Exhibit 10.52**FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT**     This First Amendment to Credit and Security Agreement (“First Amendment”) is entered into asof September 26, 2006 by among by Synergetics, Inc., a Missouri corporation (“Synergetics”), andSynergetics USA, Inc., a Delaware corporation (“Synergetics USA”) (individually, a “Borrower” andtogether, the “Borrowers”), Regions Bank (“Regions) in its capacities as Agent and a Lender, andWachovia Bank, National Association (“Wachovia”), in its capacity as a Lender.RECITALS     A. Borrowers and Regions entered into a certain Credit and Security Agreement dated as ofMarch 13, 2006 (the “Existing Credit Agreement”).     B. Borrowers and Lenders desire that Wachovia become a co-Lender under the Revolving CreditFacility and that Regions become the Agent for itself as a Lender and for Wachovia as a Lender.     C. The Existing Credit Agreement and this First Amendment constitute the “Credit Agreement”from and after the effectiveness of this First Amendment.     NOW, THEREFORE, in consideration of the foregoing and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers, Lenders andAgent agree as follows:     1. **Defined Terms****.**Each term used herein without definition or a modification todefinition shall have the same meaning as set forth in the Existing Credit Agreement.     2. **Credit Agreement Amendments****.**The Existing Credit Agreement is hereby amended asfollows, effective upon fulfillment of conditions set forth in Section 3 of this First Amendment:          (A) **Section 1.2**, entitled “Primary Definitions,” is hereby amended by adding ormodifying the following definitions: (1) “Anti-Terrorism Laws” meansany law, rule or regulation relating to terrorism or moneylaundering, including Executive Order No. 13224, the USAPatriot Act, the laws, rules and regulations comprising orimplementing the Bank Secrecy Act and of the laws, rules andregulations administered by the United States TreasuryDepartment’s Office of Foreign Asset Control
 

 
   (as any of the foregoing may from to time be amended, renewed,extended or replaced). (2) “Agent” has the meaningspecified in **Section 10.1**hereof.  (3) “Agent Advances” has themeaning specified in **Section 10.****10(f)(i)** hereof.  (4) “Borrowing Base” means, atany time and subject to change from time to time in Lenders’sole discretion, the lesser of (a) the Revolving Loan Commitment, or  (b) the sum of (i) up to 85% of Eligible Accounts, plus  (ii) up to 50% of Eligible Inventory. (5) “Lender” means Regions orWachovia and “Lenders” means Regions and Wachovia.  (6) “LIBOR Interest PaymentDate” means (a) as to any LIBOR Portion having an InterestPeriod of three months or less, the last day of such InterestPeriod, (b) as to any LIBOR Portion having an Interest Periodlonger than three months, each day which is at the end ofeach three month-period within such Interest Period after thefirst day of such Interest Period and the last day of suchInterest Period and (c) for each of (a) and (b) above, theday on which any such LIBOR Portion becomes due and payablein full or is paid or prepaid in full.  (7) “Notes” and “RevolvingNotes” mean, individually and together, the Revolving Notesattached to this First Amendment as **Exhibit A**and **Exhibit B**,respectively, which replace (without novation) the Notereferred to in the Existing Credit Agreement.  (8) “Pro-rata Share” means thefollowing percentages of the Revolving Loan Commitment(including the applicable Obligation of Reimbursement andAgent Advances):
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     Lender Pro-rata ShareRegions  63.64%Wachovia  36.36% (9) “Revolving Loan Commitment”means, collectively, $5,500,000, unless said amount isreduced pursuant to **Section 2.****11(b)** hereof, in which event itmeans the aggregate amount to which said amount is reduced.The “Revolving Loan Commitment” of each Lender is as follows:       Lender’s Revolving LoanLender CommitmentRegions $3,500,000 Wachovia $2,000,000  (10) “Swing Line Availability”means the lesser of (a) the Swing Line Commitment Amount and(b) availability under the Revolving Loan Commitment of TheSwing Line Lender.  (11) “Swing Line CommitmentAmount” means $3,500,000, which commitment constitutes asubfacility of the Revolving Loan Commitment of the SwingLine Lender.  (12) “Swing Line Lender” meansRegions Bank.  (13) “Swing Line Loan” has themeaning specified in **Section 2.1A(a)**hereof.          (B) **ARTICLE II**, entitled “Amount and Terms of the Revolving Credit Facility,” ishereby amended and restated to read as follows in its entirety:**ARTICLE II****Amount and Terms of the Revolving Credit Facility**     **Section 2.1 Advances.**Each Lender commits and agrees, on the terms and subject to theconditions herein set forth, to make Advances to the Borrowers from time to time during the periodfrom the date hereof to and including the Termination Date, or the earlier date of termination inwhole of the Revolving Credit Facility pursuant to **Section 2.10** or **Section 8.2**hereof, in an aggregate amount at any time outstanding not to exceed the lesser of such Lender’sRevolving Loan Commitment of such Lender’s pro-
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rata share of Borrowing Base, less the L/C Amount, which Advances shall be secured by theCollateral as provided in **Article III** hereof. The Borrowers agree to comply with thefollowing procedures in requesting Advances under this **Section 2.1**:     (a) The Lenders shall not make any Advance under this **Section 2.1** if, aftergiving effect to such requested Advance, the sum of the outstanding and unpaid Advancesunder this **Section 2.1** or otherwise would exceed the Borrowing Base, less the L/CAmount. So long as any Default exists, the Lender shall have no obligation to make anyAdvance.     (b) Each request for an Advance under the Prime Rate Revolving Portion shall be madeto the Agent prior to 11:00 a.m. (St. Louis, Missouri time) of the day of the requestedAdvance by the requesting Borrower (or in accordance with an electronic mechanismestablished by Agent for such advances). Each request for an Advance under the LIBORRevolving Portion shall be made by notice given as provided in **Section 2.8(e)**hereof. Each request for an Advance or request for an automated Advance mechanism may bemade in writing or by telephone, specifying the date of the requested Advance and theamount thereof, and shall be made by (i) any officer of a Borrower; or (ii) any persondesignated as such Borrower’s agent by any officer of such Borrower in a writing deliveredto the Lender; or (iii) any person reasonably believed by the Lender to be an officer ofsuch Borrower or such a designated agent.     (c) Upon fulfillment of the applicable conditions set forth in **Article IV**hereof, each Lender shall fund its Pro-Rata Share of the requested Advanced made by Agentcrediting the same to the requesting Borrower’s demand deposit account maintained withAgent, unless the Lenders and the requesting Borrower shall agree in writing to anothermanner of disbursement. Upon request of the Agent, and in any event if any Advance is tobe made to any account other than the above-referenced account, the requesting Borrowershall promptly provide such confirmation that the Agent may require. The Borrowers shallbe obligated to repay all Advances under this **Section 2.1** notwithstanding thefailure of the Agent to receive such confirmation and notwithstanding the fact that theperson requesting the same was not in fact authorized to do so. Any request for an Advanceunder this **Section 2.1**, whether written or telephonic, shall be deemed to be arepresentation by the Borrowers that (i) the condition set forth in **Section 2.1(a)**hereof has been met, and (ii) the conditions set forth in **Section 4.2** hereof havebeen satisfied as of the time of the request.     (d) Upon effectiveness of the First Amendment, Wachovia shall pay Regions an amountequal to Wachovia’s Pro-Rata Share of aggregate Advances outstanding under the RevolvingCredit Facility immediately prior to effectiveness of the First Amendment; provided that,if at the time of effectiveness of the First Amendment, the Interest Period for any thenoutstanding LIBOR Portion has not expired, Wachovia shall make such payment to Regions inthe amount equal to Wachovia’s Pro-Rata Share of such LIBOR Portion upon
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expiration of such Interest Period and, prior to such payment, such LIBOR Portionshall be considered a loan solely by and for the account of Regions.     (e) Upon any reduction in the Revolving Loan Commitment pursuant to **Section2.10**, each Lender’s Revolving Loan Commitment will automatically reduce by such LendersPro-Rata Share of such reduction in the aggregate revolving Loan Commitment.     (f) The failure of any Lender to make any Advance required to be made by it shall notrelieve any other Lender of its obligations hereunder; provided, however, that theRevolving Loan Commitments of the Lenders are several and no Lender shall be responsiblefor any other Lender’s failure to make Advances as required. Unless Agent shall have beennotified by a Lender prior to the time an Advance is to be made hereunder that such Lenderdoes not intend to make its share of such Advance available to Agent, Agent may assume thatsuch Lender will make its share of such Advances available to Agent, and Agent may inreliance upon such assumption make available to requesting Borrower a corresponding amount.If such corresponding amount is not in fact made available to Agent by such Lender andAgent has made such amount available to a requesting Borrower, Agent shall be entitled toreceive such amount from such Lender forthwith upon its demand, together with interestthereon in respect of each day during the period from and including the date such amountwas made available to Borrower through the date Agent recovers such amount from such Lenderat a rate per annum equal to the rate applicable to the Prime Rate Revolving Portion.     **Section 2.1A****Swing Line Loan**     (a) Each advance made by the Swingline Lender pursuant to its credit line sweep arrangementwith Borrowers will automatically be a Swingline Loan unless Borrowers request that such advance bemade not as a Swingline Loan but as a Prime Rate Revolving Portion or a LIBOR Revolving Portion.Subject to the foregoing, the Agent shall notify the Swing Line Lender upon the Agent’s receipt ofany request for an Advance under the Swing Line Loan. Subject to the terms and conditions hereof,the Swing Line Lender may, in its sole discretion, make available from time to time until theTermination Date advances (each, a “Swing Line Loan”) in accordance with any such notice.The provisions of this **Section 2.1A**shall not relieve Lenders of their obligations to make Advancesunder the Revolving Credit Facility under **Section 2.1**; provided that if the Swing Line Lender makesa Swing Line Loan pursuant to any such notice, such Swing Line Loan shall be in lieu of any Advanceunder the Revolving Credit Facility that otherwise may be made by the Lenders pursuant to suchnotice. The aggregate amount of Swing Line Loans outstanding shall not exceed at any time SwingLine Availability. Until the Termination Date, the Borrowers may from time to time borrow, repayand reborrow under this **Section 2.1A.**Each Swing Line Loan shall be made pursuant to a requestdelivered by the Borrowers to the Agent in accordance with **Subsection 2.1(b)**. Any such notice mustbe given no later than 11:00 A.M., (St. Louis, Missouri time), on the Banking Date of the proposedSwing Line Loan. Unless the Swing Line Lender has
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received at least one Banking Day’s prior written notice from the Lenders instructing it notto make a Swing Line Loan, the Swing Line Lender shall, notwithstanding the failure of anycondition precedent set forth in **Article IV**, be entitled to fund that Swing Line Loan, and to havesuch Lender make advances under the Revolving Credit Facility in accordance with **Subsection 2.1A(c)**or purchase participating interests in accordance with **Subsection 2.1A(d)**. Notwithstanding anyother provision of this Agreement or the other Loan Documents, each Swing Line Loan shallconstitute a Prime Rate Revolving Portion.     (b) The entire unpaid balance of each Swing Line Loan and all other noncontingent Obligationsshall be immediately due and payable in full in immediately available funds on the Termination Dateif not sooner paid in full.     (c) The Swing Line Lender, at any time and from time to time, but no less frequently than onceweekly, shall on behalf of the Borrowers (and the Borrowers hereby irrevocably authorize the SwingLine Lender to so act on their behalf) request each Lender with a Revolving Loan Commitment(including the Swing Line Lender) to make an Advance under the Revolving Credit Facility to theBorrowers (which the Borrowers may designate as a LIBOR Revolving Portion or a Prime Rate RevolvingPortion) in an amount equal to that Lender’s Pro Rata Share of the principal amount of all SwingLine Loans (the “Refunded Swing Line Loan”) outstanding on the date such notice is given. Unlessany of the events described in **Subsection 8.****1(f)** has occurred (in which event the procedures of**Subsection 2.1A(d)**shall apply) and regardless of whether the conditions precedent set forth inthis Agreement to the making of an Advance under the Revolving Credit Facility are then satisfied,each Lender shall disburse directly to the Agent, its Pro Rata Share on behalf of the Swing LineLender, prior to 2:00 P.M. (St. Louis, Missouri time), in immediately available funds on the datethat notice is given (provided that such notice is given by 12:00 noon St. Louis, Missouritime, on such date. The proceeds of such Advances shall be immediately paid to the Swing LineLender and applied to repay the Refunded Swing Line Loan.     (d) If, prior to refunding a Swing Line Loan with an Advance under the Revolving LoanCommitment pursuant to **Subsection 2.1A(c)**, one of the events described in **Subsection 8.****1(f)** hasoccurred, then, subject to the provisions of **Subsection 2.1A(e)**below, each Lender shall, on thedate such Advance was to have been made for the benefit of the Borrowers, purchase from the SwingLine Lender an undivided participation interest in the Swing Line Loan in an amount equal to itsPro Rata Share of such swing Line Loan. Upon request, each Lender shall promptly transfer to theSwing Line Lender, in immediately available funds, the amount of its participation interest.     (e) Each Lender’s obligation to make Advances under the Revolving Credit Facility inaccordance with **Subsection 2.1A(c)**and to purchase participation interests in accordance with**Subsection 2.1A(d)**shall be absolute and unconditional and shall not be affected by anycircumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that suchLender may have against the Swing Line Lender, Borrowers or any other Person for any reasonwhatsoever; (ii) the occurrence or continuance of any Default or Event of Default; (iii) anyinability of Borrower to satisfy the conditions
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precedent to borrowing set forth in this Agreement at any time or (iv) any other circumstance,happening or event whatsoever, whether or not similar to any of the foregoing. If and to theextent any Lender shall not have made such amount available to the Agent or the Swing Line Lender,as applicable, by 2:00 P.M., St. Louis, Missouri time, the amount required pursuant to **Subsection2.1A(c)**or **2.1A(d)**, as the case may be, on the Banking Day on which such Lender receives noticefrom the Agent of such payment or disbursement (it being understood that any such notice receivedafter noon, St. Louis, Missouri time, on any Banking Day shall be deemed to have been received onthe next following Banking Day), such Lender agrees to pay interest on such amount to the Agent forthe Swing Line Lender’s account forthwith on demand, for each day from the date such amount was tohave been delivered to the Agent to the Date such amount is paid, at a rate per annum equal to thePrime Rate from time to time in effect.     **Section 2.2****Notes; Obligations Joint and Several**. The Borrowers’ obligation to repay,with interest, the Advances in the amount of each Lender’s Pro-rata Share shall be evidenced by aRevolving Note. The principal of the Revolving Notes shall be payable as provided herein and onthe earlier of the Termination Date or acceleration by the Agent for benefit of the Lenderspursuant to **Section 8.2** hereof, and shall bear interest as provided in **Section 2.8**hereof.     **Section 2.3****Issuance of Letters of Credit**.     (a) Lenders agree, on the terms and subject to the conditions herein set forth, to cause Agentto issue one or more letters of credit for the account of the Borrowers (each, a “Letter ofCredit”) from time to time during the period from the date hereof until the earlier of theTermination Date or the date the Revolving Credit Facility has been terminated pursuant to**Section 2.11** or **Section 8.2** hereof, in an aggregate amount at any time outstandingnot to exceed the Borrowing Base less the sum of (i) all outstanding and unpaid Advances hereunder,(ii) the unpaid amount of the Obligation of Reimbursement, if any, but in no event shall the unpaidamount of all Obligations of Reimbursement exceed $2,000,000. Each Letter of Credit, if any, shallbe issued pursuant to a separate L/C Application entered into by the Borrowers for the benefit ofAgent, completed in a manner satisfactory to the Agent. The terms and conditions set forth in eachsuch L/C Application shall supplement the terms and conditions hereof, but in the event ofinconsistency between the terms of any such L/C Application and the terms hereof, the terms hereofshall control.     (b) No Letter of Credit shall be issued under this **Section 2.3** if, after the issuanceof such requested Letter of Credit, the sum of the face amounts of all issued and outstandingLetters of Credit would exceed the Borrowing Base less the sum of (i) all outstanding and unpaidAdvances hereunder, and (ii) the unpaid amount of the Obligation of Reimbursement.     (c) No Letter of Credit shall be issued with an expiry date later than the Termination Date ineffect as of the date of issuance.
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     (d) Any request for Agent, on behalf of Lenders, to issue a Letter of Credit under this**Section 2.3**shall be deemed to be a representation by the Borrowers that (i) the conditionset forth in **Section 2.3(b)** hereof has been met, and (ii) the conditions set forth in**Section 4.1** or **Section 4.2** hereof (as the case may be) have been satisfied as ofthe time of the request.     (e) No Letter of Credit shall be issued so long as any Default or Event of Default exists.     **Section 2.4****Payment of Amounts Drawn Under Letters of Credit; Obligation ofReimbursement****.**The Borrowers acknowledge that the Lenders will be liable to Agent forreimbursement based on their respective Pro-Rata Shares of any and all draws under Letters ofCredit and for all other amounts required to be paid under the applicable L/C Application.Accordingly, the Borrower agrees to pay the Agent for the ratable benefit of the Lenders any andall amounts required to be paid under the applicable L/C Application, when and as required to bepaid thereby, and the amounts designated below, when and as designated:     (a) The Borrowers hereby agree to pay Agent for the ratable benefit of the Lenders onthe day a draft is honored under any Letter of Credit a sum equal to all amounts drawnunder such Letter of Credit plus any and all reasonable charges and expense that the Agentor the Lenders may pay or incur relative to such draw and the applicable L/C Application,plus interest on all such amounts, charges and expenses through an Advance as set forthbelow (the Borrower’s obligation to pay all such amounts is herein referred to as the“Obligation of Reimbursement”).     (b) Whenever a draft is submitted under a Letter of Credit, the Lenders shall maketheir Pro Rata Share of an Advance in the amount of the Obligation of Reimbursement andshall apply the proceeds of such Advance thereto. Such Advance shall be repayable inaccordance with and be treated in all other respects as an Advance hereunder.     (c) If a draft is submitted under a Letter of Credit when the Borrowers are unable forany reason to obtain an Advance to pay the Obligation of Reimbursement, the Borrowers shallpay to Agent for the ratable benefit of the Lenders on demand in immediately availablefunds, the amount of the Obligation of Reimbursement together with interest accrued fromthe date of the draft until payment in full at the Default Rate. Notwithstanding theBorrowers’ inability to obtain an Advance for any reason, the Agent for the ratable benefitof the Lenders is irrevocably authorized in its sole discretion to make an Advance in theamount sufficient to discharge the Obligation of Reimbursement, and all accrued but unpaidinterest thereon.     (d) The Borrower’s obligation to pay any Advance made under this **Section 2.4**shall be evidenced by the Revolving Note and shall bear interest as provided in **Section2.8** as a Prime Rate Revolving Portion.
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     (e) The customary fees charged by Regions in connection with issuance andadministering each Letter of Credit shall be solely for the account of Regions.     **Section 2.5****Special Account**. If the Revolving Credit Facility is terminated for anyreason whatsoever while any Letter of Credit is outstanding, the Borrowers shall thereupon pay theLender in immediately available funds for deposit in the Special Account an amount equal to themaximum aggregate amount available to be drawn under all Letters of Credit then outstanding,assuming compliance with all conditions for drawing thereunder. The Special Account shall bemaintained by Agent for the ratable benefit of Lenders. Any interest earned on amounts depositedin the Special Account shall be credited to the Special Account. Amounts on deposit in the SpecialAccount may be applied by Agent at any time or from time to time to the Borrowers’ Obligation ofReimbursement or any other Obligations, in the Agent’s sole discretion, and shall not be subject towithdrawal by the Borrowers so long as the Agent maintains a security interest therein. Agentagrees to transfer any balance in the Special Account to the Borrowers at such time as allobligations of the Issuer under all Letters of Credit are terminated.     **Section 2.6****Obligations Absolute**. The obligations of the Borrowers arising under thisAgreement with respect to the Obligation of Reimbursement shall be absolute, unconditional andirrevocable, and shall be paid strictly in accordance with the terms of this Agreement, under allcircumstances whatsoever, including (without limitation) the following circumstances:     (a) any lack of validity or enforceability of any Letter of Credit or any otheragreement or instrument relating to any Letter of Credit (collectively the “RelatedDocuments”);     (b) any amendment or waiver of or any consent to departure from the terms of all orany of the Related Documents;     (c) the existence of any claim, setoff, defense or other right which a Borrower mayhave at any time, against any beneficiary or any transferee of any Letter of Credit (or anypersons or entities for whom any such beneficiary or any such transferee may be acting), orother person or entity, whether in connection with this Agreement, the transactionscontemplated herein or in the Related Documents or any unrelated transactions;     (d) any statement or any other document presented under any Letter of Credit provingto be forged, fraudulent, invalid or insufficient in any respect or any statement thereinbeing untrue or inaccurate in any respect whatsoever;     (e) payment by or on behalf of the Issuer or the Lender under any Letter of Creditagainst presentation of a draft or certificate which does not strictly comply with theterms of such Letter of Credit; or
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     (f) any other circumstance or happening whatsoever, whether or not similar to any ofthe foregoing; provided that none of such circumstances will affect any rights of Borrowersagainst the Issuer of any Letter of Credit.     **Section 2.7****Capital Adequacy**.     (a) If Agent shall have determined that the adoption after the date hereof of any law, rule orregulation regarding capital adequacy, or any change therein after the date hereof or in theinterpretation or application thereof, or compliance by Lenders with any request or directiveregarding capital adequacy (whether or not having the force of law) from any central bank orgovernmental authority enacted after the date of this Agreement, does or shall have the effect ofreducing the rate of return on any of the Lenders’ capital as a consequence of their obligationshereunder to a level below that which Lenders could have achieved but for such adoption, change orcompliance (taking into consideration Lenders’ policies with respect to capital adequacy) by amaterial amount, then from time to time, after submission by Agent to Borrowers of a written demandtherefor together with the certificate described below, Borrowers shall pay to Agent, for theratable benefit of the affected Lender(s), such additional amount or amounts as will compensatesuch Lender(s) for such reduction, such demand to be made with reasonable promptness following suchdetermination. A certificate of such Lender(s) claiming entitlement to payment as set forth aboveshall be conclusive in the absence of manifest error. Such certificate shall set forth the natureof the occurrence giving rise to such reduction, the amount of such charge to be paid to Lender,and the method by which such amount was determined. In determining such amount, such Lender mayuse any reasonable averaging and attribution method, applied on a non-discriminatory basis.     (b) If a Lender invokes the provisions of subsection (a) hereof, it shall promptly notifyBorrowers. Borrowers, by notice given to such Lender within 30 days of such action, may, within 60days of the date of such notice to Agent and Lenders, prepay in full all Obligations withoutprepayment penalty, anything in **Section 2.11** to the contrary notwithstanding.     **Section 2.8****Interest**.     (a) Subject to all of the terms and conditions of this **Section 2.8**, portions of theprincipal Indebtedness evidenced by the Note (all of the Indebtedness evidenced by the Note bearinginterest at the same rate for the same period of time being hereinafter referred to as a “Portion”)may, at the option of the Borrowers, bear interest with reference to the Prime Rate (“Prime RatePortions”) or with reference to the LIBOR (“LIBOR Portions”), and Portions may be converted fromtime to time from one basis to the other. All of the Indebtedness evidenced by the Revolving Notewhich is not part of a LIBOR Portion shall constitute a single Prime Rate Portion (a “Prime RateRevolving Portion”) and all of the Indebtedness evidenced by the Revolving Note which bearsinterest with reference to a particular LIBOR for a particular Interest Period shall constitute asingle LIBOR Portion (a “LIBOR Revolving Portion”). There shall not be more than four (4) LIBORPortions applicable to the Note outstanding at any one time. Anything contained herein to thecontrary notwithstanding, the obligation of the Lender
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to create, continue or effect by conversion any LIBOR Portion shall be conditioned upon thefact that at the time no Default or Event of Default shall have occurred and be continuing. TheBorrowers hereby promise to pay interest on the applicable Portions at the rates and timesspecified in this **Section 2.8**.     (b) The Prime Rate Portions shall bear interest at the rate per annum determined by adding theApplicable Prime Rate Margin then in effect in accordance with the definition of ApplicablePercentage to the Prime Rate as in effect from time to time. Interest on the Prime Rate Portionsshall be compiled on the basis of actual days elapsed in a 360-day year. Interest on the Prime RatePortions shall be payable monthly in arrears on the thirteenth day of each month in each year andat maturity or prepayment of the Note, and interest after maturity (whether by lapse of time,acceleration or otherwise) shall be due and payable upon demand. Any change in the interest rate onthe Prime Rate Portions resulting from a change in the Prime Rate shall be effective on the date ofthe relevant change in the Prime Rate.     (c) Each LIBOR Portion shall bear interest for each Interest Period selected therefor at arate per annum determined by adding the Applicable LIBOR Margin then in effect in accordance withthe definition of Applicable Percentage to the LIBOR for such Interest Period. If an Event ofDefault occurs and is then continuing, effective at the end of each then existing Interest Period,each then existing LIBOR Portion shall automatically be converted into and added to an appropriatePrime Rate Portion and shall thereafter bear interest at the interest rate applicable to such PrimeRate Portion unless and until converted in accordance with the terms hereof. Interest on the LIBORPortions shall be computed on the basis of actual days elapsed in a 360-day year. Interest on eachLIBOR Portion shall be due and payable in arrears on each LIBOR Interest Payment Date. TheBorrowers shall notify the Agent on or before 11:00 a.m. (St. Louis, Missouri time) on the thirdBanking Day preceding the end of an Interest Period applicable to a LIBOR Portion whether suchLIBOR Portion is to continue as a LIBOR Portion, in which event the Borrowers shall notify theAgent of the new Interest Period selected therefor, and in the event the Borrowers shall fail to sonotify the Agent, such LIBOR Portion shall automatically be converted into and added to theapplicable Prime Rate Portion as of and on the last day of such Interest Period.     (d) Each LIBOR Portion shall be in an amount equal to $250,000 or such greater amount which isan integral multiple of $50,000.     (e) The Borrowers shall notify the Agent by 11:00 a.m. (St. Louis, Missouri time) at leastthree Banking Days prior to the date upon which the Borrowers request that any LIBOR Portion becreated or that any part of a Prime Rate Portion be converted into a LIBOR Portion (each suchnotice to specify in each instance the amount thereof and the Interest Period selected therefor).If any request is made to convert a LIBOR Portion into another type of Portion available hereunder,such conversion shall only be made so as to become effective as of the last day of the InterestPeriod applicable thereto. All requests for the creation, continuance and conversion of Portionsunder this Agreement shall be irrevocable. Such requests may be in writing or by telephone andshall be made by (i) any officer of the requesting Borrower; or (ii) any person designated as such
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Borrower’s agent by any officer of the Borrower in a writing delivered to the Lender; or (iii)any person reasonably believed by the Agent to be an officer of such Borrower or such a designatedagent.     (f) Notwithstanding anything to the contrary contained herein, (i) from and after the date ofthe occurrence of any Default or Event of Default, in the Agent’s discretion, the principal amountof the Advances, outstanding from time to time shall bear interest at the Default Rate; and (ii)during any period that the sum of the outstanding principal balance of all Advances exceeds the sumof the Borrowing Base, the L/C Amount and reserves imposed pursuant to Section 2.1 hereof, if any,the principal of the Advances shall automatically bear interest at the Default Rate; and provided,further, that in any event no rate change shall be put into effect which would result in a rategreater than the highest rate permitted by law.     (g) Notwithstanding any other provision of this Agreement or the Notes, if at any time theAgent shall determine that any change in applicable laws, treaties or regulations or in theinterpretation thereof by any court or governmental authority charged with the administrationthereof makes it unlawful, as a result of compliance by the Lender in good faith with such laws,treaties, regulations or interpretations thereof, for the Lender to create or continue to maintainany LIBOR Portion, it shall promptly so notify the Borrowers and the obligation of the Lender tocreate, continue or maintain any such LIBOR Portion under this Agreement shall terminate until itis no longer unlawful for the Lenders to create, continue or maintain such LIBOR Portion. TheBorrowers, on demand, shall, if the continued maintenance of any such LIBOR Portion is unlawful,thereupon prepay the outstanding principal amount of the affected LIBOR Portion, together with allinterest accrued thereon and all other amounts payable to Agent, for the ratable benefit of theLenders, with respect thereto under this Agreement; provided, however, that the Borrowers may electto convert the principal amount of the affected Portion into another type of Portion availablehereunder, subject to the terms and conditions of this Agreement.     (h) Notwithstanding any other provision of this Agreement or the Notes, if prior to thecommencement of any Interest Period, the Agent shall determine that deposits in the amount of anyLIBOR Portion scheduled to be outstanding during such Interest Period are not generally availablein the relevant market or, by reason of circumstances affecting the relevant market, adequate andreasonable means do not exist for ascertaining LIBOR, then the Agent shall promptly give noticethereof to the Borrowers and the obligations of the Agent or Lenders to create, continue or effectby conversion any such LIBOR Portion in such amount and for such Interest Period shall terminateuntil deposits in such amount and for the Interest Period selected by the Borrowers shall again begenerally available in the relevant market and adequate and reasonable means exist for ascertainingLIBOR.     (i) With respect to any LIBOR Portion, if the Agent shall determine that any change in anyapplicable law, treaty, regulation or guideline (including, without limitation, Regulation D of theBoard of Governors of the Federal Reserve System) or any new law, treaty, regulation or guideline,or any interpretation of any of the foregoing
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by any governmental authority charged with the administration thereof or any central bank orother fiscal, monetary or other authority having jurisdiction over the Lenders or a lending branchof a Lender or the LIBOR Portions contemplated by this Agreement (whether or not having the forceof law), shall: (i) impose, increase, or deem applicable any reserve, special deposit orsimilar requirement against assets held by, or deposits in or for the accountof, or loans by, or any other acquisition of funds or disbursements by, aLender which is not in any instance already accounted for in computing theinterest rate applicable to such LIBOR Portion;  (ii) subject a Lender, any LIBOR Portion or any of the Note to the extentit evidences such a LIBOR Portion to any tax (including, without limitation,any United States interest equalization tax or similar tax however namedapplicable to the acquisition or holding of debt obligations and any interestor penalties with respect thereto), duty, charge, stamp tax, fee, deduction orwithholding in respect of this Agreement, any LIBOR Portion or any of the Noteto the extent it evidences such a LIBOR Portion, except such taxes as may bemeasured by the overall net income or gross receipts of such Lender or itslending branches and imposed by the jurisdiction, or any politicalsubdivision, or taxing authority thereof, in which such Lender’s principalexecutive office or its lending branch is located;  (iii) change the basis of taxation of payments of principal and interestdue from the Borrowers to a Lender hereunder or under any of the Notes to theextent it evidences any LIBOR Portion (other than by a change in taxation ofthe overall net income or gross receipts of a Lender); or  (iv) impose on a Lender any penalty with respect to the foregoing or anyother condition regarding this Agreement, any LIBOR Portion, or itsdisbursement, or any of the Notes to the extent it evidences any LIBORPortion;    and such Lender shall determine that the result of any of the foregoing isto increase the cost (whether by incurring a cost or adding to a cost) tosuch Lender of creating or maintaining any LIBOR Portion hereunder or toreduce the amount of principal or interest received or receivable by suchLender, such Lender shall promptly advise the Agent and Borrowers of theforegoing and then the Borrowers shall pay to the Agent, for the benefitof such Lender, within fifteen (15) days after demand therefor by theAgent, such additional amounts as such Lender shall reasonably
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   determine are sufficient to compensate and indemnify it for such increasedcost or reduced amount.     (j) In the event a Lender shall incur any loss, cost or expense (including, withoutlimitation, any loss (including loss of profit), cost or expense incurred by reason of theliquidation or reemployment of deposits or other funds acquired or contracted to be acquired bysuch Lender to fund or maintain any LIBOR Portion or the relending or reinvesting of such depositsor other funds or amounts paid or prepaid to such Lender) as a result of: (i) any payment of a LIBOR Portion on a date other than the last day ofthe then applicable Interest Period for any reason, whether before or after anEvent of Default or Default, and whether or not such payment is required byany provisions of this Agreement; or  (ii) any failure by the Borrowers to create, borrow, continue or effectby conversion a LIBOR Portion on the date specified in a notice given pursuantto this Agreement;    then within fifteen (15) days after demand therefor by the Agent, theBorrowers shall pay to the Agent, for the benefit of the affected Lender,such amount as will reimburse such Lender, for such loss, cost or expense.     (k) The Lenders may, at their option, elect to make, fund or maintain Portions of the Loanshereunder at such of its branches or offices as the Lenders may from time to time elect.     (l) Notwithstanding any provision of this Agreement to the contrary, the Lenders shall beentitled to fund and maintain their funding of all or any part of the Notes in any manner they seefit, it being understood, however, that for the purposes of this Agreement all determinationshereunder (including, without limitation, determinations under **Sections 2.8(h)**,**(i)**and **(j)**hereof) shall be made as if the Lenders had actually funded and maintained each LIBOR Portionduring each Interest Period applicable thereto through the purchase of deposits in the relevantmarket in the amount of such LIBOR Portion, having a maturity corresponding to such InterestPeriod, and, in the case of any LIBOR Portion, bearing an interest rate equal to the LIBOR, as thecase may be, for such Interest Period.     (m) If a Lender sells a participation (as opposed to a sale of a direct interest) in theLoans, no such sale will result in a change in the rate of interest being assessed against theObligations.     **Section 2.9****Maximum Interest Rate**. In no event shall any interest rate provided forhereunder exceed the maximum rate, if any, permissible for corporate borrowers under applicable lawfor loans of the type provided for hereunder (the “Maximum Rate”). If, in any month, any interestrate, absent such limitation, would have exceeded the Maximum Rate, then the interestrate for that month shall be the Maximum
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Rate, and, if in future months, that interest ratewould otherwise be less than the Maximum Rate, then that interest rate shall remain at the MaximumRate until such time as the amount of interest paid hereunder equals the amount of interest whichwould have been paid if the same had not been limited by the Maximum Rate. In the event that, uponpayment in full of the Obligations under this Agreement, the total amount of interest paid oraccrued under the terms of this Agreement is less than the total amount of interest which would,but for this **Section 2.9**, have been paid or accrued if the interest rates otherwise setforth in this Agreement had at all times been in effect, then the Borrowers shall, to the extentpermitted by applicable law, pay the Agent, for the ratable benefit of the Lenders, an amount equalto the difference between (a) the lesser of (i) the amount of interest which would have beencharged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest whichwould have accrued had the interest rates otherwise set forth in this Agreement, at all times, beenin effect and (b) the amount of interest actually paid or accrued under this Agreement. In theevent that a court determines that the Lenders have received interest and other charges hereunderin excess of the Maximum Rate, such excess shall be deemed received on account of, and shallautomatically be applied to reduce, the Obligations other than interest, in the inverse order ofmaturity, and if there are no Obligations outstanding, the Lender shall refund to the Borrowerssuch excess.     **Section 2.10****Voluntary Prepayment; Termination of Agreement by Borrowers; PermanentReduction of Commitment**.     (a) Except as otherwise provided herein, the Borrowers may, in their discretion, prepay theObligations in whole at any time or from time to time in part.     (b) The Borrowers may at any time and from time to time, upon at least 30 days’ prior writtennotice to the Agent, permanently reduce in part or terminate the Revolving Loan Commitment;provided, however, that no reduction shall reduce the Revolving Loan Commitment to an amount lessthan the then-aggregate amount of the Advances; plus the L/C Amount.     **Section 2.11****Mandatory Prepayment**. Without notice or demand and without limitingBorrowers’ obligation to pay interest at the Default Rate as required under **Section2.8**(f)(i) or (ii), if the sum of the outstanding principal balance of the Advances plus the L/CAmount plus reserves imposed pursuant to **Section 2.1** hereof, if any, shall at any timeexceed the Borrowing Base (an “Overadvance”), the Borrowers shall (i) first, immediately prepay theAdvances to the extent necessary to eliminate such excess; and (ii) if prepayment in full of theAdvances is insufficient to eliminate such excess, pay to the Agent, for the ratable benefit of theLenders, in immediately available funds for deposit in the Special Account an amount equal to theremaining excess. Any payment received by the Agent under this **Section 2.11** or under**Section 2.10** may be applied to the Obligation of Reimbursement, or the Advances, includinginterest thereon and any fees, commissions, costs andexpenses required to be paid hereunder and under the Security Documents, in such order and insuch amounts as the Agent, in its discretion, may from time to time determine.
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     **Section 2.12****Payment**. All payments of principal of and interest on the Advances, theObligation of Reimbursement, the commissions and fees hereunder and amounts required to be paid tothe Agent for deposit in the Special Account shall be made to the Agent in United States dollarsconstituting immediately available funds. The Borrowers hereby authorize the Agent, in itsdiscretion at any time or from time to time and without request by the Borrowers, to make anAdvance to the extent necessary to pay any such amounts and any fees, costs or expenses hereunderor under the Security Documents.     **Section 2.13****Payment on Non-Banking Days**. Subject to clause (i) of the definition ofInterest Period, whenever any payment to be made hereunder shall be stated to be due on a day whichis not a Banking Day, such payment may be made on the next succeeding Banking Day, and suchextension of time shall in such case be included in the computation of interest on the Advances orthe fees hereunder, as the case may be.     **Section 2.14****Use of Proceeds**. The proceeds of Advances and each Letter of Creditcaused to be issued shall be used by the Borrowers for repayment of Borrowers’ prior revolving lineof credit and for Capital Expenditures, stock acquisitions, permitted acquisitions and othergeneral corporate needs.     **Section 2.15****Liability Records**. The Agent may maintain from time to time, at itsdiscretion, liability records as to any and all Advances made or repaid, interest accrued or paidunder this Agreement, outstanding Letters of Credit and fees thereon and the Borrowers’ Obligationof Reimbursement. All entries made on any such record shall be presumed correct until theBorrowers establish the contrary. On demand by the Agent, the Borrowers will admit and certify inwriting the exact principal balance that the Borrowers then assert to be outstanding to the Lenderfor Advances under this Agreement and the amount of any Letters of Credit outstanding. Any billingstatement or accounting rendered by the Agent shall be presumed correct, until Borrowers establishthe contrary.     **Section 2.16****Fees**.     (a) The Borrowers agree to pay the Agent, for the ratable benefit of the Lenders, a fee at therate of the Unused Line Fee applicable at such time in accordance with the definition of ApplicablePercentage on the average daily unused amount of the Revolving Loan Commitment from the date hereofto and including the date on which such facility is terminated, due and payable quarterly inarrears on the first day of each quarter, commencing April 1, 2006, provided that any such feeremaining unpaid upon termination of the total credit facility or acceleration of the Notes by theLenders pursuant to **Section 8.2** hereof shall be due and payable on the date of suchtermination oracceleration. Such fee shall be calculated on the basis of actual days elapsed in a 360-dayyear.     (b) The Borrowers agree to pay the Agent, for the ratable benefit of the Lenders, a commissionwith respect to each Letter of Credit, if any, accruing on a daily basis and computed at the rateof two percent (2%) per annum of the available amount of such Letter of Credit (as it may bechanged from time to time) from and including the
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date of issuance of such Letter of Credit untilsuch date as such Letter of Credit is terminated, payable monthly in arrears, and prorated for anypart of a full calendar month in which such Letter of Credit remains outstanding. The foregoingcommission shall be in addition to any and all customary fees, commissions and charges of anyIssuer of a Letter of Credit with respect to or in connection with such Letter of Credit.     **2.17****Joint and Several Liability of Borrowers; Rights of Contribution among Borrowers****.**     (a) Each Borrower states and acknowledges that: (1) pursuant to this Agreement, the Borrowersdesire to utilize their borrowing potential on a consolidated basis to the same extent possible asif they were merged into a single corporate entity; (2) each Borrower has determined that it willbenefit specifically and materially from the advances of credit contemplated by this Agreement; (3)it is both a condition precedent to the obligations of the Lenders hereunder and a desire of eachBorrower that each Borrower execute and deliver to the Lenders this Agreement; and (4) eachBorrower has requested and bargained for the structure and terms of and security for the advancescontemplated by this Agreement.     (b) Each Borrower hereby irrevocably and unconditionally: (i) agrees that it is jointly andseverally liable to the Lender for the full and prompt payment and performance of the Obligationsand agreements of each Borrower under this Agreement and each other document related hereto thatmay specify that a particular Borrower is responsible for a given payment or performance; (ii)agrees to fully and promptly perform all of its obligations hereunder with respect to each advanceof credit hereunder as if such advance had been made directly to it; and (iii) agrees as a primaryobligation to indemnify Agent and Lenders, on demand, for and against any loss incurred by Agent orLenders as a result of any Borrower being or becoming void, voidable, unenforceable or ineffectivefor any reason whatsoever, whether or not known to the subject Borrower or any Person, the amountof such loss being the amount which the Lender would otherwise have been entitled to recover fromthe Borrower.     (c) It is the intent of each Borrower that the indebtedness, obligations and liabilitieshereunder of no one of them be subject to challenge on any basis related to any federal or statelaw dealing with fraudulent conveyances or any other law related to transfers for less than fair orreasonably equivalent value. Accordingly, as of the date hereof, the liability of each Borrowerunder this **Section 2.17** together with all of its other liabilities to all Persons as of thedate hereof and as of any other date on which a transfer is deemed to occur by virtue of thisAgreement, calculated in amount sufficient to pay itsprobable net liabilities on its existing indebtedness as the same become absolute and matured.**(“****Dated Liabilities****”)**is and is to be, less than the amount of the aggregate of a fairvaluation of its property as of such corresponding date **(“****Dated Assets****”)**. To this end,each Borrower under this **Section 2.17**(i) grants to and recognizes in each other Borrowerratably, rights of subrogation and contribution in the amount, if any, by which the Dated Assets ofsuch Borrower, but for the aggregate rights of subrogation and contribution in its favor recognizedherein, would exceed the Dated Liabilities of such Borrower or, as the case may be, and (ii)acknowledges receipt of and recognizes its
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rights to subrogation and contribution ratably from theother Borrower in the amount, if any, by which the Dated Liabilities of such Borrower, but for theaggregate of subrogation and contribution in its favor recognized herein, would exceed the DatedAssets of such Borrower under this **Section 2.17**. In recognizing the value of the DatedAssets and the Dated Liabilities, it is understood that each Borrower will recognize, to at leastthe same extent of their aggregate recognition of liabilities hereunder, their rights tosubrogation and contribution hereunder. It is a material objective of this **Section 2.17**that each Borrower recognizes rights to subrogation and contribution rather than be deemed to beinsolvent (or in contemplation thereof by reason of an arbitrary interpretation of its joint andseveral obligations hereunder).     **2.18****Waiver of Suretyship and Other Defenses**. To the extent a Borrower is deemed tobe a surety, secondary obligor, endorser or accommodation party with respect to Obligationsincurred under this Agreement, each Borrower waives, to the full extent permitted by applicablelaw, all suretyship defenses and all defenses and rights of an endorser or accommodation partyprovided in Section 400.3-605 of the UCC and all other defenses allowed by law provided to Personsholding such status.     (C) **Section 3.1**, entitled “Grant of Security Interest,” is herebyamended by changing the reference in the second line thereof from “the Lender” to “theAgent, for the ratable benefit of the Lenders” and by making the same change wherever theterm “Lender” appears in **ARTICLE III**, unless the context clearly otherwiserequires.     (D) The references in **ARTICLE IV** to the “Obligation of the Lender” to make anAdvance is hereby amended to read “the Obligation of the Lenders.”     (E) The first line of **ARTICLE V**, entitled “Representations andWarranties” is hereby amended to read as follows:     “The Borrowers jointly and severally represent and warrant to the Agent and tothe Lenders as follows:”Further, all references in **ARTICLE V** to the requirements of the Borrowers todeliver financial statements or other information or notices to the Lender are herebyamended to require such deliveries and notices be sent or given to the Agent. Agent shallpromptly deliver copies of all such information to Lenders.     (F) The introductory clause of **ARTICLE VI**, entitled “Affirmative andFinancial Covenants of the Borrowers,” is hereby amended to read as follows in itsentirety:     “So long as the Notes shall remain unpaid or the Revolving Credit Facility orany Letter of Credit shall be outstanding, the Borrowers will comply with thefollowing requirements, unless the Agent shall otherwise in consent in writing.”
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     Further, all references in **ARTICLE VI** to delivery of reports, information andnotices shall be deemed to require delivery thereof to Agent and references the rights ofLender to make inspections and examinations under **ARTICLE VI** shall mean the rightsof Agent and Lenders to do so. Further, all policies of insurance required under**Section 6.6** shall name the Lenders as lender loss payees and additional insureds,as the case may be.     (G) The initial clause of **ARTICLE VII** entitled “Negative Covenants,”is hereby amended to read as follows in its entirety:     “So long as the Notes shall remain unpaid or the Revolving Credit Facilityshall be outstanding or any Letter of Credit shall be outstanding, the Borrowersagree that, without the prior written consent of Agent:”     (H) All references in **Article VIII** entitled “Events of Default, Rights andRemedies,” to the “Lender” are hereby amended to read the “Agent.”     (I) **Section 9.2**, entitled “Amendments, Etc.,” is hereby amended to read asfollows in its entirety:          **“Section 9.2****Amendments, Etc.** No amendment, modification, termination orwaiver of any provision of any Loan Document or consent to any departure by the Borrowerstherefrom or any release of a security interest in any assets of Borrower shall beeffective unless the same shall be in writing and signed by Agent, and then such waiver orconsent shall be effective only in the specific instance and for the specific purpose forwhich given; provided, however, the following amendments shall not be effective unlesssigned by Agent and all Lenders: (a) any increase in any Lender’s Revolving LoanCommitment or Pro-rata Share; (b) any extension of the Termination Date; (c) anypostponement of the payment of principal, interest, fees or other amounts due under orpursuant to this Agreement; (d) any change in the method of computing the interest rate,including the Applicable Percentage, under the Revolving Credit Facility; (e) any change infees (other than fees referred to in **Section 2.4(e)** hereof regarding Letters ofCredit) required to be paid under this Agreement; (f) any change in this **Section9.2****;**(g) any release of Collateral with fair market value of $250,000 or more; or (h)any change in the Borrowing Base. No notice to or demand on the Borrowers in any caseshall entitle the Borrowers to any other or further notice or demand in similar or othercircumstances.”     (J) A new **ARTICLE X**entitled “Agent,” is hereby added to read as follows inits entirety:**ARTICLE X****AGENT**     **Section 10.1****Appointment**. Each Lender hereby irrevocably designates and appointsRegions, as the contractual representative of each Lender under this Agreement
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and the other LoanDocuments (in such capacity, the “Agent”). Each Lender irrevocably authorizes Regions, asAgent for each Lender, to take any and all actions on its behalf under the provisions of thisAgreement and the other Loan Documents and to exercise any and all powers and perform any and allduties as are expressly delegated to Agent by the terms of this Agreement and the other LoanDocuments together with any and all other powers as are reasonably incidental thereto.Notwithstanding any provision to the contrary elsewhere in this Agreement, Agent will not have anyduties or responsibilities except those expressly set forth in this Agreement or any fiduciaryrelationship with any Lender, and no implied covenants, functions, responsibilities, duties,obligations or liabilities may be read into this Agreement or any other Loan Document or otherwiseexist against Agent. Each Lender authorizes and directs Agent, on behalf of the Lenders, to enterinto and amend each of the Loan Documents in accordance with **Section 9.2** hereof.     **Section 10.2****Delegation of Duties**. Agent may execute any of its duties under thisAgreement and the other Loan Documents by or through agents, contractors, or attorneys-in-fact andwill be entitled to advice of counsel concerning all matters pertaining to those duties. Agent willnot be responsible for the negligence or misconduct of any agents, contractors, orattorneys-in-fact selected by it in good faith.     **Section 10.3****Exculpatory Provisions**. Neither Agent nor any of its officers,directors, employees, agents, attorneys-in-fact or affiliates may be (i) liable for any actionlawfully taken or omitted to be taken by it or such Person under or in connection with thisAgreement or any other Loan Document (except to the extent of any direct damages suffered from itsor such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner toany of the Lenders or Agent (a) for any recitals, statements, representations or warranties made byBorrowers or any officer or employee or agent of Borrowers contained in this Agreement or any otherLoan Document or in any certificate, report, statement or other document or electronic transmissionreferred to, or provided for in, or received by Agent under or in connection with, this Agreementor any other Loan Document, (b) for the value, validity, effectiveness, genuineness, enforceabilityor sufficiency of this Agreement or any other Loan Document, (c) the value of the Collateral, theperfection or priority of any interest of Agent or the Lenders in the Collateral purported to becreated or perfected by the Loan Documents, or with respect to rights and interests pertaining tothe Loan Documents, (d) for any failure of Borrower to perform its obligations under this Agreementor any other Loan Document, (e) for anyloss or depreciation of, lack of insurance on, or failure to realize on, any Collateral or forthe failure or delay in collecting or receiving payment of any sums from Borrower, or for anymistake, omission, or error of judgment in passing upon or accepting any Collateral, or in themaking of any examination, or for granting extensions or indulgences to Borrowers permitted to bemade hereunder, (f) for any apportionment or distributions of payments made by it hereunder, absentgross negligence or willful misconduct or, (g) with respect to the income or withholding tax statuswith respect to any interest on, or fees in respect of, the Loans. Agent will not be under anyobligation to any Lender to ascertain or to inquire as to the observance or performance of any ofthe agreements contained in, or conditions of, this Agreement or any other Loan Document, or toinspect the properties, books or records of Borrower.
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     **Section 10.4****Reliance by Agent**. Agent will be entitled to rely, and will be fullyprotected in relying, on any agreement, instrument, writing, resolution, notice, consent,certificate, affidavit, letter, facsimile, telex, teletype, or email message, statement, order orother 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 on advice and statements of legal counsel(including counsel to Borrowers), independent accountants and other experts selected by Agent.Agent may deem and treat each Lender as the owner of its Revolving Loans for all purposes unless anassignment thereof has been made in accordance with the terms of this Agreement. As to any mattersnot expressly provided for by this Agreement and the other Loan Documents (including withoutlimitation enforcement and collection of the Notes), Agent may, but shall not be required to,exercise any discretion or take any action, but Agent shall, subject to the terms of thisAgreement, be required to act or to refrain from acting (and shall be fully protected in so actingor refraining from acting) upon the unanimous instructions of the Lenders, whenever suchinstruction shall be requested by Agent or required hereunder, and such instructions shall bebinding upon all Lenders and all future holders of the Obligations under the Revolving CreditFacility; *provided*, that Agent will be fully justified as between itself and the Lenders in failingor refusing to take any action under this Agreement or any other Loan Document unless Agent hasfirst received such advice or concurrence of the Lenders as Agent deems appropriate or Agent hasbeen first indemnified to its satisfaction by the Lenders against any and all liability and expensewhich may be incurred by it by reason of taking or continuing to take any such action.     **Section 10.5****Notice of Default**. Agent will be deemed not to have knowledge or noticeof the occurrence of any Default or Event of Default unless Agent has received notice from a Lenderor Borrowers referring to this Agreement, describing the Default or Event of Default and statingthat the notice is a “notice of default.” If Agent receives such a notice, Agent will give noticethereof to the Lenders. Subject to the terms of this Agreement, Agent will take such actionreasonably promptly with respect to such Default or Event of Default as is reasonably directed bythe Lenders; *however*, unless and until Agent has received such directions, Agent may (but shall notbe obligated to) take such action, or refrain from taking such action, with respect to such Defaultor Event of Default as it believes advisable in the best interests of the Lenders. Notwithstandinganything to the contrary in this **Article X**, at no time will Agent be required under any circumstance to takeany action that, in its sole and absolute judgment, (i) is contrary to the terms of the LoanDocuments or applicable law, or (ii) would expose Agent to liability.     **Section 10.6****Non-Reliance on Agent and Other Lenders**. Each Lender expresslyacknowledges that neither Agent nor any of its officers, directors, employees, agents,attorneys-in-fact or Affiliates has made any representations or warranties to any Lender and thatno act by Agent in the future taken, including any review of the affairs of Borrowers, will bedeemed to constitute any representation or warranty by Agent to any Lender. Each Lender representsto Agent that the Lender has, independently and without reliance on Agent or any other Lender, andbased on such documents and information as the Lender has deemed appropriate, made its ownappraisal of and investigation into the business, operations, property, financial and othercondition and creditworthiness of
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Borrowers and made its own decision to make its extensions ofcredit under this Agreement and enter into this Agreement. Each Lender also represents that itwill, independently and without reliance on Agent or any other Lender, and based on such documentsand information as each Lender deems appropriate at the time, continue to make its own creditanalysis, appraisals and decisions in taking or not taking action under this Agreement and theother Loan Documents, and to make such investigation as it deems necessary to inform itself as tothe business, prospects, operations, property, financial and other condition and creditworthinessof Borrowers.     **Section 10.7****Indemnification**. The Lenders will indemnify Agent in its capacity assuch (to the extent not reimbursed by Borrowers and without limiting the obligation of Borrowers todo so), ratably according to their Pro-rata Share in effect on the date on which indemnification issought under this Section 10.7 (or, if indemnification is sought after the date on which theRevolving Loan Commitment has terminated and the Loans shall have been paid in full, ratably inaccordance with their Pro-rata Share, from and against any and all liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kindwhatsoever which may at any time (including at any time following the payment of the Obligations)be imposed on, incurred by or asserted against Agent in any way relating to or arising out of thisAgreement, any of the other Loan Documents or any documents contemplated by or referred to in thisAgreement or in any of the other Loan Documents or the transactions contemplated by this Agreementor by any of the other Loan Documents or any action taken or omitted by Agent under or inconnection with any of the foregoing; *provided*that a Lender will not be liable for the payment ofany portion of such liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements to the extent resulting from Agent’s gross negligence orwillful misconduct so long as the Lender had no part in such action or omission by Agent and didnot receive any benefit from such action or omission by Agent. The agreements in this **Section10.7** will survive the payment of the Obligations.     **Section 10.8****Agent in Its Individual Capacity**. Agent and its affiliates may makeloans to, accept deposits from and generally engage in any kind of business with Borrowers andtheir Affiliates as though Agent were not an agent under this Agreement and under the otherLoan Documents. With respect to its Loans made or renewed by it, Agent will have the same rightsand powers under this Agreement and the other Loan Documents as any Lender and may exercise thesame as though it were not Agent, and the terms “Lender” and “Lenders” will include Agent in itsindividual capacity.     **Section 10.9****Resignation of Agent**. Agent may resign as Agent on 30 days advancenotice to the Lenders. If Agent resigns as Agent under this Agreement and the other LoanDocuments, then the Lenders will, within 30 days after notice of Agent’s resignation, appoint fromamong the Lenders a successor agent for the Lenders, which, unless an Event of Default has occurredand is continuing, successor agent must be approved by Borrowers (which approval shall not beunreasonably withheld, delayed or conditioned), whereupon (i) such successor agent will succeed tothe rights, powers and duties of Agent, (ii) the term “Agent” will mean such successor agenteffective on such appointment and approval, and (iii) the former Agent’s rights, powers and dutiesas
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Agent will be terminated, without any other or further act or deed on the part of such formerAgent or any of the parties to this Agreement or any holders of the Obligations under the RevolvingCredit Facility; *however*, if a successor agent has not so been appointed within that 30 day period,the retiring Agent will have the right to appoint a successor agent, which shall be a commercialbank organized under the laws of the United States of America or of any state thereof and having acombined capital and surplus of at least $500,000,000 who will serve as “Agent” until the time, ifever, as the Required Lenders appoint a successor Agent as provided in this **Section 10.9**.After any retiring Agent’s resignation as Agent, (a) the provisions of this **Article X** willinure to its benefit as to any actions taken or omitted to be taken by it while it was Agent underthis Agreement and the other Loan Documents and (b) the retiring Agent will be relieved of allfurther duties and obligations as Agent.     **Section 10.10****Collateral Matters**.     (a) **Perfection/Enforcement Actions**. Agent will hold the Collateral under the SecurityDocuments as agent for the ratable benefit of Lenders, subject to the terms of this Agreement andthe Security Documents. Agent is hereby authorized on behalf of all of the Lenders, without thenecessity of any notice to or further consent from any Lender, from time to time, to take anyaction with respect to any Collateral which may be necessary or desirable to perfect and maintainperfected the security interest in the Collateral granted pursuant to the Loan Documents. Paymentand performance of the Obligations under this Agreement and the other Loan Documents may beenforced only by the action of Agent, and no Lender will have any right individually to seek toenforce or to enforce payment or performance of the Obligations or any of those agreements, itbeing understood and agreed that such rights and remedies may be exercised only by Agent, for thebenefit of Agent and the Lenders, upon the terms of those agreements and this Agreement.     (b) **Release of Collateral**. The Lenders hereby authorize Agent, at its option and inits discretion, to release any security interest granted to or held by Agent on any Collateral (i)on termination of payment and satisfaction of all of the Obligations under the Revolving CreditFacility (and all Letters of Credit have been cancelled and returned to Agent) at any time arisingunder or in respect of this Agreement or the other Loan Documents or the transactions contemplatedhereby or thereby, (ii) constituting property in which Borrowers did not own an interest at thetime the security interest was granted to Agent, (iii) to the extent required to effect any sale orother disposition of any Collateral in connection with any exercise of remedies of Agent andLenders pursuant to the Loan Documents, (iv) owned by or leased to Borrowers which is subject to apurchase money security interest or which is the subject of a capital lease, (v) constitutingproperty leased to Borrowers under a lease which has expired or been terminated in a transactionpermitted under this Agreement or is about to expire and which has not been, and is not intended byBorrowers to be, renewed or extended, or (vi) other than on all or a substantial part of theCollateral, if (a) approved, authorized or ratified in writing by the Lenders and (b) after givingeffect thereto a deficiency does not exist (but this clause (iii) shall not be deemed to requiresuch approval to the extent such release is expressly authorized under this Agreement). On requestby Agent at any time, the Lenders will
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confirm in writing Agent’s authority to release particulartypes or items of Collateral pursuant to this **Section 10.10**. In the event of any sale ortransfer of Collateral, or any foreclosure with respect to any of the Collateral, Agent isauthorized to deduct all of the expenses incurred by Agent from the proceeds of any such sale,transfer or foreclosure.     (c) **Automatic Release of Collateral**. The Lenders hereby agree that the securityinterest of Agent in any property sold or disposed of with the consent of the Lenders will, if noEvent of Default then exists, be automatically released.     (d) **Execution of Release Documents**. To the extent, pursuant to the provisions of**Subsections 10.****10(b)** and **10.10(c)**, Agent’s execution of a release is required to release thesecurity interest granted to Agent and the Lenders on any sale and transfer of Collateral which isexpressly permitted pursuant to the terms of this Agreement, or consented to in writing by theLenders, and on at least five (5) Banking Days prior written request by Borrowers, Agent will (andis hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary toevidence the release of the security interests granted to Agent for the benefit of the Lenders inthe Loan Documents on the Collateral that was sold or transferred; provided that (i) Agent will notbe required to execute any such document on terms which, in Agent’s opinion, would expose Agent toliability or create any obligation or entail any consequence other than the release of suchsecurity interests without recourse or warranty and (ii) such release will not in any mannerdischarge, affect or impair the Obligations or any security interests on (or obligations ofBorrowers in respect of) all interests retained by Borrowers, including the proceeds of the sale,all of which will continue to constitute part of the Collateral.     (e) **Agency for Perfection by Possession**. Each Lender hereby appoints each otherLender as agent for the purpose of perfecting Agent’s security interests in property which, inaccordance with the UCC or other applicable law, can be perfected only bypossession. Should any Lender (other than Agent) obtain possession of any Collateral orsecurity for the Obligations, that Lender will notify Agent and, promptly on Agent’s request, thatLender will deliver the Collateral to Agent or in accordance with Agent’s instructions.     (f) **Agent Expenditures**.     (i) Subject to the limitations set forth in this **Section 10.10(f)**, Agent ishereby authorized by Borrowers and the Lenders, from time to time in Agent’s discretion,(a) during the existence of a Default or an Event of Default, or (b) at any time that anyof the other applicable conditions precedent set forth in **Section 4.2** have not beensatisfied, to make Advances under the Revolving Credit Facility to Borrowers on behalf ofthe Lenders which Agent, in its judgment, deems necessary or desirable (1) to preserve orprotect the Collateral, or any portion thereof, (2) to collect any of the Obligations, (3)to sell, liquidate, dispose of, or otherwise realize on, any of the Collateral, (4) topreserve, interpret, enforce, or defend any rights or remedies of Agent, the Lenders, orany of them, conferred by the Loan Documents, (5) to enhance the likelihood of, or maximize
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the amount of, repayment of the Loans and other Obligations, or (6) to pay any other amountchargeable to Borrowers pursuant to the terms of this Agreement, including costs, fees andexpenses as described in **Section 9.6** (any of the advances described in this**Section 10.10(f)** being hereinafter referred to as “Agent Advances”); provided thatany Lender other than Agent may at any time revoke Agent’s authorization contained in this**Section 10.10(f)** to make the Agent Advances, any such revocation to be in writingand to become effective prospectively upon Agent’s receipt thereof. Agent shall promptlynotify each Lender in writing of each such Agent Advance. Each Agent Advance will beevidenced solely by entries upon Agent’s books and records.     (ii) Each Agent Advance shall be secured by the Collateral and shall constitute a Loanand an Obligation. No part of any Agent Advance may, on the repayment thereof, be redrawnor reborrowed by Borrowers.     (iii) By the making of an Agent Advance and without any further action on the part ofAgent or the Lenders, Agent hereby grants to each Lender, and each Lender hereby acquiresfrom Agent, a participation in such Agent Advance equal to such Lender’s Pro-rata share.In consideration and in furtherance of the foregoing, each Lender hereby absolutely andunconditionally agrees to pay to Agent, for the account of Agent, such Lender’s Pro-rataShare of each Agent Advance, or of any payment on an Agent Advance required to be refundedto Borrowers for any reason. Each Lender acknowledges and agrees that its obligation toacquire participations pursuant to this paragraph in respect of Agent Advances is absoluteand unconditional and shall not be affected by any circumstance whatsoever, including theoccurrence and continuance of an Event of Default, the failure of any condition in**Article IV** to be satisfied, or any reduction or termination of the Revolving LoanCommitment, and that each such payment shall be made without any offset, abatement,withholding or reductionwhatsoever. Following receipt by Agent of any payment by Borrowers in respect of anyAgent Advance, Agent shall apply such payments to such Agent Advance and, to the extentthat the Lenders have made payments pursuant to this **Section 10.10(f)** to Agent,then to Agent and such Lenders, as their interest may appear. The purchase ofparticipations in any Agent Advance pursuant to this paragraph **Section 10.10(f)**shall not relieve Borrowers of any default in the payment thereof.     **Section 10.11****No Third Party Beneficiary**. The provisions of this **Article X**are solely for the benefit of Agent and the Lenders, and Borrowers will not have any rights as athird party beneficiary of any of the provisions of this **Article X**. In performing itsfunctions and duties as Agent under this Agreement and the other Loan Documents, Agent acts solelyas the contractual representative of the Lenders and does not assume and will not be deemed to haveassumed any obligation toward, or relationship of agency or trust with or for, Borrowers or anyAffiliate.     **Section 10.12****No Reliance on Agent’s Customer Identification Program** Each Lenderacknowledges and agrees that neither such Lender, nor any of its Affiliates,
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participants orassignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s orassignee’s customer identification program, or other obligations required or imposed under orpursuant to the USA Patriot Act or the regulations thereunder, including the regulations containedin 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any otherAnti-Terrorism Law, including any programs involving any of the following items relating to or inconnection with Borrowers, their Affiliates or their agents, this Agreement or the Loan Documentsor the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2)any recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) otherprocedures required under the CIP Regulations or such other laws.     **Section 10.13****USA Patriot Act**. Each Lender or assignee or participant of a Lenderthat is not incorporated under the Laws of the United States of America or a state thereof (and isnot excepted from the certification requirement contained in Section 313 of the USA Patriot Act andthe applicable regulations because it is both (i) an affiliate of a depository institution orforeign Lender that maintains a physical presence in the United States or foreign county, and (ii)subject to supervision by a banking authority regulating such affiliated depository institution orforeign Lender) shall deliver to the Agent the certification, or, if applicable, recertification,certifying that such Lender is not a “shell” and certifying to other matters as required by Section313 of the USA Patriot Act and the applicable regulations at such times as are required under theUSA Patriot Act.     **Section 10.14.****Collections and Distributions to Lenders by Agent**. Except as otherwiseprovided in this Agreement, all payments of interest, fees, principal and other amounts received byAgent for the account of Lenders shall be distributed byAgent to Lenders in accordance with their pro rata shares of the outstanding Loan Obligationsat the time of such distribution on the same Banking Day when received, unless received after 12:00noon Central Time in which case they shall be so distributed by 12:00 noon Central Time on the nextBusiness Day. All amounts received by any Lender on account of the Obligations under the RevolvingCredit Facility, shall be paid over promptly to Agent for distribution to Lenders as provided abovein this Section. Such distributions shall be made according to instructions that each Lender maygive to Agent from time to time.     **Section 10.15****Distribution of Proceeds from Liquidation of Inventory and Accounts****.**Anything to the contrary in this Agreement notwithstanding, the following provisions shall, asbetween Regions and Wachovia, as Lenders, apply to the disposition of the proceeds of Collateralupon exercise of rights and remedies of Agent under this Agreement:     (a) The proceeds from liquidation of Inventory and Accounts shall be distributed toLenders according to their respective Pro-rata Shares until the Obligations to each Lenderunder the Revolving Loan Commitment, including the Obligations of Reimbursement and theAgent Advances, are satisfied in full;     (b) All proceeds, if any, remaining after application of proceeds of liquidation ofInventory and Accounts and all proceeds from liquidation of
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Equipment will be distributedsolely to Regions until all Obligations (including all Obligations other than under thisAgreement) of Borrowers to Regions are satisfied in full;     (c) To the extent there is a surplus after application of proceeds from liquidation ofCollateral and distributions pursuant to Subsection (b) hereof, such surplus and allproceeds from liquidation of all other Collateral (i.e., all Collateral other thanInventory, Accounts and Equipment) will be distributed to the Lenders according to theirrespective “Post-Liquidation Pro-Rata Shares” (defined as the fraction whose numerator isthe amount of all then-outstanding Obligations of Borrowers to Regions or Wachovia, as thecase may be, and whose denominator is the aggregate amount of all then-outstandingObligations of Borrowers to Regions and Wachovia) until all remaining Obligations toRegions and Wachovia are satisfied in full; and     (d) any surplus then remaining will be distributed as required by law.(K) Agent and all Lenders shall have the benefit of all rights of “Lender” under**Article IX**, entitled “Miscellaneous,” including without limitation,reimbursement of costs and expenses under **Section 9.6**and rights to indemnity **Section 9.7**.All notices to Agent or Regions as a Lender shall be sent to the address set forth in**Section 9.3**for Regions. The address for notices to Wachovia under **Section 9.3**is:Wachovia Bank, National Association