agreement (the “Lenders”), the Agent and Credit Suisse
Securities (LLC) USA, as Sole Lead Arranger and Sole Bookrunner, and, in
connection therewith, the Lenders require, among other things, liens on all of
the Company's tangible and intangible personal property including, without
limitation, the Bailed Inventory.
Credit Suisse asks that you sign and return to the Agent's attorneys, at the
address set forth below, one of the enclosed copies of this letter to
acknowledge and confirm your agreement as follows:
1.You are holding the Bailed Inventory for the benefit of the Agent. You
disclaim any and all ownership rights and interests in the Bailed Inventory.
Legal and beneficial title thereto remains and will continue to remain in the
Company and you have no “rights in the collateral” or the power to transfer
rights in the collateral to a secured party as such term is used in
Section 9-203 of the Uniform Commercial Code as in effect from time to time in
the State of New York.

--------------------------------------------------------------------------------

2
2.The Agent's security interest in the Bailed Inventory shall be senior to all
of your liens, claims and interests, if any, in the Bailed Inventory.
3.You shall not assert against any of the Bailed Inventory any statutory or
possessory liens, including without limitation, warehouseman's liens,
processor's liens, rights of levy and distraint for rent, all of which you
hereby waive. You shall not offset any amounts due from the Company against the
Bailed Inventory.
4.You shall maintain a system whereby the Bailed Inventory is clearly identified
as being owned by the Company and is kept separate and distinct from your
property and any other property in your possession.
5.You shall allow the Agent to inspect the Bailed Inventory upon its request
during normal business hours at any time and from time to time.
6.You shall inform all of your creditors who seek to obtain a security interest
in your property located at the Premises that the Bailed Inventory is owned by
the Company, subject to the Agent's first priority security interest therein and
lien thereon.
7.You shall notify the Agent if the Company defaults on its obligations to you
under any agreement between you and the Company and allow the Agent thirty
(30) days from its receipt of such notice in which to cure, or cause the Company
to cure, any such defaults.
8.If the Company defaults on its obligations to the Lenders, and, as a result,
the Agent undertakes to enforce its security interest in the Bailed Inventory,
you shall (i) cooperate reasonably with the Agent in its efforts to assemble all
of the Bailed Inventory located on the Premises, (ii) not hinder the Agent's
actions in enforcing its liens on the Bailed Inventory, (iii) hold the Bailed
Inventory for the Agent's account for up to 60 days after notice of default from
the Agent, and (iv) upon the oral or written direction of the Agent, deliver the
Bailed Inventory to such persons as the Agent may instruct.
9.In the event that you issue warehouse receipts or other documents of title
which evidence any Bailed Inventory now or hereafter delivered by the Company to
you, (i) such receipts shall be nonnegotiable and issued to or for the account
of the Agent and (ii) you shall provide the Agent with copies of such receipts
or other documents upon its request therefor.
10.You shall duly execute and deliver, or cause to be delivered, such
instruments and documents, and do such further acts, as may be

--------------------------------------------------------------------------------

3
necessary or proper in the Agent's reasonable opinion to further effectuate the
purposes hereof.
Notwithstanding the issuance of any warehouse receipts or other documents to or
for the account of the Agent, the Agent hereby authorizes you, subject to the
conditions described below, to release any of the Bailed Inventory to any
authorized agent of the Company upon the Company's request. Your authority to
release the Bailed Inventory to such agent is subject to the following
conditions: upon the written direction of the Agent, subject to the terms of the
Guarantee and Collateral Agreement (as such term is defined in the Credit
Agreement), you shall refuse to release the Bailed Inventory to the Company or
its agents, and you shall only release such Bailed Inventory to the Agent or the
party designated by the Agent in such written direction.
The Company agrees that you shall have no liability to it if you comply with the
Agent's written direction as described above. The Company further agrees that it
will continue to pay, if required under and pursuant to its existing arrangement
with you, all warehousing, handling and other fees and expenses related to the
storage and other handling of the Bailed Inventory and will reimburse you for
all reasonable costs or expenses incurred as a direct result of your compliance
with the terms and provisions of this letter.
Please return the other enclosed copy of this letter to Cravath, Swaine & Moore,
LLP, 825 Eighth Avenue, New York, NY 10019, Attention: Lizabeth R. Eisen, after
it has been signed, so that we may complete our file.
Very truly yours,
CREDIT SUISSE, as Agent,
By: ___________________________
Title:
Acknowledged and agreed to this [ ] day of [ ], 200[].
[ROTECH HEALTHCARE INC.] [•]
By
________________________________    

Title:

--------------------------------------------------------------------------------

4
Acknowledged and agreed to this [ ] day of [ ], 200[].
[NAME OF BAILEE]
By
_____________________________    

Title:

--------------------------------------------------------------------------------

        

EXHIBIT K

[FORM OF
POST-CLOSING LETTER]

ROTECH HEALTHCARE INC.
2600 Technology Drive, Suite 300
Orlando, FL 32804
March 30, 2007
Credit Suisse, as Administrative Agent
and Collateral Agent under the Credit
Agreement referred to below
Eleven Madison Avenue
New York, NY 10010

Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 30, 2007 (the
“Credit Agreement”), among Rotech Healthcare Inc., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from
time to time party thereto, Credit Suisse Securities (USA) LLC, as sole lead
arranger and sole bookrunner, and Credit Suisse, as administrative agent (in
such capacity, the “Administrative Agent”) and as collateral agent (in such
capacity, the “Collateral Agent” and, together with the Administrative Agent,
the “Agents”). Capitalized terms used in this letter agreement and not otherwise
defined herein have the meanings assigned to them in the Credit Agreement.
We hereby agree that, with respect to each matter set forth on Schedule A
attached hereto, we will ensure that each such matter shall have been
accomplished promptly, and in no event later than the time periods specified on
Schedule A or such later date as shall be specified by the Agents in writing.
The parties hereto agree that this letter shall constitute a Loan Document for
all purposes of the Credit Agreement, and each of the agreements set forth in
this letter agreement shall be deemed to constitute covenants under the Credit
Agreement, which for purposes of Article VIII of the Credit Agreement will be
governed by clause (c)(i) thereof.
This letter agreement may not be amended or modified except in writing signed by
all the parties hereto.
This letter agreement shall be construed in accordance with and governed by the
laws of the State of New York. This letter agreement may be executed in two or
more counterparts (including, without limitation, delivery via facsimile or
electronic mail in accordance with the Credit Agreement), each of which when so
executed and delivered

--------------------------------------------------------------------------------

shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument.
[Remainder of this page intentionally left blank]

--------------------------------------------------------------------------------

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof by signing below.
Very truly yours,

ROTECH HEALTHCARE INC.
By ___________________________________________                        
Name:
Title:

                                    
Accepted as of the date
first written above by:
CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as Administrative Agent and
Collateral Agent
By__________________________                
Name:
Title:

By__________________________                
Name:
Title:

--------------------------------------------------------------------------------

SCHEDULE A

1. Within fifteen business days after the Closing Date, the Borrower shall
deliver to the Collateral Agent customary opinions of local counsel in South
Carolina, Texas and Colorado covering matters incident to the transactions
contemplated by the Credit Agreement (in form and substance reasonably
satisfactory to the Collateral Agent).

2. Within fifteen business days after the Closing Date, the Borrower shall
deliver to the Collateral Agent an executed deposit account control agreements
(in form and substance reasonably satisfactory to the Collateral Agent) in
respect of its deposit accounts with Bank of America, N.A.

3. Within two business days after the Closing Date, the Borrower shall deliver
to the Collateral Agent a certificate representing 100% of the Capital Stock of
RCI Medical Corp.